The Class Action Fairness Act of 2005: A New Tool in the Defense of Publicly Traded Companies in High Stakes Litigation

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1 January 2006, Vol. 10 No. 1 Thomson/West IN THIS ISSUE: The Class Action Fairness Act of 2005: A New Tool in the Defense of Publicly Traded Companies in High Stakes Litigation By Cari K. Dawson and Stephanie B. Driggers This publication was created to provide you with accurate and authoritative information concerning the subject matter covered, however it may not necessarily have been prepared by persons licensed to practice law in a particular jurisdiction. The publisher is not engaged in rendering legal or other professional advice, and this publication is not a substitute for the advice of an attorney. If you require legal or other expert advice, you should seek the services of a competent attorney or other professional. For authorization to photocopy, please contact the Copyright Clearance Center at 222 Rosewood Drive, Danvers, MA 01923, USA (978) ; fax (978) or West s Copyright Services at 610 Opperman Drive, Eagan, MN 55123, fax (651) Please outline the specific material involved, the number of copies you wish to distribute and the purpose or format of the use. For subscription information, please contact the publisher at: west.legalworkspublications@thomson.com ARTICLE REPRINT The Class Action Fairness Act of 2005: A New Tool in the Defense of Publicly Traded Companies in High Stakes Litigation By Cari K. Dawson and Stephanie B. Driggers * * Cari K. Dawson (cari.dawson@alston.com) is a partner in the Atlanta office of Alston & Bird LLP. She specializes in complex commercial litigation with a particular focus on class actions. Stephanie Driggers (sdriggers@alston.com) is an associate in the Atlanta office of Alston & Bird. Her practice includes complex commercial litigation and class action defense. The authors would like to recognize John Goselin, a partner in Alston & Bird LLP s Securities Litigation group, for his contributions to this article. Introduction The highly anticipated Class Action Fairness Act of 2005 ( CAFA ) was signed into law on February 18, CAFA is a direct response to the abuses and ineffectiveness of the former rules of federal diversity jurisdiction as applied to class actions. Pre-CAFA, publicly traded corporations often found themselves targeted in so-called state judicial hellholes with no effective means to avail themselves of federal court. CAFA amends the diversity statute 2 to create federal jurisdiction over many (but not all) class actions. 3 Pre-CAFA, complete diversity of citizenship of the parties was required for removal, meaning that removal was not an option if a plaintiff was a citizen of the same state as any defendant. 4 In addition, the value of individual claims could not be aggregated to reach the threshold amount in controversy. 5 CAFA now allows removal where there is minimal diversity: As long as any member of the plaintiff class is a citizen of a state different from any defendant, diversity is satisfied, and the citizenship of all members of the putative class is considered, providing even greater elasticity to the minimal diversity requirement. 6 CAFA also requires courts to aggregate the claims of the individual class members to determine whether the amount in controversy exceeds the sum or value of $5 million, exclusive of interest and costs. 7 CAFA is not a cure-all for parties seeking to avoid state court, however. The legislation raises more questions than it answers, as some of its provisions are unclear and operative words are left undefined. One of these undefined issues is to what extent CAFA applies to class actions challenging corporate change-in-control transactions or certain types of securities-related class actions. By its plain language, CAFA does not apply to any class action that solely involves a claim concerning a covered security...; that solely relates to the internal affairs or governance of a corporation or other form of business enterprise...; or that solely relates to the rights, duties... and obligations

2 relating to... any security. 8 These phrases have not been widely considered in any published decisions, and there is no conclusive authority regarding their meaning. Arguably, CAFA does permit removal of certain types of class action litigation that involve corporate change-in-control transactions and some types of securities-related litigation when the complaint does not solely involve one of the statute s three limited carve-outs. Consider the example of a shareholder of a corporation being acquired filing suit and naming the selling corporation, the members of the board of directors, the buying corporation, and/or the investment bankers as defendants. If minimal diversity is satisfied, the members of the proposed class number 100 or more, and the amount in controversy is met, there is a strong