Class Action Fairness Act Interlocutory Appeals

Transcription

1 Appellate Advocacy The Best Approach? Do Some Work in Advance By Wystan M. Ackerman Class Action Fairness Act Interlocutory Appeals The Class Action Fairness Act of 2005 (CAFA) substantially expanded federal jurisdiction over putative class action cases. CAFA confers federal jurisdiction on all cases in which at least one member of a putative class has diverse citizenship from at least one defendant, none of the defendants is a citizen of the state where the court will adjudicate dispositive motions less rigorously or will permit more expansive discovery than a federal court. Plaintiffs attorneys who perceive a state court as more favorable sometimes try to avoid federal jurisdiction by trying to plead a case so that it has an amount in controversy under $5 million or by including in-state defendants and defining the putative class as residents of that state. In many of these cases a defendant will remove the case to federal court, and the plaintiffs attorney will file a motion to remand. This motion pracplaintiffs filed the lawsuit, and the amount in controversy exceeds $5 million. See 28 U.S.C. 1332(d). CAFA also provides for federal jurisdiction in many cases where at least some of the defendants have out-ofstate citizenship and the amount in controversy exceeds $5 million. Plaintiffs attorneys, however, often try to avoid federal jurisdiction under CAFA when they perceive the state court forum as more favorable, typically because they perceive state law on class certification as more favorable, or they expect that the state Wystan M. Ackerman is a partner of Robinson & Cole LLP in Hartford, Connecticut, where he chairs the firm s Class Action Team. Mr. Ackerman has a national practice focusing on defending insurers and other companies in class actions and litigating insurance coverage issues. He writes the blog Mr. Ackerman successfully petitioned the U.S. Supreme Court to grant certiorari in its first Class Action Fairness Act interlocutory appeal (The Standard Fire Insurance Company v. Knowles). He is a member of the DRI Appellate Advocacy and Insurance Law Committees, as well as the DRI Commercial Litigation Committee s Class Actions Specialized Litigation Group. 30 In-House Defense Quarterly Fall DRI. All rights reserved.

2 tice typically focuses on disputes regarding the amount in controversy, the scope of the allegations in the complaint, or the interpretation of CAFA. This jurisdictional battle, which occurs at the outset of these cases, often is critically important. For a defendant the outcome can mean the difference between litigating in a favorable federal court with rigorous federal class certification standards and litigating in an unfavorable state forum with unfavorable class certification law. While defendants usually cannot appeal federal district court orders remanding cases to state courts, CAFA changed that for putative class actions. CAFA gives the federal courts of appeals discretion to hear appeals of orders granting or denying motions to remand. See 28 U.S.C. 1453(c) (1). These appeals, which are expedited as required by CAFA, differ substantially from an ordinary federal appeal after a final judgment, and they also differ from other types of federal interlocutory appeals, such as an appeal from an order certified under 28 U.S.C. 1292(b) or from a class certification order appealable under Federal Rule of Civil Procedure 23(f). If you are an in-house lawyer or defense lawyer faced with the prospect of potentially handling your first CAFA interlocutory appeal, it is important to become familiar with the process and think through some of your options and your strategy before you wind up in the court of appeals. Preparing to handle a CAFA interlocutory appeal before it starts is particularly important because they move very quickly. So you do not have the luxury of time that you typically have with an ordinary appeal. This article will endeavor to prepare you to plan for a CAFA appeal. It will discuss the procedures involved in these appeals in-depth from beginning to end, the criteria that courts use in granting or denying review, strategies for preparing your petition for permission to appeal or your answer to the plaintiffs petition, and the procedures for seeking a stay of a remand order pending appeal. Procedure for CAFA Appeals Before the enactment of CAFA, except in quite rare circumstances, defendants had no right to appeal federal district court orders remanding cases to state courts. See 28 U.S.C. 1447(d). A plaintiff could not appeal an order denying remand until after a court entered a final judgment, unless