Westwood Apex v. Jesus A. Contreras

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

WESTWOOD APEX, 
Plaintiff/Counterclaim Defendant,
GEORGE BURNETT, an individual;
WILLIAM OJILE, an individual;
ALTA COLLEGES INC., a Delaware
Corporation; WESTWOOD COLLEGE
INC., a Colorado Corporation;
TRAV CORPORATION, a Colorado
Corporation, DBA Westwood
College, DBA Westwood College
Online; GRANT CORPORATION, a No. 11-55362
Colorado Corporation, DBA D.C. No.
Westwood College; WESGRAY
CORPORATION, a Colorado
 5:10 Civ. 01382
(GAF)
Corporation, DBA Westwood
OPINION
College; BOUNTY ISLAND
CORPORATION, a Delaware
Corporation, FDBA Redstone
College,
Additional Counterclaim
Defendants-Appellants.,
v.
JESUS A. CONTRERAS,
Defendant/Counter-Complainant-
Appellee.

Appeal from the United States District Court
for the Central District of California
Gary A. Feess, District Judge, Presiding

Argued and Submitted
April 12, 2011—Pasadena, California

6035
6036 WESTWOOD APEX v. BURNETT
Filed May 2, 2011

Before: Jay S. Bybee and Milan D. Smith, Jr.,
Circuit Judges, and Kent J. Dawson, District Judge.*

Opinion by Judge Milan D. Smith, Jr.;
Concurrence by Judge Bybee

*The Honorable Kent J. Dawson, United States District Judge for the
District of Nevada, sitting by designation.
6038 WESTWOOD APEX v. BURNETT
COUNSEL

Jeffrey K. Brown, Esq., Payne & Fears, LLP, Irvine, Califor-
nia; Christopher King, Esq., Homer Bonner, P.A., Miami,
Florida, for the appellants.

Timothy G. Blood, Esq., Blood Hurst & O’Reardon, LLP,
San Diego, California; John A. Yanchunis, Esq., James Hoyer
Newcomer Smiljanich & Yanchunis, P.A., Tampa, Florida,
for the appellee.

OPINION

M. SMITH, Circuit Judge:

The Class Action Fairness Act of 2005 (CAFA), Pub. L.
No. 109-2, 119 Stat. 4, confers federal jurisdiction over class
action lawsuits where the amount in controversy exceeds
$5,000,000 and the adversaries are minimally diverse. When
a class action satisfying these conditions is filed in state court,
Section 5 of CAFA provides that “such action may be
removed by any defendant without the consent of all defen-
dants.” 28 U.S.C. § 1453(b). In this appeal, we address
whether CAFA Section 5, 28 U.S.C. § 1453(b), allows a party
joined to an action as a defendant to a counterclaim (an addi-
tional counterclaim defendant) to remove the case to federal
court. We hold that § 1453(b) does not permit additional
counterclaim defendants to remove an action to federal court,
and we affirm the district court’s decision to remand this case
to state court.

BACKGROUND

I. CAFA and the Removal Statutes

Congress enacted CAFA to “ ‘curb perceived abuses of the
class action device which, in the view of CAFA’s proponents,
 WESTWOOD APEX v. BURNETT 6039
had often been used to litigate multi-state or even national
class actions in state courts.’ ” United Steel v. Shell Oil Co.,
602 F.3d 1087, 1090 (9th Cir. 2010) (quoting Tanoh v. Dow
Chem. Co., 561 F.3d 945, 952 (9th Cir. 2009)). CAFA
wrought several changes to the Judicial Code, including
amending the federal diversity statute, 28 U.S.C.
§ 1332(d)(2), and liberalizing the requirements governing
removal from state court, 28 U.S.C. § 1453.

Section 4(a) of CAFA amended the federal diversity juris-
diction statute, 28 U.S.C. § 1332, to grant original federal
jurisdiction over large interstate class actions (i.e., at least 100
class members) in which the matter in controversy exceeds
$5,000,000 and any member of the plaintiffs’ class is diverse
in his domicile from any defendant. See 28 U.S.C.
§ 1332(d)(2), (d)(5)(B).

