The issue of whether federal subject matter jurisdiction under the Class Action Fairness Act (“CAFA”) continues to exist after class certification is denied continues to generate new and conflicting opinions. The Ninth Circuit Court of Appeals has now issued two rulings on the question. The first, Kennedy v. Natural Balance Pet Foods, Inc., Case No. 08-56378 (9th Cir. Jan. 6, 2010), ordered a case remanded to state court after class certification was denied, citing 28 U.S.C. Section 1447(c). However, the panel noted that the parties had not disputed that the district court no longer had jurisdiction over the dispute once class certification was denied, which obviously limits the precedential impact of the opinion.

In a later opinion where the issue was squarely raised, the Ninth Circuit reached the opposite conclusion. In AFL-CIO v. Shell Oil Co., No. 10-55269, 2010 U.S. App. LEXIS 8208 (9th Cir. April 21, 2010) the panel, without referencing the earlier Kennedy decision, held that once a case was removed under CAFA, the district court retained jurisdiction over the matter even after class certification was denied. Relying on Cunningham Charter Corp. v. Learjet, Inc., 592 F.3d 805 (7th Cir. 2010) and Vega v. T-Mobile USA, Inc., 564 F.3d 1256 (2d Cir. 2009), the Ninth Circuit held that “Congress intended the usual and long-standing principles apply – post-filing developments do not defeat jurisdiction if jurisdiction was properly invoked as of the time of filing.” AFL-CIO, 2010 U.S. App. LEXIS at *9.

District courts continue to address the “vanishing jurisdiction” issue as well. A particularly interesting example is a decision by Judge Standish of the Western District of Pennsylvania. In Lewis v. Ford Motor Co., Case No. 09-164, 2010 U.S. Dist. LEXIS 372 (W.D. Pa. Jan. 5, 2010), Judge Standish looked at the legislative history of CAFA in determining whether subject matter jurisdiction continued to exist after class certification had been denied. Specifically, he noted that an earlier draft of the legislation contained a provision that provided for cases to be remanded to state court if class certification was denied. That provision was deleted during negotiation of CAFA’s final form, with Senator Christopher Dowd explaining the amendment was necessary to address the “merry-go-round” problem of cases going back and forth between state and federal courts. Id. at *28-29, citing 149 Cong. Rec. S16, 102-103 (daily ed. Dec. 9, 2003). Judge Standish found this persuasive evidence Congress intended that disputes remain in federal court after they have been properly removed under CAFA.

Undoubtedly, further appellate decisions on this issue will be forthcoming. Until it is resolved, either through consistent Court of Appeals rulings or a definitive pronouncement by the Supreme Court, the possibility of vanishing jurisdiction under CAFA will remain an important tactical concern for class action litigators.

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Passage of the Class Action Fairness Act, 28 U.S.C. § 1332, 28 U.S.C. § 1441(a) and (b) and 28 U.S.C. §1453 (“CAFA”) of course dramatically expanded federal jurisdiction over class action cases. But while CAFA explicitly defines what constitutes a “class action” for purposes of federal jurisdiction, it does not explicitly address what happens to federal jurisdiction after it becomes apparent, whether by judicial decision or amendment, that no class can be certified.

Until now, the circuit courts had not directly addressed this issue, and the district courts had reached conflicting decisions, based in part on the procedural posture of the cases being decided. See, e.g., Irish v. Burlington Northern Santa Fe Railway Co., 632 F. Supp. 2d 871 (W.D. Wis. 2009) (collecting competing authority). However, in Cunningham Charter Corp. v. Learjet, Inc., No. 09-8042 (7th Cir. Jan. 22, 2010), the Seventh Circuit held the denial of class certification does not automatically mean a cases loses federal jurisdiction. In support of its conclusion, the Seventh Circuit cited the general rule that jurisdiction, once properly invoked, cannot be ousted by subsequent events as well as the danger of jurisdictional "ping-pong" if a case was found uncertificable by a federal court, but a state court reached a different conclusion after remand. The Seventh Circuit also cited what was arguably dicta from an Eleventh Circuit case, Vega v. T-Mobile USA, Inc., 564 F.3d 1256, 1268 n. 12 (11th Cir. 2009) in support of its conclusion. More...