the federal district court certified the order for an interlocutory appeal under 28 U.S.C. 1292(b). CAFA changed this for putative class actions, allowing discretionary While defendants usually cannot appeal federal district court orders remanding cases to state courts, CAFA changed that for putative class actions. review of orders both granting and denying remand, with such appeals required to proceed on an expedited schedule. CAFA enacted a new statute that now provides that 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). (The words not more than 10 days were originally written as not less than 10 days, which created some confusion, but this was later corrected by amendment.) The application referred to in 28 U.S.C. 1453(c)(1) is known as a petition for permission to appeal, which is governed by Fed. R. App. P. 5. This petition must include the relevant facts, the question presented, and the reasons why the court of appeals should allow an appeal. See Fed. R. App. P. 5(b)(1). The petition must be short. It is limited to 20 pages in the typical 14-point font used in the federal courts of appeals. See Fed. R. App. P. 5(c). The respondent may, but is not required to, file an answer in opposition to the petition within 10 days after the petition is served, subject to the same 20-page limit. See Fed. R. App. P. 5(b) (2), Fed. R. App. P. 5(c). The rules do not establish procedures for filing a reply brief to support a petition, but in practice the courts of appeals generally have granted leave to petitioners to file reply briefs. Although uncommon, submitting amicus briefs in support of petitions for permission to appeal might be a great way to highlight the importance of the issue for which a petitioner seeks review if the petitioner can argue that the case presents a recurring issue that is important to other cases. Given that the Supreme Court often receives amicus briefs in support of or in opposition to petitions for certiorari, federal courts of appeals likely would consider them on petitions for permission to appeal. Absent an applicable local rule, Federal Rule of Appellate Procedure 29(e), which governs the time for filing amicus briefs on the merits, probably governs amicus briefs in support of a petition. If so, any amicus would need to file its brief within seven days of filing the petition, and the amicus briefs probably each would have a 10-page limit. To avoid any contention by the opposing party that they did not have adequate time to respond to the amicus brief(s), it might be preferable for amicus briefs to be filed simultaneously with the petition, which is filed only 10 days after the district court order on which review is sought. This requires that amici move quickly in deciding whether to participate and preparing their brief. Most circuits decide whether to grant or deny review within 30 to 60 days after the answer in opposition to the petition is filed, although some circuits occasionally take longer. Sometimes a court of appeals will take longer because it plans to decide the merits based on the petition and the answer alone. Although there appears to be no comprehensive statistical analysis available, the rate at which the circuits grant or deny petitions for permission to appeal appears to vary considerably among the circuits. The Seventh Circuit appears to have granted review more frequently than other circuits. It has issued the most CAFA opinions of any circuit. In comparison, the Second Circuit appears to have granted review quite sparingly. One study of the Sixth Circuit revealed a 50 percent grant rate for CAFA petitions. See Bruce Kuhla, Can We Appeal That Now? Discretionary Interlocutory Appeals at the Sixth In-House Defense Quarterly Fall

3 Appellate Advocacy Preparing to handle a CAFA interlocutory appeal before it starts is particularly important because they move very quickly. Circuit, Sixth Circuit Appellate Blog (May 4, 2012), com/?s=can+we+appeal+that+now%3f+. My own review of Eighth Circuit cases recently revealed 11 denials since January 1, 2011, and only seven decisions in CAFA interlocutory appeals in the seven years after the statute was enacted. Typically a motions panel or an administrative panel makes the decision to grant or to deny a review. This panel might keep the case if the members grant a review, or the case might be reassigned randomly to a merits panel. The practice among the circuits varies on this, but you can usually figure it out by doing some PACER research on previous CAFA interlocutory appeals in the circuit you are in. Courts of appeals generally do not hold oral arguments on whether to grant review, unless the court decides to defer