In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 15‐3332
SASKATCHEWAN MUTUAL INSURANCE CO.,
Plaintiff‐Appellant,
v.
CE DESIGN, LTD.,
Defendant‐Appellee.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 15 C 4921 — John Z. Lee, Judge.
____________________
ARGUED JANUARY 5, 2017 — DECIDED JULY 26, 2017
____________________
Before WOOD, Chief Judge, and MANION and WILLIAMS, Cir‐
cuit Judges.
WOOD, Chief Judge. Saskatchewan Mutual Insurance (SMI)
is trying to enforce a Canadian judgment against CE Design
in federal court. That judgment resulted from CE Design’s un‐
successful effort to enforce an earlier Illinois judgment against
SMI in Saskatchewan. The question before us is whether the
federal courts—the third set of tribunals that have played host
2 No. 15‐3332
to this decade‐long legal battle—have jurisdiction over the lat‐
est round. We conclude that the answer is no—an outcome
that is especially appropriate given the comity concerns that
pervade this litigation.
I
CE Design is an Illinois corporation whose business now
appears to center on litigating claims under the federal Tele‐
phone Consumer Protection Act (TCPA), 47 U.S.C. § 227. It
brought the present suit as a class action in Illinois state court
against Homegrown Advertising, which was then a Canadian
marketing firm; the complaint accused Homegrown of send‐
ing junk faxes to CE Design in violation of Illinois law and the
TCPA. The two sides settled in February 2007 for $5 million
plus interest and costs. Several points about the settlement are
noteworthy. First, Homegrown failed to notify its insurer,
SMI, about the litigation, and instead hired its own counsel in
Illinois. SMI learned of the case only in May 2006. Second—
and one suspects related to point one—the February 2007 set‐
tlement was structured to be enforceable only against Home‐
grown’s commercial liability policy with SMI.
In March 2007, CE Design (to which Homegrown had as‐
signed all its rights under the policy) filed a citation to dis‐
cover assets in the Lake County, Illinois, circuit court in an ef‐
fort to recover some or all of the judgment from SMI. At that
point Rod Rath, SMI’s Canadian attorney, wrote a letter to the
circuit court advising that SMI was denying coverage. SMI
took no other steps to fight the citation on the merits. On
May 3, 2007, the Illinois court entered judgment for CE De‐
sign. Skirmishes over the settlement have continued in the
state courts since that time. (Years later, Homegrown was dis‐
No. 15‐3332 3
solved under the law of Saskatchewan, but that is of no mo‐
ment, since CE Design has been the real party in interest since
the assignment.)
Our concern is with a subplot of the wider story. As the
state court litigation unfolded, CE Design decided to try
another tack: enforcement of the Illinois judgment in
Saskatchewan, where SMI is based. The gambit failed. On
January 8, 2008, the Queen’s Bench, which is the court of first
instance in the province, concluded that SMI had not received
sufficient notice of the Illinois judgment and thus that it was
unenforceable. The Saskatchewan court also awarded SMI
“costs … in respect of this application … [of] $1,000.” That is
where matters stood for seven years, but more was to come.
In June 2015, SMI revived the issue by filing a motion to
enforce the Saskatchewan judgment in federal district court.
We can assume that SMI is interested in more than the $1,000
(Canadian) to which the Saskatchewan judgment entitled it;
recognition and enforcement of the Saskatchewan judgment
may undermine the Lake County settlement. Or it may not.
We may reach that potentially difficult question only if the
district court had subject‐matter jurisdiction over SMI’s
action. We thus turn immediately to that issue, as did the
district court.
Two possible bases for jurisdiction have been advanced:
the Class Action Fairness Act (CAFA), 28 U.S.C. § 1332(d), and
the alienage branch of diversity jurisdiction, 28 U.S.C.
§ 1332(a)(2). The district court found CAFA inapplicable be‐
cause the class is the defendant in this suit, and this court has
held that CAFA applies only to plaintiff classes. Travelers Prop.
Cas. v. Good, 689 F.3d 714, 723 (7th Cir. 2012). As for diversity
jurisdiction, the court concluded that no individual class
4 No. 15‐3332
member could satisfy the $75,000 amount‐ in‐controversy re‐
quirement, and none of the exceptions to the general prohibi‐
tion on aggregating claims applied. See Snyder v. Harris,
394 U.S. 332 (1969). Those rulings ended the case in the district
court.