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On November 17, 2008 the Department of Labor (DOL) issued new regulations that impact the Family and Medical Leave Act (FMLA). These regulations, which became effective January 16, 2009, modify the obligations imposed upon employers and alter the rights of employees, impacting the manner in which employers manage potential FMLA issues.

For those employers without an FMLA policy, now is the time to develop one. Employers who currently have the FMLA policy should amend it to conform to the new regulations. It is clear that employers who fail to comply with the requirements of the new regulations may be exposed to significant liability.  Following are some of the more significant changes to the regulations:

1. Covered employers now must post a general FMLA notice, even if they do not have any employees eligible for FMLA leave.
2. Employers now must provide employees two types of notice when employees request FMLA leave: eligibility notice (either indicating that the employee is eligible for leave or explaining the reason the employee is not eligible); and designation notice (notifying the employee whether the leave will be designated and counted as FMLA leave as well as if paid leave will be required to be substituted for unpaid FMLA leave and if the employer will require a fitness-for-duty certification upon return from leave).
3. Each time the eligibility notice is provided, employers now must provide employees a notice of rights and responsibilities detailing the expectations and obligations of the employee and explaining the consequences of a failure to meet these obligations.
4. Eligible employees now are provided 12 weeks of unpaid leave for a qualifying exigency arising out of the fact that the employee's spouse, son, daughter, or parent is a covered military member on active duty (or has been notified of an impending call or order to active duty) in support of a contingency operation.
5. Eligible employees now may take unpaid leave, or substitute appropriate paid leave if the employee has earned or accrued it, for up to 26 work weeks in a single 12-month period to care for a covered service member with a serious injury or illness.
6. Employers have additional time for requesting certification from a health care provider that the employee is suffering from a serious health condition.
7. Employers may demand more detailed information from the employee's health care provider before returning the employee to work.
8. Employers may consider FMLA absences in determining bonuses and other incentive awards.
9. New forms have been implemented to assist employers in providing FMLA leave, including forms for employee eligibility and rights and responsibilities, designation of leave, certification of qualifying exigency for military family leave, and certification of serious injury or illness of the covered service member for military family leave.
10. There now are separate medical certification forms for an employee's serious health condition and for a family member's serious health condition.
11. Employees are now explicitly permitted to settle past FMLA claims.

These topics represent only a fraction of the changes arising from the new FMLA regulations.  For more information on these new regulations and how they may affect your operations, please contact one of the lawyers in the Labor Law and Employment Litigation Section of Freeamn Mathis & Gary, LLP.

Additionally, to view the revised FMLA regulations and forms, please go to

Amy M. Combs
Freeman Mathis & Gary


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Motion for Transfer: A Beacon of Light in the Storm of Class Actions?
Choice of venue is an important aspect of all class action litigation. Since the passage of the Class Action Fairness Act (CAFA), plaintiffs are increasingly filing class actions in federal court. This influx of litigation has increased the need to ensure the best possible venue for these cases.

The Legal Standard
Pursuant to 28 U.S.C. § 1404(a), “[f]or the convenience of the parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.” The first issue in evaluating such a motion to transfer venue is whether the transferee court is a proper venue. This is usually an easy threshold for a defendant to overcome because the analysis is governed by 28 U.S.C. § 1391, which provides that the judicial district where the defendant resides, among other options, is a proper venue.

The second step in the transfer analysis can be more problematic as the court must balance numerous factors while taking into consideration the convenience of the parties and the interests of justice. The party moving for transfer bears the burden of establishing that the suggested venue is a “more convenient forum.” Van Dusen v. Barrack, 376 U.S. 612, 645-46 (1964). The difficulty for the moving party is compounded by the general principle of law that a plaintiff’s choice of forum is to be given considerable deference. “Unless the balance is strongly in favor of the defendant, the plaintiff’s choice of forum should rarely be disturbed.” Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947).