a decision on whether to grant review until after full briefing and oral argument, as discussed further below. When a court of appeals denies review, the order often says nothing more than that the court denied the petition. But occasionally courts of appeals have written opinions or short orders explaining why they denied review. See, e.g., LG Display Co. v. Madigan, 665 F.3d 768, 774 (7th Cir. 2011); Anderson v. Bayer Corp., 610 F.3d 390, 395 (7th Cir. 2010); Froud v. Anadarko E&P Co. Ltd. P ship, 607 F.3d 520, 523 (8th Cir. 2010); In re Lerner, Sampson & Rothfuss, 2009 U.S. App. Lexis (6th Cir. Sept. 28, 2009); In re U-Haul Int l, Inc., 2009 U.S. App. Lexis 7163 (D.C. Cir. Apr. 6, 2009). On a rare occasion, a court of appeals has written an opinion explaining why it has granted review before adjudicating the merits. See, e.g., BP Am., Inc. v. Okla. ex rel. Edmondson, 613 F.3d 1029, 1031 (10th Cir. 2010). If a court of appeals grants a petition, the case typically will move very quickly because of CAFA s expedited review requirement. CAFA specifies that [i]f the court of appeals accepts an appeal the court shall complete all action on such appeal, including rendering judgment, not later than 60 days after the date on which such appeal was filed, unless an extension is granted. 28 U.S.C. 1453(c)(2). The legislative history does not provide any insight into why Congress chose to impose this requirement of expediting the appellate process. The Senate report explains only that [t]he purpose of this provision is to develop a body of appellate law interpreting the legislation without unduly delaying the litigation of class actions, and [t]he Committee believes it is important to create a similar body of clear and consistent guidance for district courts that will be interpreting this legislation and would particularly encourage appellate courts to review cases that raise jurisdictional issues likely to arise in future cases. S. Rep. No , at 43. Several circuits have held that this 60-day period to decide the appeal does not begin until the court of appeals grants a petition for permission to appeal. See Lewis v. Verizon Communs., Inc., 627 F.3d 395, 396 (9th Cir. 2010); Evans v. Walter Indus., Inc., 449 F.3d 1159, 1162 (11th Cir. 2006); Patterson v. Dean Morris, L.L.P., 444 F.3d 365, 368 (5th Cir. 2006). The rationale for this interpretation is that the date on which such appeal was filed is the date when permission to appeal is granted because the order granting permission to appeal serves as the date of the notice of appeal under Federal Rule of Appellate Procedure 5(d)(2). In practice, if the 60-day period began when a party filed the petition, it would require a court of appeals to decide whether to grant review, then receive briefing on the merits, hear oral argument if it plans to do so, and issue an opinion, all within 50 days after the response to the petition is filed. That would impose a breakneck pace, and no court of appeals has interpreted CAFA as requiring a court to move that fast. Notwithstanding that the 60-day period begins when a court of appeals grants a petition, CAFA appeals still move at a much faster pace than usual for courts of appeals. When a court of appeals grants review, the panel members may need to delay issuing opinions in other cases they are working on or otherwise disrupt their regular schedules to issue the opinion in the CAFA case within the 60-day period. This may drive the tendency of some circuits to grant review under CAFA quite sparingly. A court of appeals can grant itself an extension of 10 days for good cause shown. See 28 U.S.C. 1453(c)(3)(B). Courts have frequently taken advantage of that provision. With the consent of all parties a court may grant itself a longer extension. See 28 U.S.C. 1453(c)(3)(A). Courts of appeals have not asked for longer extensions as often as you might expect. I can only speculate about why, but some judges might feel that regularly asking for such extensions would defeat the Congressional intent to expedite review, or that asking for longer extensions puts the parties unfairly in difficult positions because the parties and their counsel may worry that refusing consent might result in a negative reaction from the judges, particularly when refusals can impact the judges schedules. While it might seem feasible to create a system in which only the clerk of the court would know which party or parties did not consent, in reality only the respondent would consider refusing to consent. A petitioner likely would consent to an extension because otherwise it would risk the possibility that the court would reconsider its decision to grant permission