Section 5 of CAFA augmented Chapter 89 of the Judicial
Code (which governs the removal of state-court actions to
federal courts) by the addition of 28 U.S.C. § 1453. Subsec-
tion (b) of § 1453 provides that

[a] class action may be removed to a district court of
the United States in accordance with section 1446
(except that the 1-year limitation under section
1446(b) shall not apply), without regard to whether
any defendant is a citizen of the State in which the
action is brought, except that such action may be
removed by any defendant without the consent of all
defendants.

28 U.S.C. § 1453(b). Section 1446, which is cross-referenced
in § 1453(b), sets forth the procedures a removing defendant
must follow and provides, inter alia, that “[a] defendant or
defendants desiring to remove any civil action . . . shall file
in the district court of the United States for the district and
division within which such action is pending a notice of
removal . . . containing a short and plain statement of the
6040 WESTWOOD APEX v. BURNETT
grounds for removal” as well as the operative pleadings. Id.
§ 1446(a). The notice of removal “shall be filed within thirty
days after the receipt by the defendant” of the complaint or,
in certain states, the summons. Id. § 1446(b).

The “general” removal statute, which was not amended by
CAFA, is also found in Chapter 89 of the Judicial Code, and
provides:

[A]ny civil action brought in a State court of which
the district courts of the United States have original
jurisdiction, may be removed by the defendant or the
defendants, to the district court of the United States
for the district and division embracing the place
where such action is pending.

28 U.S.C. § 1441(a).

II. The Underlying Proceedings

This litigation commenced in San Bernardino County
Superior Court on May 17, 2010, when plaintiff Westwood
Apex filed a breach of contract action against defendant Jesus
Contreras to recover $20,000 on an unpaid student loan.
Westwood Apex is a subsidiary entity of the for-profit higher-
education institution Westwood College. Contreras, a former
Westwood College student, answered the complaint and, on
August 11, 2010, filed class action counterclaims alleging
violations of California consumer-protection laws.

Contreras’s counterclaims allege that plaintiff/counterclaim
defendant Westwood Apex and additional counterclaim defen-
dants1 Westwood College and certain affiliated individuals
1
The parties and pleadings refer to Westwood Apex as a “cross-
defendant” as opposed to a “counterclaim defendant.” They also refer to
Westwood College as a “cross-defendant.” In accord with Federal Rule of
Civil Procedure 13, the appropriate way to describe the underlying pro-
 WESTWOOD APEX v. BURNETT 6041
and entities (collectively, the additional counterclaim defen-
dants, removing parties, or Westwood College) committed
fraud and engaged in unfair and deceptive business practices
in connection with their operation of the college. Contreras’s
putative class consists of all California residents who have
attended, or are presently attending, Westwood College’s pro-
grams.

On September 10, 2010, the additional counterclaim defen-
dants (i.e., all Westwood College entities except Westwood
Apex) filed a notice of removal in the Central District of Cali-
fornia. That notice asserted that federal jurisdiction was
appropriate under 28 U.S.C. § 1332(d)(2), and that removal
was authorized by Section 5 of CAFA, 28 U.S.C. § 1453(b).
Specifically, the notice of removal reads:

Section 1453(b), added by CAFA, expands removal
authority, conferring on “any defendant” the right to
remove a class action. . . . [Section] 1453(b), in
authorizing removal “by any defendant,” expands
removal authority beyond § 1441(a)’s limits so that
it includes “any defendant,” including naturally a
defendant joined in the case by a counterclaim.

