IN THE
UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
________________________
No. 08–1019
THOMAS SPRINGMAN, individually and on behalf of all others
similarly situated,
Plaintiff‐Appellant,
v.
AIG MARKETING, INC. and ILLINOIS NATIONAL INSURANCE CO.,
Defendants‐Appellees.
__________________________
Appeal from the United States District Court
for the Southern District of Illinois.
No. 07–737–GPM—G. Patrick Murphy, Judge.
__________________________
Argued April 4, 2008—Decided April 15, 2008*
__________________________
Before POSNER, ROVNER, and EVANS, Circuit Judges.
POSNER, Circuit Judge. The plaintiff filed this class action
suit in an Illinois state court in July 2003 against AIG Claim Ser‐
vices (AIGC), a company that processes insurance claims, as
well as against Illinois National Insurance Company, which is‐
sues insurance policies; the policies give rise to claims for pay‐
This opinion is being released in typescript because of the deadline im‐
*
posed by the Class Action Fairness Act. 28 U.S.C. § 1453(c)(2).
No. 08–1019 2
ment. The complaint charged the defendants with having vio‐
lated Illinois fraud and consumer protection law by underpay‐
ing accident‐insurance claims submitted by the plaintiff and the
members of his class.
In December 2003, in response to an interrogatory served
by the plaintiff, AIGC stated that it had not handled his insur‐
ance claim. But not until October of the next year did he serve
an interrogatory asking who had handled it. AIGC and Illinois
National responded the following month that the claim had
been handled by an affiliate of AIGC called AIG Marketing
(AIGM). Three years (less two months) later, and thus nearly
four years after he had first been told that he had sued the
wrong party, the plaintiff moved the court for leave to amend
his complaint to add AIGM as a defendant and drop AIGC. The
court granted the motion.
In the meantime, however, Congress had passed the Class
Action Fairness Act, which allows certain types of class action
suit filed in state court and governed by state law to be re‐
moved to federal district court despite the absence of complete
diversity, 28 U.S.C. §§ 1331(d), 1453, provided the suit was
“commenced” on or after the Act’s effective date, which was
February 18, 2005. Both the plaintiff and Illinois National are
citizens of Illinois, though neither of the AIG companies is.
AIGC therefore could not have removed the case to federal
court because the suit against it was filed before the Act’s effec‐
tive date and thus at a time when complete diversity was re‐
quired for removal of a diversity case. But AIGM was substi‐
tuted for AIGC after that date. So, promptly after the amend‐
ment of the complaint (and incidentally before a class had been
certified), AIGM removed the case to federal district court,
which denied the plaintiff’s motion to remand to state court,
precipitating this appeal under 28 U.S.C. § 1453(c)(1). The ques‐
tion we have to answer is whether the substitution of AIGM for
AIGC was the commencement of a suit against AIGM within
No. 08–1019 3
the meaning of the Class Action Fairness Act, thus enabling re‐
moval of the entire suit. 28 U.S.C. § 1453(b).
That the suit had been filed before the Act’s effective date
might seem to doom removal. But the plaintiff does not argue
that; it bows to our case law, which rejects the position that
nothing that happens after suit is filed can affect removal. E.g.,
Phillips v. Ford Motor Co., 435 F.3d 785, 786–88 (7th Cir. 2006);
Knudsen v. Liberty Mutual Ins. Co., 411 F.3d 805, 806–07 (7th Cir.
2005). All but one of the other circuits to have addressed the
question agree with us. Smith v. Nationwide Property & Casualty
Ins. Co., 505 F.3d 401, 405–06 (6th Cir. 2007); Prime Care of North‐
east Kansas, LLC v. Humana Ins. Co., 447 F.3d 1284, 1285–86 (10th
Cir. 2006); Braud v. Transport Service Co., 445 F.3d 801, 803‐04
(5th Cir. 2006); Plubell v. Merck & Co., 434 F.3d 1070, 1071–72
(8th Cir. 2006). The outlier is the Ninth Circuit. E.g., McAtee v.
Capital One, F.S.B., 479 F.3d 1143, 1145–48 (9th Cir. 2007).