Reduced Deference to a Plaintiff’s Choice of Forum in Class Action Litigation
Despite the general deference to a plaintiff’s choice of forum, courts in most jurisdictions have held that in class action litigation “the weight accorded to plaintiff’s choice of forum is considerably reduced in class and derivative suits.” Koster v. Lumbermens Mut. Cas. Co., 330 U.S. 518 (1947); Donia v. Sears Holding Corp., No. 1:07-cv-02627-KMO, 2008 U.S. Dist. LEXIS 43532, *13 (N.D. Ohio May 30, 2008) (ruling “the importance of the plaintiff’s choice of forum is nonetheless diminished where the plaintiff has intentionally broadened the geographic scope of the action by seeking to certify the class”); Allen v. Sears Roebuck & Co., No. 07-11706, 2007 U.S. Dist. LEXIS 60770, *7 (E.D. Mich. Aug. 20, 2007); Beesley v. International Paper Co., No. 06-cv-703-DRH, 2007 U.S. Dist. LEXIS 62534, *7 (S.D. Ill. Aug. 24, 2007); Goldstein v. RadioShack Corp., No. 6:06-CV-285, 2007 U.S. Dist. LEXIS 32278, *5 (E.D. Tex. May 1, 2007); Jones v. Walgreen Co., 463 F. Supp. 2d 267, 274 (D. Conn. 2006); Lucas v. Family Dollar Stores of Okla., No. CIV-04-536-M, 2005 U.S. Dist. LEXIS 45521, *7 (W.D. Okla. Mar. 9, 2005); Saleh v. Titan Corp., 361 F. Supp. 2d 1152, 1157 (S.D. Cal. 2005) (stating “[t]he Ninth Circuit, like other courts, has noted that the weight to be given the plaintiff’s choice of forum is discounted where the action is a class action”). See also Anderson v. Family Dollar, Inc., No. CIV-04-0210-F, 2004 U.S. Dist. LEXIS 30579, *5 (W.D. Okla. Apr. 30, 2004) (“significantly less deference”); Bolton v. Tesoro Petroleum Corp., 549 F. Supp. 1312, 1314 (E.D. Pa. 1982).

Although it is difficult to predict the exact degree of “reduced” deference in class actions, a few general patterns have emerged.

Deference Greatly Reduced: Nationwide Class Actions and Plaintiffs Who Engage in Forum Shopping
A number of recent cases demonstrate that deference to the plaintiff’s choice of forum is most reduced in the context of nationwide class actions. See, e.g., Gueorguiev v. Max Rave, LLC, 529 F. Supp. 2d 853, 857 (N.D. Ill. 2007); Stock v. Integrated Health Plan, No. 06-CV-002150DRH, 2006 U.S. Dist. LEXIS 86041, *5 (S.D. Ill. Nov. 28, 2006); Berernson v. NationalFin. Services, LLC, 319 F. Supp. 2d 1, 3 (D.D.C. 2004). When class members are scattered throughout the country, deference to venue should be reduced because “each of many potential plaintiffs may claim the right to have the action heard in his home forum,” and “the nominal plaintiff’s role in the litigation is likely to be quite minimal.” Ingram v. Family Dollar Stores of Ala., Inc., No. CV-06-BE-1507-S, 2006 U.S. Dist. LEXIS 96845, *6 n.2 (N.D. Ala. Sept. 29, 2006). Courts therefore rationalize this reduced deference because of the numerous potentially valid forums in which to bring the case and the often weak ties of the class representative to the selected forum.

Under such circumstances, some courts in the Seventh Circuit have gone so far as to find that a plaintiff’s forum selection should be afforded no weight. Nelson v. AIM Advisors, No. 01-cv-0282-MJR, 2002 U.S. Dist. LEXIS 5101, *15 (S.D. Ill. Mar. 8, 2002) (holding that “where a plaintiff alleges a nationwide class action, plaintiff’s home forum is irrelevant”), citing Georgeouses v. NaTec Res., Inc., 963 F. Supp. 728, 730 (N.D. Ill. 1997); Genden v. Merrill Lynch Pierce Fenner & Smith, 621 F. Supp. 780, 782 (N.D. Ill. 1985).

