United States Court of Appeals
For the First Circuit
No. 09-2201
COLLEGE OF DENTAL SURGEONS OF PUERTO RICO,
Plaintiff, Appellee,
v.
CONNECTICUT GENERAL LIFE INSURANCE COMPANY AND
METROPOLITAN LIFE INSURANCE COMPANY,
Defendants, Appellants.
___________________
TRIPLE-S MANAGEMENT, INC., ET AL.,
Defendants, Appellees.
APPEAL FROM AN INTERLOCUTORY REMAND ORDER OF THE
UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF PUERTO RICO
[Hon. José Antonio Fusté, U.S. District Judge]
Before
Selya, Boudin and Howard, Circuit Judges.
Charles P. Scheeler and DLA Piper LLP (US) on brief for
defendant-appellant Connecticut General Life Insurance Company.
Frank Gotay-Barquet and Gotay & Perez, P.S.C. on brief for
defendant-appellant Metropolitan Life Insurance Company.
Edna Hernández-Arroyo, María Luisa Martínez-López, and Ávila,
Martínez & Hernández, P.S.C. on brief for plaintiff-appellee.
Manuel A. Pietrantoni, César T. Alcover Acosta, Casellas
Alcover & Burgos, P.S.C., Rafael Escalera Rodríguez, and Reichard
& Escalera on brief for defendants-appellees Triple-S Management,
Inc., Triple-S, Inc., Triple-C, Inc., La Cruz Azul de Puerto Rico,
Inc., and American Health, Inc.
José A. Acosta-Grubb, María L. Montalvo-Vera, José Luis
Ramírez-Coll, and Fiddler Gonzáles & Rodríguez, P.S.C. on brief for
defendant-appellee Delta Dental Plan of Puerto Rico, Inc.
German J. Brau and Usera Morell Bauzá Dapena & Cartagena on
brief for defendants-appellees Preferred Medicare Choice, Inc., and
MMM Health Care, Inc.
Luis Sánchez Betances, Adrián Sánchez Pagán, and Sánchez
Betances, Sifre & Muñoz Noya, P.S.C. on brief for defendants-
appellees MAPFRE Life Insurance Company and Mennonite General
Hospital, Inc.
Carlos José Onetti Irizarry, Fermín M. Contreras Gómez, and
Estuido Legal Fermín M. Contreras Gómez on brief for defendants-
appellees Medical Card System, Inc., MCS Health Management Options,
Inc., and MCS Advantage, Inc.
October 22, 2009
SELYA, Circuit Judge. The pivotal question in this
appeal is whether removal jurisdiction under the Class Action
Fairness Act (CAFA), Pub. L. No. 109-2, 119 Stat. 4 (2005), may
attach even though the complaint does not specifically define a
proposed class. The district court answered this question in the
negative and remanded the case to the local court in which it had
originated. Coll. of Dental Surgeons of P.R. v. Triple-S Mgmt.,
Inc., Civ. No. 09-1209, 2009 WL 1076308, at *2 (D.P.R. Apr. 21,
2009). On September 1, 2008, we granted an application for leave
to pursue an interlocutory appeal from this ruling.
We now decide the appeal. After sketching the background
facts and travel of the case, our response is in two main parts.
First, we articulate the standards that apply in this circuit to
guide the court of appeals in allowing or disallowing applications
for leave to pursue discretionary appeals under CAFA. Second, we
address the merits of the district court's order and conclude that
the court acted prematurely in remanding the action. Consequently,
we vacate the remand order and remit the case for further
proceedings in the district court.
I. BACKGROUND
Because this litigation is in its infancy, we draw the
facts from the complaint.
The College of Dental Surgeons of Puerto Rico (the
College) is an entity created by the Puerto Rico legislature. See
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P.R. Laws Ann. tit. 20, §§ 111-123. With only minor exceptions,
every dentist licensed to practice in Puerto Rico must belong. Id.
§ 114. The College has both the capacity to sue, id. § 112(a), and
a statutory mandate to "protect" its members' interests as those
interests relate to the practice of dentistry, id. § 112(h).