argument that the case is properly removable under CAFA. The buying corporation and the investment bankers owe no duties to the shareholders of the selling corporation and claims against these entities would not involve the internal affairs of the selling corporation or any corporate governance issues. Even beyond this stark example, the vague language contained in the statute and the legislative history indicates that the three carve-outs cover only a limited set of securitiesrelated class actions and that at least some of these cases are removable under CAFA. This is an area that has not been fully tested, but may very well be in the coming years. To be sure, the extent of CAFA s application to securities-related class actions will continue to be debated, and conflicting opinions will no doubt emerge within the circuits. Given the absence of many published opinions discussing this issue, this article will focus on CAFA s application to consumer class actions in general and assist readers in understanding how the legislation can aid a company faced with a class action filed in state court. CAFA in Practice Consider the following hypothetical involving a publicly traded company facing bet-the-company litigation. Drugs, Inc., a major pharmaceutical company, is incorporated in Delaware, and its principal place of business is New York. On February 17, 2005, Drugs, Inc. is named in a nationwide putative class action filed in state court in Gulf Coast, Texas. The plaintiff class seeks hundreds of millions of dollars in damages, medical monitoring, and other injunctive relief related to their purchase and use of a drug. Plaintiffs claim the drug causes physical injuries and that the company failed to disclose the drug s harmful side effects. On March 1, 2005, the plaintiffs amend their original complaint by adding an additional claim for violation of state deceptive trade practices acts and by adding new plaintiffs. On February 20, 2005, a copycat nationwide consumer class action is filed in Cook County, Illinois state court. On February 18, 2005, Drugs, Inc. and several of its current or former officers and directors are named as defendants in a securities class action arising out of defendants misstatements and omissions regarding one of the drugs produced by the company. Plaintiffs are bringing a state law claim for breach of fiduciary duty. The suit is a putative nationwide class action filed in South Florida state court. Using the above hypothetical, this article discusses whether CAFA applies to these lawsuits, addresses filing the notice of removal when CAFA is applicable, discusses the anticipated motion to remand, and reviews the burden of establishing federal subject matter jurisdiction. Step One: Does CAFA Apply to these Class Actions? Faced with three nationwide class actions in the same month in state courts that the American Tort Reform Association has identified as judicial hellholes, Drugs, Inc. is best served if it can be in federal court, and CAFA is a potential avenue to that end. For the securities-related class action, the issue is whether the case solely involves one of the three prescribed carve-outs within CAFA. 9 Based upon Indiana State District Council of Laborers v. Renal Care Group, Inc., 10 which held that CAFA did not apply to a case involving breach of fiduciary duties and self-dealing in connection with a corporate merger, it appears that CAFA would not apply to the above-described securities case because the class action is based solely on breach of fiduciary duty in connection with a security. Therefore, our analysis of the February 18 suit for purposes of CAFA ends here. For the consumer class actions, the preliminary issue to consider is whether the cases commenced after CAFA s effective date such that CAFA will apply. Specifically, CAFA applies to class actions commenced on or after February 18, However, the statute does not define when an action commences. The majority of courts to consider the issue have held that a case commences when it is filed in state court. 11 Applying this line of cases to our hypothetical, it appears that only the Illinois consumer class action commenced on or after February 18, and therefore, CAFA has no application to the Texas suit filed on February 17. In some states, however, the applicable rules of civil procedure provide that service of process may commence a suit. 12 Additionally, there exist some unique circumstances in which some action other than filing a complaint in court is deemed to commence a lawsuit. 13 Thus, it still may be possible for Drugs, Inc. to remove the February 17 action. As the Seventh Circuit observed in Knudsen v. Liberty Mutual Insurance Co.: [A] new claim for relief (a new cause of action in state practice), the addition of a new defendant, or any other step sufficiently distinct that courts would treat it as independent for limitations purposes, could well commence a new piece of litigation for federal purposes even if it bears an old docket number for state purposes. Removal practice recognizes this point: an amendment to Wall Street Lawyer. This publication was created to provide you with accurate and authoritative information concerning the subject matter covered,

