Santamarina, Guiller v. Sears Roebuck

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 06-3054
GUILLERMO GARCIA SANTAMARINA, et al.,
on behalf of themselves and all others
similarly situated,
Plaintiffs-Appellees,
v.
SEARS, ROEBUCK & CO.,
Defendant-Appellant.
____________
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
MDL No. 1703 (JPG), Case No. 05 C 4743—John F. Grady, Judge.
____________
ARGUED SEPTEMBER 7, 2006—DECIDED OCTOBER 19, 2006
____________
Before POSNER, EASTERBROOK, and RIPPLE, Circuit Judges.
POSNER, Circuit Judge. This class action, originally filed
in a California state court, charged Sears Roebuck
with having violated California law by fraudulently repre-
senting that certain of its “Craftsman” brand of tools are
manufactured in the United States that in fact are manu-
factured abroad. The suit was filed in January 2005, the
month prior to the passage (and effective date) of the Class
Action Fairness Act of 2005, which so far as bears on this
case places within federal diversity jurisdiction a class
2 06-3054
action suit in which the amount in controversy exceeds
$5 million and at least one member of the plaintiff class is a
citizen of a different state from the defendant or defendants.
28 U.S.C. § 1332(d)(2)(A). This suit fulfills these require-
ments, and so had it been filed on or after the effective date
of the Class Action Fairness Act it could have been removed
to federal district court.
Sears filed a demurrer (that is, a motion to dismiss the suit
for failure to state a claim), and the plaintiffs responded by
filing an amended complaint. By then the Act had gone into
effect, and Sears removed the case to the federal district
court in California on the ground that the amended com-
plaint was really the opening gun of a new suit. The district
judge denied the plaintiffs’ motion to remand the case to the
state court. They could have appealed to the Ninth Circuit
from the denial, 28 U.S.C. § 1453(c)(1), but did not. Later the
multidistrict litigation panel transferred the case to the
federal district court in Chicago. By now it was November
2005, and the plaintiffs filed a motion in that court to
reconsider the ruling by the district judge in California. The
court granted the motion, ruled the suit had been improp-
erly removed, and ordered it remanded to the California
state court.
Sears appeals, arguing that the district judge in Chicago
should not have reconsidered the earlier ruling because
the motion to reconsider did not meet the standard of
Rule 60(b) of the Federal Rules of Civil Procedure. But
that rule, by its terms limited to “final” judgments or orders,
is inapplicable to interlocutory orders. Kapco Mfg. Co. v. C &
O Enterprises, Inc., 773 F.2d 151 (7th Cir. 1985); Penn West
Associates, Inc. v. Cohen, 371 F.3d 118, 124-25 (3d Cir. 2004);
Prudential Real Estate Affiliates, Inc. v. PPR Realty, Inc., 204
F.3d 867, 880 (9th Cir. 2000). The authority of a district judge
05-3054 3
to reconsider a previous ruling in the same litigation,
whether a ruling made by him or by a district judge previ-
ously presiding in the case, including (because the case has
been transferred) a judge of a different court, is governed by
the doctrine of the law of the case, which authorizes such
reconsideration if there is a compelling reason, such as a
change in, or clarification of, law that makes clear that the
earlier ruling was erroneous. Agostini v. Felton, 521 U.S. 203,
236 (1997); Christianson v. Colt Industries Operating Corp., 486
U.S. 800, 816-17 (1988); Brengettcy v. Horton, 423 F.3d 674,
680 (7th Cir. 2005); Williams v. Commissioner, 1 F.3d 502, 503
(7th Cir. 1993); McMasters v. United States, 260 F.3d 814, 818
(7th Cir. 2001). Not to reconsider in such circumstances
would condemn the parties to the unedifying prospect of
continued litigation when they knew that a possibly critical
ruling was in error and, unless it became moot in the course
of the proceedings, would compel a reversal of the final
judgment at the end of the case.
