'My Client Wanted To Remove But The District Court Said No, No, No. 'Any Defendant' Does Not Mean 'Any Defendant.''

Article by CAFA Law Blog

Previously published by CAFA Law Blog on 29 March 2012.

Apex v. Contreras, No. CV 10-1382 (C.D. Cal. Nov. 4, 2010).

A District Court in California remanded the action to state court finding that use of the term, "any defendant" in 28 U.S.C. § 1453(b) does not change the long standing rule that only original defendants can remove.

The plaintiff, Westwood Apex, filed suit against the defendant, Jesus Contreras, for breach of contract in state court based on allegations that Contreras failed to pay amounts due on his student loan note. Contreras, who did not agree with the assertion that he should pay back his student loan, answered the complaint, and in order to keep members of the California bar busy for quite some time filed a class action cross-complaint against Westwood and several additional defendants--Cross Defendants, alleging violation of inter alia the Consumers Legal Remedies Act, California's Unfair Competition Law by engaging in unfair and deceptive practices in connection with their operation of for-profit college campuses.

All the Cross-Defendants, except Westwood, removed the action to the District Court pursuant to CAFA.

The District Court, skeptical about the removal, wanted to know what the attorneys were thinking and issued a show cause order wanting to know why the matter had been properly removed under CAFA, 28 U.S.C. § 1453(b).

Ultimately the court said no, no, no and remanded the matter finding that removal was not authorized by CAFA. (Editors' Note: Regular readers of the CAFA Law Blog, all of whom are scholars, know that we disagree with this decision. But we don't get to wear the robe. As an aside, if we did get to wear the robe, we would wear it commando style. If you want to see our position, see the article published in the Consumer Financial Services Law Report by clicking here).

Because § 1453(b) refers to "any defendant" rather than "the defendant or the defendants," the issue before the Court was whether § 1453(b) allows cross-defendants who are not plaintiffs in the original action to remove a class action to federal court.

In Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941), the Supreme Court construed a predecessor removal statute to preclude a cross-defendant that was originally a plaintiff in the state action from removing. That version of the removal statute, like the current version,allowed removal "by the defendant or defendants." The Supreme Court took particular note...