to appeal because it could not complete an opinion within 60 days. Even after granting review, a court of appeals can decide later that it improvidently granted review. See, e.g., Alvarez v. Midland Credit Mgmt., Inc., 585 F.3d 890, 894 (5th Cir. 2009). You should keep in mind that a court of appeals might rule summarily on the merits of the jurisdictional issue at the same time that it decides whether to grant permission to appeal. The Seventh Circuit has quite regularly used this procedure, and other circuits have occasionally done so. See, e.g., Keeling v. Esurance Ins. Co., 660 F.3d 273, 275 (7th Cir. 2011); ABM Sec. Servs. v. Davis, 646 F.3d 475, 476 (7th Cir. 2011); Blomberg v. Serv. Corp. Int l, 639 F.3d 761, 763 (7th Cir. 2011); Back Doctors 32 In-House Defense Quarterly Fall 2012

4 Ltd. v. Metro. Prop. & Cas. Ins. Co., 637 F.3d 827, 829 (7th Cir. 2011); Estate of Pew v. Cardarelli, 527 F.3d 25, 29 (2d Cir. 2008). If the court of appeals orders further briefing on the merits, the briefing schedule will proceed much faster than the rules provide for in an ordinary appeal, because the 60-day time clock will run from the date that the court grants the petition. A typical schedule might require the appellant to file a merits brief within seven or 10 days of a court granting review, the appellee to file its brief 14 days thereafter, and the appellant to file a reply brief seven days later. This will allow the court of appeals to have approximately 30 days to issue an opinion after briefing is completed. Oral argument is relatively rare in these appeals except when the parties agree to extend time for the court to issue a decision. If there is no such extension, and the court decides to hear oral argument, the court typically schedules the argument very soon after the merits briefing concludes. Although uncommon, a court of appeals can order briefing on the merits and oral argument before deciding whether or not to grant the petition for permission to appeal. Deferring the decision on whether to grant review until after full briefing and oral argument enables a court of appeals to delay the start of the 60-day clock. An appeal that follows this procedure permits a more normal overall schedule. Courts of appeals have rarely done this, however, perhaps because they view it as inconsistent with Congress s intent behind the 60-day requirement. Petitions for Rehearing CAFA does not expressly address whether a court of appeals would need to consider a petition for rehearing by the panel or rehearing en banc and decide such a petition within the 60-day period. I am not aware of any court of appeals refusing to consider a petition for rehearing because the 60-day period had expired. In a number of instances courts of appeals have considered rehearing petitions after the 60-day period ended. For example, in Palisades Collections LLC v. Shorts, 552 F.3d 327, 345 (4th Cir. 2009), rehearing en banc was denied with one judge dissenting. See also Freeman v. Blue Ridge Paper Prods., Inc., 2009 U.S. App. Lexis (6th Cir. May 1, 2009) (noting denial of rehearing en banc for lack of majority vote in favor and denial of panel rehearing with one judge on the panel dissenting); Amalgamated Transit Union Local 1309 v. Laidlaw Transit Servs., Inc., 448 F.3d 1092 (9th Cir. 2006) (similar). The statute specifies that the court Some judges might feel that regularly asking for such extensions would defeat the Congressional intent to expedite review. of appeals shall complete all action, including rendering judgment within the 60-day period. 28 U.S.C. 1453(c)(2). Judgment is entered when an opinion or other order is issued, as distinguished from the mandate, which is entered after the court of appeals decides any petition for rehearing or the time to seek rehearing expires. See Fed. R. App. P. 36; Fed. R. App. P. 41. Thus, it appears likely that CAFA allows a court of appeals to consider a petition for rehearing when the 60-day period for rendering judgment has expired. Although someone might argue that to complete all action on a CAFA appeal requires resolution of a petition for rehearing, this would seem inconsistent with the rules of appellate procedure and completely impractical. It also would create a unique category of appeals for which rehearings and rehearings en banc would be impossible. This would be particularly undesirable when CAFA cases move so quickly that the pace could increase the risk that a panel deciding an appeal might overlook something important in the record or governing precedent that only a rehearing (or Supreme Court review) could correct. Petitions for Certiorari CAFA does not address Supreme Court review. Obviously the Supreme Court could not issue a decision on a petition for certiorari, let alone rule on the merits, within the 60-day time frame provided in the statute. CAFA s appellate review provision speaks only to review by the court of appeals and does not address Supreme Court review. 