In addition, deference to a plaintiff’s choice of forum is greatly reduced in class actions when there is evidence of forum shopping. In fact, courts in the Ninth Circuit have ruled, “Where forum shopping is evident . . . courts should disregard plaintiff’s choice of forum.” Foster v. Nationwide Mutual Insurance Co., No. C 07-04927 SI, 2007 U.S. Dist. LEXIS 95240, * 6 (N.D. Cal. Dec. 14, 2007) (emphasis added), citing Italian Colors Rest. v. American Express Co., No. C-03-3719, 2003 U.S. Dist. LEXIS 20338, *4 (N.D. Cal. Nov. 10, 2003).

Deference Somewhat Reduced: Class Action Where Plaintiff Asserts State Law Claims, But Substantially Similar, Nationwide Litigation Is Pending Elsewhere
At first blush, in cases where an in-state plaintiff files a state-wide class action asserting state law claims only, it may seem that plaintiff’s choice of forum would be given great weight. However, where parallel, nationwide class actions are pending, courts have found that judicial economy and convenience of the parties and witnesses justify transfer to the alternative venue. See, e.g., Donia v. Sears Holding Corp., No. 1:07-cv-02627-KMO, 2008 U.S. Dist. LEXIS 43532, *13 (N.D. Ohio May 30, 2008) (granting defendant’s motion to transfer where “the factors strongly favor transfer” because plaintiff’s “lawsuit simply represents a sub-class of the national class action already proceeding in the Northern District of Illinois”). The “pendency of a similar action in the transferee court is a universally recognized reason for granting a change of venue.” Pacific Coast Federation v. Gutierrez, No. C-05-3232, 2006 WL 194507, at *2 (N.D. Cal. Jan. 24, 2006) (quoting Weltmann v. Fletcher, 431 F. Supp. 448, 451 (N.D. Ohio 1976)).

Plaintiff’s Choice of Forum Afforded Most Deference: Certain Statutory Class Actions
In certain class actions, however, courts adhere to traditional rules of deference to a plaintiff’s choice of forum. Specifically, courts have taken this approach in the context of class action litigation involving federal statutes that contain venue provisions, such as ERISA, federal securities statutes, and the FLSA. Both the Federal Exchange Act and ERISA statutory venue provisions have been interpreted to provide plaintiffs with the broadest possible forum choices. See, e.g., In re Amkor Tech., No. 06-298, 2006 U.S. Dist. LEXIS 93931, *11-12 (E.D. Pa. Dec. 28, 2006) (securities law class action), citing SEC v. Elecs. Warehouse, Inc., 689 F. Supp. 53, 74 (D. Conn. 1988); Shanehchian v. Macy’s, Inc., No. 1:07-CV-00828, 2008 U.S. Dist. LEXIS 31484, *13 (S.D. Ohio Apr. 15, 2008) (ERISA class action), citing Winnett v. Caterpillar, Inc., No. 3:06-cv-00235, 2006 U.S. Dist. LEXIS 95973, *5 (M.D. Tenn. June 20, 2006). In addition, the “opt-in” nature of class actions under the FLSA also “suggests that Congress intended to give plaintiffs considerable control over the bringing of an FLSA action.” Hernandez v. Texas Capital Bank, No. 07-0726-CV-W-ODS, 2008 U.S. Dist. LEXIS 8408, *11-12 (W.D. Mo. Feb. 5, 2008), quoting Onyeneho v. Allstate Ins. Co., 466 F. Supp. 2d 1, 6 n.2 (D.D.C. 2006).

The deference afforded to a plaintiff’s choice of forum is significantly reduced in most class action litigation. Some exceptions exist to this general rule, and the practical significance of this “reduced” deference varies from jurisdiction to jurisdiction. However, the emerging body of authority on this topic gives additional options to defendants faced with class action litigation in federal courts.

Gregory R. Farkas
Frantz Ward LLP

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