On September 29, 2010, the district court ordered West-
wood College to show cause why removal was appropriate
under CAFA. Specifically, the district court highlighted the
dearth of authority in this circuit regarding whether “state
court cross-defendants, joined by way of a cross-complaint,
qualify as defendants under [28 U.S.C. § ] 1453.” The order
to show cause further recognized persuasive authority from

ceedings is that defendant Contreras filed a counterclaim against plain-
tiff/counterclaim defendant Westwood Apex and joined as additional
counterclaim defendants Westwood College, et al. Fed. R. Civ. P. 13(h).
However, any deviations from this nomenclature are immaterial to the
result in this case.
6042 WESTWOOD APEX v. BURNETT
the United States Court of Appeals for the Fourth Circuit
which, in considering the issue presented here, held that
CAFA does not permit removal by additional counterclaim
defendants. See Palisades Collections, LLC v. Shorts, 552
F.3d 327, 328-29 (4th Cir. 2008).

Following briefing by the parties, the district court
remanded the action to state court on the ground that removal
by an additional counterclaim defendant was not authorized
by either the language or purpose of CAFA (the Order of
Remand). See Apex v. Contreras, No. 10 Civ. 1382 (GAF),
2010 WL 4630274 (C.D. Cal. Nov. 4, 2010).

On March 4, 2011, we granted the additional counterclaim
defendants’ petition to appeal the Order of Remand.

JURISDICTION AND STANDARD OF REVIEW

We have jurisdiction under 28 U.S.C. § 1453(c). “CAFA
mandates a prompt disposition of controversies that arise over
issues relating to jurisdiction under the Act.” Lewis v. Verizon
Commc’ns, Inc., 627 F.3d 395, 396 (9th Cir. 2010). An appeal
of an order of remand must be decided no more than 60 days
after the petition to appeal was granted. 28 U.S.C.
§ 1453(c)(2).

Whether a case was properly removed from state to federal
court is a question we review de novo. Lively v. Wild Oats
Markets, Inc., 456 F.3d 933, 938 (9th Cir. 2006). We likewise
review the “construction, interpretation, or applicability” of
CAFA de novo. Bush v. Cheaptickets, Inc., 425 F.3d 683, 686
(9th Cir. 2005).

DISCUSSION

The removing parties contend that § 1453(b) permits
removal by “any defendant” and that this phrase includes
additional counterclaim defendants. This is a question of stat-
 WESTWOOD APEX v. BURNETT 6043
utory interpretation, and thus our analysis begins with the
plain language of the act. Campbell v. Allied Van Lines Inc.,
410 F.3d 618, 620 (9th Cir. 2005). “The plainness or ambigu-
ity of statutory language is determined by reference to the lan-
guage itself, the specific context in which that language is
used, and the broader context of the statute as a whole.” Rob-
inson v. Shell Oil Co., 519 U.S. 337, 341 (1997). Where lan-
guage is susceptible to varying interpretations, we will look
to other sources to determine congressional intent, such as the
canons of construction or a statute’s legislative history. Jonah
R. v. Carmona, 446 F.3d 1000, 1005 (9th Cir. 2006).

[1] Our circuit has addressed the meaning of § 1453(b).
See Abrego Abrego v. Dow Chemical Co., 443 F.3d 676, 684
(9th Cir. 2006); see also Progressive W. Ins. Co. v. Preciado,
479 F.3d, 1014, 1017-18 & n.2 (9th Cir. 2007). In Progressive
West, where the question of removal by a plaintiff/cross
defendant arose, we recognized that § 1453(b) was written to
“eliminate three significant barriers to removal for qualifying
actions.” 479 F.3d at 1017 & n.2. First, § 1453(b) “expressly
‘exempts qualifying actions from the § 1446(b) prohibition of
removal more than 1 year after commencement of the [state-
court] action.’ ” Id. at 1018 n.2 (citation omitted). Second,
§ 1453(b) allows a class action founded on diversity to be
removed even where “any defendant” is a citizen of the state
where the action was filed. This language “eliminates the so-
called ‘home-state defendant’ restriction on removal found in
§ 1441(b).” Palisades Collections, 552 F.3d at 335. Finally,
§ 1453(b) provides that “any defendant” is allowed to remove
an action without obtaining the consent of “all defendants.”
This “overrides the judge-created requirement that each
defendant consent to removal.” Arego Abrego, 443 F.3d at
681. That unanimity requirement had been longstanding, dat-
ing back to the Supreme Court’s decision in Chicago, Rock
Island, & Pacific Railway Company v. Martin, 178 U.S. 245
(1900).

