Split Noted: Can Events After the Filing of a Class Action Suit Affect Its Removal?

Per Springman v. AIG Marketing, Inc., 2008 WL 1722153, *3 (7th Cir. Apr. 15, 2008)

In July 2003, Plaintiff Springman filed a class action suit in an Illinois state court against AIG Claim Services, Inc, alleging fraudulent claims processing. AIG Claim Services responded to an interrogatory in December 2003 by stating that it had not handled Sprigman’s claims. Almost a year later, Springman finally asked who handled his claim and was informed that the processor was AIG Marketing, Inc. Finally, Springman amended his complaint to aid AIG Marketing and drop AIG Claim Services almost three years after discovering that AIG Marketing was responsible for the allegedly fraudulent claims processing.

In between the suits initial filing and the amended complaint, however, Congress passed the Class Action Fairness Act, which allows removal of some class actions to federal court despite the lack of complete diversity. This act applies to any suit commenced on or after the Act’s effective date. The question is whether the substitution of the parties constitutes a ‘commencement’ of a suit against AIG Marketing within the meaning of the CAFA.

Judge Posner, on behalf of a unanimous panel, notes that the circuits are split on this issue. The majority (the CAs 5,6,7,8,10) hold that actions after the filing of a suit can affect removal, whereas the CA 9 only looks to the suit as initially filed. The majority school does apply the ‘relation-back’ doctrine to determine if the substitution of parties (or other changes) so relates back to the initial suit as not to commence a new suit. That doctrine does not apply here because of Plaintiff Springman’s inexplicable delay in amending his complaint. Therefore, the substitution of the parties commenced a new suit, which can be removed under the CAFA.