Braud v. Transport Service Co.

United States Court of Appeals
Fifth Circuit
F I L E D
In the April 6, 2006
United States Court of Appeals Charles R. Fulbruge III
for the Fifth Circuit Clerk
_______________

m 06-30088
_______________

PAMELA BRAUD; IBRAHIM AUTAMARI; NICOLE CALVIN; DAVID JACKSON; DJUANNA
KNAPPER; DERRYL DUNN, SR.; TROY LAMBERT,
INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED;

Plaintiffs-Appellees,

VERSUS

TRANSPORT SERVICE COMPANY OF ILLINOIS,

Defendant-Appellant.

_________________________

Appeal from the United States District Court
for the Eastern District of Louisiana
_________________________
Before SMITH, GARZA, and PRADO, effective date, which is February 18, 2005.
Circuit Judges. Transport Service Company of Illinois
(“Transport”), pursuant to 28 U.S.C.
JERRY E. SMITH, Circuit Judge: § 1453(c), filed on December 16, 2005, a
timely application for leave to appeal,1 which
This case presents an issue of first impres- we granted on January 27, 2006.2
sion for this court: whether amending a com-
plaint to add a defendant “commences” a new II.
suit under the Class Action Fairness Act of Section 9 of CAFA provides that “[t]he
2005 (“CAFA”), Pub. L. 109-2, 119 Stat. 4. amendments made by this Act shall apply to
We answer in the affirmative and, for that rea- any civil action commenced on or after the
son, we reverse the district court’s order of re- date of enactment of this Act.” 119 Stat. at
mand, and we remand to that court for further
proceedings..
1
CAFA’s interlocutory appeal provision per-
I. mits a court of appeals to “accept an appeal from
On August 30, 2004, Pamela Braud and an order of a district court granting or denying a
certain other plaintiffs (the “Braud plaintiffs”) motion to remand a class action to the State court
filed a “Class Action Petition for Damages” in from which it was removed if application is made
state court. On April 8, 2005, the Braud plain- to the court of appeals not less than 7 days after
tiffs amended their petition to name as an ad- entry of the order.” 28 U.S.C. § 1453(c)(1) (2005
ditional defendant Ineos Americas, LLC (“In- Supp.). This provision creates an exception to the
eos”), which plaintiffs contend was the owner general rule that remand orders are not appealable.
See Patterson v. Dean Morris, L.L.P., No. 06-
and co-shipper of the chemical that allegedly
30215, 2006 U.S. App. LEXIS 7174, at *2-*3 (5th
spilled. Ineos was served with the original and
Cir. Mar. 22, 2006).
supplemental class action petition on April 19,
2005. 2
CAFA, in 28 U.S.C. § 1453(c)(2), provides
that once we accept an appeal, we must “complete
On May 19, 2005, Ineos timely removed the all action . . . not later than 60 days after the date
action to federal court, basing removal juris- on which such appeal was filed, unless an exten-
diction on CAFA. The Braud plaintiffs are citi- sion is granted under paragraph (3).” Section
zens of Louisiana, and Ineos is a foreign cor- 1453(c)(3)(B), in turn, allows us to grant an ex-
poration authorized to do business in Louisiana. tension of the 60-day period for up to 10 days “for
good cause shown and in the interests of justice.”
On June 17, 2005, the Braud plaintiffs By order of March 7, 2006, we granted plaintiffs’
moved to remand to state court, and on July 12, motion for a 10-day extension of the final disposi-
tion date to April 7, 2006.
2005, they filed a purported unopposed motion
to dismiss Ineos. By order entered on Decem- Our disposition thus meets CAFA’s require-
ber 9, 2005, the district court remanded, finding ment of expedited consideration. The period for
that CAFA does not apply because the Braud consideration of an appeal is measured from the
plaintiffs had filed their initial complaint before date (January 27) on which we granted the appli-
CAFA’s effective date, despite the fact that In- cation for leave to appeal. Patterson, 2006 U.S.
eos was not named as a defendant until after the App. LEXIS, at *5-*10. The 70th day after Janu-
ary 27 is April 7.