[2] The phrase “any defendant” is used twice in § 1453(b),
first as part of the language eliminating the complete diversity
6044 WESTWOOD APEX v. BURNETT
requirement and second in the clause overriding Martin’s una-
nimity rule. Despite the apparent usage of “any defendant” in
two provisions aimed at eliminating longstanding barriers to
removal, the removing parties nevertheless contend that
§ 1453(b) also authorizes removal by additional counterclaim
defendants. Their argument proceeds by taking § 1453(b)’s
final clause—“such action may be removed by any defendant
without the consent of all defendants”—and erasing the last
six words so that what remains is, according to the removing
parties, “unambiguous” authority that “any defendant” of
whatever kind may remove a class action to federal court. We
believe it inappropriate to construe a statute by reading related
clauses in isolation or taking parts of a whole statute out of
their context. An excerpted clause in a statute cannot be inter-
preted without reference to the statute as whole, nor can it be
understood free from the sentence in which it was included.
See United States v. Morton, 467 U.S. 822, 828 (1984) (“We
do not, however, construe statutory phrases in isolation; we
read statutes as a whole.”); see also Harbison v. Bell, 129 S.
Ct. 1481, 1492 (2009) (Roberts, C.J., concurring) (“’[W]e do
not . . . construe statutory phrases in isolation; we read stat-
utes as a whole.’ This certainly applies to reading sentences
as a whole.” (citation omitted)). Appellants’ focus on the
phrase “any defendant” takes the words out of the context in
which they are written; here the word “any” is being
employed in connection with the word “all” later in the
sentence—“by any . . . without . . . the consent of all [.]” See
also Palisades Collections, 552 F.3d at 335-36 (“[T]he use of
the word ‘any’ juxtaposed with the word ‘all’ was intended to
convey the idea of non-unanimity, not to alter the definition
of the word ‘defendant[.]’ ”). Given that “any” and “all” are
used in relation to one another, they should be read that way
and interpreted consistently with the sentence’s structure.

[3] The argument that § 1453(b) allows for additional
counterclaim defendants to remove depends on Appellants’
faith in the redeeming power of one adjective—“any”. But
this argument not only ignores Twain’s skepticism on the
 WESTWOOD APEX v. BURNETT 6045
value of a modifier2, it also eschews the established meaning
of “defendant” in Chapter 89 of the Judicial Code. Since the
Supreme Court’s decision in Shamrock Oil & Gas Corpora-
tion v. Sheets, 313 U.S. 100 (1941), “defendant” for purposes
of designating which parties may remove a case under § 1441
has been limited by a majority of the courts to mean only
“original” or “true” defendants; “defendant” in Chapter 89,
thereby, excludes plaintiffs and non-plaintiff parties who
become defendants through a counterclaim.

In Shamrock Oil, the Supreme Court interpreted the pre-
decessor statute to § 1441, which permitted removal “ ‘by the
defendant or defendants therein,’ ” to preclude removal by a
state-court plaintiff who “was in point of substance a defen-
dant to the cause of action asserted in the counterclaim.” Id.
at 104-05, 107 (citation omitted). The ability for certain par-
ties to remove a state-court action to a federal forum has
existed since the first Judiciary Act. See St. Paul Mercury
Indem. Co. v. Red Cab Co., 303 U.S. 283, 286-89 (1938) (cit-
ing Judiciary Act of Sept. 24, 1789 § 12, 1 Stat. 73, 79). The
Shamrock Oil Court traced the amendments in removal law
back to the first Judiciary Act and emphasized that, at differ-
ent times, removal was either afforded to “defendants” or,
alternatively, to “either party.” 313 U.S. at 105-06. Because
Congress was presumed to be aware of this statutory history,
the choice of “defendant” was a deliberate exclusion of other
classes of parties. Id. at 107-08 (“We think these alterations
in the statute are of controlling significance . . . .”).