The cases that allow removal under the Class Action Fair‐
ness Act on the basis of certain events that take place after the
case was filed are consistent with federal removal doctrine; “an
amendment to the pleadings that adds a claim under federal
law (where only state claims had been framed before), or adds a
new defendant, opens a new window of removal.” Knudsen v.
Liberty Mutual Ins. Co., supra, 411 F.3d at 807; see 28 U.S.C. §
1446(b). The Ninth Circuit, however, believes that a simpler ap‐
proach, one that disregards post‐filing developments, is war‐
ranted because all that is at stake in removal under the Class
Action Fairness Act is whether the same case, governed by state
law, will be litigated in a state court or in a federal court. But
that is all that’s at stake whenever a suit is removed to federal
court on the basis of diversity. Nowhere does the Act state or
suggest that removal pursuant to it is more limited than in the
usual diversity case. On the contrary, the Act lengthened the
time within which a normal diversity suit can be removed, 28
U.S.C. § 1453(b), as well as making a particular class of diversity
No. 08–1019 4
cases, namely class actions in which diversity is only partial,
removable to federal court for the first time.
On the Ninth Circuit’s view, a plaintiff can defeat removal
by first filing a complaint that does not include a claim or a de‐
fendant that would trigger the Act’s right of removal and later
substituting a claim or defendant that would have triggered the
right. Suppose that with the Act’s effective date looming, the
plaintiff had not completed even a minimal pre‐complaint in‐
vestigation. Under the Ninth Circuit’s view, the plaintiff could
sue Donald Duck for violating a Chicago noise ordinance and
then at his leisure amend the complaint to substitute a proper
claim against a proper defendant, and the new defendant
would not be able to remove.
But even the cases that reject the Ninth Circuit’s position
forbid removal if the new claim or defendant (new in the sense
of having been added after the effective date of the Class Action
Fairness Act) “relates back” to the original claim or the original
defendant. It would not do so in the Donald Duck case, al‐
though that would not faze the Ninth Circuit, which considers
relation back important only when necessary to avoid a statute
of limitations defense, since, if successful, the defense kills the
plaintiff’s claim rather than just forcing it to be litigated in a dif‐
ferent court system. McAtee v. Capital One, F.S.B., supra, 479 F.3d
at 1147.
The majority view, because it makes relation back impor‐
tant, raises a threshold question: should state or federal law
govern whether a claim or defendant relates back? The cases
thus far have assumed that it is state law, e.g., Schorsch v. Hew‐
lett‐Packard Co., 417 F.3d 748, 750–51 (7th Cir. 2005); Plubell v.
Merck & Co., supra, 434 F.3d at 1071, but with little discussion of
the issue, probably because its resolution rarely matters (it
doesn’t matter in this case, as we shall see). What may have in‐
fluenced the assumption is that state law determines the date
on which a diversity suit was commenced for purposes of de‐
No. 08–1019 5
termining whether the statute of limitations has run. Walker v.
Armco Steel Corp., 446 U.S. 740 (1980). The statute of limitations,
however, is a substantive defense, and its application depends
on the length of time that elapsed between the date on which
the plaintiff’s claim accrued and the date on which he filed suit.
If state law governs the statute of limitations defense, as it nor‐
mally will in a diversity case, it makes sense to defer to the state
law’s determination of when a claim accrues and when a suit is
commenced, for those are the dates that determine whether the
suit is barred. But the validity of a state‐law defense is not the
issue when the district court is asked to decide in which court
system, the federal or the state, the case shall be litigated. Sup‐
pose that in an effort to delay the effective date of the Class Ac‐
tion Fairness Act, a state court defined “relation back” so
broadly that even the replacement of Donald Duck by AIGM
would relate back to the date of the original complaint and
therefore AIGM could not remove. That would defeat the Act’s
goal, and as the Act is silent on relation back, the interpretation
that is consistent with that goal is permissible as well as prefer‐
able.
