Class Action Exception to Rule Allows for Removal Past One-Year Limit: Eighth Circuit | Practical Law

Class Action Exception to Rule Allows for Removal Past One-Year Limit: Eighth Circuit | Practical Law

The US Court of Appeals for the Eighth Circuit in Reece v. Bank of New York Mellon ruled that the one-year time limit for removing a case to federal court imposed by 28 U.S.C. § 1446(c)(1) does not apply to class actions due to the exception set out in 28 U.S.C. § 1453(b). 

Class Action Exception to Rule Allows for Removal Past One-Year Limit: Eighth Circuit

by Practical Law Litigation
Published on 28 Jul 2014 • USA (National/Federal)
The US Court of Appeals for the Eighth Circuit in Reece v. Bank of New York Mellon ruled that the one-year time limit for removing a case to federal court imposed by 28 U.S.C. § 1446(c)(1) does not apply to class actions due to the exception set out in 28 U.S.C. § 1453(b).
On July 23, 2014, the US Court of Appeals for the Eighth Circuit in Reece v. Bank of New York Mellon ruled that the one-year time limit for removing a case to federal court imposed by 28 U.S.C. § 1446(c)(1) does not apply to class actions due to the exception set out in 28 U.S.C. § 1453(b) (Nos. 12-3526 and 13-1245 (8th Cir. July 23, 2014)).
Gary Reece, a citizen of Arkansas, received a non-judicial foreclosure notice from Bank of New York Mellon (Mellon) and obtained a temporary restraining order against the bank. Over a year later, he amended his complaint, seeking to represent a class of Arkansas homeowners against Mellon. Mellon removed within 30 days of the amended complaint’s filing and also moved to dismiss while Reece moved to remand. The district court denied the motion to remand and granted Mellon's motion to dismiss. Reece appealed, arguing that:
  • Mellon was barred from removing the suit to federal court because it filed its notice of removal almost four months past the one-year limit prescribed by § 1446(c)(1), which states that a case may not be removed under § 1446(b)(3) on the basis of diversity jurisdiction more than one year after commencement of the action.
  • The exclusion to this limit, set out in § 1453(b), applies solely to class actions brought under the Class Action Fairness Act of 2005, which requires a higher amount in controversy ($5 million as opposed to $75,000).
The Eighth Circuit Court of Appeals affirmed the denial of Reece's motion to remand.
Seeking to protect against clever gamesmanship by plaintiffs hoping to evade federal jurisdiction, the court looked at the statutory language, case law and congressional intent, and found that the one-year limit in § 1446(c)(1) does not apply to class actions regardless of how federal jurisdiction over the class action arises.
Practitioners litigating class actions in the Eighth Circuit should be aware that § 1453(b) allows an exception from the one-year limit for removal prescribed by § 1446(c)(1).