Prime Care of Northeast Ks, LLC v. Humana Ins. Co.

• Decision Date: 12 May 2006
• Docket Number: No. 06-3024.,06-3024.
• Citation: 447 F.3d 1284
• Parties: PRIME CARE OF NORTHEAST KANSAS, LLC; New Century Health Quality Alliance, Inc.; James Mirabile, M.D., P.A.; Paincare, P.A.; Kansas City Urology Care, PA; the Drake Institute, PA; Midwest Neurosurgery Associates, PA; College Park Family Care Center, PA; United Medical Group, LLC; Kanza Multispeciality Group, PA; Statland Clinic Ltd, PA; Heartland Primary Care, PA; Kansas City Allergy and Asthma Associates, PA; Nelson Harmon and Kaplan, M.D.S., Chtd; Head & Neck Surgery of Kansas City, PA; Contemporary Women's Centre, LLC; Cynthia Romito, MD; Associated Orthopedics, PA; Dickson-Dively Midwest Orthopedic Clinic, Inc., Plaintiffs-Appellees, v. HUMANA INSURANCE COMPANY; United Healthcare Insurance Company, Inc.; Coventry Health & Life Insurance Company, Defendants-Appellants, and Blue Cross and Blue Shield of Kansas City, Inc.; Blue Cross and Blue Shield of Kansas, Inc.; Good Health HMO, Inc; Premier Health, Inc.; Total Health Care, Inc.; Coventry Services Corporation, doing business as Coventry Health Care, Inc., Defendants.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1284

447 F.3d 1284

PRIME CARE OF NORTHEAST KANSAS, LLC; New Century Health Quality Alliance, Inc.; James Mirabile, M.D., P.A.; Paincare, P.A.; Kansas City Urology Care, PA; the Drake Institute, PA; Midwest Neurosurgery Associates, PA; College Park Family Care Center, PA; United Medical Group, LLC; Kanza Multispeciality Group, PA; Statland Clinic Ltd, PA; Heartland Primary Care, PA; Kansas City Allergy and Asthma Associates, PA; Nelson Harmon and Kaplan, M.D.S., Chtd; Head & Neck Surgery of Kansas City, PA; Contemporary Women's Centre, LLC; Cynthia Romito, MD; Associated Orthopedics, PA; Dickson-Dively Midwest Orthopedic Clinic, Inc., Plaintiffs-Appellees, v. HUMANA INSURANCE COMPANY; United Healthcare Insurance Company, Inc.; Coventry Health & Life Insurance Company, Defendants-Appellants, and Blue Cross and Blue Shield of Kansas City, Inc.; Blue Cross and Blue Shield of Kansas, Inc.; Good Health HMO, Inc; Premier Health, Inc.; Total Health Care, Inc.; Coventry Services Corporation, doing business as Coventry Health Care, Inc., Defendants.

No. 06-3024.

United States Court of Appeals, Tenth Circuit.

May 12, 2006.

Submitted on the briefs:^* Douglas M. Weems, Barry L. Pickens, Spencer Fane Britt & Browne, LLP, Jeffrey J. Simon, Leonard L. Wagner, Husch & Eppenberger, LLC, Kansas City, MO, H. Reed Walker, Law Offices of H. Reed Walker, P.A., Overland Park, KS, for Appellants.

R. Frederick Walters, Walters Bender Strohbehn & Vaughn, P.C., Kansas City, MO, for Appellees.

Before BRISCOE, McKAY, and BRORBY, Circuit Judges.

BRISCOE, Circuit Judge.

The Class Action Fairness Act of 2005 (CAFA), Pub.L. No. 109-2, 119 Stat. 4, amended 28 U.S.C. § 1332(d) to confer federal jurisdiction over class actions involving at least 100 members and over $5 million in controversy when minimal diversity (between any defendant and any plaintiff class member) is met. CAFA also added its own removal statute, permitting any defendant to remove a qualifying action without regard to the residence or consent of other defendants, see 28 U.S.C. § 1453(b), and providing discretionary appellate review of rulings on motions for remand notwithstanding the extant bar in 28 U.S.C. § 1447(d) to appeals from remand orders, see 28 U.S.C. § 1453(c)(1). CAFA applies "to any civil action commenced on or after [February 18, 2005]." 119 Stat. at 14. The question raised here is whether CAFA permits the removal of a class action filed before the Act's effective date if the removing defendant was first added by amendment after the effective date. The district court held CAFA does not apply in these circumstances and remanded the case to state court. On de novo review, see, e.g., Bush v. Cheaptickets, Inc., 425 F.3d 683, 686 (9th Cir.2005); see also Dallis v. Martin, 929 F.2d 587, 589 (10th Cir.1991), we vacate the district court's order and remand for further proceedings.

Plaintiffs filed this class action in Kansas state court on February 14, 2005. They subsequently amended the pleadings several times, to correct and clarify party designations. On April 22, 2005, the state court granted them leave to file a fifth amended petition, in which they first named Defendants Humana Insurance Company, Coventry Health & Life Insurance Company, and United Healthcare Insurance. The state court also specifically held that the amended petition related back to the initial filing date. A month later, the newly added defendants removed the case under § 1453(b). Plaintiffs moved for remand, arguing that CAFA was not applicable because the case had been commenced prior to the Act's effective date. The removing defendants opposed the motion, contending that as to them the action commenced a month after CAFA's effective date, when they were first added to the pleadings. The district court granted the motion for remand, and the removing defendants appealed.¹

In the short time since CAFA's passage, courts have adopted at least three distinct positions on the issue of commencement-by-amendment for purposes of removal under the Act. A few, like the district court here, insist that a "civil action" can "commence" only once and, thus, take the absolute position that if an action was commenced prior to CAFA's effective date, no post-CAFA amendment of the pleadings can bring the Act into play. See Comes v. Microsoft Corp., 403 F.Supp.2d 897, 903 (S.D.Iowa 2005) (following Weekley v. Guidant Corp., 392 F.Supp.2d 1066, 1067-68 (E.D.Ark.2005)). Most courts, however concede that the addition of a new claim sufficiently distinct from prior pleadings may commence a new action removable under CAFA by the affected parties.