Since Shamrock Oil, the law has been settled that a coun-
terclaim defendant who is also a plaintiff to the original state
action may not remove the case to federal court. See, e.g.,
Progressive West, 479 F.3d at 1018 (“[W]e must conclude
CAFA does not alter the longstanding rule announced in
Shamrock that precludes plaintiff/cross-defendants from
2
“As to the Adjective; when in doubt, strike it out.” Mark Twain, The
Tragedy of Pudd’nhead Wilson 130 (Am. Pub. Co., 1900) (1894).
6046 WESTWOOD APEX v. BURNETT
removing class actions to federal court.”); Am. Int’l Under-
writers (Phil.), Inc. v. Cont’l Ins. Co., 843 F.2d 1253, 1260-61
(9th Cir. 1988) (“[T]he Supreme Court found that Congress
had intended to eliminate the automatic right of a plaintiff to
remove”). Likewise, the Shamrock Oil rule has been extended
to preclude removal by third-party defendants to an action.
See Palisades Collections, 552 F.3d at 332-33 (collecting
cases); First Nat’l Bank of Pulaski v. Curry, 301 F.3d 456,
462-63 (6th Cir. 2002) (“Although Shamrock Oil is not dispo-
sitive of the precise issue before us, it does dictate that the
phrase ‘the defendant or the defendants,’ as used in § 1441(a),
be interpreted narrowly, to refer to defendants in the tradi-
tional sense of parties against whom the plaintiff asserts
claims.”); see also 14C Wright & Miller, et al., Federal Prac-
tice & Procedure § 3730 (2010) (“The federal courts . . . often
speak[ ] of the right to remove as being limited to ‘true’
defendants. . . . [T]hird-party defendants brought into the state
action by the original defendant [cannot] exercise the right to
remove claims to the federal court, although there is some
authority to the contrary in the Fifth [and Eleventh Cir-
cuits].”). While we left the question of third-party removal
without a definitive answer prior to the enactment of CAFA,
O’Halloran v. Univ. of Wash., 856 F.2d 1375, 1381 (9th Cir.
1988) (“[W]e need not reach the interesting question whether
third-party defendants are defendants for purposes of the
removal statute.”), some courts in our circuit recognized that
the majority position prohibited third-party removal. See, e.g.,
Schmidt v. Ass’n of Apartment Owners of Marco Polo Condo.,
780 F. Supp. 699, 702 (D. Haw. 1991).

[4] This accepted understanding of “defendant” as exclud-
ing plaintiff/counterclaim defendants and third-party defen-
dants survived the enactment of § 1453(b). We recognized
this, albeit in dicta, in Progressive West, where we observed
that § 1453(b) “[did] not create an exception to Shamrock’s
longstanding rule that a plaintiff/cross-defendant cannot
remove an action to federal court.” 479 F.3d at 1018. The
Seventh Circuit, endorsing Progressive West, held that
 WESTWOOD APEX v. BURNETT 6047
§ 1453(b)’s use of “any” is not enough to alter the meaning
of the term “defendant.” See First Bank v. DJL Props., LLC,
598 F.3d 915, 917-18 (7th Cir. 2010). As Chief Judge Easter-
brook explained in First Bank:

[T]he word “defendant” has an established meaning
in legal practice, and it is vital to maintain consistent
usage in order to ensure that Members of Congress
(and those who advise them) know what proposed
language will do, and people can understand the
meaning of statutes. . . .

By using a word with an established meaning, Con-
gress produces the established result.

Id. at 917.

