Liberty Mutual Fire Insurance Co. v. EZ-FLO International, Inc., No. 17-56523 (9th Cir. 2017)
Annotate this CaseEZ-FLO manufactures supply lines that connect water pipes to plumbing fixtures. The supply lines consist of flexible tubing on the inside, a protective covering of braided wire on the outside, and plastic nuts on both ends that connect the supply lines to adjacent plumbing. Plaintiffs, insurance companies, alleged that the plastic nuts are defective and allow water to leak out of the supply lines and that they made payments to their insured homeowners for damages caused by the alleged defect. They filed suit as subrogees of those insureds, seeking over $5,000,000 in damages. EZ-FLO filed a notice of removal pursuant to the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d). The district court held that it lacked jurisdiction because the amended complaint “does not include more than 100 named plaintiffs.” The Ninth Circuit affirmed. A CAFA “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.” A lawsuit filed by 26 insurance companies in their capacity as subrogees of 145 insured homeowners does not qualify as a mass action.
Court Description: 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.
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