On February 11, 2009, the College sued twenty-five
defendants (insurance companies, health maintenance organizations,
and the like) in a Puerto Rico court. The complaint asserts a
litany of claims on behalf of the College and its dentist-members.
Among other things, the complaint alleges that the defendants
engage in questionable and sometimes fraudulent practices anent
contracting, claims processing, and the like, to the dentists'
economic detriment.
The College's averments are divided into nine statements
of claim, all arising under Puerto Rico law. Citing provisions of
the Puerto Rico Rules of Civil Procedure, the complaint alleges
that the pleaded facts qualify the case for treatment as a class
action. In its concluding prayers, the complaint seeks a
declaratory judgment, injunctive relief, and damages in excess of
$150,000,000.
Two defendants, Connecticut General Life Insurance
Company and Metropolitan Life Insurance Company, sought to shift
the battleground by filing a timely notice of removal to the
federal district court. The removing defendants (appellants here)
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predicated removal on CAFA, 28 U.S.C. §§ 1332(d), 1453(b).1 CAFA
does not require the consent of all defendants to remove a class
action to federal court. See id. § 1453(b).
Several parties moved to remand, arguing that CAFA did
not give the district court subject matter jurisdiction. After
some procedural skirmishing, not pertinent here, the district court
ordered briefing on the jurisdictional issue. The appellants
claimed that CAFA jurisdiction attached because the complaint
contains class-type allegations sufficient to come within CAFA's
scope. The College and the objecting defendants (collectively, the
appellees) demurred; they contended that the complaint does not
fall within CAFA's scope. The College never argued, however, that
its suit is other than a class action.
In due course, the district court granted the motions to
remand, reasoning in a terse order that the complaint does not
"sufficiently define[]" the contours and membership of the
plaintiff class and, thus, the College "has not defined a class
[within] Federal pleading requirements." Coll. of Dental Surgeons,
2009 WL 1076308, at *2. On that basis, the court found CAFA
jurisdiction wanting, without reaching questions raised by the
1
The appellants also mentioned federal question jurisdiction,
28 U.S.C. § 1331, as an alternate ground for removal. Because the
other defendants did not unanimously consent to removal, any
assertion of federal question jurisdiction is unavailing. See id.
§ 1441; Chi., Rock Island & Pac. Ry. Co. v. Martin, 178 U.S. 245,
247-48 (1900).
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appellees about whether any of CAFA's specific jurisdictional
exceptions applied.
CAFA affords an opportunity for immediate appeal of a
remand order if the court of appeals, in its discretion, grants
leave so to proceed. 28 U.S.C. § 1453(c)(1). The appellants
sought such permission. The appellees objected.
On September 1, 2009, we granted the application in an
unpublished order. The entry of such an order starts the accrual
of a sixty-day period within which the court of appeals must decide
the matter. See id. § 1453(c)(2); see also DiTolla v. Doral Dental
IPA of N.Y., LLC, 469 F.3d 271, 275 (2d Cir. 2006) (holding that
the statutorily prescribed period runs from the date that the
application for leave to appeal is granted); Hart v. FedEx Ground
Package Sys., Inc., 457 F.3d 675, 678 (7th Cir. 2006) (same); Evans
v. Walter Indus., Inc., 449 F.3d 1159, 1162-63 (11th Cir. 2006)
(same); Patterson v. Dean Morris, L.L.P., 444 F.3d 365, 368 (5th
Cir. 2006) (same); Bush v. Cheaptickets, Inc., 425 F.3d 683, 685-86
(9th Cir. 2005) (same).
II. ANALYSIS
We divide our analysis into two segments, beginning with
our rationale for granting review and only then turning to the meat
of the appeal.
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A. Leave to Appeal.