28 U.S.C. 1453(c). The Court has accordingly held that [w]e thus interpret 1453(c) s 60-day requirement as simply requiring a court of appeals to reach a decision within a specified time not to deprive this Court of subsequent jurisdiction to review the case. Hertz Corp. v. Friend, 130 S. Ct. 1181, 1187 (2010). See also 28 U.S.C The Supreme Court can grant certiorari even when a court of appeals denies review. See Hohn v. United States, 524 U.S. 236, 242 (1998) (holding that the Supreme Court may grant certiorari after court of appeals denies permission to appeal). In fact, the Supreme Court recently granted certiorari in The Standard Fire Insurance Company v. Knowles, No , after the Eighth Circuit had denied permission to appeal. Knowles is the first case the Court has agreed to hear under CAFA. (I am counsel for The Standard Fire Insurance Company in that case.) Criteria That Guide Review Decisions Some circuits have adopted a set of factors to guide their decision- making on whether or not to grant discretionary review under CAFA. The First Circuit has the most comprehensive set of factors, which the Ninth and Tenth Circuits later adopted. These factors are: (1) whether the petition presents an important CAFA- related question ; (2) whether the question presented is unsettled; (3) whether the question, at first glance, appears to be either incorrectly decided or at least fairly debatable ; (4) whether the question is consequential to the resolution of the particular case ; (5) whether the question is likely to evade effective review if left for consideration only after final judgment, described as [a] particularly important factor ; (6) the likelihood of recurrence of the question presented; (7) whether the district court order is sufficiently final to position the case for intelligent review ; and (8) a balance of relevant harms weighing the probable harm to the applicant should an immediate appeal be refused against the probable In-House Defense Quarterly Fall

5 Appellate Advocacy harm to the other parties should an immediate appeal be entertained. College of Dental Surgs. of P.R. v. Conn. Gen. Life Ins. Co., 585 F.3d 33, (1st Cir. 2009). See also Coleman v. Estes Express Lines, Inc., 627 F.3d 1096, 1100 (9th Cir. 2010) (adopting First Circuit factors); BP Am., Inc. v. Oklahoma, 613 F.3d 1029, (10th Cir. 2010) (same). Although this is a lengthy set of factors, in practice it appears that the most important factors are whether the question or questions presented are important and recurring. See also Estate of Pew v. Cardarelli, 527 F.3d 25, 29 (2d Cir. 2008) (writing that a court s exercise of discretion will be guided by consideration of the importance and novelty of the issues raised by the case ). Most cases in which courts of appeals grant review involve a question that likely would affect multiple cases, not just the case before the court. In some cases, the federal district courts have disagreed on the question. In some instances, however, a court of appeals has granted review under CAFA on an issue unique to a particular case that seems unlikely to arise in other cases. This happens more often when a court of appeals reverses the district court. The Fifth and Sixth Circuits also have expressly explained that the pressure that the 60-day expedited decision requirement imposes on the court of appeals is one reason why it will deny review. Alvarez v. Midland Credit Mgmt., Inc., 585 F.3d 890, 894 (5th Cir. 2009) ( [I]n granting us interlocutory discretionary review, Congress placed very short time limits on our determination of such appeals. Therefore, in exercising our discretion to hear such appeals we must weigh the time taken from earlier- filed appeals to tend to the CAFA appeal against the benefit of hearing such an appeal at this juncture. ); In re Am. Gen. Fin., Inc., 2010 U.S. App. Lexis 27012, at *1 (6th Cir. June 23, 2010) ( Pursuant to 1453(c)(2), if the court grants the petition, a decision must be rendered within sixty days. Upon consideration of the petition, and in light of the requirement for expedited consideration, we conclude that the issues raised in the petition are not of sufficient magnitude to warrant such extraordinary review of the remand order. ). A petitioner might consider offering in the petition to agree to an extension of time, although the respondent would also need to for the 