Eleventh Circuit ships Costa Concordia cases back to state court

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July 25, 2013

Eleventh Circuit ships Costa Concordia cases back to state court 

Steven M. Sellers

Plaintiffs in two mass tort actions filed in the wake of the Costa Concordia shipwreck fended off removal efforts by the ship’s owner, winning a remand to state court. The unanimous Eleventh Circuit panel remanded the actions, one filed by a group of 56 plaintiffs and another by 48 plaintiffs, for lack of federal subject matter jurisdiction under the Class Action Fairness Act.

Plaintiffs in two mass tort actions filed in the wake of the Costa Concordia shipwreck fended off removal efforts by the ship’s owner, winning a remand to state court from the Eleventh Circuit. The unanimous panel remanded the actions, one filed by a group of 56 plaintiffs and another by 48 plaintiffs, for lack of federal subject matter jurisdiction under the Class Action Fairness Act (CAFA). (Scimone v. Carnival Corp., 2013 WL 3287065 (11th Cir. July 1, 2013).)

The Costa Concordia ran aground in Italy in 2012, prompting multiple lawsuits by injured passengers, including Geoffrey Scimone, who filed a lawsuit that eventually included 38 other plaintiffs. When 65 additional plaintiffs sought to join the case—potentially reaching the 100-plaintiff threshold for federal jurisdiction under CAFA—the plaintiffs voluntarily dismissed their complaint and filed two separate actions in state court with 56 and 48 plaintiffs, respectively. None of the plaintiffs sought consolidation of the cases.

Carnival Corp., the ship’s owner and operator, removed both cases to the Southern District of Florida under CAFA’s mass action jurisdiction provision. The company also argued that the federal courts had exclusive jurisdiction over the cases because of “substantial issues of federal common law relating to foreign relations.” The district court rejected Carnival’s jurisdictional arguments and common law claims and remanded the actions to state court.

Carnival appealed, and the 11th Circuit affirmed. Writing for the court, Judge Stanley Marcus noted that CAFA permits removal of a mass action in the same manner as a class action if “monetary relief claims for 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact.” He noted that none of the parties disagreed that the plaintiffs’ claims involved the same questions of law and fact; the critical issues were whether the 100-plaintiff threshold had been met and whether the cases were proposed to be tried jointly. “Based on the undisputed record, Carnival cannot demonstrate that the plaintiffs in the two actions proposed a joint trial of their claims, in whole or in part, in state court,” Marcus wrote.

Marcus also disputed Carnival’s contention that the Supreme Court’s recent decision in Standard Fire Insurance v. Knowles (133 S. Ct. 1345 (2013)) dictated removal of the cases. In Knowles, Marcus explained, the question was not mass actions but “whether the lead plaintiff in a class action lawsuit could avoid federal removal jurisdiction by stipulating prior to class certification that he, and the class he sought to represent, would not seek more than $5 million in damages.” He concluded that Knowles could not be interpreted to defeat CAFA’s mass action provisions: “It cannot be read to suggest that all sections of CAFA strip plaintiffs of their traditional role as masters of their complaint, particularly where, as in this case, the plaintiffs’ decision to proceed in two separate lawsuits does not merely create the appearance of two trials but would actually result in two trials in state court.” Marcus left open the possibility that federal removal jurisdiction could be revived if a state court judge were to consolidate 100 or more cases for trial.

Daniel Karon, a consumer class action attorney and law professor in Cleveland, said the decision was a victory for plaintiffs who seek a state tribunal for their claims. “I think what’s significant about Scimone is that it respects CAFA and applies it properly,” he said. “The decision avoids a pretextual basis—as we sometimes see—for sending perfectly valid state court cases to federal court.”

 


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