CASE 0:09-cv MJD-JSM Document 151 Filed 10/13/11 Page 1 of 21 UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA

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1 CASE 0:09-cv MJD-JSM Document 151 Filed 10/13/11 Page 1 of 21 UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA GRAPHIC COMMUNICATIONS LOCAL 1B HEALTH & WELFARE FUND A, et al., CIVIL NO (MJD/JSM) Plaintiffs, v. REPORT AND RECOMMENDATION CVS CAREMARK CORPORATION, et al., Defendants. The above matter came before the undersigned United States Magistrate Judge upon on remand from the Eighth Circuit Court of Appeals [Docket Nos. 122, 123] to consider Plaintiffs Motion for Remand. David L. Hashmall, Esq., Perrin Rynders, Esq., and Gary J. Mouw, Esq. appeared on behalf of plaintiffs. David Marshall, Esq. and Brain Murray Esq. appeared on behalf of defendants. This matter has been referred to the undersigned Magistrate Judge for a Report and Recommendation by the District Court pursuant to 28 U.S.C. 636(b)(1)(B) and Local Rule 72.1(c). I. FACTUAL BACKGROUND This class action arises out of plaintiffs claims that since July 28, 2003, defendants have violated Minnesota Statute by failing to pass on savings to purchasers of consumer drugs realized by the defendant pharmacies when they dispensed a generic prescription drug versus a brand-name version of the prescription in Minnesota. On July 23, 2009, plaintiffs initiated the present class action in the Fourth Judicial District of Hennepin County, Minnesota. See Docket No. 1. On August 21,

2 CASE 0:09-cv MJD-JSM Document 151 Filed 10/13/11 Page 2 of , defendants removed the present case to this Court, asserting jurisdiction under the Class Action Fairness Act of 2005 ( CAFA ), 28 U.S.C. 1332(d)(2), 1 as well as federal question jurisdiction under See Docket No After removal, plaintiffs filed an Amended Complaint, which clarified that they were not seeking any recovery under Medicare or Medicare related programs. See Docket No. 10. Defendants subsequently moved to dismiss the Amended Complaint. See Docket No. 28. Former United States District Judge, James M. Rosenbaum, dismissed the Amended Complaint without prejudice on the basis that it failed to properly plead a cause of action pursuant to Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). See Docket No. 44, pp On November 23, 2009, Judge Rosenbaum entered the Order dismissing the Amended Complaint and giving plaintiffs until November 27, 2009 to 1 Section 1332(d)(2) provides: (2) The district courts shall have original jurisdiction of any civil action in which the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs, and is a class action in which-- (A) any member of a class of plaintiffs is a citizen of a State different from any defendant; (B) any member of a class of plaintiffs is a foreign state or a citizen or subject of a foreign state and any defendant is a citizen of a State; or (C) any member of a class of plaintiffs is a citizen of a State and any defendant is a foreign state or a citizen or subject of a foreign state. 2

3 CASE 0:09-cv MJD-JSM Document 151 Filed 10/13/11 Page 3 of 21 replead in manner consistent with Rule 8. See November 23, 2009 Order [Docket No. 45]. On November 25, 2009, plaintiffs filed their Second Amended Complaint. See Docket No. 46. On December 1, 2009, the United States District Court, Western District off Michigan issued an order sua sponte, remanding back to state court a case very similar to the instant matter brought by class action plaintiffs who alleged Michigan pharmacies overcharged for generic prescription medications. See Declaration of Bryan Walters in Support of Memorandum in Support of Remand Reasonable Time Issue ( Walters Decl. ), Ex. A (Order, City of Lansing, et al. v. CVS Caremark Corp., et al., 1:09-CV-788 (W.D. Mich. Dec. 1, 2009) (unpublished)). The defendants had removed the Michigan action to federal court under CAFA, 1332(d). The parties had stipulated that the three basic jurisdictional requirements of CAFA had been met. Nevertheless, recognizing that parties cannot stipulate to federal jurisdiction where none exists, the court concluded that remand was appropriate under the local controversy exception of CAFA, 28 U.S.C. 1332(d)(4)(A). 2 Id., pp. 3, 8. The parties had stipulated that two-thirds of the 2 Section 1332(d)(4)(A) provides: (4) A district court shall decline to exercise jurisdiction under paragraph (2)-- (A)(i) over a class action in which-- (I) greater than two-thirds of the members of all proposed plaintiff classes in the aggregate are citizens of the State in which the action was originally filed; (II) at least 1 defendant is a defendant-- 3