60-day period to be extended. Strategies for Petitions for Permission to Appeal If a district court orders a remand, you Some circuits have adopted a set of factors to guide their decision-making on whether or not to grant discretionary review under CAFA. will need to file your petition for permission to appeal within 10 calendar days from entry of the order. If you think that a district court seems reasonably likely to order a remand, either because other district court decisions contradict your position in the jurisdiction or the issue involves a close call, you may want to get a head start by pre- writing parts of the petition before the court issues the order, or by having your outside counsel do this, so that you have adequate time to revise it. You still will need to revise this draft substantially after the decision comes down, but an attorney can often write the background section, write about the importance of the issue presented, and write some of the arguments on the merits in advance. As in-house counsel, if you are considering retaining appellate counsel for a CAFA interlocutory appeal, it is a good idea to have the appellate counsel on board and familiar with the case before a district court issues a remand decision. Otherwise the appellate counsel will have to operate under an extraordinary time pressure to complete a conflicts check, learn about the case, and prepare the petition. This won t serve you well. Frequently I see petitions filed that focus entirely on the merits whether the court below issued a correct decision rather than focusing on why the court of appeals should view the issues as worthy of review. Or if the petition addresses why review should be granted, it explains this only very briefly. These petitions read as if the court of appeals either is required to hear the merits, or would only care about the merits in deciding the petition. I do not view this as a good strategy. A significant focus of the petition, although it need not consume more than a few of your 20 pages, should be on whether the issue presented warrants review under the factors articulated by the circuit. If the circuit you are in has not set forth a set of factors, I would suggest using the First Circuit factors (which have also been adopted in the Ninth and Tenth Circuits). In preparing your petition, I suggest researching not only caselaw in your circuit but also doing PACER research regarding instances where your circuit has granted or denied review under CAFA over the last several years. These petitions are docketed in most circuits as Miscellaneous cases. Typically there are a manageable number of CAFA petitions (no more than 20) filed in one circuit in a given year, so it will not take much time to skim through them. This will give you a sense of your circuit s inclinations in CAFA appeals, and you may be able to cite examples of where your circuit granted review in analogous circumstances (if you are the petitioner) or denied review (if you are the respondent). Many of these petitions do not result in published opinions or orders available on electronic databases other than PACER. By doing the research on PACER you will also find out your circuit s inclinations on (1) how long it takes the court to decide whether to grant review; (2) whether the court might rule on the merits summarily based on the petition and response, and if so, how long that tends to take; (3) whether the court has allowed reply briefs in support of a petition; (4) how the court will schedule the briefing if it grants review; and (5) whether the court typically hears oral arguments when it grants review. It is helpful to know all of this, but you will especially want to know if your circuit might decide the merits based on the petition and the response, If so, you will want to make sure to include reasonably complete briefing on the merits in 34 In-House Defense Quarterly Fall 2012

6 the petition, as best as you can within the 20-page limit, or you will want to explain in the petition why you believe the court will need further briefing if it grants review. Although as with any appeal as the appellant you typically want to select carefully the issues to raise and only raise a few issues that have a reasonably good chance of success, in a CAFA petition, this becomes even more important. Remember that the court of appeals, if it accepts your case, will need to decide it very quickly, so a case that presents only one or two issues and seems easy to decide has a better chance of achieving review. The court of appeals may be disinclined to take a case that involves multiple significant issues or complicated, unsettled issues because it