F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
May 12, 2006
UNITED STATES COURT OF APPEALS Elisabeth A. Shumaker
Clerk of Court
TENTH CIRCUIT
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, No. 06-3024
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.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
(D.C. No. 05-CV-2227-KHV)
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,
Missouri, H. Reed Walker, Law Offices of H. Reed Walker, P.A., Overland Park,
Kansas, for Appellants.
R. Frederick Walters, Walters Bender Strohbehn & Vaughn, P.C., Kansas City,
Missouri, for Appellees.
*
After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument.
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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
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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
1
This court granted defendants-appellants’ application for appeal by order
dated January 20, 2006. The sixty-day deadline for disposition of such an appeal
specified in § 1453(c)(2) was extended, on agreement of the parties, until May 18,
2006, pursuant to § 1453(c)(3)(A).
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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. ScripSolutions, 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.
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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., 2006 WL 880051, at *1-*4 (5th Cir. Apr. 6, 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
2
We have held that a case commenced in state court prior to CAFA is not
“recommenced” post-CAFA by the act of removal itself. See Pritchett v. Office
Depot, Inc., 420 F.3d 1090, 1094-97 (10th Cir. 2005).
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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
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
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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 . . . (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, 61 U.S. at 64.
Braud, 2006 WL 880051, at *2.
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 criticism to bear on the
position espoused in Braud and the Seventh Circuit cases. Underlying Braud’s
reliance on the Martinez and M’Intyre cases in the quoted passage is the principle,
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repeatedly invoked by the Supreme Court, that “Congress is presumed to enact
legislation with knowledge of the law and a newly-enacted statute is presumed to
be harmonious with existing law and judicial concepts.” Garcia v. Dep’t of
Homeland Sec., 437 F.3d 1322, 1336 (Fed. Cir. 2006) (collecting Supreme Court
cases); see Bd. of County Comm’rs v. U.S. E.E.O.C., 405 F.3d 840, 845 (10th Cir.
2005). Braud fails to acknowledge, however, that the relevant law and judicial
concepts in the pleading-amendment context have developed significantly since
the Martinez case was decided in 1904.
With the issuance of the Federal Rules of Civil Procedure in 1938, pleading
amendments were controlled by Rule 15(c), which did not maintain the simple
equation of amendment and commencement reflected in the old law cited by
Braud, but looked instead to more recent relation-back principles. Indeed, when
courts failed to heed this move from automatic recognition of a new proceeding to
a nuanced relation-back analysis, the Rule was amended in 1966 “to state more
clearly when an amendment of a pleading changing [defendants] shall ‘relate
back’ to the date of the original pleading.” Advisory Committee’s 1966 Note on
Subd. (c) (“Analyses in terms of ‘new proceedings’ is traceable to [cases that]
antedate the adoption of the Rules which import different criteria for determining
when an amendment is to ‘relate back.’ As lower courts have continued to rely on
[outdated] cases despite the contrary intent of the Rules, clarification of Rule
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15(c) is considered advisable.”). Especially telling here is the Advisory
Committee’s pointed clarification that, when the addition of a defendant satisfies
relation-back criteria, “characterization of the amendment as a new proceeding is
not responsive to the realty [sic], but is merely question-begging; and to deny
relation back is to defeat unjustly the claimant’s opportunity to prove his case.”
Id. We note that, as the Kansas rule applied in this case reflects, state
relation-back doctrines have largely tracked the federal rule. Steven S. Sparling,
Note, Relation Back of “John Doe” Complaints in Federal Court: What You
Don’t Know Can Hurt You, 19 Cardozo L. Rev. 1235, 1266 & nn.250, 251
(Dec. 1997).
Thus, when Congress tied CAFA’s effective date to the legal concept of
commencement, it did so presumptively aware that – contrary to the principle
invoked by the Fifth and Seventh Circuit cases applying CAFA – an amendment
adding a defendant does not necessarily commence a new action as to that
defendant. 3 Nor, contrary to Comes and Weekley, are commencement and
3
We do not gainsay the equitable appeal of allowing a defendant added to a
suit by a post-CAFA amendment to remove the case that has just been asserted
“against it.” Schillinger, 425 F.3d at 333 (quotation omitted). But this appeal
quickly diminishes once it is recognized that the relation-back analysis prescribed
by both Rule 15(c) and its Kansas counterpart, Kan. Stat. Ann. § 60-215(c)(2),
already accounts for the “new case against this defendant” idea: these rules
specify that an amendment adding a defendant relates back to the original
pleading only if the defendant “received such notice of the institution of the
(continued...)