4 CASE 0:09-cv MJD-JSM Document 151 Filed 10/13/11 Page 4 of 21 plaintiffs were citizens of Michigan and the complaint alleged a class of persons who purchased generic drugs in Michigan, thereby meeting the first and third requirements of the local controversy exception. Id., p. 5. As to the second requirement, the court determined that the plaintiffs sought significant relief from six of the defendant pharmacies, who were citizens of Michigan and owned and operated 300 retail pharmacies from which the plaintiffs sought relief. Id. In interpreting the word significant under 1332(d)(4)(A)(i)(aa) and (bb), the court rejected the interpretations of other courts, including the Eleventh Circuit, that a market share analysis should be used to compare the relief sought against all defendants or to determine each defendant s ability to pay a potential judgment. Id., p. 7. Instead, the court interpreted the term significant to mean more than peripheral, having meaning, and present by (aa) from whom significant relief is sought by members of the plaintiff class; (bb) whose alleged conduct forms a significant basis for the claims asserted by the proposed plaintiff class; and (cc) who is a citizen of the State in which the action was originally filed; and (III) principal injuries resulting from the alleged conduct or any related conduct of each defendant were incurred in the State in which the action was originally filed; and (ii) during the 3-year period preceding the filing of that class action, no other class action has been filed asserting the same or similar factual allegations against any of the defendants on behalf of the same or other persons; or (B) two-thirds or more of the members of all proposed plaintiff classes in the aggregate, and the primary defendants, are citizens of the State in which the action was originally filed. 4

5 CASE 0:09-cv MJD-JSM Document 151 Filed 10/13/11 Page 5 of 21 design rather than mere chance. Id. In applying this interpretation, the court concluded that the presence of the six Michigan defendants was meaningful, even if the six only represented a small percentage of the total relief sought by the plaintiffs, in that without them, some of the members of the class would have been unable to obtain relief. Id., p. 6. In addition, the court found that there was no reason to believe these six defendants were introduced into the case by chance or to defeat jurisdiction. Id. As to the fourth requirement of CAFA, set forth in 28 U.S.C. 1332(d)(4)(A)(ii), the court concluded that it had been met as no other class action had preceded the Michigan action alleging the same or similar facts against the defendants on the behalf of the same or other persons, even though the present action had been filled in Minnesota on the same day. Id., pp On December 2, 2009, the day after the Michigan decision and 104 days after the notice of removal, plaintiffs in this action filed a notice of motion to remand for lack of subject matter jurisdiction. 3 See Docket No. 48. On December 4, 2009, defendants filed a second motion to dismiss. See Docket No. 49. On July 20, 2010, Judge Rosenbaum denied defendants second motion dismiss for failure to state claim and granted plaintiffs motion to remand on the basis that the Court lacked subject matter jurisdiction under CAFA. See July 20, 2010 Order [Docket No. 109], pp. 6, 13. Defendants appealed the decision to remand to the Eighth Circuit of Appeals, asserting that the local controversy exception in CAFA does not divest the district court of subject matter jurisdiction and that because plaintiffs moved to remand the matter 3 The motion to remand and the materials supporting the motion were filed on December 23, See Docket Nos

6 CASE 0:09-cv MJD-JSM Document 151 Filed 10/13/11 Page 6 of 21 more than thirty days after removal, the remand should have been denied pursuant to 28 U.S.C. 1447(c). 4 See Graphic Communications Local 1B Health & Welfare Fund A v. CVS Caremark Corp., 636 F.3d 971, 973 (8th Cir. 2011). The Eighth Circuit decided that the local controversy provision in CAFA operates as an abstention doctrine, which does not divest the district court of subject matter jurisdiction. Id. Having determined that the local controversy provision was akin to an abstention doctrine, the Eighth Circuit then concluded that the local controversy exception was not a defect within the meaning of section 1447(c) and thus, the 30-day filing requirement of this section did not apply to motions for remand under CAFA s local controversy provision. Id. at 975. At the same time, the appellate court recognized that although the 30-day statutory filing requirement did not apply to remands under CAFA s local controversy provision, this did not mean non-1447(c) remands could be brought anytime, including anytime-before-judgment or on appeal. Id. at (citation omitted). Instead, the Eighth Circuit found that such non-1447(c) remands are required to be brought within a reasonable time frame. Id. at 976. In reaching this conclusion, the Eighth Circuit cited to case law supporting the proposition that a reasonable time may be significantly shorter where remand is apparent and an analysis may take into account the benefits of resolving the question early in litigation. Id. (citing Kamm v. ITEX Corp., 568 F.3d 752, 757 (9th Cir. 2009); Snapper, Inc. v. Redan, 171 F.3d 1249, 1257 n.18 (11th Cir. 1999)). Ultimately, the Eighth Circuit remanded this issue back to this Court to make the following determination: 4 Section 1447(c) provides in relevant part, [a] motion to remand the case on the basis of any defect other than the lack of subject matter jurisdiction must be made within 30 days after the filing of the notice of removal.... 6