Generally, post-removal procedures are dictated by the
provisions of 28 U.S.C. § 1447. These procedures apply to CAFA
cases, but with some modifications. Pertinently, while most remand
orders are not immediately appealable, see, e.g., Things
Remembered, Inc. v. Petrarca, 516 U.S. 124, 127 (1995), CAFA allows
a court of appeals to "accept an appeal from an order of a district
court granting or denying a motion to remand a class action to the
State court from which it was removed." 28 U.S.C. § 1453(c)(1).
Because this grant of discretionary authority is relatively new and
out of the ordinary, we take this opportunity to elucidate criteria
that bear on our willingness to grant an application of this type.
We do not write on a wholly pristine page. Several other
courts of appeals have touched upon this topic. A common theme is
that the presence of an important CAFA-related question is a factor
weighing in favor of allowing an application for leave to appeal.
See, e.g., Bullard v. Burlington N. Santa Fe Ry. Co., 535 F.3d 759,
761 (7th Cir. 2008); Estate of Pew v. Cardarelli, 527 F.3d 25, 29
(2d Cir. 2008). The presence of a non-CAFA issue (even an
important one) is generally not thought to be entitled to the same
weight. See, e.g., Coffey v. Freeport McMoran Copper & Gold, ___
F.3d ___, ___ (10th Cir. 2009) [2009 WL 2840508, at *7]. This
dichotomy highlights the fact that the discretion granted under
section 1453(c) is designed, in large part, to "develop a body of
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appellate law interpreting the legislation." S. Rep. No. 109-14,
at 49 (2005), reprinted in 2005 U.S.C.C.A.N. 3, 46.2
It follows, then, that uncertainty is also a factor that
cuts in favor of an affirmative exercise of discretion; to warrant
immediate appeal, the question presented usually will be unsettled.
See, e.g., Bullard, 535 F.3d at 761. Along the same line, the
court must assess whether the question, at first glance, appears to
be either incorrectly decided or at least fairly debatable. If, on
the face of the materials presented, it seems likely that the
district court decided the question correctly, the need for
immediate review is lessened. See, e.g., Tmesys, Inc. v. Eufaula
Drugs, Inc., 462 F.3d 1317, 1319 (11th Cir. 2006).
Another factor is whether the question is consequential
to the resolution of the particular case. See, e.g., Estate of
Pew, 527 F.3d at 29. A particularly important factor is whether
the question is likely to evade effective review if left for
consideration only after final judgment. Cf. Waste Mgmt. Holdings,
Inc. v. Mowbray, 208 F.3d 288, 294 (1st Cir. 2000) (establishing
similar criteria for leave to appeal under Fed. R. Civ. P. 23(c)).
Because CAFA is chiefly a jurisdictional statute, cases raising
2
Peculiarly, this report was not issued until ten days after
CAFA was signed into law. Blockbuster, Inc. v. Galeno, 472 F.3d
53, 57-58 (2d Cir. 2006). Consequently, its value as a means of
discerning congressional intent is clouded. See Weinberger v.
Rossi, 456 U.S. 25, 35 (1982); cf. Hamdan v. Rumsfeld, 548 U.S.
557, 580 n.10 (2006) (discounting statement inserted into
Congressional Record after floor debate).
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serious jurisdictional issues will often fit this model. By the
same token, likelihood of recurrence may be relevant; if the
question is one that is unlikely to recur, there is a weaker
argument for allowing an interlocutory appeal. See Eufaula Drugs,
462 F.3d at 1319.
Another consideration is whether the application arises
from a decision or order that is sufficiently final to position the
case for intelligent review. As a general proposition, courts
discourage piecemeal appeals. See Mowbray, 208 F.3d at 294
(collecting cases). The wisdom of this principle is illustrated by
an earlier CAFA case in this circuit. There, removal was found to
be premature because the record was insufficiently developed to
determine whether the lawsuit met CAFA's amount-in-controversy
requirement. Amoche v. Guar. Trust Life Ins. Co., 556 F.3d 41, 53
(1st Cir. 2009).
Last — but far from least — a reviewing court should
construct a balance of relevant harms. This entails weighing the
probable harm to the applicant should an immediate appeal be
refused against the probable harm to the other parties should an
immediate appeal be entertained.