II
We begin with CAFA, which authorizes federal courts to
hear class actions “if the class has more than 100 members, the
parties are minimally diverse, and the ‘matter in controversy
exceeds the sum or value of $5,000,000.’” Standard Fire Ins. Co.
v. Knowles, 133 S. Ct. 1345, 1348 (2013) (quoting § 1332(d)(2)).
SMI easily satisfies the first two requirements. The proposed
class has 23,541 members, and there is minimal diversity be‐
cause CE Design is incorporated in and has its principal place
of business in Illinois, and SMI is an insurance company or‐
ganized under the law of Saskatchewan. The amount in con‐
troversy is less clear cut. The settlement was for exactly $5 mil‐
lion, a sum which by definition does not exceed $5 million.
Nor would the $1,000 (Canadian) award change things, since
the Queen’s Bench said it was for “costs,” and CAFA applies
only when “the matter in controversy exceeds the sum or
value of $5,000,000, exclusive of interest and costs.”
§ 1332(d)(2).
These questions, however, are beside the point. Even if we
thought that the amount‐in‐controversy requirement had
been satisfied, SMI faces a more fundamental obstacle: CAFA
“applies only where there is a plaintiff class, not a defendant
class.” Good, 689 F.3d at 723. As the case reached the federal
court, SMI is the plaintiff and the class is the defendant. A
straightforward application of Good takes CAFA jurisdiction
No. 15‐3332 5
off the table. Good’s striking resemblance to this case under‐
scores the point. There, a retailer settled with a class for
$16 million plus costs but stipulated that the sum could be
paid only from its insurance policies. The class then tried to
enforce the settlement against the insurer in Illinois court, and
the insurer tried to block the effort by filing a separate action
for a declaratory judgment of non‐coverage in federal court.
In the latter case, the insurer alleged diversity and CAFA ju‐
risdiction. We concluded that neither one was available and
dismissed for lack of jurisdiction. Id. at 716–17, 723, 726.
Good’s application of CAFA is fully in line with the statu‐
tory text. Although Federal Rule of Civil Procedure 23 allows
“[o]ne or more members of a class [to] sue or be sued as repre‐
sentative parties” on behalf of a class, the key jurisdictional
language in CAFA speaks only of plaintiff classes. Compare
FED. R. CIV. P. 23(a) (emphasis added) with 28 U.S.C.
§ 1332(d)(2). Nowhere in section 1332(d)(2) does the phrase
“defendant class” appear, and references to the “defendant”
or “defendants” consistently place them in opposition to the
“class.” See, e.g., § 1332(d)(2)(A) (“any member of a class of
plaintiffs is a citizen of a State different from any defendant”).
If we had any remaining doubts, the enacted findings that ac‐
companied CAFA would resolve them. Congress stressed that
“abuses of the class action device” harmed “the free flow of
interstate commerce,” and that state courts were “bias[ed]
against out‐of‐State defendants.” Class Action Fairness Act of
2005, Pub. L. 109‐002, 119 Stat 4 (2005); see also Edward A.
Purcell, Jr., The Class Action Fairness Act in Perspective: The Old
and the New in Federal Jurisdictional Reform, 156 U. Pa. L. Rev.
1823, 1876–77 (2008) (“CAFA’s greatest practical significance
lay in the way it tilted the playing field even more sharply in
favor of corporate defendants … .”). It is true, as SMI stresses,
6 No. 15‐3332
that Congress wanted courts to read CAFA broadly. Appert v.
Morgan Stanley Dean Witter, Inc., 673 F.3d 609, 618 (7th Cir.
2012); see Dart Cherokee Basin Operating Co., LLC v. Owens,
135 S. Ct. 547, 554 (2014). But that does not mean that we can
stray from the plain language of the statute.
Perhaps recognizing this, SMI has a fallback argument: it
asserts that it is the de facto defendant and so CAFA applies
by its terms. This is so, it says, because it was the defendant in
the Saskatchewan action and it is merely enforcing the result‐
ing judgment—a ministerial matter that preserves the judg‐
ment’s substance, including the parties’ positions relative to
the “v.” We understand the point, but the reality remains that
it was SMI that invoked the federal court’s authority. And as
this case well illustrates, registration of a judgment (or a
stand‐alone action on a foreign judgment) is not always a rote
administrative task. Cf. Good, 689 F.3d at 723–26 (deeming
class’s citation action against insurer an independent action).
