Natale v. Pfizer, Inc.

• Decision Date: 28 July 2005
• Docket Number: No. CIV.A.05-10591-WGY.,No. CIV.A.05-10590-WGY.,CIV.A.05-10590-WGY.,CIV.A.05-10591-WGY.
• Citation: 379 F.Supp.2d 161
• Parties: Jerry NATALE, On Behalf of Himself and All Others Similarly Situated, Plaintiff, v. PFIZER INC. Defendant, Sherry Kwaak, On Behalf of Herself and All Others Similarly Situated, Plaintiff, v. Pfizer Inc. Defendant,
• Court: U.S. District Court — District of Massachusetts

379 F.Supp.2d 161

Jerry NATALE, On Behalf of Himself and All Others Similarly Situated, Plaintiff, v. PFIZER INC. Defendant, Sherry Kwaak, On Behalf of Herself and All Others Similarly Situated, Plaintiff, v. Pfizer Inc. Defendant,

No. CIV.A.05-10590-WGY.

No. CIV.A.05-10591-WGY.

United States District Court, D. Massachusetts.

July 28, 2005.

William M. Cowan, Dora L. Kripapuri, Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, PC, Boston, MA, Thomas A. Smart, Richard A. DeSevo, Kaye, Scholer LLP, New York, NY, for Pfizer, Inc., Defendant.

Kenneth D. Quat, Concord, MA, for Sherry Kwaak, Plaintiff.

MEMORANDUM AND CERTIFICATION

YOUNG, Chief Judge.

Jerry Natale, on behalf of himself and all others similarly situated ("Natale"), and Sherry Kwaak, on behalf of herself and all others similarly situated ("Kwaak"), challenge the removal of this case from state court and whether this Court, pursuant to the Class Action Fairness Act of 2005, Pub.L. No. 109-2 (2005) (the "Act") (amending 28 U.S.C. §§ 1332, 1453), properly has jurisdiction over these matters. The motions to remand of Natale, Civ. Action No. 05-10590, and Kwaak, Civil Action No. 05-10591, will be treated identically here for discussion purposes.¹

Section 9 of the Act provides that the Act applies to any case "commenced on or after [February 18, 2005,] the date of enactment," of the new federal class action law. Pub.L. No. 109-2 (emphasis added). The controlling issue to be decided by this Court is: under section 9 of the Class Action Fairness Act of 2005, is a civil action "commenced" on the date a class action complaint is filed by a plaintiff in the state court or on the date a case is removed by a defendant to the federal court? This Court answers this question as did the United States Courts of Appeals for the Seventh and Tenth Circuits and holds that an action is commenced as of the date of filing in the state court.

I. Relevant Facts and Procedural History

A. Natale v. Pfizer

On February 14, 2005, Natale commenced this action by filing his state court class action complaint in the Massachusetts Superior Court sitting in and for the County of Middlesex ("Middlesex Superior Court"). Mem. in Supp. of Mot. to Remand [Civ. A. No. 05-10590 Doc. No. 10] at 3 ("Natale Mem."). Natale sought "certification of a statewide class consisting of all Massachusetts consumers who purchased Listerine® Antiseptic Mouthrinse[] between February 11, 2002 and the present." Id. The advertising statement that was the subject of the class action suit was: "Listerine as effective as Floss — Clinical studies prove it." Id. Natale argues that this statement "knowingly contained materially false and misleading misrepresentations, statements and omissions" and seeks to receive damages under a theory of common law fraud. Id.

On March 25, 2005, Pfizer filed, pursuant to the Act, a notice of removal with the United States District Court removing the civil action from the Middlesex Superior Court. Id. at 4. Pfizer asserts that federal diversity jurisdiction exists under the new Act and argues that, under section 9 of the Act, a case is commenced in federal court upon a timely removal to federal court rather than on the date of filing with the state court.

B. Kwaak v. Pfizer

Kwaak filed her state class action complaint against Pfizer in the Middlesex Superior Court on January 13, 2005, and a first amended complaint on March 2, 2005. Mem. of Law in Supp. of Pl.'s Mot. to Remand [Civ. A. No. 05-10591 Doc. No. 11] at 3 ("Kwaak Mem."). Like Natale, Kwaak seeks "certification of a statewide class consisting of all Massachusetts consumers who purchased Listerine ® Antiseptic Mouthrinse[] from June 1, 2004 through the present." Id. The Kwaak case focuses on the same allegedly misleading misrepresentation — "Listerine (R) as effective as Floss — Clinical studies prove it" — as does Natale's claim. Id. Kwaak seeks damages for herself and the class under the theory of unjust enrichment and under the Massachusetts consumer protection act. Id.; Mass. Gen. Laws ch. 93A, § 2.

On March 25, 2005, Pfizer filed a notice of removal with the district court again arguing that federal diversity jurisdiction exists pursuant to the removal provisions of the Act because "commence" means removal to the federal court. Kwaak Mem. at 4. In Kwaak's matter, Pfizer argues in the alternative that federal diversity jurisdiction exists because Kwaak's "request for relief in the form of disgorgement among all class members is a `common and undivided interest' in excess of $75,000, exclusive of interest and costs." Id.