3 the pleadings that adds a claim under federal law (where only state claims had been framed before), or adds a new defendant, opens a new window of removal. We imagine, though we need not hold, that a similar approach will apply under [CAFA], perhaps modeled on Federal Rule Of Civil Procedure 15(c), which specifies when a claim relates back to the original complaint and when it is sufficiently independent of the original contentions that it must be treated as fresh litigation. 14 With that background, the central question is, what constitutes a step sufficiently distinct that courts would treat it as independent for limitations purposes and deem it to commence a new piece of litigation? To date, the courts have examined three areas: amending the class definition; adding a new plaintiff; and adding a new defendant. 15 Amending the complaint to change the class definition Courts have held that amending a complaint filed before February 18 to change the class definition may commence a new action such that CAFA applies, notwithstanding the original filing date. In Senterfitt v. Suntrust Mortgage, the class action originally was filed on March 30, 2004, but plaintiffs amended the complaint for the second time on March 21, The court held that a new action commenced when the amended complaint expanded the class definition by adding 16 years of additional claims and significantly increasing the size of the potential class, and concluded that CAFA applied to the amended complaint. 16 In contrast, in Schorsch v. Hewlett-Packard, the circuit court held that a second amended complaint changing the class definition by simply alleging additional information that was encompassed by the initial complaint filed before February 18 did not commence a new action, 17 and therefore, CAFA did not apply. Amending the complaint to add a new plaintiff and new factual allegations Likewise, adding new plaintiffs and new factual allegations also may commence a new action, triggering CAFA s application to a suit filed pre-february 18. For example, in Heaphy v. State Farm Mutual Automobile Insurance Co., 18 the plaintiffs filed the underlying case in state court on August 10, 2001, and after preliminary litigation in state court, the case went to arbitration. An arbitration award was issued in defendant s favor in April 2005, and the defendant sought to have the award confirmed as a judgment in state court. The plaintiffs then filed a first amended complaint after CAFA s effective date to add a plaintiff, allege new factual allegations arising out of events different from those in the initial complaint, and state three additional causes of action. The state court confirmed the arbitration award, and the defendant then removed the case to federal court. The plaintiffs moved to remand, arguing that the amended complaint related back to the date of the initial filing. The defendant responded that the amended complaint commenced a new action because the plaintiff had already lost all claims in arbitration before the amended complaint was filed. The court agreed with the defendant and found that CAFA applied to the first amended complaint. Notwithstanding the Heaphy case, the court in Judy v. Pfizer held that routine amendments, including refined class allegations, did not commence a new action because the substance of the claims was the same. Even though the plaintiff added claims for negligence and breach of warranty, the court found that these claims were contemplated in the original petition. 19 In Morgan v. American International Group the court reached a similar result when it held that adding class representatives and adding claims that related back to the initial complaint did not commence a new action for CAFA purposes. 20 These cases suggest that defendants will be hard pressed to identify amendments that are so novel as to commence a new action for CAFA purposes where the original complaint was filed before February 18. Amending the complaint to add a new defendant Finally, adding a new defendant also may commence a new action such that CAFA applies. In Adams v. Federal Materials Co., a class action originally was filed on March 11, On April 1, 2005, the action was amended to add a new defendant. The district court held that this later-added defendant presents precisely the situation in which it can and should be said that a new action has commenced for purposes of removal pursuant to the CAFA. 21 So, does CAFA apply to our consumer class action hypothetical? Applying these commencement rules to our hypothetical indicates that CAFA applies to the copycat litigation filed on February 20. The application of CAFA to the first suit, filed on February 17 and amended March 1, is a closer call. Without question, federal courts are reluctant to apply CAFA to actions filed prior to February 18. One of the most disappointing cases to date is Weekley v. Guidant Corp., where the court remanded a case that was filed originally as an individual claim and was amended post-cafa to add class allegations. 