Eleventh Circuit Court of Appeals: We lack jurisdiction under the Class Action Fairness Act to review sua sponte remand order.

Apr 04, 2022   
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On March 9, 2022, the Eleventh Circuit Court of Appeals denied a petition for permission to appeal an order remanding a case removed to federal court under the Class Action Fairness Act (“CAFA”). In its ruling denying the petition for permissive appeal, the Court addressed the issue of whether an appellate court has jurisdiction to review an order remanding a case brought under CAFA when that order was issued by the district court sua sponte. In holding that it lacked such jurisdiction, the Eleventh Circuit has created a circuit split on the issue. The Order of the Court in Ruhlen v. Holiday Haven Homeowners, Inc., No. 21-90022 (11th Cir. March 9, 2022) can be read here.

Ruhlen stems from an action initially brought in Florida state court by a group of mobile homeowners and their association against various defendants alleging violations of the Florida Antitrust Act and the Americans with Disabilities Act (“ADA”). Plaintiffs filed suit not as a class action under Florida Rule of Civil Procedure 1.220, but instead as a “representative action” under Florida Rule of Civil Procedure 1.222 which allows for mobile homeowners associations to file suits on behalf of homeowners concerning matters of common interest. Defendants removed to the Middle District of Florida based on the ADA and CAFA.

While the case was pending in the Middle District, Plaintiffs amended their complaint to remove the ADA claim and added other state-law based claims. Consequently, the Middle District sua sponte issued an order remanding the case back to state court on the basis that federal question jurisdiction no longer existed because: i) only state-law claims remained; and ii) CAFA does not provide for jurisdiction over these claims because they were brought in a “representative capacity” under Fla. R. Civ. P. 1.222. The Middle District found that 1.222 representative claims are not class actions, as the term is understood for CAFA jurisdiction. Defendants then sought permission to appeal the sua sponte remand to the Eleventh Circuit.

The appealability of class action remand orders is governed by CAFA and codified at 28 U.S.C. § 1453. Prior to CAFA, a district court’s order remanding a class action for lack of subject matter jurisdiction or a defect in the removal process typically was not appealable. 28 U.S.C. § 1447(d). With CAFA’s passage, “a court of appeals may accept an appeal from an order of a district court granting or denying a motion to remand a class action to the State court from which it was removed if application is made to the court of appeals not more than 10 days after entry of the order.” 28 U.S.C. § 1453(c)(1). Under CAFA, appellate review is discretionary. Thus, a party seeking review of “an order of a district court granting or denying a motion to remand a class action” must file a petition for permission to appeal with the circuit court under Federal Rule of Appellate Procedure 5. It is through this vessel that the Eleventh Circuit analyzed its jurisdiction.

While considering the Petition, the Court studied the phrase “an order of a district court granting or denying a motion to remand a class action” as used in 1453(c)(1) and examined whether it applies in cases where a district court issues a sua sponte remand order. In holding that it did not, the Court found that the word “motion”, as the term is ordinarily used, refers to a request made by a party, not an action the court does on its own. The Court considered that an action taken sua sponte is sometimes “colloquially” described as a court acting “on its own motion” and rejected this expansive logic apply to 1453(c)(1): “we find ourselves constrained to conclude (colloquialisms aside) that when a court sua sponte orders a remand, it is not ‘granting’ its own ‘motion’ within the meaning of § 1453(c)(1)—any more than it would be ‘denying’ its own motion in the absence of such an order.” The decision of the Eleventh Circuit was not unanimous, as Judge Rosenbaum authored a dissent.

In her dissent, Judge Rosenbaum characterized the majority’s reading of § 1453(c)(1) as “hypertechnical.” Judge Rosenbaum noted that both the Eleventh Circuit and the Supreme Court characterized sua sponte actions as those being “on [the court’s] own motion.” Thus, the dissent found that based on the Circuit’s own definition of the term “sua sponte”, such an order would qualify as reviewable under § 1453(c)(1).

Judge Rosenbaum reasoned that the phase “granting or denying a motion to remand” with in § 1453(c)(1) was not meant to exclude sua sponte remand orders but to ensure that all remand orders were not subject to either the jurisdictional bar of § 1447(d) or the final judgment rule. Judge Rosenbaum further reasoned that, even if the majority’s textualism approach was correct, treating a sua sponte remand order differently that a remand order granting or denying a motion made by a party would be an absurd construction of the CAFA immediate appealability provision of § 1453(c)(1).

Judge Rosenbaum detailed how the decision of the Eleventh Circuit is in conflict with how other circuits have expressly or implicitly addressed whether sua sponte remand orders are subject to appellate review under § 1453(c)(1). The Ninth Circuit has expressly found that an appellate court has jurisdiction under § 1453(c)(1) to review sua sponte orders of remand. Watkins v. Vital Pharms, Inc., 720 F.3d 1179, 1181 (9th Cir. 2013); see also Kenny v. Wal-Mart Stores, Inc., 881 F.3d 786, 789 (9th Cir. 2018). Additionally, although not expressly reaching the issue, the Seventh and Eighth Circuits have both implicitly held that sua sponte remand orders are reviewable under § 1453(c)(1) because each Circuit has accepted jurisdiction of appeals concerning such issues. See Fox v. Dakkota Integrated Sys., LLC, 980 F.3d 1146, 1151 (7th Cir. 2020) (reviewing a sua sponte CAFA remand); Dalton v. Walgreen Co., 721 F.3d 492, 494 (8th Cir. 2013) (same). Judge Rosenbaum also noted that the D.C. Circuit acknowledged that a sua sponte remand order was “properly before [the] court as the remand order falls within section 1453(c)(1).” In re U-Haul Int’l, Inc., No. 08-7122, 2009 WL 902414, at *2 (D.C. Cir. Apr. 6, 2009) (Rogers, J., dissenting from majority’s decision to decline jurisdiction over appeal).

Judge Rosenbaum further noted that because of the decision, the Eleventh Circuit is the first to hold that sua sponte orders remanding CAFA cases are wholly insulted from appellate review. Whether the issue is ultimately addressed by Congress in an amendment of the statute, or the circuit split is resolved in an appropriate case before the United States Supreme Court remains to be seen. See generally, Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 89-90 (2014) (discussing Supreme Court jurisdiction to review denials of petitions for permission to appeal of CAFA cases). For now, practitioners in the Eleventh Circuit must be aware of the Circuit’s unique interpretation of its jurisdiction.

Regardless of which side you’re on, FIDJ’s seasoned trial and appellate litigators can help you. Our appellate and trial support practice group is chaired by Jeffrey J. Molinaro, B.C.S., who is recognized by the Florida Bar as a Board Certified Specialist in Appellate Practice. For more information on how we can assist in your appellate or trial support needs, contact us at 305-350-5690 or info@fidjlaw.com.