Friday, October 12, 2007

CAFA's Home State Exception Interpreted

BNA's class action report came out today.  One of the more interesting decisions reported concerns the interpretation of the "home state" exception to removal under CAFA.  Here is a bit from the report:

A federal court in Pennsylvania Sept. 27 concluded that the "home-state" exception to the Class Action Fairness Act does not apply if one or more primary defendants is not a resident of the state in question (Anthony v. Small Tube Manufacturing Corp., E.D. Pa., No. 06-CV-4410,  9/27/07). 

The court rejected plaintiff's argument that the case ought to be remanded to state court because the home state exception (28 USC sec. 1332(d)(4)(B) applies if a single primary defendant is of the same state as plaintiffs.  A bit more from the BNA summary:

Few courts have dealt with the definition of "primary defendants" in the home-state exception, [Judge] Gardner said. Using an analysis set out in Passa v. Derderian, 308 F. Supp.2d 43 (D.R.I. 2004), on a similar law, the judge said primary defendants are those with direct liability to the plaintiffs, while secondary ones are those who are liable under such theories as indemnification or vicarious liability. Under this definition, he found both Small Tube and Cabot were primary defendants, as were the other defendants in the litigation, rejecting the plaintiffs' argument that only Small Tube met that test.


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