Counsel for SMI asserts that judgments entered by the
courts of Canada (or other foreign countries) are entitled to
“full faith and credit” in the United States, but the matter is
more complicated than that. The law of Illinois governs
recognition and enforcement of foreign judgments in state
court, and Illinois has enacted the Uniform Foreign Money‐
Judgments Recognition Act, 735 ILCS 5/12‐618 et seq., and the
Uniform Enforcement of Foreign Judgments Act, 735 ILCS
5/12‐650 et seq. Those statutes confer on judgments of foreign
countries the same status as judgment of sister states, and
grant those foreign judgments full faith and credit. CE Design
Ltd. v. Healthcraft Prods., Inc., 2017 IL App. (1st) 143000, ¶¶ 20–
21. This is a matter of legislative grace on the state’s part. It is
notable that all efforts at the international level to create a
No. 15‐3332 7
multilateral convention providing rules for recognition and
enforcement of civil money judgments in signatory countries
have failed so far. See HAGUE CONFERENCE ON PRIVATE
INTERNATIONAL LAW, EXPLANATORY NOTE PROVIDING
BACKGROUND ON THE PROPOSED DRAFT TEXT AND IDENTIFYING
OUTSTANDING ISSUES (2016), https://assets.hcch.net/docs/
e402cc72‐19ed‐4095‐b004‐ac47742dbc41.pdf (noting that
work began in 1992, and discussing a new March 2016 draft).
Moreover, the Illinois courts permit an inquiry into the
jurisdiction of the rendering court, as well as into fraud in the
inducement. See Healthcraft Prods., 2017 IL App. (1st) 143000,
¶ 23.
Federal courts sitting in diversity usually apply recogni‐
tion and enforcement rules of the state in which the federal
court sits. See generally 18B CHARLES ALAN WRIGHT, ARTHUR
R. MILLER & EDWARD H. COOPER, FEDERAL PRACTICE AND
PROCEDURE § 4473 (2d ed. 2002). Cf. Semtek Int’l Inc. v. Lockheed
Martin Corp., 531 U.S. 497 (2001) (federal law on the effect of a
federal diversity judgment borrows the state‐law rule). (In
federal‐question cases, federal common law provides the
rule.1) On the assumption that the federal courts of Illinois
1 The leading federal case on recognition and enforcement of foreign‐
country judgments remains Hilton v. Guyot, 159 U.S. 113 (1895). Although
Hilton held that a foreign judgment rendered in accordance with regular
procedures is entitled to recognition and enforcement in U.S. courts, it
qualified that rule with a reciprocity requirement. Shortly thereafter, the
New York Court of Appeals held that the effect given to foreign judgments
raises a question of private law on which it was entitled to chart its own
course. See Johnston v. Compagnie Generale Transatlantique, 152 N.E. 121
(N.Y. 1926). It did so, and rejected the reciprocity rule. At this point, a ma‐
jority of U.S. jurisdictions do not require reciprocity. See GARY B. BORN &
8 No. 15‐3332
would follow Illinois law in this case—and there is no reason
to think that an independent federal rule would be more gen‐
erous than the state law—SMI still had real work to do as the
plaintiff seeking recognition and enforcement. Evans Cabinet
Corp. v. Kitchen Intʹl, Inc., 593 F.3d 135, 140–41 & n. 6 (1st Cir.
2010) (listing cases).
SMI’s position finds little support in decided cases; it has
cited only two district court decisions, and they are of dubious
relevance: Juneau Spruce Corp. v. International Longshoremenʹs
& Warehousemen’s Union, 128 F. Supp. 697 (D. Haw. 1955); and
Sallie Mae Servicing v. Lee, 2016 WL 613963 (D. Ariz. Feb. 16,
2016). Juneau Spruce describes registration as a “ministerial
act” that is “different from a suit upon a judgment which is a
new and independent action.” 128 F. Supp. at 699. But the con‐
text was the usual one, in which one district court (in Hawaii),
was deciding what to do with a judgment from another dis‐
trict court (in Alaska); making the case even less helpful is the
fact that at the time both Alaska and Hawaii were territories,
and so only one sovereign—the United States—was involved.
Juneau Spruce had nothing to do with the proper way to han‐
dle judgments from foreign courts. Lee is no better, as it in‐
volved the procedure used when a state‐court judgment
(there, from Arizona) is assigned to the United States. 2016
WL 613963, at *2–4. Even assuming that full faith and credit
applies, nothing requires the second court to follow the align‐
ment of parties that was before the foreign court. From an ad‐
ministrative point of view, it is best to evaluate the new case
on its own facts, which is what the district court did here.