7 CASE 0:09-cv MJD-JSM Document 151 Filed 10/13/11 Page 7 of 21 Id. (citation omitted). We recognize that there may be similar considerations to take into account in this case, but, along with the central question of whether the more than 100 days it took for Plaintiffs to move to remand constitutes a reasonable time frame, we remand to the district court to make these determination in the first instance. In their materials to this Court supporting remand, plaintiffs relied on Rule 60(c) of the Federal Rules of Civil Procedure, which requires motions for relief of judgment to be made within a reasonable time, and cases that stand for the proposition that a reasonable time under Rule 60(c) depends largely on the facts of a given case, including the length and circumstances of the delay and the possibility of prejudice to the opposing party. See Plaintiffs Memorandum of Law in Support of Remand Reasonable Time Issue ( Pl. s Mem. ) [Docket No. 131], p. 8 (citations omitted). Plaintiffs also pointed to cases declining to exercise supplemental jurisdiction absent extraordinary circumstances. Id., pp As to the facts of this case, plaintiffs argued that their motion to remand was filed at an early stage of the litigation, only three months after removal. Id., p. 10. Plaintiffs represented that they recognized the applicability of CAFA s local controversy exception in this case the day the Michigan lawsuit was remanded. Id., p. 4. Plaintiffs also contended that remand in this case was appropriate where no discovery has been conducted and no Rule 16 pretrial conference has taken place. Id., p. 10. Further, in light of the Eighth Circuit s holding that CAFA operates as an abstention doctrine, plaintiffs cited to abstention cases permitting remands over 80 days after the notice of removal (see Melahn v. Pennock Ins. Inc., 965 F,2d 1497 (8th Cir. 1992)), and cases supporting the proposition that abstention can be raised by the court sua sponte, even 7

8 CASE 0:09-cv MJD-JSM Document 151 Filed 10/13/11 Page 8 of 21 on appeal. Id., pp , (citations omitted). In addition, plaintiffs pointed to the mandatory language of 28 U.S.C. 1332(d)(4) that a district court shall decline to exercise jurisdiction with regards to CAFA s local controversy exception and Congress s intent that cases to which the local controversy exception applies should be adjudicated in state court. Id., p. 15. Defendants countered that plaintiffs motion to remand amounts to an impermissible attempt at forum shopping. See Defendants Memorandum of Law in Opposition to Plaintiffs Motion to Remand Untimeliness Issue ( Defs. Mem. ) [Docket No. 135], pp Defendants cited to the fact that plaintiffs only moved to remand after twice amending their complaint and only after they had received a harsh ruling from Judge Rosenbaum dismissing the complaint. Id., pp In addition, similar to cases such as Snapper, which have concluded that remand based on a forum selection clause must not be delayed as being generally apparent from the time of removal, defendants argued that the local controversy exception should have been apparent at the time of the removal. Id., pp Defendants urged this Court to apply the factors set forth in Koehnen v. Herald Fire Ins. Co., 89 F.3d 525 (8th Cir. 1996) to find that plaintiffs failed to bring their motion to remand within a reasonable time frame: (1) whether the remanding party seeks affirmative relief in federal court; and (2) whether the remanding party waited until the rendering of an unreasonable ruling before moving to remand. Id., pp Defendants also took issue with plaintiffs reliance on the supplemental jurisdiction doctrine for guidance--neither forum shopping nor timeliness is usually a factor with supplemental jurisdiction, where federal courts typically decline to 8