In the final analysis, lists of criteria are merely
guides. The decision about whether to grant leave to appeal under
section 1453(c) is a matter committed to the informed discretion of
the reviewing court. That discretion is not cabined by rigid
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rules, and many decisions are apt to be case-specific. But the
factors we have identified will, in the majority of cases, serve as
buoys to mark channels of inquiry.
The case at hand is a good prototype. Here, the CAFA
question — the relationship between CAFA jurisdiction and the
precision of the class allegations contained in the complaint — is
important, unsettled, and recurrent. Absent an interlocutory
appeal, the question will in all probability escape meaningful
appellate review. The district court's resolution of the question
appears to rest on shaky ground. To cinch matters, the lower
court's ruling is ripe for review, and the balance of harms favors
accepting the application. It is for these reasons that we chose,
in our discretion, to entertain this interlocutory appeal.
B. The District Court's Order.
The district court thought itself without subject matter
jurisdiction because the complaint did not sufficiently define the
plaintiff class. We review this determination de novo. See
Viquéra v. First Bank, 140 F.3d 12, 16 (1st Cir. 1998).
CAFA grants federal courts subject matter jurisdiction
over many large, multistate class actions by creating a specialized
form of diversity jurisdiction. Subject to certain exceptions,
that jurisdictional grant applies to class actions in which the
amount in controversy exceeds $5,000,000 and a watered-down version
of the classic diversity requirement is satisfied. See 28 U.S.C.
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§ 1332(d) (requiring that some member of the plaintiff class and
some defendants are diverse). For this purpose, CAFA identifies a
class action in the following terms:
[T]he term "class action" means any civil
action filed under rule 23 of the Federal
Rules of Civil Procedure or similar State
statute or rule of judicial procedure
authorizing an action to be brought by 1 or
more representative persons as a class action
. . . .
Id. § 1332(d)(1)(B).
CAFA allows class actions originally filed in state
courts — or in Puerto Rican courts, id. § 1332(e) — to be removed
to the federal courts if they conform to the statutory profile.
Id. § 1453(b). Class actions removed under section 1453(b) may be
remanded pursuant to the generic remand statute. See id. § 1447.
This means that a federal court lacking subject matter jurisdiction
over an improvidently removed action must remand that action to the
originating state court. Id. § 1447(c). The party seeking removal
bears the burden of showing that federal jurisdiction lies.
Amoche, 556 F.3d at 48.
In the case at hand, the district court concluded that
CAFA jurisdiction did not attach because the College's complaint
failed sufficiently to define the class. We examine this
conclusion.
To satisfy CAFA's definition of a class action, a case
need only be "filed under" either Federal Rule of Civil Procedure
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23 or some state-law analogue of that rule. See 28 U.S.C.
§ 1332(d)(1)(B); see also Clausnitzer v. Fed. Express Corp., 621 F.
Supp. 2d 1266, 1270 (S.D. Fla. 2008). The court below ignored the
second part of this formulation and, instead, focused on its
assumption that the College, in the complaint, had not "defined a
class under Federal pleading requirements." Coll. of Dental
Surgeons, 2009 WL 1076308, at *2. Yet the complaint plainly
invoked Puerto Rico's class action rules, see, e.g., P.R. Laws Ann.
tit. 32, app. III, R. 20.1-20.2, and contained allegations of harm
to the "members of the class."
In fairness, this may be a mere matter of form; although
the district court did not say so, it may have realized that the
complaint was filed under a state-law analogue to Rule 23 — but
nonetheless thought it insufficient. The more acute problem is
with the substance of the court's appraisal.
The complaint plausibly alleges claims for class-wide
relief; it consistently alleges harm to the dentists as a
professional group; it describes the College as representing the
"dentistry class" in Puerto Rico; it states that its allegations
are similar to those made in a class action pending in the United
States District Court for the Southern District of Florida (which
it identifies); and it seeks class-wide relief. In deciding that
the complaint did not confer CAFA jurisdiction, the district court
downplayed these allegations — it simply did not mention them — and
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relied instead on the absence of any sufficient class definition.