PETER B. RUTLEDGE, INTERNATIONAL CIVIL LITIGATION IN UNITED STATES
COURTS at 1031 (4th ed. 2007).
No. 15‐3332 9
Comity considerations support the approach we are tak‐
ing here. Comity “counsels lower federal courts to resist en‐
gagement in certain cases falling within their jurisdiction” out
of “a proper respect for state functions … .” Levin v. Commerce
Energy, Inc., 560 U.S. 413, 421 (2010) (internal quotation marks
omitted). The Supreme Court has “repeatedly cautioned” that
“[s]tatutes conferring federal jurisdiction … should be read
with sensitivity to ‘federal‐state relations’ and ‘wise judicial
administration.’” Id. at 423 (quoting Quackenbush v. Allstate
Ins. Co., 517 U.S. 706, 716 (1996)). CAFA is such a jurisdictional
statute, and it seems to us neither sensitive nor wise for fed‐
eral courts to insert themselves into litigation that has busied
the Illinois and Saskatchewan courts for a considerable time.
SMI evidently does not like how the latest phase of the case is
progressing, but its remedy lies in an appeal to a higher Illi‐
nois court, not in using federal authority to transmute a $1,000
(Canadian) award into a $5 million (US) trump card. The bot‐
tom line is this: When litigation has dragged on for a decade
across two countries and three jurisdictions, comity and com‐
mon sense both counsel forbearance on the part of the federal
courts.
III
That leaves alienage jurisdiction, which requires complete
diversity and an amount in controversy that “exceeds the sum
or value of $75,000, exclusive of interest and costs.” § 1332(a).
There is complete diversity, as we noted earlier. The record
does not reveal, however, even a chance that at least one class
member has put more than $75,000 in controversy. Unlike
CAFA, in ordinary diversity cases “the general rule is that the
claims of multiple litigants cannot be aggregated to reach the
jurisdictional amount in controversy.” Good, 689 F.3d at 717.
10 No. 15‐3332
Under the circumstances, SMI can invoke diversity jurisdic‐
tion only if there is an applicable exception that permits ag‐
gregation. As in Good, the only plausible candidate is the rule
that the claims of co‐parties (here, the class members) may be
aggregated “when they have a ‘common and undivided inter‐
est’ in a ‘single title or right.’” Id. at 718 (quoting Snyder,
394 U.S. at 335). Good explained that interests are “common
and undivided” only if “each claim (1) is part of a ‘common
fund’ and (2) could not be adjudicated on an individual basis
without affecting the interests of the other claimants.” Id. at
721.
It is possible that SMI satisfies the second criterion. The
class members are entitled to a pro rata share of the settlement
award, and so the amount each member receives will be a
function of the size of the class. In that sense, their individual
claims are interdependent. SMI does not, however, satisfy the
first requirement. A “common fund” exists when “plaintiffs
share[] a preexisting (pre‐litigation) interest in the subject of
the litigation.” Id. (alteration in original) (citation omitted). In
Good, as in our case, the class members’ claim was for the pol‐
icy limits of an insurance policy—a claim that at first blush
might seem to qualify as a “common fund.” Yet Good never‐
theless found that the class members lacked the requisite pre‐
litigation interest because their claims “arose from separate
transactions,” namely, the printing of a receipt or receipts by
the defendant retailer. Id. The dispositive issue was the “na‐
ture of the right asserted,” not whether vindication would
“lead to a single pool of money that will be allocated among
the plaintiffs.” Id. at 722 (quoting Gilman v. BHC Sec., Inc.,
104 F.3d 1418, 1427 (2d Cir. 1997)).
No. 15‐3332 11
Though the offending papers here are faxes instead of re‐
ceipts, that detail does not matter. Each class member’s claim
rests on a specific fax or faxes, and thus each claim stems from
a separate transaction. It makes no difference that the class
members now seek to satisfy their disparate claims from a sin‐
gle source. Nor are we persuaded by SMI’s attempt to distin‐
guish Good factually by alleging the fax problem was the re‐
sult of “a single fax blast campaign.” Even granting that the
faxes were sent simultaneously from one source, they were
received by 23,541 different entities. That defeats a finding of
“common fund” for aggregation purposes.
IV
Neither CAFA nor conventional diversity jurisdiction em‐
powers us to hear this matter, and so we AFFIRM the judgment
of the district court dismissing this case for lack of subject‐
matter jurisdiction.