22 Notwithstanding Weekley, there is ample opportunity to make new law. There is no real downside to seeking removal under CAFA, and, depending on the unique factual circumstances, there may be a strong argument for applying CAFA to an amended pleading. In our hypothetical, counsel for Drugs, Inc. should argue that CAFA applies to the suit filed on February 17 because a new suit commenced when plaintiffs amended their complaint. Counsel should argue that adding new plaintiffs and a new claim for deceptive trade practices is sufficiently distinct and that it raises independent questions of which the defendants did not get notice in the initial complaint. That is, the new claim does not relate back to the originally. This publication was created to provide you with accurate and authoritative information concerning the subject matter covered, Vol. 10 No. 1, 2006

4 filed complaint. However, based on the case law cited above, this argument will be an uphill battle, and some courts may conclude that the new claims do relate back, which means CAFA will not apply. Step Two: Filing the Notice of Removal After you ve looked at the complaint and decided that CAFA applies to the February 20 lawsuit, the next step is to remove the case to federal court. Just as in non-cafa cases, the notice of removal must include a short and plain statement of the grounds for removal. The notice of removal must be filed within 30 days of learning facts demonstrating that the case is removable to federal court. Likewise, the removal notice must demonstrate the grounds for removal under CAFA, including: the existence of 100 or more class members; at least one putative class member and one defendant are citizens of different states; and the matter in controversy exceeds $5 million, exclusive of interest and costs. 23 Defining the class As with any class action, there may be challenges in identifying the number and location of class members within 30 days to ensure that removal is timely. New subsection 1332(d)(7) of CAFA clarifies that the citizenship of members of proposed classes are determined as of the date the action is filed. But, defendants must determine the number of class members who are citizens of a particular state because, as discussed below, federal jurisdiction under CAFA depends upon whether less than one-third, between one-third and two-thirds, or two-thirds or more of the class are citizens of the state in which the action was filed. While not implicated in the straightforward hypothetical in this article, in other circumstances involving multistate class actions or vague class definitions, it may be very difficult for a corporate defendant to compile and submit information concerning the citizenship and numbers of alleged class members within 30 days, as required by 28 U.S.C.A. 1446(b). In-house counsel are well aware of the challenges of identifying putative class members where the class period is lengthy, data has been inadvertently destroyed or lost, and information is simply not readily accessible via computer systems or is only accessible at prohibitive costs. Faced with a 30-day time limit, some corporations may not be able to take advantage of CAFA simply because they cannot compile the necessary information for the notice of removal. In our hypothetical, as a nationwide class action, the citizenship and location of the class members are self-evident. In the February 20 case, there are putative class members from all 50 states. While the defendant is incorporated in Delaware and has a principal place of business in New York, because at least one plaintiff is a resident of a different state from the defendant, diversity is satisfied. And, there is no question that fewer than one-third of the class members are citizens of the state in which the action was filed. Satisfying the amount in controversy requirement According to the Senate Report on CAFA, if the value of the matter in litigation exceeds $5 million from the viewpoint of either the plaintiff or the defendant, and regardless of the relief sought (damages, injunctive relief, or declaratory relief), the amount in controversy is satisfied. 24 The claims of the individual class members in any class action can be aggregated to determine whether the amount in controversy exceeds the sum or value of $5 million (exclusive of interest and costs). 