All Representative Actions Are Not Removable Under CAFA

Stein v. American Express Travel Related Servs., No. 11–1384 (GK), 2011 WL 4430855 (D.D.C. Sept. 23, 2011).

In this case, a District Court in District of Columbia, relying on Breakman v. AOL, L.L.C., 545 F.Supp.2d 96 (D.D.C.2008), held that CAFA does not establish an alternative basis for federal jurisdiction because the representative action under the D.C. Consumer Protection Procedures Act is authorized by D.C. statute and is a separate and distinct procedural vehicle from a class action.

The plaintiffs filed a complaint in the state court as private attorney generals alleging violations by various American Express corporate defendants of the D.C. Consumer Protection Procedures Act, D.C. Code 28–3901 (the "DCCPA").

The defendants removed the lawsuit to the federal district court, and the plaintiffs challenged that removal and moved for a remand back to the Superior Court of the District of Columbia.

The District Court granted the plaintiffs' motion to remand.

At the outset, the Court noted that under the federal system, "federal courts are courts of limited jurisdiction;" indeed, the law presumes that "a cause lies outside of the court's limited jurisdiction." Because of the limited jurisdiction of federal courts, any doubts as to whether such federal jurisdiction exists in any given case must be resolved in favor of remand. Further, the presence or absence of federal question jurisdiction is governed by the well pleaded complaint rule, which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint.

First, the defendants argued that a "federal question" had stemmed from the complaint's references to the Fourth Amendment; thus, the Court had federal question jurisdiction under 28 U.S.C. § 1331.

The Court noted that each and every one of the plaintiffs' seven counts against the defendants alleged various violations of only one state statute—the DCCPA, and no federal statute was relied on anywhere in the complaint.

The Court observed that the plaintiffs had not pled any violation of the Fourth Amendment; nor did they seek any relief under the Fourth Amendment. Rather, they alleged deceptive trade practices by American Express, namely, outsourcing the handling of card members' private data to foreign countries, which, in practice, affected the constitutional rights of those members, without giving them any notice or disclosure of the ramifications of that...