The parties presented oral argument on June 13, 2005 as to whether this Court has jurisdiction over this matter pursuant to the Class Action Fairness Act of 2005. This Court took the matter under advisement properly to consider and interpret the Act as applied to these matters. Tr. of Mot. Hr'g of June 13, 2005 at 13.

II. Class Action Fairness Act of 2005

A. General Overview of the Act

The Class Action Fairness Act of 2005 was passed by Congress and signed into law by President George W. Bush on February 18, 2005.² Pub.L. 109-2 (2005). Its enactment was heralded as a product of bipartisan efforts.³ Yet, the Act was the subject of much controversy and debate.⁴ See 151 Cong. Rec. H643-01, H643 (daily ed. Feb. 16, 2005) (statement of Rep. Gingrey) (noting that "[e]ven with such bipartisan support ... there are differences of opinion on how to reform our class action system."); Rick Knight, The Class Action Fairness Act of 2005: A Perspective, 52 Fed. Law. 46 (June 2005) ("[D]espite the roiling public brouhaha surrounding this and other — so-called national litigation — reform, the jury is likely to be out on [the Act] ... for years to come.").

The Act is expected by some to be "problematic." Georgene M. Vairo, Class Action Fairness, Nat'l L.J., June 27, 2005 at 12. It was enacted to "address some of the most egregious problems in class action practice." The Class Action Fairness Act of 2005, Dates of Consideration and Passage, S. Rep. 109-14, 2005 U.S.C.C.A.N. 3, 6 (describing the legislation as a "modest, balanced step" and not a "panacea" in reform). Among other things, the Act amends 28 U.S.C. § 1332, in pertinent part, to establish original subject matter jurisdiction in federal courts⁵ over class actions, and amends 28 U.S.C. § 1453, to allow removal jurisdiction from state courts⁶ in those cases in which (1) the class consists of at least 100 proposed members; (2) the matter in controversy is greater than $5,000,000 after aggregating the claims of the proposed class members, exclusive of interest and costs, Pub.L. 109-2, § 4, and (3) in pertinent part,⁷ "any member of a class of plaintiffs is a citizen of a different state from any defendant." S. Rep. 109-14, 2005 U.S.C.C.A.N. at 28, 34 (emphasis added); see also Andrée Sophia Blumstein, A New Road to Resolution — The Class Action Fairness Act of 2005, 41 Tenn. Bar J. 16 (Apr.2005) (noting that, after the passage of the Act, "bare-bones minimal diversity" is sufficient for purposes of federal diversity jurisdiction (internal quotation marks omitted)).

As described by Senator Arlen Specter on behalf of the Senate Judiciary Committee:

One of the primary historical reasons for diversity jurisdiction "is the reassurance of fairness and competence that a federal court can supply to an out-of-state defendant facing suit in state court." Because interstate class actions typically involve more people, more money, and more interstate commerce ramifications than any other type of lawsuit, the Committee firmly believes that such cases properly belong in federal court. To that end, this bill (a) amends section 1332 to allow federal courts to hear more interstate class actions on a diversity jurisdiction basis, and (b) modifies the federal removal statutes to ensure that qualifying interstate class actions initially brought in state courts may be heard by federal courts if any of the defendants so desire.

S. Rep. 109-14, 2005 U.S.C.C.A.N. at 6, 7 (stating the judiciary committee's view that the diversity and removal statutes as they currently apply to class action lawsuits "have facilitated a parade of abuses, and are thwarting the underlying purpose of the constitutional requirement of diversity jurisdiction") (internal footnotes omitted, emphasis added).

The primary mechanisms for expanding jurisdiction both (1) replaces the strict complete diversity requirement with a lenient rule now granting jurisdiction if any diversity exists between plaintiffs and defendants and (2) allows for the claims to be aggregated when calculating and satisfying the $75,000 amount in controversy required. Still, not all class actions may be heard in federal court subsequent to the Act. Some class actions may yet be heard in state court — those class actions in which all parties reside in the same state, those with fewer than 100 plaintiffs or with less than $5 million at issue, those where a state government is the main defendant, those against a company in its home state if two-thirds or more of the plaintiffs are residents of such state, and those involving local matters. Pub.L. 109-2, § 4 (amending section 28 U.S.C.A. § 1332); S. Rep. 109-14, 2005 U.S.C.C.A.N. at 27, 29, 48 (describing the Act as "narrowly tailored" to "leave[] most legitimately local disputes in state court, while ensuring that large, interstate class actions like those typically brought in [state] magnet courts can be heard in federal court").⁸

The dispute here arises out of the section 9 language that "amendments made by this Act shall apply to any civil action commenced on or after the date of enactment." Pub.L. 109-2, § 9 (emphasis added). So the question arises: do federal courts have jurisdiction over cases commenced in state court prior to the passage of the Act but removed subsequent to its enactment?⁹

B. Removal Provisions of the Act

The Act modifies the standard rules for removal...