9 CASE 0:09-cv MJD-JSM Document 151 Filed 10/13/11 Page 9 of 21 exercise jurisdiction over state claims after all federal claims are eliminated from a suit, which often does not occur until at the end of a case. Id., pp Additionally, defendants asserted that any claim by plaintiffs that abstentionbased remands can never be untimely because they can be raised sua sponte, is contrary to the instructions of the Eighth Circuit, which directed this Court determine whether the facts of this case warranted a finding of timeliness by the plaintiffs. Id., p. 16. Defendants pointed to 28 U.S.C. 1332(c)(2), in the bankruptcy context, where the statute requires a timely motion to remand and court decisions that have interpreted this language to mean that a party should seek to remand as soon as the party should have learned of the grounds for such a motion. Id., p. 17. As to plaintiffs analogy to Rule 60(c) motions, defendants argued that such motions do not have concerns of the forum shopping that are present in this case, and in any case, cases examining Rule 60(c) motions take into account the delay in bringing a motion for relief from judgment. Id., p. 18 (citation omitted). Further, defendants asserted that plaintiffs failed to adequately explain why they did not raise the local controversy expectation shortly after removal. Id., p. 19. Defendants opined that plaintiffs argument that they only recognized the applicability of the local controversy exception in this case the day the Michigan lawsuit was remanded was incredulous since the parties were notified of the Michigan court s concern at the November 2, 2009 Rule 16 conference, the Michigan court offered the parties the opportunity to file supplemental briefing regarding the court s jurisdiction under CAFA, and scheduled oral argument on the issue. Id., p. 20 (citing Declaration of Brian Murray, Ex. E (Michigan Order)), p. 1. Defendants noted that plaintiffs did not seek a remand until after Judge 9

10 CASE 0:09-cv MJD-JSM Document 151 Filed 10/13/11 Page 10 of 21 Rosenbaum dismissed their Complaint on November 23, 2009 for being inadequate. Id., p. 20. In reply, plaintiffs argued that when the Eighth Circuit remanded this case back to this Court, it did not instruct the Court to apply a Koehnen waiver analysis to the present case, and in any event, the Koehnen waiver applied to a procedural defect remand and not an abstention related remand. See Plaintiff s Reply in Support of Remand Reasonable Time Issue ( Pls. Reply ) [Docket No. 138], pp Further, unlike this case, the plaintiff in Koehnen only sought a remand after its affirmative dispositive motion was denied. Id., p. 5. In this case, plaintiffs asserted that the filing of an amended complaint does not constitute waiver to the right to remand unless the party seeking remand has filed an amended complaint seeking further or different relief. Id., p. 6. Plaintiffs maintained that they amended their complaint the first time to clarify that they were not seeking reimbursement under Medicare and Medicaid, and the second amendment was filed only to add additional facts to address the pleading defects identified by Judge Rosenbaum. Id., p. 7. Plaintiffs also argued that responding to a motion to dismiss does not constitute affirmative conduct sufficient to waive its right to remand. Id. Additionally, plaintiffs took issue with defendants assertion that they were engaging in forum shopping. Plaintiffs claimed that they did not immediately move for remand because they did not have sufficient evidence on each defendant s respective share of the market, culpability or ability to pay to satisfy the relief/significant basis element of the local controversy exception. Id., p. 11. In support, plaintiffs pointed to the briefing they submitted in the Michigan action, after the court raised the local 10

11 CASE 0:09-cv MJD-JSM Document 151 Filed 10/13/11 Page 11 of 21 controversy exception sua sponte in November 2009, where they informed the court that they were unable to meet their burden under 28 U.S.C. 1332(d)(4)(A), of showing that the prescription drug activities of the Michigan Defendants form a significant basis for the claims alleged, or that significant relief is being sought from them. Id., p. 12 (citing Declaration of Bryan R. Walters in Support of Plaintiffs Reply in Support of Remand Reasonable Time Issue ( Walters Reply Decl. ) [Docket No. 139], Ex. 1 (City of Lansing v. CVS Caremark Corporation, Case No. 1:09-cv-778 (W.D. Mich. Nov. 19, 2009), Pls.' Supp. Br. Regarding Jurisdiction), p. 7.). It was not until the Michigan court rejected plaintiffs analysis and interpreted significant broadly to encompass a local defendant that had a role that was more peripheral, that plaintiffs concluded that the quantum of evidence was minimal and easy to establish based on the face of the complaint. See Pls. Reply, p. 12. Plaintiffs believed that the local controversy exception could apply to the present case given the presence of Target Corporation, a Minnesota corporation, as one of the defendants. Id., p. 13. Without the Michigan decision, plaintiffs represented that they would not have filed their motion to remand in this case at that time. Id. To counter defendants claims of forum shopping, based on Judge Rosenbaum s adverse decision, plaintiffs reminded the Court that Judge Rosenbaum s July 20, 2010 decision denied defendants second motion to dismiss and he admitted at the hearing on this second motion that the initial amended complaint was not deficient. Id., p. 14. Finally, even if the Court found that the motion to remand was untimely, plaintiffs encouraged it to remand this case, sua sponte, to state court under the local 11