That reliance was misplaced.
A complaint that contains class-type allegations
historically has been assumed to assert a class action before
formal class certification. See, e.g., Mehlenbacher v. Akzo Nobel
Salt, Inc., 216 F.3d 291, 296 n.7 (2d Cir. 2000). CAFA embraces
this principle; in terms, it applies "to any class action before or
after the entry of a class certification order by the court with
respect to that action." 28 U.S.C. § 1332(d)(8). The district
court's pronouncement that this was not a class action because the
complaint lacked a sufficiently defined class is in tension with
this provision (which effectively treats as provisional class
actions those suits visibly framed as such, notwithstanding flaws
that may be subject to adjustment or revision before a class can be
certified).
The appellees try to justify the district court's order
by arguing that, in remanding, the court may have concluded that a
class never could be certified in this case. This argument rests
on the premise that the College, as an association of dentists
rather than an individual dentist, cannot itself be a member of a
certifiable class. But an association can sue on behalf of its
members as long as "(a) its members would otherwise have standing
to sue in their own right; (b) the interests it seeks to protect
are germane to the organization's purpose; and (c) neither the
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claim asserted nor the relief requested requires the participation
of individual members in the lawsuit." Hunt v. Wash. State Apple
Comm'n, 432 U.S. 333, 343 (1977). And an association can bring a
class action on behalf of its members in a case (like this one)
that seeks class-wide injunctive or declaratory relief. After all,
an association, organized for the primary purpose of protecting its
members' interests, has a substantial stake in pursuing such
remediation. See, e.g., Norwalk CORE v. Norwalk Redev. Agency, 395
F.2d 920, 937-38 (2d Cir. 1968); Smith v. Bd. of Educ. of Morrilton
Sch. Dist., 365 F.2d 770, 773, 777 (8th Cir. 1966) (Blackmun, J.);
Upper Valley Ass'n for Handicapped Citizens v. Mills, 168 F.R.D.
167, 168, 171 (D. Vt. 1996).
To be sure, the complaint in this case contains a
multiplicity of claims — and some may not be susceptible to class
action treatment without the joinder of individual dentists. But
at this stage, our inquiry focuses on whether the College, under
Hunt, could bring any one of those claims on behalf of a class of
dentists. See Playboy Enters., Inc. v. Pub. Serv. Comm'n, 906 F.2d
25, 35-36 & n.10 (1st Cir. 1990). We think that, at least with
respect to the claims for injunctive and declaratory relief, the
College clears this hurdle.
To begin with the obvious, the College is a unified
professional association; that is, membership in the College is
compulsory, and the College's ranks comprise nearly all licensed
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dentists who practice in Puerto Rico. P.R. Laws Ann. tit 20,
§ 114. The members could assert individual claims for injunctive
and declaratory relief arising out of the challenged contracting
and claims-processing practices. Consequently, the College
satisfies the first Hunt requirement.
Next, the enabling legislation makes pellucid that the
College exists mainly to protect its members' interests and
authorizes the College to sue to that end. Id. § 112. Thus, the
College satisfies the second Hunt requirement.
Finally, the injunctive and declaratory relief that the
College seeks can be granted without the participation of
individual dentists as parties. See, e.g., Camel Hair & Cashmere
Inst. of Am., Inc. v. Assoc'd Dry Goods Corp., 799 F.2d 6, 12 (1st
Cir. 1986). The complaint alleges that the defendants' pernicious
practices harm all affected dentists in the same way. Although
adjudicating the class-wide claims for injunctive and declaratory
relief may require definition of specific sub-classes and evidence
from individual dentists, those claims do not necessarily require
the type of "fact-intensive-individual inquiry," N.H. Motor Transp.
Ass'n v. Rowe, 448 F.3d 66, 72 (1st Cir. 2006), that would defeat
Hunt standing. This relief, if granted, would inure to the benefit
of all the affected dentists equally, regardless of their
individual circumstances.