We need not choose between state and federal law (we are
merely flagging the issue for possible consideration in the fu‐
ture) because Illinois’s relation‐back rule is identical to the fed‐
eral rule. Both rules provide that a party may be changed if,
within the deadline for service of the complaint on it, (1) the
new party had received enough notice of the original suit that it
would not be “prejudiced in maintaining a defense on the mer‐
its” if it were brought into the case belatedly, and (2) it “knew
or should have known that, but for a mistake concerning the
identity of the proper party, the action would have been
brought against” it. 735 ILCS 5/2–616(d)(2); Fed. R. Civ. P.
15(c)(1)(C). The plaintiff argues that these conditions have been
satisfied.
No. 08–1019 6
The first may have been, but not the second. The plaintiff
learned by December 2003, or at the latest by November 2004,
that he had sued the wrong party, yet he waited almost three
years to substitute the right one. He offers no excuse for having
waited so long to correct his mistake. Neither party can explain
the delay.
No matter, says the plaintiff; the rule imposes no duty of
diligence. Not in so many words; that is true. But we must have
regard for context, and in particular we must ask why there is a
relation‐back doctrine in the first place. The primary reason is to
provide relief from a defense based on the statute of limitations
in cases in which the deadline imposed by it is too tight. Just as
a statute of limitations fixes a deadline for suing, the Class Ac‐
tion Fairness Act fixes a deadline for bringing a suit that cannot
be removed to federal court, and so the relation‐back issues are
the same, at least when as in this case the federal and state rela‐
tion‐back rules are the same.
The purpose of allowing relation back—to extend a dead‐
line—allies the doctrine closely to equitable tolling, which per‐
mits a party to delay filing his suit beyond the expiration of the
limitations period if he could not reasonably be expected to
have done so sooner. E.g., Fidelity National Title Ins. Co. v. How‐
ard Savings Bank, 436 F.3d 836, 839 (7th Cir. 2006); Neverson v.
Faquharson, 366 F.3d 32, 39–40 (1st Cir. 2004). He might, for ex‐
ample, have known he had suffered a wrongful injury but have
been unable to identify the injurer in time. E.g., Singletary v.
Continental Illinois National Bank & Trust Co., 9 F.3d 1236, 1241–
42 (7th Cir. 1993). But to be given the benefit of the doctrine he
must be diligent in seeking out that identity and must sue
promptly once he has learned it. E.g, Shropshear v. Corporation
Counsel, 275 F.3d 593, 595 (7th Cir. 2001); Pacific Harbor Capital,
Inc. v. Barnett Bank, N.A., 252 F.3d 1246, 1252 (11th Cir. 2001);
Johnson v. Nyack Hospital, 86 F.3d 8, 12–13 (2d Cir. 1996).
No. 08–1019 7
It is the same here. The plaintiff thought he had been stiffed
by whoever had handled his insurance claim, and we’ll assume
that he was unable even by the exercise of diligence to identify
the handler correctly when he sued. The relation‐back doctrine
would give him the time he needed to find out whom he should
have sued, and sue him, provided that the new defendant knew
about the suit and was not prejudiced by the delay in naming
him as a defendant. But it doesn’t give the plaintiff forever. It is
implicit that he must proceed diligently. Otherwise the doctrine
would undercut the tolling rules.
We have in this case a situation in which for three years a
plaintiff knows that he has sued the wrong party and knows
who the right party to sue is—for the plaintiff does not suggest
that he disbelieved AIGC when it told him that not it but its af‐
filiate AIGM had handled his claim—yet he neither drops the
wrong party from the case nor adds the right one as a defen‐
dant. Throughout this period the wrong party, though knowing
it is the wrong party, must keep tabs on the case, may have to
report it to insurance and securities regulators as a pending
case, or must incur the expense of seeking a dismissal, while the
right party wonders why it hasn’t been sued and must make
preparations for an eventual suit by lining up counsel and pre‐
serving evidence. Neither the named nor the mysteriously un‐
named defendant may be able—without disproportionate ex‐
pense—to prove that it is being prejudiced by the plaintiff’s
dereliction, yet the litigation process is being complicated and
uncertainty engendered and all for no reason.