2
14. To determine whether a lawsuit was com- occurs either when the suit is filed or when the
menced on or after February 18, 2005, the dis- complaint or summons is served, but in Con-
trict court relied on Federal Rule of Civil Pro- necticut the action commences by service.5 In
cedure 3, which, as plaintiffs correctly point Louisiana, a suit is commenced by filing of a
out, reads that “[a] civil action is commenced pleading presenting the demand to a court of
by filing a complaint with the court.” Despite competent jurisdiction. LA. C.C.P. art. 421.
the logical of this argument, the courts of ap- Therefore, the Braud plaintiffs’ original action
peals that have examined the issue have un- commenced on August 30, 2004.
animously held that when a lawsuit is initially
“commenced” for purposes of CAFA is deter- A distinct issue, however, is whether an
mined by state law.3 We agree. amendment of the complaint through the
addition of a new defendant “commences” a
As the court in Bush explained, CAFA new suit for purposes of CAFA. The defen-
broadens diversity jurisdiction for certain qual- dants urge us to employ the reasoning of
ifying class actions and authorizes their re- Knudsen I, 411 F.3d at 807, and Schillinger v.
moval, and thus, “given its context, CAFA’s Union Pac. R.R., 425 F.3d 330 (7th Cir.
‘commenced’ language surely refers to when 2005), to hold that the post-CAFA amendment
the action was originally commenced in state of a pre-CAFA complaint by adding a new
court.” Bush, 425 F.3d at 688. Furthermore, defendant “commences” a new suit. Plaintiffs
when an action is commenced in state court is respond that (1) CAFA was not meant to be
determined based on the state’s own rules of retroactive; (2) Knudsen I is inapposite, and
procedure.4 In most states “commencement” any language that may support appellants’
position is “mere dicta;” (3) even applying
Knudsen I’s reasoning, no new suit would
3 commence here, because the addition of Ineos
See Bush v. Cheaptickets, Inc., 425 F.3d 683,
689 (9th Cir. 2005); Natale v. Pfizer, Inc., 424 F.3d “related back” to the original complaint; and
43, 44 (1st Cir. 2005); Plubell v. Merck & Co., 434 (4) in any event, Ineos’s dismissal after re-
F.3d 1070, 1071-72 (8th Cir. 2006); Pritchett v. moval and before the ruling on the motion to
Office Depot, Inc., 420 F.3d 1090 (10th Cir. 2005); remand ousted the court of subject matter
Knudsen v. Liberty Mut. Ins. Co. (“Knudsen I”), jurisdiction.
411 F.3d 805 (7th Cir. 2005).
A.
4
Pace v. DiGuglielmo, 544 U.S. 408 (2005) Plaintiffs’ argument regarding “retroactiv-
(looking to state law to determine when a pleading ity” is without merit. Although CAFA is
has been “properly filed” for purposes of a federal meant to apply only to suits “commenced” af-
time limit). See also Herb v. Pitcairn, 324 U.S. ter the effective date, and courts apply a pre-
117, 120 (1945) (“Whether any case is pending in
the Illinois courts is a question to be determined by
Illinois law”); Bush, 425 F.3d at 688 (noting 28
U.S.C. § 1446(b)’s similar reference to “commence- 4
(...continued)
ment” of a suit and stating that “a federal court (quoting Cannon v. Kroger Co., 837 F.2d 660,
must honor state court rules governing commence- 664 (4th Cir. 1988)).
ment of civil actions when an action is first brought
5
in state court and then removed to federal court”) See Bush, 425 F.3d at 688, and cases cited
(continued...) therein.

3
sumption against the retroactivity of a statute cussed by that court.
absent a plain congressional intent to the con-
trary, Landgraf v. USI Film Prods., Inc., 511 First, the district court’s remark that
U.S. 244, 280 (1994), the issue is not whether “there’s no specific language in the CAFA
CAFA should apply to suits “commenced” be- legislation itself . . . that would support that
fore February 18, 2005, but whether the addi- position that if a new party was added [post-
tion of a new defendant “commences” a new CAFA to a pre-CAFA case then] CAFA
suit. That is, if under the applicable decisional would apply” misses the mark.7 Precisely
law, Ineos’s addition “commenced” a new suit because CAFA does not define “commence-
on April 8, 2005, the removal would not be ment” of an action, it is obvious that CAFA is
retroactive, because the suit would be consid- not intended to replace caselaw deciding
ered “commenced” on or after February 18, when a lawsuit is considered “commenced” as
2005. to a new defendant.