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Of course, compliance with the strictness of Rule 23 is
needed for a plaintiff to litigate its case to a conclusion using
the class action mechanism. But the appellees' argument that the
College is not a "member of the class" is "fully encompassed by
. . . Rule 23 criteria." 1 Alba Conte & Herbert Newberg, Newberg
on Class Actions § 2:11, at 128 (4th ed. 2002); accord Int'l
Woodworkers v. Chesapeake Bay Plywood Corp., 659 F.2d 1259, 1268-69
(4th Cir. 1981); 7A Charles A. Wright, Arthur R. Miller & Mary K.
Kane, Federal Practice & Procedure § 1761, at 168-69 (3d ed. 2005).
Let us be perfectly clear. We do not minimize the
importance of being able to define the class — but class
composition (including compliance with the requirements of Rule 23)
is not the issue at the inception of a class action. In all but
the clearest of cases, the existence vel non of a sufficiently
defined class is appropriately addressed after some development of
the facts and under Rule 23's established protocol for weighing the
propriety of class certification. Reviewing the complaint alone is
not normally a suitable method for determining whether a class
eventually can be certified.3 See In re Hydrogen Peroxide
Antitrust Litig., 552 F.3d 305, 316 n.15 (3d Cir. 2008); In re
3
We say "normally" because there may be rare situations in
which it is obvious from the complaint alone that there cannot be
a class that would warrant certification. See, e.g., Washington v.
Safeway Corp., 467 F.2d 945, 947 (10th Cir. 1972) (per curiam)
(affirming ruling that complaint containing purely individual
allegations and requesting only personal relief did not commence a
class action).
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PolyMedica Corp. Sec. Litig., 432 F.3d 1, 6-7 (1st Cir. 2005). It
follows, we think, that reviewing the complaint alone is not
normally a suitable occasion for determining whether the plaintiff
has sufficiently defined a cognizable class.
Whether or not the College will succeed in satisfying the
requirements of Rule 23 is not before us. That is a question for
the district court at the class certification stage. Viewed in
this light, the district court's ruling on the inadequacy of the
class definition was premature. See Falcon v. Philips Elecs. N.
Am. Corp., 489 F. Supp. 2d 367, 368 (S.D.N.Y. 2007) (stating that,
at the time a case is removed under CAFA, "class certification will
almost always remain to be decided").
We add two postscripts. There is an open question as to
whether a later denial of class certification will divest the
district court of CAFA jurisdiction. Compare id. (stating that
CAFA jurisdiction is terminated if class certification is denied on
a "basis that precludes even the reasonably foreseeable possibility
of subsequent class certification"), and In re TJX Cos. Retail Sec.
Breach Litig., 564 F.3d 489, 492 (1st Cir. 2009) (suggesting in
dictum that "denial [of class certification] would . . . defeat
[CAFA] jurisdiction"), with Genenbacher v. CenturyTel Fiber Co. II,
500 F. Supp. 2d 1014, 1017 (C.D. Ill. 2007) (contra). See
generally Arvitt v. Reliastar Life Ins. Co., Civ. No. 07-1817, 2009
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WL 1703224, at *1-2 (D. Minn. June 18, 2009) (collecting
conflicting case law). We express no opinion on this question.
Second, CAFA contains two exceptions to its grant of
subject matter jurisdiction over large, multistate class actions:
the "local controversy" exception, 28 U.S.C. § 1332(d)(4)(A), and
the "home state" exception, id. § 1332(d)(4)(B). There are two
reasons why we do not address these exceptions today. First, the
district court has not yet addressed them. Second, the record is
largely undeveloped as to the facts needed to apply them. We leave
it to the district court, on remand, to delve into these matters.
III. CONCLUSION
We need go no further. For the reasons elucidated above,
we hold that the district court determined prematurely that it
lacked CAFA jurisdiction. Consequently, we vacate the order
appealed from and return the case to the district court for further
proceedings consistent with this opinion. Costs are taxed in favor
of appellants.
So Ordered.
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