The Fourth Circuit, the only other court of appeals to have
addressed the precise issue presented here, also concluded
that § 1453(b) did not overwrite the accepted meaning of “de-
fendant.” See Palisades Collections, 552 F.3d at 334-36. In
Palisades Collections, then-Chief Judge Williams recognized
that “[f]or more than fifty years, courts applying Shamrock
Oil have consistently refused to grant removal power under
§ 1441(a) to third-party defendants.” Id. at 332. Palisades
Collections aptly highlighted that “Congress has shown the
ability to clearly extend the reach of removal statutes to
include counter-defendants, cross-claim defendants, or third-
party defendants” by using the term “party” in other sections
of Chapter 89. See Id. at 333 (citing 28 U.S.C. § 1452(a) (“A
party may remove any claim or cause of action . . .”)). The
Fourth Circuit further explained that § 1453(b) was drafted to
comport with both § 1441 and § 1446, which each employ the
word “defendant.” Id. at 334-35. If the meaning in § 1441(a)
and § 1446 is dictated by Shamrock Oil, and excludes third
parties (i.e., both third-party defendants and counterclaim
defendants), then § 1453(b) does as well. Id. at 335.
6048 WESTWOOD APEX v. BURNETT
The various judicial interpretations of CAFA, including our
own, recognize that “CAFA . . . evidences [a] detailed appre-
ciation of the background legal context.” Abrego Abrego, 443
F.3d at 684; see also Blockbuster, Inc. v. Galeno, 472 F.3d 53,
58 (2d Cir. 2006) (“CAFA’s detailed modifications of exist-
ing law show that Congress appreciated the legal backdrop at
the time it enacted this legislation.”). To the extent there is
any ambiguity about the meaning of “defendant” as it is used
in § 1453(b), the legislative history reveals that Congress’s
purpose in drafting CAFA Section 5 was not animated by
concerns regarding Shamrock Oil or its progeny, nor was
§ 1453(b) drafted with the intention of changing the meaning
of “defendant.” As explained above, § 1453(b) removed three
longstanding obstacles to removal of interstate class actions,
namely “(1) the rule that, in a diversity case, a defendant can-
not remove a case from its home forum, § 1441(b); (2) the
rule that a defendant cannot remove a diversity case once it
has been pending in state court for more than a year,
§ 1446(b); and (3) the rule that all defendants must consent to
removal.” Palisades Collections, 552 F.3d at 331-32.

The report of the Senate Judiciary Committee confirms
Congress’s intent to remove these three longstanding barriers
to removal. The report specifically identifies each barrier to
removal, discusses its potential for abuse, and explicitly states
that § 1453(b) eliminates it. See S. Rep. No. 109-14, at 48-50
(2005), reprinted in 2005 U.S.C.C.A.N. 3, 45-47. Despite the
numerous abuses of the class action system chronicled in its
lengthy legislative history, § 1453(b) omits any mention of
Shamrock Oil or the majority rule limiting the right of
removal to original defendants. Indeed, there is no mention of
“Shamrock Oil” or “third-party” or “counterclaim defendant”
in the entirety of the Senate Report. Given the care Congress
took to modify the three established legal principles discussed
above, we cannot conclude that Congress also intended to
modify the original defendant rule—another established legal
principle—without any mention of its desire to do so. See
Abrego Abrego, 443 F.3d at 684 (“Given the care taken in
 WESTWOOD APEX v. BURNETT 6049
CAFA to reverse certain established principles but not others,
the usual presumption that Congress legislates against an
understanding of pertinent legal principles has particular
force.”); cf. First Bank, 598 F.3d at 917 (“If the drafters of the
2005 Act wanted to negate Shamrock Oil, they could have
written ‘defendant (including a counterclaim defendant)’ or
‘any party’. . . . But they chose the unadorned word ‘defen-
dant,’ a word with a settled meaning.”).