B. The caselaw holds that generally “a party
Plaintiffs’ argument that Knudsen I and the brought into court by an amendment, and who
other cases cited by defendants are inapposite has, for the first time, an opportunity to make
and provide mere “dicta” is also misplaced. defense to the action, has a right to treat the
Even if the statements are dicta, they are per- proceeding, as to him, as commenced by the
suasive; moreover, the court in Schillinger ex- process which brings him into court.” United
plained that the defendants “correctly observe States v. Martinez, 195 U.S. 469, 473 (1904)
that in general, ‘a defendant added after Febru- ((citing Miller v. M’Intyre, 31 U.S. 61
ary 18 could remove because suit against it
would have been commenced after the effective
date[.]’” Schillinger, 425 F.3d at 333 (quoting 7
Further, as explained in Werner v. KPMG
Schorsch v. Hewlett-Packard Co., 417 F.3d LLP, 2006 WL 295394 (S.D. Tex. Feb. 7, 2006),
748, 749 (7th Cir. 2005)). The Schillinger which undertook an exhaustive analysis of the
court noted that this principle was inapplicable caselaw on this issue, “most courts examining
to the defendant in that case because his addi- post-CAFA pleading amendments in a suit pending
tion to the amended complaint was a “scriv- pre-CAFA recognize that such amendments can
ener’s error.” Id. commence a ‘new’ lawsuit and create federal re-
moval jurisdiction. Moreover, the court in Weekley
C. v. Guidant Corp., 392 F. Supp. 2d 1066 (E.D.
We agree with the Seventh Circuit that Ark. 2005), which held, like the district court in the
amendments that add a defendant “commence” instant case, that a class action is “commenced”
the civil action as to the added party.6 We only once, when the original complaint is filed, has
been rejected by implication by the circuit court
reach this conclusion based on two considera-
from that jurisdiction. In Plubell v. Merck & Co.,
tions, of which only the latter has been dis- 434 F.3d 1070 (8th Cir. 2006), the court adopted
the reasoning employed by the Seventh Circuit and
examined whether the amended pleading related
6
See Schorsch, 417 F.3d at 749 (noting that “a back to the filing of the original complaint. Some
defendant added after February 18 could remove be- authorities (none at the circuit level) support plain-
cause suit against it would have been commenced tiffs’ position. E.g., Robb v. Stericycle, Inc., 2005
after the effective date”). WL 2304475 (W.D. La. Aug. 19, 2005).

4
(1832)). As the Miller Court explained, this is [I]f the case stated by the initial pleading is
because it “would be a novel and unjust princi- not removable, a petition for removal may
ple to make the defendants responsible for a be filed within thirty days after receipt by
proceeding of which they had no notice.” the defendant, through service or other-
Miller, 31 U.S. at 64.8 Therefore, if a defen- wise, of a copy of an amended pleading,
dant was added post-CAFA, the suit com- motion, order or other paper from which it
mences post-CAFA as to him. may first be ascertained that the case is one
which is or has become removable.
Second, we agree with the Knudsen I court
that the addition of a new defendant “opens a 28 U.S.C. § 1446(b). Therefore, as to the new
new window of removal” under 1446(b).9 Sec- defendant, removability is determined as of the
tion 1446(b) indicates that a case that was pre- date of receipt of service of the amended
viously non-removable can become removable complaint, not as of the date on which the
when a new party is added. As explained in original suit was filed in state court.
WRIGHT, MILLER & COOPER, supra, § 3732 at
311-48, § 1446(b) “supplements the thirty-day Furthermore, under CAFA a new defendant
removal period described in the first paragraph may remove regardless of whether it was add-
of the provision,” which covers only the period ed more than one year after the original com-
for effecting removal to federal court following plaint was filed in state court. Therefore, the
the “receipt or filing” of the initial pleading. district court incorrectly pointed out that the
addition of a new party does not commence a
That is, if an original complaint is not new suit because (as the district court improp-
amended, removal must be determined based erly reasoned) Congress “give[s] you a specific
only on the law and facts as to removability at time period within which you must remove or
the time of filing or receipt of the initial plead- forever lose your right to remove without re-
ing under § 1446(b) ¶ 1. If the complaint is gard to if you happen to add a partySSif the
amended, however, § 1446(b) ¶ 2 provides that plaintiff decides to add a party a year and a
the new defendant has a new window to re- half from now, your time period doesn’t run
move as of the date of receipt of service of the again.”
amended complaint:
Instead, a new defendant can remove even
if the plaintiff decided to add it more than one
8
See also Adams v. Fed. Materials Co., No. year after the initial suit. Therefore, there is
5:05-CV-90-R, 2005 WL 1862378 (W.D. Ky. July no indication that the time when the initial suit
28, 2005) (relying on, inter alia, Martinez and was filed has any relevance as to when an ac-
Miller to hold that adding a defendant after CAFA’s tion “commences” under CAFA for an amend-
effective date allows that defendant to remove, ment adding a new defendant. Rather, the cor-
because the civil action has newly commenced as to
rect approach is that used in Adams, Martinez,
it).
and Miller, which, because of concerns re-
9
Knudsen I, 411 F.3d at 807 (citing 28 U.S.C. garding notice and limitations, looked at com-
§ 1446(b) and CHARLES ALAN WRIGHT,ARTHUR R. mencement as to a new defendant as of the
MILLER & EDWARD H. COOPER, 14C FEDERAL date of service of the amended pleading (or
PRACTICE AND PROCEDURE § 3732, at 311-48 (3d receipt of that pleading under 1446(b)).
ed.1998)).

5
 Thus, although “an amendment of the com- does not relate back to the filing of the original
plaint will not revive the period for removal if a complaint unless Federal Rule of Civil Pro-
state court case previously was removable but cedure 15(c)(3) applies. 12 Also, under
the defendant failed to exercise his right to do
so,” a different result generally is reached if the
12
pleading amendment provides (1) a “new basis Werner, 2006 WL 295394, at *10 & n.14.
for removal” or (2) “changes the character of In its text, rule 15(c)(3) appears to refer only to the
the litigation so as to make it substantially a changing or substitution of defendants, not to the
addition of new defendants without any substitution
new suit.” 14C WRIGHT, MILLER & COOPER,
of the old ones. The Advisory Committee Notes
supra, § 3732 at 311-48.10
make plain, however, that a case involving misno-
mer of a defendant is an exception to the more
Ineos’s addition “changes the character of general rule that the addition of a new defendant
the litigation so as to make it substantially a commences a new proceeding:
new suit,” because as we explained, the addi-
tion of the new defendant commences the law- Relation back is intimately connected with the
suit as to it. This permits removal even absent policy of the statute of limitations. The policy
any discussion of “relation back,” provided, of of the statute limiting the time for suit against
course, that the defendant is indeed a “new” the Secretary of HEW would not have been of-
defendant.11 fended by allowing relation back in the situ-
ations described above. For the government
This distinction for new defendants, as op- was put on notice of the claim within the stated
posed to new claims, is a distinction without a periodSSin the particular instances, by means of
the initial delivery of process to a responsible
difference, because the same result is reached as
government official (see Rule 4(d)(4) and (5)).
though the relation back test were used: Under In these circumstances, characterization of the
federal law, adding a new defendant generally amendment as a new proceeding is not respon-
sive to the realty [sic], but is merely ques-
tion-begging; and to deny relation back is to de-
10 feat unjustly the claimant’s opportunity to
An amendment provides a “new basis” for re-
moval where, in a previously non-removable case, prove his case.
the only non-diverse defendant is dismissed, or
where the amount in controversy is increased so as Advisory Committee Notes to FED. R. CIV. P. 15.
to exceed the diversity jurisdictional threshold. In
contrast, the “substantially new suit” analysis looks Furthermore, because as the Notes make plain,
to whether the amendment of a previously remov- relation back is intimately connected with the stat-
able suit makes it a substantially new suit so as to ute of limitations, it is apparent that the addition of
restart the removal window. a new defendant suffers from the same
notice/limitations problems as does the substitution
11
Knudsen I and the other Seventh Circuit cases of a defendant. Therefore, only the addition of a
do not employ any relation-back analysis with re- defendant that satisfies the notice criteria in rule
spect to the addition of a new defendant. See, e.g., 15(c)(3) relates back to the original complaint. See
Knudsen I, 411 F.3d at 808 (“If in the future Lib- also Godfrey v. E. Gas & Fuel Assocs, 71 F.
erty Mutual Fire Insurance Company should be Supp. 175 (D. Mass. 1947) (“However, if the ef-
added as a defendant, it could enjoy a right to re- fect of the amendment was to bring into the case a
move under the 2005 Act, for suit against it would new party defendant that was not served with a
have been commenced after February 18, 2005.”) (continued...)

