First Bank v. DJL Properties, LLC, et al, No. 10-8008 (7th Cir. 2010)
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In the United States Court of Appeals For the Seventh Circuit Nos. 10-8008 & 10-8009 F IRST B ANK, Plaintiff, Counterdefendant-Petitioner, v. DJL P ROPERTIES, LLC, et al., Defendants, Counterplaintiffs-Respondents. Petitions for Leave to Appeal from the United States District Court for the Southern District of Illinois. Nos. 09-cv-969-MJR & 09-cv-970-JPG Michael J. Reagan and J. Phil Gilbert, Judges. S UBMITTED M ARCH 4, 2010 D ECIDED M ARCH 24, 2010 Before E ASTERBROOK, Chief Judge, and R OVNER and W ILLIAMS, Circuit Judges. E ASTERBROOK, Chief Judge. First Bank commenced two suits in state court against DJL Properties, which filed counterclaims styled as class actions. First Bank then filed notices of removal, invoking the Class Action Fairness Act of 2005, 28 U.S.C. §§ 1332(d), 1453. The pro- 2 Nos. 10-8008 & 10-8009 ceedings were assigned to different district judges. Judge Gilbert remanded one of the suits, concluding that a litigant who initially chose the state forum cannot remove even after becoming a counterclaim defendant. 2010 U.S. Dist. L EXIS 7204 (S.D. Ill. Jan. 27, 2010). Judge Reagan then remanded the other suit, adopting Judge Gilbert s reasoning. 2010 U.S. Dist. L EXIS 7700 (S.D. Ill. Jan. 29, 2010). We grant First Bank s petition for leave to appeal, see §1453(c)(1), because the cases present an issue not yet resolved in this circuit. Chapter 89 of the Judicial Code, 28 U.S.C. §§ 1441 53, authorizes removal of certain cases by defendants. Almost 70 years ago, the Supreme Court concluded that a litigant who files suit in state court is a plaintiff and cannot remove the case, even if the defendant files a counterclaim and the original plaintiff then wears two hats, one as plaintiff and one as defendant and even if the counterclaim is distinct from the original claim and could have been a separate piece of litigation. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941). That rule may be as old as 1867. See West v. Aurora, 73 U.S. 139, 142 (1867). It remains the law for removal in general, and two circuits have held that it applies to removal under the Class Action Fairness Act in particular. Palisades Collections LLC v. Shorts, 552 F.3d 327, 336 (4th Cir. 2008); Progressive West Insurance Co. v. Preciado, 479 F.3d 1014, 1018 (9th Cir. 2007). Judge Gilbert held that Shamrock Oil, Palisades Collections, and Progressive West Insurance prevent First Bank from removing; Judge Reagan agreed; so do we. We conclude that Palisades Collections and Progressive West Insurance were rightly decided. Nos. 10-8008 & 10-8009 3 Section 1453(b) says that a class action (a defined term) may be removed in accordance with section 1446 whether or not any defendant is a citizen of the state in which the suit is pending, and without the consent of all defendants . (Otherwise every defendant must sign the notice of removal. Chicago, Rock Island & Pacific Ry. v. Martin, 178 U.S. 245 (1900).) The 2005 Act thus refers us to §1446, which specifies where and when defendants file notices of removal. Section 1441, which creates the right of removal for cases that could have been filed initially in federal court, also says that defendants may remove a suit. First Bank contends that the word defendant in §1453(b) includes a counterclaim defendant even though the word defendant in §1441 and §1446 does not. That would make hash of Chapter 89, because §1453(b) refers to §1446; unless the word defendant means the same thing in both sections, the removal provisions are incoherent. More than that: the word defendant has an established meaning in legal practice, and it is vital to maintain consistent usage in order to ensure that Members of Congress (and those who advise them) know what proposed language will do, and people can understand the meaning of statutes. It does not follow from the fact that the 2005 Act expands the set of removable cases that it must use defendant in a novel way. The statute employs timetested legal language. If the drafters of the 2005 Act wanted to negate Shamrock Oil, they could have written defendant (including a counterclaim defendant) or any 4 Nos. 10-8008 & 10-8009 party (the phrase in 28 U.S.C. §1452(a) for removal in bankruptcy proceedings). But they chose the unadorned word defendant, a word with a settled meaning. First Bank observes that in §1453(b) the word any precedes the word defendant . Any is inclusive, to be sure, but the word that it modifies remains defendant which First Bank is not, under Shamrock Oil. Any appears twice. The function of the first any in §1453(b) is to establish that §1441(b), which provides that a homestate defendant can t remove a diversity suit, does not apply. (The context is: without regard to whether any defendant is a citizen of the State in which the action is brought .) The function of the second any is to establish that a single defendant s preference for a federal forum prevails, notwithstanding Martin. (The context is: except that such action may be removed by any defendant without the consent of all defendants .) Neither instance of the word any implies that defendant means something different in §1441(b) and §1453(b). By using a word with an established meaning, Congress produces the established result. See, e.g., Nken v. Holder, 129 S. Ct. 1749, 1759 (2009); Whitfield v. United States, 543 U.S. 209, 216 (2005). See also Brill v. Countrywide Home Loans, Inc., 427 F.3d 446 (7th Cir. 2005) (applying this approach to the 2005 Act). Giving legal words their standard legal meaning spares judges and lawyers expensive tours through the legislative history and avoids the impossible task of trying to guess what Members of Congress may have had in mind or intended about statutory language. See Hor v. Gonzales, 400 F.3d 482, Nos. 10-8008 & 10-8009 5 484 85 (7th Cir. 2005). Doubtless First Bank is right to say that exempting counterclaims from §1453 means that the 2005 Act achieves less than it otherwise would, but no legislation pursues its purposes at all costs. Deciding what competing values will or will not be sacrificed to the achievement of a particular objective is the very essence of legislative choice and it frustrates rather than effectuates legislative intent simplistically to assume that whatever furthers the statute s primary objective must be the law. Rodriguez v. United States, 480 U.S. 522, 525 26 (1987) (emphasis in original). Congress enacted a rule allowing removal by defendants ; it did not say anything similar to: Courts may allow removal whenever the case involves a large, multi-state class action. The word defendant in §1453(b) means what the word defendant means elsewhere in Chapter 89 and, as Shamrock Oil held, that word does not include a plaintiff who becomes a defendant on a counterclaim. A FFIRMED 3-24-10
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