A Ninth Circuit panel has held that a defendant may remove a case to federal court within 30 days after the CAFA ground for removal can first be ascertained, even where plaintiff’s complaint, filed years earlier, provided a basis for removal based on federal question jurisdiction.
On April 3, 2012, plaintiff filed her initial complaint against Nationstar in state court, alleging various causes of action, including a federal cause of action under the Fair Debt Collection Practices Act. The complaint did not specify an amount in controversy. However, on June 3, 2014, and less than a month after the state court had certified a class, plaintiff served interrogatory responses stating that the amount in controversy was expected to exceed $25,000,000. On June 5, 2014, Nationstar removed the case pursuant to CAFA, stating that the interrogatory responses revealed that the amount in controversy met CAFA’s $5,000,000 threshold. Plaintiff moved to remand, arguing that Nationstar’s notice of removal was untimely because it was filed more than two years after the case became removable on federal question grounds based on the federal FDCPA cause of action alleged in plaintiff’s complaint. The district court agreed and remanded the case to state court.
Relying on the Supreme Court’s statement in Dart Cherokee Basin Operating Co. v. Owens, that Congress did not intend for a presumption against removal to apply to CAFA cases, the Ninth Circuit held that a class action “becomes ‘removable’ for purposes of section 1446 when the CAFA ground for removal is first disclosed,” even if the case was previously removable on other grounds. Based on this holding, the court held that Nationstar’s removal under CAFA was timely and reversed the district court’s remand order. According to the court, although a basis for removal existed at the time that plaintiff filed her initial complaint on April 3, 2012, the CAFA ground for removal was not disclosed until June 3, 2014, when plaintiff stated in her interrogatory responses that the amount in controversy was expected to exceed $25,000,000. Accordingly, because Nationstar removed the case within 30 days after the CAFA ground for removal was first disclosed, its notice of removal was timely.
Plaintiff has moved for panel rehearing, arguing that her September 2013 class certification motion put Nationstar on notice that CAFA’s amount in controversy requirement had been met, thereby starting the 30-day clock for removal under CAFA and rendering Nationstar’s June 2014 CAFA removal untimely.