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amendment properly seen as utterly unrelated matters. 4 Rather, the relevant
landscape in which both of these legal concepts reside has for some time been
governed by the relation-back principle. This is the fundamental underpinning for
the position that the effect of post-CAFA amendments should be a function of
whether they relate back to the pre-CAFA filing.
There is one other justification invoked for the position adopted by the
Fifth and Seventh Circuits that we should address. The argument notes that the
general removal statute grants newly served defendants (served with the initial
pleading if the case is removable or with an amended pleading if the amendment
makes the case removable) thirty days to remove, see 28 U.S.C. § 1446(b), and
from this concludes that a defendant added after CAFA’s effective date should be
able to remove because it has been given this procedural window in which to do
so. Knudsen, 411 F.3d at 807; see Braud, 2006 WL 880051, at *3 (following
3
(...continued)
action that the party [will/would] not be prejudiced in maintaining a defense” and,
in fact, “knew or should have known that, but for a mistake concerning the
identity of the proper party, the action would have been brought against the
party.” In effect, an amendment adding defendants to a case will relate back, and
thus not commence a new case, only when it really is not a new case against those
defendants.
4
It is worth noting that the unqualified disregard of any post-CAFA pleading
amendments espoused by Comes and Weekley entails the practically untenable
result that once a pre-CAFA case is filed, the plaintiff can tack on new causes of
action so substantively independent of the original case that they would be
properly treated as filed after CAFA’s effective date for all legal purposes
controlled by Rule 15(c) except for CAFA.
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Knudsen rationale); Adams, 2005 WL 1862378, at *3 (same). The jump from
premise to conclusion here turns on a conflation of two concepts that should be
kept distinct: a substantive basis for removal (here the federal action created by
CAFA) and a procedural opportunity to effect removal on that substantive basis.
A procedural opportunity to assert a substantive right does not create the right to
be asserted; the opening of a window to seek removal under CAFA merely raises
the question of whether CAFA is applicable to the case at that time, it does not
answer it. Indeed, this particular conflation of substantive and procedural
removability is very much at odds with our holding in Pritchett, see supra at 6,
n.2, which took pains to clarify that CAFA’s substantive applicability to a case
did not turn on the procedural event of removal.
Moreover, the confusion of a removal window with the substantive right to
remove would lead to absurd consequences, which can be illustrated by a simple
example. Because § 1446(b) grants the defendant thirty days to remove a case
following service of the complaint, if a removal window after CAFA’s effective
date is enough to trigger application of CAFA, then CAFA actually applies to all
civil actions commenced after or up to thirty days before its designated effective
date – a bizarre result contrary to the plain wording of the Act’s effective date.
For the reasons discussed above, we hold that whether a post-CAFA
amendment triggers a substantive right of removal under CAFA by the affected
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parties depends on whether the amendment relates back to the pre-CAFA pleading
that is being amended. Because the district court followed the absolute approach
reflected in Comes and Weekley, under which no post-CAFA amendment would
grant removal rights under the Act, it did not consider whether the amendment at
issue properly related back to the commencement of the case when it remanded
the proceeding to state court. 5 We therefore vacate the district court’s order and
remand to the district court for further proceedings consistent with this opinion,
in particular for a determination whether the amendment adding the removing
defendants related back to the pre-CAFA commencement of this action. 6
The order of the district court is VACATED and the cause REMANDED to
the district court for further proceedings.
5
We note the state court’s initial (ex parte) order holding that the operative
amendment related back is inherently non-final and subject to reconsideration in
federal court. See 16 James Wm. Moore, Moore’s Federal Practice § 107.31[3]
(3d ed. 2006); see also 28 U.S.C. § 1450.
6
As noted, the prevailing view is that this determination should be governed
by the law of the state in which the action was commenced. Given the essentially
identical text of Rule 15(c) and Kan. Stat. Ann. § 215(c), see supra at 10 n.3, it
appears unlikely that a choice between federal and state law is necessary to our
resolution of this case. At this juncture, however, we do not express an opinion
as to whether federal or state law should control. Of course, it is still possible
that federal and state case law applying the same language has diverged in some
material respect. We therefore do not foreclose the district court’s consideration
of the matter on remand in the event the parties develop opposing positions based
on a demonstrable divergence between federal and state law on the facts of this
case.
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