may not have sufficient time to address them due to the 60-day clock. If you can avoid raising unsettled or difficult issues of state law that also would help because certifying a question to a state supreme court is simply impossible in the time frame allowed for a CAFA appeal without both sides agreeing to a lengthy extension of time. Courts of appeals in CAFA cases also appear to grant review on issues of law more often than on factual determinations such as whether the evidence was sufficient on the amount in controversy or where putative class members reside. The strongest petitions present issues that have repeatedly arisen in other cases with disparate results. If you cannot frame your case that way, another option is to select an issue or two that would apply somewhat broadly beyond your case and explain why, ideally by offering examples of other cases raising the same issue. If all you have is arguments that the district court erred in making factual determinations in the specific context of your case, think about whether you can argue that those types of issues will recur regularly or why the factual issues really involve central questions of evidentiary law. You should also explain why the issues are susceptible to appellate review even though they are factual questions, such as because the record is all on paper and is straightforward. As the petitioner, Federal Rule of Appellate Procedure 5 does not provide you with the right to file a reply. But courts of appeals often grant leave to file a reply. If you decide to seek this leave, you should do it quickly because some circuits will issue a decision on a petition within two weeks after the respondent files an answer, although other circuits tend to take much longer. You can understand this better after you complete some PACER research In-House Defense Quarterly Fall

7 Appellate Advocacy remind the court that CAFA s interlocutory review procedure is unique, and Congress intended courts to use it selectively. With some PACER research, sometimes you can find cases in which the court of appeals previously denied review on precisely the issue that the petitioner has raised in your case or on an analogous issue. That can be very helpful to point out in your response. Usually the remainder of a response would resemble a typical appellee brief, focusing on the claimed errors in the district court s opinion and responding to the arguments made by the petitioner. If the circuit considering the petition has tended to decide the merits based on petitions and answers alone, as the Seventh Circuit has, you will want to include in your answer a reasonably comprehensive response to the petition s arguments on the merits, often not an easy task with a 20-page limit. Seeking a Stay of a Remand Order Pending Appellate Review As defense counsel or in-house counsel faced with a district court order of remand to state court, you will also need to consider whether to seek a stay of the remand order until the court of appeals has considered your petition for permission to appeal and, if the petition is granted, while the appeal is pending. One major difficulty that you might encounter seeking a stay is that you might not have any time after the district court issues the remand order and before the district court clerk implements it. The governing statute, 28 U.S.C. 1447(c), specifies that [a] certified copy of the order of remand shall be mailed by the clerk to the clerk of the State court. The State court may thereupon proceed with such case. Sometimes this happens immediately, on the same day that the district court issues a remand order. Because of that possibility, you may want to include a contingent request in your opposition to the motion to remand asking for a stay pending appeal in the event that remand is granted. While that may detract somewhat from the strength of your argument in opposition to a motion to remand, including a short and appropriately worded conditional request in your opposition to the motion to remand may be your only chance to achieve a stay before the district court clerk effectuates a remand. You could also file a separate motion for a stay in the event of a remand order, but that might suggest more strongly a weakness in your position. In CAFA cases, courts have granted stays pending petitions for appellate review in a number of instances. See, e.g., Lafalier v. State Farm Fire & Cas. Co., 391 Fed. If a district court orders a remand, you will need to file your petition for permission to appeal within 10 calendar days from entry of the order. App x 732, 737 (10th Cir. 2010) (noting that remand order was stayed pending appellate review