6
Louisiana law the addition of a new defendant Although plaintiffs argue that Ineos’s addi-
does not relate back to the original complaint tion related back to the original complaint be-
unless a misnomer situation as described in rule cause it arose out of the same transaction or
15(c)(3) applies.13 occurrence, this assertion is, at best, careless.
Even if the “misnomer” exception described in
Ray, 434 So. 2d at 1087 (or the identical rule
12
(...continued) 15(c)(3)) were to apply, plaintiffs discussed
summons or complained against in the original only the same-transaction-or-occurrence prong
action, the amendment will not relate back to the for relation back.14 Both federal and Louisiana
time of the original complaint . . . .”); Royal Wor-
cester Corset v. White, 40 F. Supp. 267 (D. Mass.
1941) (same); Williams v. Pa. R.R., 91 F. Supp.
13
652 (D. Del. 1950) (“If the amendment is granted (...continued)
and its effect is merely to correct a misnomer, there the federal rule and that relation back does not “ap-
is no doubt that the amendment would relate back in ply where the amendment seeks to add new and
time to the date of the original complaint. But if its unrelated defendants, since this would be
effect is to make a new party to the suit, the tantamount to assertion of a new cause of action”).
amendment would not relate back . . . .”); Messelt v. Louisiana law nonetheless allows relation back for
Sec. Storage Co., 14 F.R.D. 507 (D.C. Del. 1953); a misnomer case, under the same circumstances as
Schram v. Poole, 97 F.2d 566 (9th Cir. 1938); those under rule 15(c)(3):
Davis v. L.L. Cohen & Co., 268 U.S. 638 (1925);
United States v. Martinez, 195 U.S. 469, 473 (1) The amended claim must arise out of the
(1904) (explaining that the general rule for statute same transaction or occurrence set forth in the
of limitations purposes is that “a party brought into original petition; (2) The purported substitute
court by an amendment, and who has, for the first defendant must have received notice of the in-
time, an opportunity to make defense to the action, stitution of the action such that he will not be
has a right to treat the proceeding, as to him, as prejudiced in maintaining a defense on the mer-
commenced by the process which brings him into its; (3) The purported substitute defendant must
court”). Rule 15(c)(3) allows relation back of a know or should have known that but for a mis-
change of a party only where (i) “the claim or take concerning the identity of the proper party
defense asserted in the amended pleading arose out defendant, the action would have been brought
of conduct, transaction, or occurrence set forth or against him; (4) The purported substitute de-
attempted to be set forth in the original pleading;” fendant must not be a wholly new or unrelated
(ii) the party to be brought in “has received such defendant, since this would be tantamount to
notice of the institution of the action that the party assertion of a new cause of action which would
will not be prejudiced in maintaining a defense on have otherwise prescribed.
the merits;” (iii) the party to be brought in “knew or
should have known that, but for a mistake con- Id.
cerning the identity of the proper party, the action
14
would have been brought against the party;” and It is less certain whether state law provides
(iv) the requirements in (ii) and (iii) were met within the applicable rules for the relation back analysis.
the applicable statutory limitations period. Compare Schillinger, 425 F.3d at 335 (noting that
CAFA may make state rules about statutes of limi-
13
See Ray v. Alexandria Mall, 434 So. 2d 1083, tation irrelevant to the type of commencement that
1087 (La. 1983) (noting that Louisiana procedural is necessary for federal removal and expressly de-
law with respect to relation back is modeled after ferring resolution of the issue) with Schorsch, 417
(continued...) (continued...)