The latter courts also generally agree that whether an amendment is distinct enough to give rise to a new commencement date is properly gauged by the forum state's law governing the relation-back of pleading amendments. This broad consensus splits into two opposing views, however, regarding the treatment of amendments that add new defendants to a case. On one view, the relation-back analysis controls the commencement question for all amendments, no distinction being made for amendments adding new defendants (of course, the requirements that must be met for amendments adding defendants to relate back are strict). See Plubell v. Merck & Co., 434 F.3d 1070, 1071-72 (8th Cir. 2006); see, e.g., Eufaula Drugs, Inc. v. Scipsolutions, 2005 WL 2465746, at *2-*4 (M.D.Ala. Oct.6, 2005) (holding CAFA inapplicable where amendment adding defendant related back to pre-CAFA filing); New Century Health Quality Alliance, Inc. v. Blue Cross & Blue Shield of Kan. City, Inc., 2005 WL 2219827, at *3-*5 (W.D.Mo. Sept.13, 2005) (same). On the other view, the relation-back analysis controls for all amendments except those adding defendants, which are categorically treated as commencing a new case as to the added defendants. See Braud v. Transp. Serv. Co., 445 F.3d 801, 804-809 (5th Cir.2006) (following approach stated, but not yet dispositively applied, by Seventh Circuit in such cases as Schillinger v. Union Pac. R.R., 425 F.3d 330, 333 (7th Cir.2005) and Knudsen v. Liberty Mut. Ins. Co., 411 F.3d 805, 807 (7th Cir.2005)); Adams v. Fed. Materials Co., 2005 WL 1862378, at *3-4 (W.D.Ky. July 28, 2005) (same).

In sum, courts addressing post-CAFA pleading amendments have held that such amendments either (1) do not affect the pre-CAFA commencement date of the case; (2) affect the commencement date only if they do not relate back; or (3) affect the commencement date if they do not relate back or if they add new defendants to the case. This circuit has not yet confronted this specific issue.² For the reasons that follow, we now adopt the second position.

The view that post-CAFA amendments do not affect pre-CAFA commencement dates turns on Congress' use of the phrase "civil action" in CAFA's effective date provision. Noting that "[a] civil action, viewed as the whole case, the whole proceeding, can only be commenced once," the courts embracing this position concede that "new claims may dramatically change the action" and "may or may not `relate back' to the original complaint," but they still conclude that such proceedings cannot alter the fact that the civil action "commenced when the initial complaint was filed." Weekley, 392 F.Supp.2d at 1067-68; see Comes, 403 F.Supp.2d at 903. For these courts, it is of controlling significance that "Congress did not say [CAFA] would apply to actions in which the complaint was amended after February 18, 2005 . . . unless the amendment related back to the initial complaint." Weekley, 392 F.Supp.2d at 1068 (emphasis added); see Comes, 403 F.Supp.2d at 903 ("If Congress had intended the CAFA to apply to currently pending cases that were amended after the enactment of the CAFA, it could have explicitly done so.").

A pointed rebuttal to this rationale for adopting the first position, i.e., that post-CAFA amendments do not affect pre-CAFA commencement dates, has been given by one of the courts adopting the third position, i.e., that post-CAFA amendments that do not relate back or that add defendants give rise to new commencement dates. In Braud, the district court held that an amendment adding a defendant did not commence a new action, relying on the same basic point cited above from Weekley and Comes. The Fifth Circuit reversed, noting that the existence of established legal principles relating commencement to amendment (in this instance, amendments adding defendants) belied the idea that Congress' general reference to commencement of a civil action without an explicit direction for the treatment of pleading amendments must render pleading amendments categorically irrelevant:

[T]he district court's remark that "there's no specific language in the CAFA legislation itself . . . that would support that position that if a new party was added [post-CAFA to a pre-CAFA case then] CAFA would apply" misses the mark. Precisely because CAFA does not define "commencement" of an action, it is obvious that CAFA is not intended to replace caselaw deciding when a lawsuit is considered "commenced" as to a new defendant.

The caselaw holds that generally "a party brought into court by an amendment, and who has, for the first time, an opportunity to make defense to the action, has a right to treat the proceeding, as to him, as commenced by the process which brings him into court." United States v. Martinez, 195 U.S. 469, 473, 25 S.Ct. 80, 49 L.Ed. 282 (1904) (citing Miller v. M'Intyre, 31 U.S. (6 Pet.) 61, 8 L.Ed. 320 (1832)). As the Miller Court explained, this is because it "would be a novel and unjust principle to make the defendants responsible for a proceeding of which they had no notice." Miller, 31 U.S. at 64, 15 L.Ed. 828.

Braud, 445 F.3d at 805.

There is, however, a broader point to be made here that reinforces Braud's contextual/historical criticism of the absolute position reflected in Weekley and Comes but at the same time brings some of the same...