12 CASE 0:09-cv MJD-JSM Document 151 Filed 10/13/11 Page 12 of 21 controversy exception, given the mandatory nature of the exception to federal jurisdiction. Id., pp II. DISCUSSION In the various cases cited by the parties and others addressing the timing of a non-1447(c) remand, several factors emerge as bearing on the determination of whether such a remand was brought within a reasonable time frame. For example, in Snapper, cited to by the Eighth Circuit in its remand decision in this matter and relied upon by defendants, the Eleventh Circuit addressed a motion to remand based on a forum selection clause that was brought over 30 days after the notice of removal. There, the appellate court concluded that a remand based on a forum selection clause was not a defect in removal procedure and fell out of the 30-day requirement of 1447(c). 171 F.3d at The court also opined that it was unlikely that a remand based on either abstention or supplemental jurisdiction contexts would be ripe within such a short time frame. Id. at Regarding the timing of non-1447(c) remands, the Eleventh Circuit noted: The mere fact that the statutory time limitation on raising motions to remand does not apply does not mean that non- 1447(c) remands are necessarily authorized at any time. Prior to the enactment of the statutory limitation, motions for remand were required to be brought within a reasonable time frame. This rule continues for remands not covered by 1447(c). Because a forum selection clause is generally apparent from the time of removal, a reasonable time may be significantly shorter in that context than in the abstention or supplemental jurisdiction contexts. One might even argue that federal courts should borrow the 30-day requirement from 1447(c) in the forum selection clause context. We need not decide that question in this case, however, because the motion for remand in this case was clearly timely. Removal occurred on February 11, 1997, and Snapper moved for remand on March 7,

13 CASE 0:09-cv MJD-JSM Document 151 Filed 10/13/11 Page 13 of 21 Id. at 1257 n.18 (citations and parentheticals omitted) (emphasis added). The Court of Appeals upheld the remand to the state court. In the other case referenced by the Eighth Circuit concerning the timing of non- 1447(c) remands, Kamm, the Ninth Circuit found that a forum selection clause was not a defect in removal procedure, and therefore fell outside of the 30-day requirement of 1447(c). 568 F.3d at 757. In Kamm, the plaintiff filed a motion for remand 31 days after the notice of removal. Id. at 754. The Ninth Circuit, in finding that the motion to remand was timely, concluded that non-1447(c) remands should be brought within a reasonable time frame, explaining: In our view, there are good policy reasons to impose a statutory time limit on a motion to remand based on a forum selection clause, whether that limit be thirty days or some other period. The parties are, or should be, aware of a forum selection clause at the outset of the litigation. 5 There are good reasons to resolve early in the litigation the question of what forum will decide the case, and there are equally good reasons, where practicable, to have a bright-line rule prescribing the time within which a motion to remand should be filed. But we may not rewrite 1447(c) to suit our own view of good policy. That is, of course, a task for Congress. As 1447 is now written, it simply does not contain a time limit for a motion to remand to state court based on a forum selection clause. Id. at 757 (emphasis added). These cases are premised on the notion that whether a non-1447(c) remand motion was brought within a reasonable time frame is dependent on when the remanding party was or should have been aware of the basis for remand. Indeed, 5 Obviously, parties should know about forum selection clause at the outset of litigation since parties in most cases agreed to such clauses before the inception of litigation. 13

14 CASE 0:09-cv MJD-JSM Document 151 Filed 10/13/11 Page 14 of 21 when looking for guidance at the abstention provisions in the bankruptcy context under 28 U.S.C. 1332(c)(2), which requires a timely motion to remand, courts have concluded that a party acts in a timely fashion when he or she moves as soon as possible after he or she should have learned the grounds for such a motion. In re Applegate, 414 B.R. 209, 214 (N.D. Ohio 2008) (quoting In re Novak,116 B.R. 626, 628 (N.D. Ill. June 18, 1990)) (emphasis added). Other cases stand for the proposition that there is no bright-line rule when a non- 1447(c) remand motion should be brought, and what constitutes a reasonable time frame will be dependent on the particular facts of a given case. Cf., United States v. Puig, 419 F.3d 700, 708 (8th Cir. 2005) (finding that what constitutes a reasonable time for a bringing a Rule 60(b) motion for relief of judgment depends on the particular facts of a case) (citations omitted). Another factor considered by courts in evaluating whether a remand based on a non-procedural defect is timely includes the stage of the litigation when the motion to remand is filed. See Ayers v. Watson, 113 U.S. 594, (1888) (affirming the denial of remand as untimely due to the fact that the party seeking the remand did not move for such relief until after the Supreme Court issued a writ of error); Foster v. Chesapeake, 933 F.2d 1207, 1213, n. 8 (3d Cir. 1991) (affirming remand where plaintiff waited 54 days and finding that a district court in the proper exercise of discretion may deny as untimely a non-procedural defect, non-jurisdictional motion to remand if made at an unreasonably late stage of the federal litigation ); 10 Palm, LLC v. City of Miami Beach, Fla., No CIV., 2011 WL at * 3 (S.D. Fla. March 23, 2011) (finding that a non-1447(c) motion for remand was not untimely given that the 14