Because the initial denial of the motion to remand was
appealable, and because (with an immaterial exception) a
motion to remand must be filed within 30 days of removal,
28 U.S.C. § 1447(c), it is arguable (though we cannot
find any case that discusses the point) that motions to
reconsider orders denying remands under the Class Action
Fairness Act are disfavored. It is almost 15 months since the
case was removed to the federal district court and 13
months since it was transferred to Chicago, so if we affirm
the order to remand there will have been considerable waste
motion. But the case was removed, and remand denied
(without any statement of reasons), only a few months after
the promulgation of the Class Action Fairness Act, when
there was no significant case law interpreting the Act. So
some latitude in considering what might in other circum-
stances indeed be a belated motion to reconsider should be
4 06-3054
permitted. Moreover, a ruling that the district court in
Chicago should not have reconsidered the earlier ruling
would be pointless, since the law of the case doctrine does
not bar review of a lower court by a higher one. Christianson
v. Colt Industries Operating Corp., supra, 486 U.S. at 817;
Champaign-Urbana News Agency, Inc. v. J.L. Cummins News
Co., 632 F.2d 680, 683 (7th Cir. 1981). Sears does not argue
that the plaintiffs’ failure to appeal the original ruling to the
Ninth Circuit bars appellate review by this court of the
propriety of the ruling.
So we can proceed to the merits of the appeal; but for
future reference we note our rejection of the plaintiffs’
argument that an erroneous refusal to remand a case under
the Class Action Fairness Act is a jurisdictional error, which
must therefore remain corrigible until the litigation becomes
final by issuance of a final judgment and exhaustion of
appellate remedies. Suppose that the district court in
California was mistaken in thinking that the amended
complaint touched off a new suit; it would not be so grave a
mistake—so usurpative an assumption of federal jurisdic-
tion withheld by Congress—that we would have an inde-
pendent duty to correct it even if no party complained.
The merits need not detain us for long. The original
complaint was brief and summary. It would have sufficed
in a federal suit, because the federal civil rules require only
notice pleading. But California requires fact pleading,
Cal. Code Civ. Pro. § 425.10(a)(1); Davaloo v. State Farm Ins.
Co., 37 Cal. Rptr. 3d 528, 534 (App. 2005); Lim v. The.TV
Corp. Int’l, 121 Cal. Rptr. 2d 333, 336 (App. 2002), and the
absence of facts in the original complaint created a basis
for Sears’s demurrer. The amended complaint, filed in
response to the demurrer, added two plaintiffs as additional
named representatives and considerable detail concerning
05-3054 5
the nature of the alleged fraud. And while the original
complaint referred merely to “several” Craftsman tools as
having been falsely represented to be of domestic origin,
without specifying which ones, the amended complaint
refers to the entire Craftsman line, which consists of 5,000
different tools.
An amended complaint kicks off a new action only if,
under the procedural law of the state in which the suit
was filed, it does not “relate back” to the original complaint.
Phillips v. Ford Motor Co., 435 F.3d 785, 787 (7th Cir. 2006);
Schorsch v. Hewlett-Packard Co., 417 F.3d 748, 750-51 (7th Cir.
2005); Knudsen v. Liberty Mutual Ins. Co., 411 F.3d 805, 806-07
(7th Cir. 2005); Prime Care of Northeast Kansas, LLC v. Humana
Ins. Co., 447 F.3d 1284, 1289 (10th Cir. 2006); Braud v.
Transport Service Co., 445 F.3d 801, 808 (5th Cir. 2006); Plubell
v. Merck & Co., 434 F.3d 1070, 1071-72 (8th Cir. 2006). (The
usual case in which this rule matters is where the statute of
limitations has expired between the filing of the original
complaint and the filing of the amended one.) The criterion
of relation back is whether the original complaint gave the
defendant enough notice of the nature and scope of the
plaintiff’s claim that he shouldn’t have been surprised by
the amplification of the allegations of the original complaint
in the amended one. Tiller v. Atlantic Coast Line R.R., 323
U.S. 574, 581 (1945); Woods v. Indiana University-Purdue
University at Indianapolis, 996 F.2d 880, 884 (7th Cir. 1993);
Miller v. American Heavy Lift Shipping, 231 F.3d 242, 250 (6th
Cir. 2000). This is how the relation-back provision of Fed. R.
Civ. P. 15(c) is understood, Woods v. Indiana University-
Purdue University at Indianapolis, supra, 966 F.2d at 886; Braud
v. Transport Service Co, supra, 445 F.3d at 808; 6A Charles
Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal
Practice and Procedure § 1497 (2d ed. 1990 & 2006 pocket
6 06-3054
part), but Sears acknowledges that California doctrine
regarding relation back is materially identical. See Austin v.
Massachusetts Bonding & Ins. Co., 364 P.2d 681, 683 (Cal.
1961); Davaloo v. State Farm Ins. Co., supra, 37 Cal. Rptr. 3d at
416-17.
So if for example the original complaint charged that
the plaintiff’s decedent had been electrocuted by a defective
lamp and light switch, and the amended complaint that he
had been electrocuted by a defective hair dryer manufac-
tured by a different company, there would be no relation
back, even though there was the same death at the same
location. Coronet Mfg. Co. v. Superior Court, 153 Cal. Rptr.
366, 369 (App. 1979); see also Espinosa v. Superior Court, 248
Cal. Rptr. 375, 379 (App. 1988). And likewise if, as in Wiener
v. Superior Court, 130 Cal. Rptr. 61, 62-63 (App. 1976), the
amended complaint alleged a second allegedly libelous
statement in a new publication in addition to the statement
alleged in the original complaint. But there would be
relation back if the “two complaints referred to the same
general set of facts” though the amended one alleged “a
different cause of action and legal theory from the original
complaint.” Davaloo v. State Farm Ins. Co., supra, 37 Cal. Rptr.
3d at 535, citing Smeltzley v. Nicholson Mfg. Co., 559 P.2d 624,
629 (Cal. 1977), where both complaints referred to the
plaintiff’s losing his leg in a machine even though the
amended one substituted the name of the manufacturer of
the machine for an unknown defendant. See also Grudt v.
City of Los Angeles, 468 P.2d 825, 829 (Cal. 1970); Austin v.
Massachusetts Bonding & Ins. Co., supra, 364 P.2d at 683-84. In
this case, the defendant is the same in both complaints, the
plaintiffs are the same except for the addition of two named
plaintiffs drawn however from the same class, the claim is
essentially the same (misrepresentation of the country of
05-3054 7
origin of consumer goods sold by the defendant), and the
same general set of facts is alleged. The most significant-
seeming difference is that the amended complaint refers to
the entire line of Craftsman tools rather than merely to
“certain” or “several” of them. Since it is not suggested that
all Craftsman tools are made abroad, this seems to be an
allegation that some people would not have bought a
Craftsman tool made in the United States had they known
that some other Craftsman tool had been made elsewhere.
But the same theory was alleged in the original complaint,
for while only certain Craftsman tools were alleged to be
misrepresented, the suit was on behalf of all purchasers of
Craftsman tools, not just the purchasers of the mislabeled
ones.
The only situation remotely like the present case as
imagined by Sears is where the original complaint is so
cursory that someone reading the amended complaint
would not know whether it referred to the same conduct
charged in the original complaint. Davaloo v. State Farm Ins.
Co., supra, 37 Cal. Rptr. 3d at 535. That is not a problem here.
When it read the original complaint, Sears knew that the
plaintiffs were complaining about misrepresentation of the
country of origin of Craftsman tools and since it was a class
action suit must have realized that any Craftsman tool made
abroad (but represented as made in the United States) was
fair game. The two named plaintiffs in the original com-
plaint could not have bought the entire line of 5,000 Crafts-
man tools, but the entire line might have been bought by the
class as a whole (a class of “thousands of persons”) and in
that event would be within the scope of the complaint.
So there was relation back; the case should not have been
removed from the California state court; the order of
remand is therefore
AFFIRMED.
8 06-3054
A true Copy:
Teste:
_____________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—10-19-06