This analysis brings us back to the language of the relation‐
back rules. When there is protracted and inexplicable delay in
changing defendants, the plaintiff can no longer argue, under
either the Illinois or the federal rule, that the defendant “should
have known that, but for a mistake concerning the identity of
the proper party, the action would have been brought against
th[at] party.” When as in this case the plaintiff does not change
No. 08–1019 8
defendants for years after discovering the mistake, the not‐yet‐
named defendant can no longer assume that “the action would
have been brought against” him had it not been for the plain‐
tiff’s mistake. After years passed without being substituted as a
defendant for AIGC, AIGM could reasonably assume that the
plaintiff had a reason for wanting to persist in the suit against
AIGC even though that company had not handled his claim.
Maybe it had handled the claims of some members of the class,
and class counsel was thinking of substituting one of those
members for the named plaintiff and continuing with the suit
against AIGC. Maybe the plaintiff had thought that because
AIGC and AIGM are affiliated corporations it didn’t matter
which one he sued—that they could be treated as a unit.
What was AIGM to do? Petition the court to direct the
plaintiff to sue it? Or should AIGC have told the plaintiff,
please sue my affiliate?
Read literally, it is true, the relation‐back provision in both
the Illinois and the federal rule could be thought to authorize
relation back whenever the later‐named defendant should have
known within the service period that had it not been for a mistake
by the plaintiff he would have been sued, whatever he learned
later. But that would be a misreading. It is apparent that the re‐
quirement that the party learn of the mistake before the service
deadline has passed is a limitation on rather than an expansion
of the relation‐back doctrine. There can be relation back only if
the defendant realized within the period in which he might
have been sued that he should have been the one sued. If he
didn’t learn that until later, there is no relation back because he
would assume after the service deadline passed that he was out
of the woods—it would be too late for the plaintiff to add him
as a defendant. When years passed without AIGM’s being sub‐
stituted for AIGC, whatever initial concerns AIGM might have
had about being sued would have tended to dissipate. No
longer could it be sure that the plaintiff had sued AIGC, rather
No. 08–1019 9
than it, by mistake. The plaintiff’s tenacious retention of AIGC
as a defendant suggested alternative hypotheses to mistake,
such as that, as we suggested, class counsel intended to replace
the plaintiff as the named plaintiff in the class action suit with
another member of the class.
We note finally that even when the conditions for relation
bank are satisfied, a request to allow the complaint to be
amended is addressed to the judge’s discretion. Foman v. Davis,
371 U.S. 178, 182 (1962); Airborne Beepers & Video, Inc. v. AT&T
Mobility LLC, 499 F.3d 663, 666–67 (7th Cir. 2007); Mundt v. Rag‐
nar Benson, Inc., 335 N.E.2d 10, 16 (Ill. 1975); Brandon v. Bonell,
858 N.E.2d 465, 484–85 (Ill. App. 2006); Grove v. Carle Foundation
Hospital, 846 N.E.2d 153, 158 (Ill. App. 2006). (Federal, but not
Illinois, law permits a first amendment to be made as a matter
of right before the answer or a dispositive motion is filed. Com‐
pare Fed. R. Civ. P. 15(a) with 735 ILCS 5/2‐616(a). That is not
the nature of the amendment at issue.) It is difficult to regard
the state court’s permitting the plaintiff to amend his complaint
to change defendants as anything other than an abuse of discre‐
tion. The plaintiff’s delay in seeking leave to amend was gross,
unjustified, and not even explained; the maintenance for years
of a suit against a party known by the plaintiff to be the wrong
one to sue was an abuse of legal process; and the amendment
changed not only the defendants but the claimants, since the
insurance claims of some of the class members were processed
by AIGC and of others by AIGM. If as seems likely AIGM
would not have known how substituting it in as a defendant
would alter the composition of the class, that is an independent
ground for denying relation back. Smith v. Nationwide Property
& Casualty Ins. Co., supra, 505 F.3d at 406 n. 2.
Obviously we cannot reverse the state judge’s grant of
leave to amend the complaint. But the arbitrariness of that ac‐
tion supports an interpretation of the Class Action Fairness Act
under which the suit against AIGM is deemed to have been
No. 08–1019 10
commenced when it was added as a defendant, and not years
earlier when AIGC was sued.
The order of the district denying the petition to remand
this suit to the state court is
AFFIRMED.