15 CASE 0:09-cv MJD-JSM Document 151 Filed 10/13/11 Page 15 of 21 cumulative activity in the action, which included briefing a motion to dismiss, attending mediation and complying with several Court-ordered filings was not so significant and the litigation(s) so developed as to make the remand untimely); Resolution Trust Corp. v. Miller, No. CIV. A , 1993 WL at *5 n.9 (E.D. Pa. Aug. 11, 1993) ( Nevertheless, a motion to remand for non-jurisdictional reasons must be made at a reasonable time in the litigation. By litigating in two federal courts for over two years, defendants have waived any right to a remand. ) (internal citation omitted). To summarize, these cases suggest that this Court should examine the reasons for the delay in bringing a motion for remand, whether a party is attempting to use a remand as a method of forum shopping, whether the opposing party is significantly prejudiced by the remand, and whether judicial resources are being wasted. Applying these principles to this case, the Court is satisfied that plaintiffs and their counsel did not know that they had a reasonable basis for pursuing a remand until after the Michigan court issued its remand decision on December 1, In fact, the evidence before this Court establishes that plaintiffs did not believe that the CAFA local controversy exception applied to this case, even after the Michigan court raised the issue at the pretrial conference. See Walters Reply Decl., Ex. 1, p. 7. Until the Michigan court issued its ruling, plaintiffs were of the opinion that the local controversy exception did not apply since they did not have sufficient evidence on each defendants respective share of the market, culpability or ability to pay to satisfy the relief/significant basis elements of the local controversy exception. Such a belief was not unreasonable given CAFA does not provide a definition for the word significant and several courts have concluded that whether a class seeks significant relief against a defendant is 15

16 CASE 0:09-cv MJD-JSM Document 151 Filed 10/13/11 Page 16 of 21 determined by whether a plaintiff can present evidence demonstrating that the relief sought against the local defendant is significant relative to the relief sought against the other codefendants. See, e.g., Evans v. Walter Industries, Inc., 449 F.3d 1159, 1167 (11th Cir. 2006) (finding that significant relief is sought against a local defendant if the relief sought against that defendant is a significant portion of the entire relief sought by the class. ); Martin v. State Farm Mut. Auto. Ins. Co., NO. CIV. A. 3: , 2010 WL at *7 (S.D. W.Va. Aug. 18, 2010) ( Plaintiffs have not submitted the information or evidence necessary to conduct the comparative analysis required under the significant relief test.... Therefore, the Court cannot measure the relief sought against any one West Virginia adjuster against the total relief sought, and significant relief cannot be shown. ); Kearns v. Ford Motor Co., No. CV GAF(JTLX), 2005 WL at *10 (C.D. Cal. Nov. 21, 2005) ( [R]elief must be measured with respect to that sought by the entire class. ). In other words, according to these courts, the significant relief test requires a comparative analysis -- one that includes not only an assessment of how many members of the class were harmed by the defendant s actions, but also a comparison of the relief sought between all defendants and each defendant s ability to pay a potential judgment. Id. (quoting Robinson v. Cheetah Transp., 2006 WL at *3 (W.D. La. Feb. 27, 2006)). Significantly, prior to the Eighth Circuit s decision in the instant matter, at least one court in this district concluded: The statute does not expressly define the terms significant relief or significant basis. However, courts generally consider whether the relief sought from a particular defendant amounts to a significant part of the total relief sought. Evans, 449 F.3d at Courts compare the relief sought between all defendants and each defendant's ability 16