25 However, depending upon the complaint, it may not be obvious that all matters in controversy in the aggregate exceed the sum or value of $5 million. For example, in Berry v. American Express Publishing Corp., the court found that CAFA did not detail the appropriate means of valuing the amount in controversy, particularly where the plaintiff is seeking nonmonetary relief. 26 The court observed that the traditional pre-cafa rule required that, in a class action case seeking injunctive relief, the amount in controversy was determined from the perspective of the value to the plaintiff. However, the Berry court held that the amount in controversy can be determined either from the view of the aggregate value to the class members or to the defendants. The court found that the complaint specifically stated that the class did not seek to recover more than $5 million, that the value of recovery to the putative class was nominal, and that the cost of compliance to the defendants was too speculative. In light of these facts, the court ruled that the plaintiff had proven that the amount in controversy was less than $5 million and remanded the case to state court. 27 Counsel generally presume that the jurisdictional amount will be uncontestable or easy to demonstrate in most multistate or nationwide class actions. However, as illustrated in Berry, counsel for Drugs, Inc. should consider submitting affidavits demonstrating satisfaction of the amount in controversy. In our hypothetical, counsel should be able to establish the amount in controversy fairly easily. The face of the complaint alleges more than $5 million in damages and seeks injunctive relief and medical monitoring, which should be relatively easy to quantify. But in other cases, affidavits regarding the cost of complying with injunctive relief or the damages sought by the class may be more difficult to prepare. These affidavits must be filed with the notice of removal. A note of caution. Counsel should consider the impact that this comparatively early treatment of valuation of the case in the notice of removal might have on later aspects of the litigation. Although counsel must present sufficient evidence to convince the court that the jurisdictional amount is satisfied, the defendant does not want to assist the plaintiffs by helping to establish class-wide damages or presenting arguments that support plaintiffs theory of the case. Though a court should not construe removal arguments as admissions, it is expected that plaintiffs will use a defendant s jurisdictional proof against the defendant Wall Street Lawyer. This publication was created to provide you with accurate and authoritative information concerning the subject matter covered,

5 at the class certification stage and on the merits. Therefore, a corporate defendant must be careful in providing proof of the jurisdictional amount. In pleadings, the defendant should conspicuously and repeatedly indicate that plaintiff s theory is assumed arguendo, that the valuation for purposes of removal is not dispositive of the propriety of class treatment, and that it is defendant s position that class certification should be denied either in state or federal court. Step Three: Plaintiff Files Motion to Remand In response to the notice of removal, plaintiffs will file a motion to remand. Given the relative ease in satisfying minimal diversity, plaintiffs likely will challenge the amount in controversy requirement, especially where they are seeking injunctive relief or did not specify a damage amount in the complaint. And, while not implicated in the hypothetical in this article, plaintiffs may challenge federal subject matter jurisdiction by invoking the Home State and Local Controversy exceptions to CAFA. 28 Under the Home State and Local Controversy exceptions, class actions with a truly local focus are exempt from CAFA. Under the Home State exception, federal courts cannot take the case if two-thirds or more of the putative class members, as well as the primary defendants, are citizens of the state where the case was originally filed. Under the Local Controversy exception, federal courts cannot take the case if each of the following three factors is present: 1. Two-thirds or more of the putative class members are citizens of the state where the case was originally filed and at least one defendant: is a defendant from whom significant relief is sought, is accused of conduct that forms a significant basis for the claims asserted by the putative class, and is a citizen of the state in which the action was filed; 2. Principal injuries resulting from the alleged conduct of each defendant were incurred in the state in which the action was originally filed; and 3. During the three-year period preceding the filing of the class action, no other class action has been filed asserting the same or similar factual allegations. Because CAFA does not define the terms primary defendants, significant relief, significant basis, or principal injuries, there are very real challenges in identifying the citizenship of so-called primary defendants and