Thus, Appellants ask us to do what Congress did not, by
rewriting the meaning of an accepted and understood term. To
do so and change the meaning of “defendant” in § 1453(b)
would, as Judge Easterbrook phrased it, “make hash of Chap-
ter 89, because § 1453(b) refers to § 1446; unless the word
‘defendant’ means the same thing in both sections, the
removal provisions are incoherent.” First Bank, 598 F.3d at
917. Although it is at times reasonable to give disparate
meanings to the same word used in related statutes, see Envtl.
Def. v. Duke Energy Corp., 549 U.S. 561, 574 (2007), this is
not such a rare occasion. Finally, adhering to the narrow and
historical interpretation of “defendant” does not render the use
of “any” in § 1453(b) redundant; by reading “any defendant”
to mean “any defendant to the original suit,” or “true defen-
dant,” § 1453(b) still achieves CAFA’s purposes of eliminat-
ing the complete diversity rule and Martin’s unanimity rule.

CONCLUSION

[5] While CAFA eliminated several important roadblocks
to removal of class actions commenced in state court, we hold
that 28 U.S.C. § 1453(b) did not change the longstanding rule
that a party who is joined to such an action as a defendant to
a counterclaim or as a third-party defendant may not remove
the case to federal court. Accordingly, the district court’s
order remanding this suit to California state court is
AFFIRMED.
6050 WESTWOOD APEX v. BURNETT
BYBEE, Circuit Judge, concurring:

I join Judge M. Smith’s opinion in full, but I write sepa-
rately to emphasize that Congress may wish to reexamine the
applicability of the original defendant rule in the Class Action
Fairness Act context.

In this case, what started as a $20,000 debt-collection case
has now morphed into a complex class action involving
approximately 7,000 counter-plaintiffs and an amount in con-
troversy in the hundreds of millions of dollars. The original
action filed by Westwood Apex against Jesus Contreras has
been consumed by Contreras’s counterclaim. The original
debt is now a sideshow, an insignificant offset to anything
recovered by the class. It is thus counterintuitive that CAFA
does not authorize the removal of this suit but, for the reasons
explained in the principal opinion, the court has properly
adopted the original defendant rule as CAFA’s own.

Under the original defendant rule, as adopted by a majority
of the circuits, only an original defendant (i.e., a defendant
named in the pleading that commenced the action) may
remove a case to federal court. Although courts derived this
rule from Shamrock Oil & Gas Corporation v. Sheets, 313
U.S. 100 (1941), Shamrock Oil does not compel it. Shamrock
Oil held that an original plaintiff against whom the defendant
asserts a permissive counterclaim may not remove the suit to
federal court on the grounds of diversity of citizenship
because, by voluntarily choosing to commence his action in
state court, the original plaintiff thereby submitted himself to
the state court’s jurisdiction. Shamrock Oil, 313 U.S. at
106-07. As the Supreme Court explained nearly 150 years
ago, original plaintiffs who “voluntarily resort[ ] . . . to the
State court . . . [are] bound to know of what rights the defen-
dants to their suit might avail themselves under [that State’s
rules of civil procedure]. Submitting themselves to [this]
jurisdiction they submit[ ] themselves to it in its whole
extent.” West v. Aurora City, 73 U.S. 139, 142 (1867). Over
 WESTWOOD APEX v. BURNETT 6051
time, the holding of Shamrock Oil—that an original plaintiff
could not remove the case after a counterclaim was filed—
transformed into a rule that only the original defendant could
remove the case. See Palisades Collections LLC v. Shorts,
552 F.3d 327, 332-33 (4th Cir. 2008) (citing cases); First
Nat’l Bank of Pulaski v. Curry, 301 F.3d 456, 461-62 (6th Cir.
2002).

Unlike an original plaintiff who, by voluntarily choosing to
bring his action in state court, thereby submits himself to the
state court’s jurisdiction, a third-party defendant or an addi-
tional counterclaim defendant has no say in the chosen forum.
This defendant “never voluntarily submitted [himself] to the
jurisdiction of the state court,” is “dragged into state court by
service of process the same way that any other ‘defendant’ is
brought into court,” and “is as much a defendant as if the case
had been originally brought against [him].” Ford Motor
Credit Co. v. Aaron-Lincoln Mercury, 563 F. Supp. 1108,
1113 (N.D. Ill. 1983). In other words, this defendant “has
been sued in the only meaningful sense of the word—[he] has
been haled into court involuntarily and must defend an action
for relief against [him].” Id.