17 CASE 0:09-cv MJD-JSM Document 151 Filed 10/13/11 Page 17 of 21 to pay a potential judgment. Robinson v. Cheetah Transp., No , 2006 WL , at *3 (W.D.La. Feb. 27, 2006). If the relief sought from a particular defendant is just small change compared to the relief sought from the other defendants, then that particular defendant cannot be considered significant. Id. (quoting S.Rep. No , at 40 (2005), as reprinted in 2005 U.S.C.C.A.N. 3, 38). Green v. SuperShuttle Intern., Inc., NO. CIV (ADM/JJG), 2010 WL at *3 (D. Minn. Jan. 29, 2010), summarily aff d by Green v. SuperShuttle Int'l, Inc., No (8th Cir. May 26, 2010). 6 Unlike those cases where a party brings a motion for remand based on a forum selection clause, which presumably the parties are, or should be, aware of when the litigation commences, this Court concludes that plaintiffs did not know, nor was it readily apparent to them prior to the decision in City of Lansing issued on December 1, 2009, that they could establish make out the CAFA local controversy exception and support a motion for remand. 7 6 This Court notes that other courts have held that that a district court should not look beyond the complaint in determining whether the significant relief or significant basis criteria of subsections (aa) and (bb) have been satisfied. See Coleman v. Estes Exp. Lines, Inc., 631 F.3d 1010, (9th Cir. 2011); see also Coffey v. Freeport McMoran Copper & Gold, 581 F.3d 1240, 1245 (10th Cir. 2009) (holding that the district court had properly looked only to the complaint and finding that [t]he disputed portion of the local defendant provision requires that the defendant be one from whom significant relief is sought by members of the plaintiff class, 28 U.S.C. 1332(d)(4)(A)(i)(II)(aa). We agree with the district court's plain language analysis. The statutory language is unambiguous, and a defendant from whom significant relief is sought does not mean a defendant from whom significant relief may be obtained. There is nothing in the language of the statute that indicates Congress intended district courts to wade into the factual swamp of assessing the financial viability of a defendant as part of this preliminary consideration.... ). 7 Recently defendants submitted to this Court Calingo v. Meridian Resources Co. LLC, NO. 7:11-CV-628 VB, 2011 WL (S.D.N.Y. Aug. 16, 2011) to this Court in support of their opposition to the motion for remand. See Docket No Citing to the Eighth Circuit s decision in the present matter, the New York court found that CAFA s local controversy exception is not jurisdictional. The court also held that the plaintiffs' 17

18 CASE 0:09-cv MJD-JSM Document 151 Filed 10/13/11 Page 18 of 21 Further, the fact that the notice of motion for remand, filed the day after the Michigan decision, was also filed soon after the November 23, 2009 Order [Docket No. 45] dismissing the amended complaint, does not lead the Court to conclude that plaintiffs were attempting to forum shop in light of Judge Rosenbaum s adverse decision. This is especially true when the decision was premised on inadequate pleading and Judge Rosenbaum granted plaintiffs the opportunity to re-plead by November 27, 2009, which then resulted in the filing of the Second Amended Complaint. The temporal proximity of the notice for the motion to remand to the dismissal without prejudice was at best coincidental and not evidence of forum shopping, a conclusion bolstered by the fact that the Michigan decision was also rendered on December 1, 2009, after Judge Rosenbaum s order of dismissal and the filing of the Second Amended Complaint. The Court also concludes that the motion for remand was not made at an unreasonably late stage of the present federal litigation. Defendants argument that pursuant to Koehnen, this Court should hold that plaintiffs waived their right to remand based on their conduct of seeking affirmative relief in federal court in the form of amending their complaint and responding to the motions to dismiss, is rejected. Koehnen dealt with a remand under 1447(c), where the plaintiff moved to remand after being denied permission to amend his complaint. 89 F.3d at 528. The appellate motion for remand should have been filed within thirty days of removal and that 87 days is too long and is unreasonable. Id. at *6. Calingo is not instructive on the issue before the court whether waiting 104 days to move to remand the case from federal to state court was reasonable. Unlike the present case, in Calingo the plaintiffs gave no reasons for their delay. Id. Therefore, without any other explanation, the court found that that plaintiffs should have removed within the 30 days provided by 28 U.S.C. 1447(c). 18

