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Liberty Mutual Fire Insurance Co. v. EZ-FLO International, Inc.

United States Court of Appeals, Ninth Circuit

December 14, 2017

Liberty Mutual Fire Insurance Company, as Subrogee of Alexander Zahri; Auto Club Indemnity Company; California Capital Insurance Company; The Cincinnati Insurance Company; CSAA Insurance Exchange; Erie Insurance Company; First American Specialty Insurance Company; Interinsurance Exchange of the Automobile Club; Liberty Insurance Corporation; Liberty Lloyds of Texas Insurance Company; Liberty Mutual Mid-Atlantic Insurance Company; LM Insurance Corporation; Mercury Casualty Company; Residence Mutual Insurance Company; Safeco Insurance Company of America; Safeco Insurance Company of Illinois; Safeco Insurance Company of Indiana; Safeco Insurance Company of Oregon; The First Liberty Insurance Corporation; United Services Automobile Association; USAA Casualty Insurance Company; USAA General Indemnity Company; USAA Texas Lloyds Company; Westfield Insurance Company; Westfield National Insurance Company, Plaintiffs-Appellees,
v.
EZ-FLO International, Inc., Defendant-Appellant.

          Submitted December 14, 2017 Pasadena, California

         Appeal from the United States District Court No. 5:17-cv-00228-MWF-SP for the Central District of California Michael W. Fitzgerald, District Judge, Presiding

          Michael J. Hassen (argued) and Christopher H. Doyle, Jeffer Mangels Butler & Mitchell LLP, San Francisco, California; Michael Phillips, EZ-FLO International Inc., Ontario, California; for Defendant-Appellant.

          Timothy E. Cary (argued), Law Offices of Robert A. Stutman P.C., Corona, California; Hal J. Kleinman, Law Offices of Robert A. Stutman P.C., Fort Washington, Pennsylvania; for Plaintiffs-Appellees.

          Before: Stephen Reinhardt, Ronald Lee Gilman, [*] and Kim McLane Wardlaw, Circuit Judges.

         SUMMARY [**]

         Class Action Fairness Act

         The panel affirmed the district court's order, remanding to state court a complaint brought by 26 insurance companies in their capacity as subrogees of 145 insured homeowners against a defendant manufacturer, because there was no jurisdiction under the Class Action Fairness Act ("CAFA") to qualify as a "mass action." 28 U.S.C. § 1332(d)(2).

         Under CAFA, a defendant in a civil action suit may remove a "mass action" from state to federal court if the aggregate amount in controversy exceeds $5 million. A "mass action" is defined as "any civil action . . . in which monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs' claims involve common questions of law or fact."

         The panel held that, based on Mississippi ex rel. Hood v. AU Optronics Corp., 134 S.Ct. 736 (2014), the lawsuit filed by 26 insurance companies, acting as subrogees of the 145 insureds, did not satisfy CAFA's numerosity requirement. Specifically, the panel held that under Hood, the word "persons" in CAFA's phrase "100 or more persons" is synonymous with named plaintiffs. The panel further held that "plaintiffs" meant parties who actually brought suit, and it did not mean real parties in interest. The panel concluded that the 145 insureds were not plaintiffs in this case, and this fact was dispositive.

          OPINION

          GILMAN, CIRCUIT JUDGE.

         Under the Class Action Fairness Act of 2005 (CAFA), a defendant in a civil suit may remove a "mass action" from state to federal court if the aggregate amount in controversy exceeds $5, 000, 000. 28 U.S.C. § 1332(d)(2), (11). A "mass action" is defined as "any civil action . . . in which monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs' claims involve common questions of law or fact." Id. § 1332(d)(11)(B)(i). This case presents the narrow question of whether a lawsuit filed by 26 insurance companies (the Plaintiffs), in their capacity as subrogees of 145 insured homeowners, qualifies as a mass action. The district court answered in the negative. For the reasons set forth below, we AFFIRM the judgment of the district court.

         I. BACKGROUND

         A. ...


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