defendants from whom significant relief is sought and whose alleged conduct forms a significant basis for the claims asserted by the class. Corporations involved in multidefendant class actions in which some defendants are citizens of the state in which the action was originally filed and other defendants are not are faced with the challenge of how to oppose a motion to remand where plaintiff contends that remand is warranted based upon the Local Controversy or Home State exceptions. In the removal petition or remand opposition, how do defense counsel identify who the primary defendants are? Would any corporate defendant be willing to be identified as a primary defendant in order to effectuate removal when such an admission may be used against that corporation in the litigation at a later stage? What is the citizenship of the class members and how is that determined within 30 days? Is there a way to avoid remand to state court under the Home State or Local Controversy exceptions without having to denominate certain corporate defendants as primary or defendants from whom significant relief is sought and whose alleged conduct forms a significant basis for the class claims? The statute s failure to define these terms makes this analysis quite complicated. Without a definition of primary, how do you know what evidence will be sufficient to demonstrate that your client is secondary? Without a definition of significant relief, how does counsel know what quantifiable amount is insignificant by comparison? The answer to these questions depends upon how well crafted the complaint is and the theories of liability asserted therein. Neither exception is implicated in our hypothetical, nor does the court have discretion to remand because, as a nationwide class action, fewer than one-third of the class members are citizens of the state in which the case was filed. Step Four: The Burden of Establishing Federal Subject-Matter Jurisdiction When opposing the motion to remand, in addition to arguing that no exception to CAFA applies and that the requirements for CAFA jurisdiction are met, it will be essential to know which party bears the burden of proof. The text of 28 U.S.C.A is silent on the issue of which party plaintiff or defendant bears the burden of demonstrating that federal subject-matter jurisdiction exists, and there is a split of authority among the courts on this issue. Pre-CAFA case law places the burden squarely on the corporate defendant to prove federal subject-matter jurisdiction on a motion to remand. 29 However, CAFA s legislative history states, It is the intent of the committee that the named plaintiff(s) should bear the burden of demonstrating that a case should be remanded to state court. Some courts hold that the party seeking remand bears the burden, relying on legislative history, 30 but other courts hold that the removing party bears the burden. 31 Because of this split, counsel for Drugs, Inc. should be prepared to bear the burden of proof to show facts establishing jurisdiction, consistent with pre-cafa case law, while arguing that the party seeking remand should bear the burden of proof. Concluding Thoughts Congress has made clear its intention to restore the intent of the framers of the United States Constitution by providing for Federal court consideration of interstate cases. 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6 of national importance under diversity jurisdiction... through CAFA. 32 The hypothetical in this article is the seminal CAFA case, and therefore, the February 20 nationwide class action should remain in federal court, notwithstanding any remand motion. However, plaintiffs counsel are well aware of the exceptions to CAFA. If a plaintiff wants to file a class action against a publicly traded company in state court and prevent removal of the case to federal court, it can be done through strategic pleading. A discussion of these more complex removal and remand arguments is beyond the scope of this article. Though CAFA cannot be invoked in every case, counsel for publicly traded companies should consistently argue that there is a presumption that interstate class actions should be in federal court, notwithstanding plaintiff s choice of forum, and take every opportunity to remove under CAFA. Notes 1. The scope of this article is limited to illustrating the basic criteria necessary for removal under the Class Action Fairness Act of The nuances and complexities of CAFA cannot be fully explored in an article of this length. In addition, this article represents the state of the law as of December 15, Readers should be aware that rapid changes are occurring in this area of law in large part due to the expedited appeals available under CAFA U.S.C.A CAFA s grant of federal jurisdiction is not without exception. For example, federal jurisdiction will not lie if the putative class has fewer than 100 class members. See Class Action Fairness Act, Pub. L. No , 4. Likewise, CAFA s grant of jurisdiction does not extend to certain specified types of securities lawsuits. 