Here, these concerns are even more acute because Contr-
eras’s counterclaim is unrelated to the original debt-collection
action instituted by the plaintiff. “[I]t is [thus] difficult to see
what practical effect or even conceptual distinction exists
between a defendant defending against an original claim and
a plaintiff defending against a counterclaim.” Recent Devel-
opment, A Plaintiff’s Power to Remove to Federal Court, 53
COLUM. L. REV. 282, 283 (1953). Additionally, even the appli-
cation of Shamrock Oil’s rationale to the original plaintiff
may be questioned under these circumstances: that Westwood
Apex “[brought its] claim in state court does not evidence
acquiescence to state court jurisdiction of [an unrelated] coun-
terclaim when, as in the instant case, that is the only available
forum because [its] claim is below the federal jurisdictional
amount.” Id.
6052 WESTWOOD APEX v. BURNETT
Until today, our circuit had never adopted the original
defendant rule; that is, we had not yet decided whether to
extend the Shamrock Oil rule to cases in which the removing
party is either a third-party defendant or an additional coun-
terclaim defendant. The closest we came was remarking in a
pre-CAFA case that it presented an “interesting question.”
O’Halloran v. Univ. of Wash., 856 F.2d 1375, 1381 (9th Cir.
1988). We extend Shamrock Oil today, but ironically we have
no occasion to reflect on whether Shamrock Oil’s rationale
warrants its extension. Because of CAFA’s unique context, it
suffices to recognize that the original defendant rule is an
established legal principle (whether or not we have estab-
lished such a principle in our circuit), see Palisades Collec-
tions, 552 F.3d at 332 (“For more than fifty years, courts
applying Shamrock Oil have consistently refused to grant
removal power under § 1441(a) to third-party defendants.”),
that Congress understood established legal principles at the
time it enacted CAFA, see Abrego Abrego v. The Dow Chemi-
cal Co., 443 F.3d 676, 684 (9th Cir. 2006) (stating that
“CAFA . . . evidences detailed appreciation of the background
legal context”), and that Congress was careful to make clear
when it was eliminating an established legal principle, see
First Bank v. DJL Props., 598 F.3d 915, 917 (7th Cir. 2010)
(“If the drafters of the 2005 Act wanted to negate Shamrock
Oil, they could have written ‘defendant (including a counter-
claim defendant)’ or ‘any party’. . . . But they chose the
unadorned word ‘defendant,’ a word with a settled mean-
ing.”).

The facts of our case, however, highlight the problems with
this approach. Here, the removing parties did not choose to
litigate this lawsuit in state court; they are not original parties
and therefore not within a close reading of Shamrock Oil.
Rather, they were forced into state court when Contreras
transformed a $20,000 debt-collection lawsuit into an unre-
lated multi-million dollar class action by filing a counterclaim
not only against the original plaintiff, but also against the
removing parties. Had Contreras filed this class action sepa-
 WESTWOOD APEX v. BURNETT 6053
rately and not by means of a counterclaim, the defendants
could have removed the case from state court to federal court
under 28 U.S.C. § 1453; but because Contreras did not do so,
they must now, by happenstance, litigate in state court.

Given that “Congress expressly intended CAFA to expand
federal diversity jurisdiction over class actions,” Lowery v.
Alabama Power Co., 483 F.3d 1184, 1197 (11th Cir. 2007),
it seems strange that Congress would have wanted to funnel
class actions filed by means of an original complaint into fed-
eral court but keep those filed by means of a counterclaim in
state court. But as the court correctly concludes, CAFA
achieves this particular result, and if Congress does not like
it, Congress should rethink the rule.