19 CASE 0:09-cv MJD-JSM Document 151 Filed 10/13/11 Page 19 of 21 court concluded that by filing an amended petition, the plaintiff had consented to accept the jurisdiction of the United States court. Id. Koehnen stands for the proposition that the plaintiff had engaged in affirmative federal court conduct, such that a remand in this matter would be offensive to fundamental principles of fairness. Id. Even if a waiver doctrine was applicable to non-1447(c) remands, or for that matter is even an issue before this Court on remand from the Eighth Circuit, the Court concludes that plaintiffs have did not waive their ability to seek a remand. The First Amended Complaint was not filed based on a motion to amend, but rather was an amendment as of right that was filed shortly after the removal so as to clarify that there was no federal question in this case. It is evident that plaintiffs were not attempting to consent to the jurisdiction of this Court via the amendment. To the contrary, the amendment is evidence of plaintiffs attempt to further distance their case from the Court s reach. Nor does this Court find that defending against a motion to dismiss equates to plaintiffs acquiescing to the jurisdiction of this Court and waiving their right to remand, especially when defendants, and not plaintiffs, were the parties seeking the affirmative relief. See Peace v. Estate of Sorensen, No. CV , 2008 WL at *4 (C.D. Cal. June 30, 2008) ( A plaintiff s opposition to her adversary s efforts to seek relief from the court can hardly be deemed to be acquiescence to the court s jurisdiction. Therefore, plaintiffs did not waive their right to seek remand when they opposed defendants' motions in this Court. ). Likewise, this Court finds that unlike filing a motion to amend, the filing the Second Amended Complaint did not amount to affirmative conduct designed to trigger the jurisdiction of this Court. Rather, the amended pleading 19

20 CASE 0:09-cv MJD-JSM Document 151 Filed 10/13/11 Page 20 of 21 was an extension of plaintiffs defense against defendants affirmative attempts to dismiss the action and was invited by the Court. In sum, the Court finds that plaintiffs amended pleadings and the opposition to defendants motions to dismiss did not amount to affirmative conduct calculated to invoke the jurisdiction of the Court, such that a remand of this case would be offensive to fundamental principles of fairness. Finally, other considerations favor remand including that while this case has spanned a significant amount of time, it is still in its infancy. Discovery has not yet started, no Rule 16 pretrial conference has been held, and save for the motions to dismiss and the present motion to remand, the Court has not invested substantial resources in the present case. Based on the totality of the facts and circumstances is this case, the Court concludes that plaintiffs motion to remand was timely and this case should be remanded back to the Fourth Judicial District of Hennepin County, Minnesota. 8 8 This Court notes that this analysis may be purely academic since 1332(d)(4) instructs that a district court shall decline to exercise jurisdiction with regards to the local controversy exception provided for by CAFA. See 28 U.S.C. 1332(d)(4) (emphasis added). At least one appellate court has concluded that local controversy provision of CAFA is a mandatory abstention doctrine. Hollinger v. Home State Mut. Ins. Co., --- F.3d ----, 2011 WL at *3 (5th Cir. Sept. 06, 2011). Even the Eighth Circuit has recognized: Congress established two mandatory exceptions to federal jurisdiction under CAFA, only one of which is relevant here. Under the local-controversy exception, a district court must decline to exercise jurisdiction over a class action in which more than two-thirds of the class members in the aggregate are citizens of the state in which the action was originally filed, at least one defendant from whom significant relief is sought by members of the plaintiff class and whose alleged conduct forms a significant basis for the claims asserted by the proposed plaintiff class is a citizen of the state in which the class action was originally filed, the principal injuries 20

21 CASE 0:09-cv MJD-JSM Document 151 Filed 10/13/11 Page 21 of 21 III. RECOMMENDATION For the reasons set forth above and based on all the files, records, and proceedings herein, IT IS RECOMMENDED that: This matter be remanded back to the Fourth Judicial District of Hennepin County, Minnesota. Dated: October 13, 2011 s/ Janie S. Mayeron JANIE S. MAYERON United States Magistrate Judge Under D.Minn. LR 72.2(b) any party may object to this Report and Recommendation by filing with the Clerk of Court, and serving all parties by October 27, 2011, a writing which specifically identifies those portions of this Report to which objections are made and the basis of those objections. A party may respond to the objecting party's brief within ten days after service thereof. All briefs filed under this Rules shall be limited to 3500 words. A judge shall make a de novo determination of those portions to which objection is made. This Report and Recommendation does not constitute an order or judgment of the District Court, and it is therefore not appealable directly to the Circuit Court of Appeals. were incurred in the state in which the action was filed, and no other class action alleging similar facts was filed in the three years prior to the commencement of the current class action. Westerfeld v. Independent Processing, LLC, 621 F.3d 819, 824 (8th Cir. 2010) (quoting 28 U.S.C. 1332(d)(4)(A)) (emphasis added). Thus, had the Court decided the remand was untimely, it is very likely that it would have concluded that it was required to decline jurisdiction over this matter based on the local controversy exception. 21