4(a)(2)(d)(9); Ind. State Dist. Council of Laborers and Hod Carriers Pension Fund v. Renal Care Group, Inc., No. 3: , 2005 WL (M.D. Tenn. Aug. 18, 2005), motion for reconsideration denied, 2005 WL (M.D. Tenn. Sept. 12, 2005). 4. See, e.g., Lundquist v. Precision Valley Aviation, Inc., 946 F.2d 8, 10 (1st Cir. 1991). 5. See, e.g., In re Brand Name Prescription Drugs Antitrust Litig., 123 F.3d 599, 607 (7th Cir. 1997) (stating that at least one named plaintiff must satisfy the jurisdictional minimum to meet the traditional amount in controversy requirement); but see Exxon Mobile Corp. v. Allapattah Servs., Inc., 125 S. Ct (2005) (holding that, under 28 U.S.C.A. 1367, a federal court in a diversity action may exercise supplemental jurisdiction over additional plaintiffs whose claims do not satisfy the minimum amount in controversy requirement, provided the claims are part of the case or controversy as the claims of plaintiffs who do allege a sufficient amount in controversy) U.S.C.A. 1332(d)(2) U.S.C.A. 1332(d)(6) U.S.C.A. 1332(d)(9) (emphasis added, citations omitted). 9. This Article does not address how to argue that CAFA should apply to securities-related litigation. 10. No. Civ. 3: , 2005 WL , at *1 (M.D. Tenn. 2005). 11. See, e.g., Pritchett v. Office Depot, Inc., 404 F.3d 1232 (10th Cir. 2005); see also Fed. R. Civ. P. 3 (a civil action is commenced by filing a complaint with the court). 12. Id.; see also Dinkel v. Gen. Motors Corp., 400 F. Supp. 2d 289 (D. Me. 2005) (allowing removal under CAFA where three defendants were served 90 days after the pre-february 18 filed Complaint, because, under Kansas law, a lawsuit does not commence until service of process occurs if 90 days has passed since filing); Eufaula Drugs, Inc. v. Scripsolutions, No. 2:05CV370-A, 2005 WL , at *4 (M.D. Ala. Oct. 6, 2005) (analyzing commencement under Alabama law, which provides that a complaint is commenced when it is filed with the intention of having process served in due course). 13. Pritchett, 404 F.3d at F.3d 805, 807 (7th Cir. 2005). 15. Schorsch v. Hewlett-Packard Co., 417 F.3d 748, 751 (7th Cir. 2005) (holding that a second amended complaint expanding the class definition did not commence a new action); see also Judy v. Pfizer, Inc., No. 4:05CV1208, 2005 WL (E.D. Mo. Sept. 14, 2005) (holding that amendments to complaint that simply refined factual and class allegations did not commence new action and remanding case) F. Supp. 2d 1377, 1378, 1381 (S.D. Ga. 2005) F.3d 748, 751 (7th Cir. 2005). 18. No. C , 2005 WL (W.D. Wash. Aug. 15, 2005). 19. No. 4:05CV1208, 2005 WL (E.D. Mo. Sept. 14, 2005); see also Lee v. Citimortgage, Inc., No. 4:05CV1216JCH, 2005 WL , at *2 (E.D. Mo. Oct. 5, 2005) (following Judy). 20. No. C , 2005 WL , at *3 (N.D. Cal. Sept. 8, 2005); see also Boxdorfer v. DaimlerChrysler Corp., 396 F. Supp. 2d 946 (C.D. Ill. Oct. 25, 2005) (same); Richina v. Maytag Corp., No. S , 2005 WL (E.D. Cal. Oct. 26, 2005) (same). 21. No. 5:05CV-90-R, 2005 WL at *4 (W.D. Ky. July 28, 2005) F. Supp. 2d 1066 (E.D. Ark. 2005). 23. In a multidefendant case, a single defendant can remove a class action without the consent of all defendants, and the one-year limitation for removal under Section 1446(b) no longer applies. 24. S. Rep. No (2005) U.S.C.A. 1332(d)(6) F. Supp. 2d 1118, 1123 (C.D. Cal. 2005). 27. Id. at In addition, federal courts have discretion to remand if between one-third and two-thirds of the class members and primary defendants are citizens of the state in which the case was originally filed. 29. See De Aguilar v. Boeing Co., 47 F.3d 1404, 1409 n.6 (5th Cir. 1995); Burns v. Windsor Ins. Co., 31 F.3d 1092, 1094 (11th Cir. 1994). There is some difference of opinion in the circuits as to exactly what to call this burden of proof. The Fifth, Sixth, and Eleventh Circuits require a preponderance of the evidence, see De Aguilar, 47 F.3d at 1409; Gafford v. Gen. Elec. Co., 997 F.2d 150, 158 (6th Cir. 1993); Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1357 (11th Cir. 1996), whereas the Third Circuit applies the legal certainty test. Whatever the jurisdiction or terminology, the defendant must do more than make a conclusory statement in the notice of removal that the amount in controversy has been met. See Lupo v. Human Affairs Int l, Inc., 28 F.3d 269, (2d Cir. 1994); see also Huffman v. Saul Holdings Ltd. P ship, 194 F.3d 1072 (10th Cir. 1999) (burden varies on whether amount exceeds limit). 30. See, e.g., Berry v. Am. Express Publ g Corp., No. SA CV AHS, 2005 WL (C.D. Cal. June 15, 2005). 31. See, e.g., Brill v. Countrywide Home Loans, Inc., 427 F.3d 446 (7th Cir. 2005). 32. Pub. L (b)(2). Wall Street Lawyer. This publication was created to provide you with accurate and authoritative information concerning the subject matter covered,