Learjet Corporation v. Cunningham Charter Corporation ( 2010 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 09-8042
C UNNINGHAM C HARTER C ORPORATION,
Plaintiff-Respondent,
v.
L EARJET, INC.,
Defendant-Petitioner.
Petition for Leave to Appeal
from the United States District Court
for the Southern District of Illinois.
No. 07-cv-233-DRH—David R. Herndon, Chief Judge.
S UBMITTED N OVEMBER 13, 2009—D ECIDED JANUARY 22, 2010
Before P OSNER, C OFFEY, and F LAUM, Circuit Judges.
P OSNER, Circuit Judge. Cunningham Charter Corporation
sued Learjet, Inc. in an Illinois state court asserting
claims for breach of warranty and products liability on
behalf of itself and all other buyers of Learjets who had
received the same warranty from the manufacturer that
Cunningham had received. The defendant removed the
case to federal district court under the Class Action
2 No. 09-8042
Fairness Act of 2005, 28 U.S.C. § 1332(d), and the plain-
tiff then moved to certify two classes. The district judge
denied the motion on the ground that neither proposed
class satisfied the criteria for certification set forth in
Rule 23 of the Federal Rules of Civil Procedure. The
judge then ruled that the denial of class certification
eliminated subject-matter jurisdiction under the Act, and
so he remanded the case to the state court. Learjet peti-
tioned for leave to appeal the order of remand. 28 U.S.C.
§ 1453(c). We granted the petition in order to resolve
an issue under the Class Action Fairness Act that this
court has not heretofore had to resolve.
The Act creates federal diversity jurisdiction over
certain class actions in which at least one member of the
class is a citizen of a different state from any defendant
(that is, in which diversity may not be complete). 28 U.S.C.
§ 1332(d)(2). The Act defines class action as “any civil
action filed under rule 23 of the Federal Rules of Civil
Procedure or similar State statute or rule of judicial pro-
cedure authorizing an action to be brought by 1 or more
representative persons as a class action.” § 1332(d)(1)(B).
A later section says the Act applies “to any class
action [within the Act’s scope] before or after the entry
of a class certification order.” § 1332(d)(8). Probably
all this means is that the defendant can wait until a
class is certified before deciding whether to remove
the case to federal court. If (d)(8) said “the” instead of
“a” class certification order, it might be thought to
imply that the Act was limited to cases in which
such an order was eventually issued. But that would be
inconsistent with (d)(1)(B), the section quoted above that
No. 09-8042 3
defines class action as a suit filed under a statute or rule
authorizing class actions, even though many such suits
cannot be maintained as class actions because the judge
refuses to certify a class. As actually worded, (d)(8),
insofar as it relates to jurisdiction at all (it doesn’t
mention the word—the conferral of jurisdiction is
limited to (d)(2)), implies at most an expectation that a
class will or at least may be certified eventually. The
absence of such an expectation could mean that the
suit was not within the jurisdiction conferred by the
Class Action Fairness Act—that it wasn’t really a class
action. Frivolous attempts to invoke federal jurisdiction
fail, and compel dismissal. If a plaintiff sued in state
court a seller of fish tanks on behalf of himself and 1,000
goldfish for $5,000,001 and the defendant removed
the case to federal district court, that court would have
to dismiss the case, as it would have been certain
from the outset of the litigation that no class could be
certified.
Another section of the Act defines “class certification
order” as “an order issued by a court approving the
treatment of some or all aspects of a civil action as a
class action.” § 1332(d)(1)(C). Read in isolation from
the rest of the Act, this could mean that in the absence
of such an order a suit is not a class action. But
remember that jurisdiction attaches when a suit is filed
as a class action, and that invariably precedes certifica-
tion. All that section 1332(d)(1)(C) means is that a suit
filed as a class action cannot be maintained as one
without an order certifying the class. That needn’t
imply that unless the class is certified the court loses
jurisdiction of the case.
4 No. 09-8042
We assumed in Bullard v. Burlington Northern Santa Fe
Ry., 535 F.3d 759, 762 (7th Cir. 2008), that federal juris-
diction under the Class Action Fairness Act does not
depend on certification, and we now join Vega v. T-Mobile
USA, Inc., 564 F.3d 1256, 1268 n. 12 (11th Cir. 2009), in so
holding. Cf. In re TJX Companies Retail Security Breach
Litigation, 564 F.3d 489, 492-93 (1st Cir. 2009). That is the
better interpretation, see G. Shaun Richardson, “Class
Dismissed, Now What? Exploring the Exercise of CAFA
Jurisdiction After the Denial of Class Certification,” 39
New Mex. L. Rev. 121, 135 (2009); Kevin M. Clermont,
“Jurisdictional Fact,” 91 Cornell L. Rev. 973, 1015-17
(2006)—and not only as a matter of semantics. For if a
state happened to have different criteria for certifying
a class from those of Rule 23, the result of a remand
because of the federal court’s refusal to certify the
class could be that the case would continue as a class
action in state court. That result would be contrary to the
Act’s purpose of relaxing the requirement of complete
diversity of citizenship so that class actions involving
incomplete diversity can be litigated in federal court.
Our conclusion vindicates the general principle
that jurisdiction once properly invoked is not lost by
developments after a suit is filed, such as a change in
the state of which a party is a citizen that destroys diver-
sity. E.g., St. Paul Mercury Indemnity Co. v. Red Cab Co., 303
U.S. 283, 293-95 (1938); In re Shell Oil Co., 970 F.2d 355(7th Cir. 1992) (per curiam). The general principle is
applicable to this case because no one suggests that a
class action must be certified before it can be removed to
federal court under the Act; section 1332(d)(8) scotches
any such inference.
No. 09-8042 5
There are, it is true, exceptions to the principle that
once jurisdiction, always jurisdiction, notably where a
case becomes moot in the course of the litigation. See
Church of Scientology v. United States, 506 U.S. 9, 12 (1992);
Walters v. Edgar, 163 F.3d 430, 432 (7th Cir. 1998). Or, if
the plaintiff amends away jurisdiction in a subsequent
pleading, the case must be dismissed. Rockwell Int’l Corp.
v. United States, 549 U.S. 457, 473-74 (2007). And likewise
if after the case is filed it is discovered that there was no
jurisdiction at the outset, id. at 473—not that this is really
an exception to the principle that jurisdiction, once it
attaches, sticks; it is a case in which there never was
federal jurisdiction.
These points are applicable to the Class Action Fairness
Act, Clermont, supra, 91 Cornell L. Rev. at 1016-17, but
inapplicable to the present case. Although the district
court found “a number of fatal flaws” in the plaintiff’s
motion for class certification, they are not so obviously
fatal as to make the plaintiff’s attempt to maintain the
suit as a class action frivolous. Behind the principle that
jurisdiction once obtained normally is secure is a desire
to minimize expense and delay. If at all possible,
therefore, a case should stay in the system that first
acquired jurisdiction. It should not be shunted between
court systems; litigation is not ping-pong. (This consider-
ation cuts against the proposal in Richardson, supra, 39
New Mex. L. Rev. at 141-47, that having declined to
certify a class the federal court should abstain in favor
of the state courts; that would be the equivalent of re-
turning the case to the state court in which it had origi-
nated.) An even more important consideration is that the
6 No. 09-8042
policy behind the Class Action Fairness Act would be
thwarted if because of a remand a suit that was within
the scope of the Act by virtue of having been filed as a
class action ended up being litigated as a class action
in state court.
The judgment of the district court is reversed and the
case remanded to that court for further proceedings
consistent with this opinion.
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