First Circuit Clarifies Deadline for Removal under CAFA and that an E-mail May Constitute "Other Paper" | Practical Law

First Circuit Clarifies Deadline for Removal under CAFA and that an E-mail May Constitute "Other Paper" | Practical Law

In Romulus v. CVS Pharmacy, Inc., the US Court of Appeals for the First Circuit clarified when the 30-day removal period in 28 U.S.C. §1446(b)(3) is triggered for actions under the Class Action Fairness Act (CAFA). In an issue of first impression for the court, the First Circuit held that the 30-day removal period under 28 U.S.C. §1446(b)(3) is triggered only when the plaintiffs' pleadings or other papers provide a clear statement of the damages sought or sufficient information from which damages can be readily calculated, and not when the defendant could have discovered a basis for removal through significant investigation on its own. The court also held in another issue of first impression that an e-mail from the plaintiff to the defendant can constitute an "other paper" under 28 U.S.C. § 1446(b)(3).

First Circuit Clarifies Deadline for Removal under CAFA and that an E-mail May Constitute "Other Paper"

by Practical Law Litigation
Published on 28 Oct 2014 • USA (National/Federal)
In Romulus v. CVS Pharmacy, Inc., the US Court of Appeals for the First Circuit clarified when the 30-day removal period in 28 U.S.C. §1446(b)(3) is triggered for actions under the Class Action Fairness Act (CAFA). In an issue of first impression for the court, the First Circuit held that the 30-day removal period under 28 U.S.C. §1446(b)(3) is triggered only when the plaintiffs' pleadings or other papers provide a clear statement of the damages sought or sufficient information from which damages can be readily calculated, and not when the defendant could have discovered a basis for removal through significant investigation on its own. The court also held in another issue of first impression that an e-mail from the plaintiff to the defendant can constitute an "other paper" under 28 U.S.C. § 1446(b)(3).
On October 24, 2014, in Romulus v. CVS Pharmacy, Inc., the US Court of Appeals for the First Circuit clarified when the 30-day removal period in 28 U.S.C. §1446(b)(3) is triggered for actions under the Class Action Fairness Act (CAFA) (No. 14-1937, (1st Cir. Oct. 24, 2014). In an issue of first impression for the court, the First Circuit held that the 30-day removal period under 28 U.S.C. §1446(b)(3) is triggered only when the plaintiffs' pleadings or other papers provide a clear statement of the damages sought or sufficient information from which damages can be readily calculated, and not when the defendant could have discovered a basis for removal through significant investigation on its own. The court also held in another issue of first impression that an e-mail from the plaintiff to the defendant can constitute an "other paper" under 28 U.S.C. § 1446(b)(3).
The plaintiffs filed a wage-and-hour suit against CVS Pharmacy, Inc. (CVS) in Massachusetts state court for CVS's alleged failure to pay shift supervisors for “breaks” during which they had to stay on premises because no other managerial employees were on duty. The complaint did not provide the number of breaks at issue or the total amount of damages sought. During preliminary discovery, CVS provided the plaintiffs with data that allowed the plaintiffs to calculate the number of breaks. The plaintiffs informed CVS of this number via e-mail on January 18, 2013.
Within 30 days of receiving the e-mail, CVS sought removal based on its own calculation of damages extrapolated from the information in the plaintiffs' e-mail, arguing that there was a reasonable probability that the amount in controversy would exceed the $5 million amount in controversy required under CAFA. However, the district court found that CVS's notice of removal was untimely because it was filed more than 30 days after service of the complaint, and because the January 18, 2013 e-mail did not provide any new information to CVS regarding removability that CVS could not have previously ascertained based on its own knowledge and information. The district court also found that CVS violated a duty to make a reasonable inquiry into its own records at the time of the complaint.
The First Circuit reversed and found that CVS's notice of removal was timely under 28 U.S.C. §1446(b)(3). It held that the district court erred in imposing too great a duty of inquiry on the defendant. Rather, CVS had carried its burden of demonstrating a reasonable probability that the amount in controversy exceeds $5 million based on the e-mail, which was an "other paper" from which CVS could first ascertain that the case was one that was removable. The First Circuit reasoned that:
  • The text of 28 U.S.C. §1446(b)(3) focuses solely on when the plaintiffs’ own papers reveal removability, and does not impose on a defendant an independent duty to investigate damages. In other words, a defendant need only look to the papers provided by the plaintiffs to determine whether the time period for removal has been triggered.
  • Without a bright-line rule, plaintiffs would have no incentive to specify estimated damages early in the litigation.
  • Determining what the defendant should have investigated rather than analyzing what was apparent or easily ascertainable from the face of the pleadings is not efficient, and would result in fact-intensive mini-trials.
  • Focusing exclusively on the pleadings and other papers provided by the plaintiffs is consistent with Congressional intent that the party seeking removal has notice that the case is removable before the limitations period begins to run.
The First Circuit also held that the phrase "other paper" under 28 U.S.C. § 1446(b)(3) is not limited to papers that are formally filed or served on the parties, and that informal correspondence like the plaintiffs' e-mail may constitute an “other paper” because:
  • The Senate Report accompanying the passage of CAFA supports a broad interpretation of the phrase “other papers.”
  • Federal courts have included a wide variety of documents within the scope of the provision.
  • Two other circuits have also held that correspondence from the plaintiff may suffice under the statute.
The First Circuit then concluded that the January 18, 2013 e-mail from the plaintiffs to CVS was not disqualified from being an "other paper" simply because it was based on information provided by CVS that was not new. Rather, the court emphasized that CVS had no duty to perform significant investigation of its own data to ascertain removability. It then clarified that the test under 28 U.S.C. § 1446(b)(3) is not whether the information is "new," but when the plaintiffs' papers first enable the defendant to make the requisite merits showing to the district court.
In clarifying when the removal clock is triggered under 28 U.S.C. §1446(b)(3), the First Circuit joined other circuits in adopting a bright-line test, including the: