Sixth Circuit clarifies CAFA removal rules in favor of defendants

On April 7, the United States Court of Appeals for the Sixth
Circuit issued a decision clarifying the rules governing the timing of removal of cases to federal court
under the Class Action Fairness Act (CAFA). In Graiser v. Visionworks
of America, Inc.
, the plaintiff sued Visionworks in Ohio state court and
sought to represent a consumer class, alleging that Visionworks’ “Buy One, Get
One Free” promotional advertisement was misleading and in violation of Ohio’s
Consumer Sales Practices Act.

Visionworks removed the case to the United States District
Court for the Northern District of Ohio pursuant to CAFA, after applying the
plaintiff’s “proposed damage formula” to Visionworks’ own sales data for the
relevant time period, concluding that the matter in controversy exceeded $5
million. The district court remanded the case back to state court after
the plaintiff argued that Visionworks was tardy in removing the case for two
reasons: (1) the amended complaint had been removable (but was not timely
removed by Visionworks) on diversity jurisdiction grounds, thereby precluding
subsequent CAFA removal; and (2) Visionworks was in possession of its own sales
data and could have ascertained CAFA removability months earlier in any event.

The appeals court rejected both bases for the remand and
reversed the district court’s decision. First, the Sixth Circuit held

[I]n CAFA cases, the thirty-day
clocks of § 1446(b) begin to run only when the defendant receives a document from
the plaintiff
from which the defendant can unambiguously ascertain CAFA
jurisdiction. Under this bright-line rule, a defendant is not required to
search its own business records or "perform an independent investigation
into a plaintiff's indeterminate allegations to determine removability.

Second, the Sixth Circuit held that:

[O]nce a defendant ascertains that
a case is removable under CAFA, a defendant may remove the case — within
the time constraints of § 1446(b)(1) and (b)(3) discussed above — even if the
case was originally removable under a different theory of federal

The holdings, on all respects favorable to class action
defendants, are consistent with the decisions of other United States Courts of
Appeals that have addressed the questions presented to the Sixth Circuit in the
Graiser case.

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