under CAFA); Morgan v. Gay, 471 F.3d 469, 471 (3d Cir. 2006) (same); DiTolla v. Doral Dental IPA of N.Y., LLC, 469 F.3d 271, 274 (2d Cir. 2006) (court of appeals granted stay of remand order pending appellate review under CAFA); Lafalier v. Cinnabar Serv. Co., 2010 U.S. Dist. Lexis 42447, at *8 (N.D. Okla. Apr. 30, 2010) (granting stay of remand order pending appellate review under CAFA); but see Smith v. Am. Bankers Ins. Co., 2011 U.S. Dist. Lexis (W.D. Ark. Dec. 21, 2011) (denying stay). Generally you must first move for a stay of the remand order in the district court and that court must deny a stay before you can seek a stay from the court of appeals. See Fed. R. App. P. 8(a)(1). If the district court denies a stay, you can then move for a stay in the court of appeals. See Fed. R. App. P. 8(a)(2). To allow the court of appeals to have time to consider granting a stay before the remand takes place, you could ask the district court, if it is inclined to deny a stay, to grant a limited stay, at a minimum, to allow the court of appeals time to decide whether it will grant a stay. Whether to seek a stay in the court of appeals if the district court does not grant one should probably be driven largely by whether you expect significant activity to occur in the state court before the federal court of appeals makes a decision about the petition for permission to appeal. Unless you think that the state court will deny a stay and that litigating the case in the state court will become particularly burdensome, you may not want to burden the court of appeals with an expedited motion for a stay. Because a court of appeals has discretion to decide whether or not to hear CAFA appeals, you may have difficulty persuading the court of appeals in an emergency motion that you need a stay. A denial of a stay might give negative momentum to your case as it heads towards a decision on the petition for permission to appeal. If a remand is effectuated before you have received a ruling on a stay, authority exists in federal case law for recalling a remand order to a state court after it has been issued. See, e.g., In re DaimlerChrysler Corp., 2002 U.S. App. Lexis 8756, at *8 (5th Cir. Mar. 8, 2002) ( The district court is directed to recall its remand orders. ); Benson v. SI Handling Sys., Inc., 188 F.3d 780, 782 (7th Cir. 1999); In re Continental Cas. Co., 29 F.3d 292, 295 (7th Cir. 1994). Seeking a stay in the state court is another option, potentially successful in some state courts, particularly busy state courts that may not want to devote the resources to a complex class action if the federal court of appeals may ultimately conclude that the case belongs in a federal court. But heavily plaintiff- friendly state courts may deny stay requests. However, filing a motion for a stay doesn t have a downside in most state courts. Some of you may wonder what happens with the state court proceeding if it is pending when a court of appeals reverses a remand order. It appears that the state court is simply informed of the federal court of appeals decision, the state court case is closed, and the federal case proceeds on remand from the court of appeals. You shouldn t need to undertake a second removal of the case. If a state court should proceed with a case after a federal court of appeals finds that it has jurisdiction, the defendant should be able to obtain an injunction from the federal court prohibiting further state proceedings. See, e.g., CAFA Interlocutory Appeals page In-House Defense Quarterly Fall 2012

8 CAFA Interlocutory Appeals page 36 Kansas Pub. Employees Retirement Sys. v. Reimer & Koger Assocs., Inc., 77 F.3d 1063, 1069 (8th Cir. 1996); Davis Int l, LLC v. New Start Group Corp., No , 2009 WL , at *2 (D. Del. May 13, 2009), aff d, 367 Fed. Appx. 334 (3d Cir. Mar. 3, 2010); Freedom Township v. Board of Assessment Appeals of Adams County, Pa., No , 2010 WL , at *3 (M.D. Pa., Nov. 9, 2010); Faye v. High s of Baltimore, 541 F. Supp. 2d 752, (D. Md. 2008). Conclusion CAFA appeals can become challenging because of the time pressure involved, the need to convey your position persuasively in a short but comprehensive petition or answer, and the risk that a busy court of appeals might overlook an important fact or argument or fail to recognize the importance of your case. The best approach to these appeals, particularly your first or second time, is to become thoroughly familiar with the procedures and do some work in advance on the potential appeal before you wind up in the court of appeals. That will give you the luxury of time that you will not have later and put you a step ahead of your opponent. In-House Defense Quarterly Fall