7
procedural law also require, among other that point the federal court had jurisdiction un-
things, that the new defendant “knew or should der 28 U.S.C. § 1332, as amended by CAFA.
have known that, but for a mistake concerning We agree with the court in Dinkel v. General
the identity of the proper party, the action Motors Corp., 400 F. Supp. 2d 289, 294 (D.
would have been brought against the party.”15 Me. 2005), that it is the “action,” not claims
against particular defendants, that is remov-
able, so the subsequent dismissal of the remov-
There is no indication that Ineos had that ing defendant cannot render the entire lawsuit
knowledge. Accordingly, the addition of Ineos improperly removed.
does not relate back to the original complaint,
because Ineos was an additional defendant, not The language of CAFA is plain that any
a misnamed defendant.16 single defendant can remove (without the con-
sent of other defendants) the entire class action
D. (not merely the claims against that defendant):
We reject plaintiffs’ contention that Ineos’s “A class action may be removed to a district
dismissal after removal ousted the district court court of the United States . . . without regard
of subject matter jurisdiction. Under Louisiana to whether any defendant is a citizen of the
law, the Braud plaintiffs commenced their suit State in which the action is brought, except
against Ineos several months after the effective that such action may be removed by any
date of CAFA. Because the amended pleading defendant without the consent of all defen-
satisfied CAFA’s jurisdictional provisions, at dants.” 28 U.S.C. § 1453(b). Further, as the
Senate Report on CAFA notes,

14
The law is clear that, once a federal court
(...continued)
properly has jurisdiction over a case re-
F.3d at 749 (holding that relation back with respect
moved to federal court, subsequent events
to the addition of a new claim is to be decided under
state law). The result in this case is the same under generally cannot “oust” the federal court of
either of those opinions, however. jurisdiction. While plaintiffs undoubtedly
possess some power to seek to avoid feder-
15
The four-prong federal and Louisiana tests for al jurisdiction by defining a proposed class
relation back are identical. See supra notes 11 and in particular ways, they lose that power
12. once a defendant has properly removed a
class action to federal court.
16
This conclusion is limited to the addition of
new defendants. We do not decide when or whether Id. (citing Judiciary Committee Report on
the addition of new claims to a pre-CAFA case Class Action Fairness Act, S. Rep. No. 109-14
provides a new removal window. See Knudsen v.
(1st Sess. 2005), reprinted in 2005
Liberty Mut. Ins. Co. (“Knudsen II”), 435 F.3d 755
(7th Cir. 2006) (holding that the post-CAFA change
U.S.C.C.A.N. 3, 2005 WL 627977, at *43).
in claims amounted to a substantially new suit and
that there was no relation back because the old A federal court nonetheless may properly
pleading did not furnish defendants with notice that remand if the amendment dismissing the re-
plaintiffs contested any decision made by its associ- moving defendant was made for legitimate
ates/subsidiaries, which used a different adjustment purposes, provided, of course, that CAFA’s
system).

8
minimal diversity requirement is not satisfied
after the dismissal of the removing defendant.
As the Schillinger court explained,

When a plaintiff amends his complaint after
removal in a way that destroys diversity, a
district court must consider the reasons
behind the amendment in determining
whether remand is proper. If the plaintiff
amended simply to destroy diversity, the dis-
trict court should not remand. See 14B
CHARLES ALAN WRIGHT, ARTHUR R. MIL-
LER, & E DWARD H. COOPER, FEDERAL
PRACTICE AND PROCEDURE (1998 and
Supp.), § 3723, at p. 591 (citing district
court cases). But an amendment that is
made for legitimate purposes may be a prop-
er ground for a remand to state court.

Schillinger, 425 F.3d at 334. Absent the prof-
fer of any reason for Ineos’s dismissal, it ap-
pears that its dismissal was intended solely to
destroy diversity, so there is no justification for
remand. Dismissal is inappropriate for the fur-
ther reason that there is still minimal diversi-
tySSthe plaintiffs are citizens of Louisiana, and
Transport is a foreign corporation authorized to
do business in Louisiana.17

The remand order of the district court is
REVERSED, and this matter is REMANDED
to the district court for further proceedings.
The mandate shall issue forthwith.

17
The Braud plaintiffs argued before the district
court that the exception to CAFA in 28 U.S.C.
§ 1332(d)(4)(A) applies. Because they do not raise
this argument in their briefs on appeal, it is waived.

9