United States v. 2005-10-05 | 05-55995 | BUSH VCHEAPTICKETS | precedential | opinion |

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
 RONALD BUSH; JULIANE DYER; JOSH
KRAMER; ANA LOPEZ; ASHLEY
SALISBURY, On Behalf of
Themselves and All Others
Similarly Situated,
Plaintiffs-Appellees, No. 05-55995
v. D.C. No.
 CV-05-02285-PACHEAPTICKETS, INC.; CENDANT
CORPORATION; EXPEDIA INC.; IAC/ OPINION
INTERACTIVECORP; HOTELS.COM,
L.P.; HOTELS.COM GP, LLC;
ORBITZ INC.; ORBITZ LLC;
PRICELINE.COM INC.,
Defendants-Appellants. 
Appeal from the United States District Court
for the Central District of California
Percy Anderson, District Judge, Presiding
Argued and Submitted
September 16, 2005—Pasadena, California
Filed October 6, 2005
Before: Jerome Farris, David R. Thompson, and
Jay S. Bybee, Circuit Judges.
Opinion by Judge Bybee
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COUNSEL
Gordon Greenberg, McDermott Will & Emery, Los Angeles,
California, for defendant-appellant.
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Martha Boersch, Jones Day, San Francisco, California, for
defendant-appellant.
Darrel Hieber, Skadden, Arps, Slate, Meagher & Flom, Los
Angeles, California, for defendant-appellant.
Michael Reese, Milberg Weiss Bershad & Schulman, New
York, New York, for plaintiff-appellee.
Blake Harper, Hulett Harper Stewart, San Diego, California,
for plaintiff-appellee.
OPINION
BYBEE, Circuit Judge:
The question before us is when is a class-action suit “com-
menced” for purposes of the effective date of the Class Action
Fairness Act (“CAFA,” or “the Act”), Pub. L. No. 109-2, 119
Stat. 4 (2005). The plaintiffs-appellees, Ronald Bush and oth-
ers (“Bush”), filed suit in state court against various internet-
based travel companies (“Cheaptickets”). Cheaptickets
removed the case to federal court, but the district court
ordered the case remanded to state court. Bush claims that
removal was not authorized because the suit was filed on the
day before CAFA became effective. Cheaptickets argues that
the suit was commenced when it was removed to federal
court; alternatively, it argues that the action was not com-
menced in state court until the defendant received service of
process. We reject both assertions and affirm the district
court’s remand of the class action to state court.
I. FACTS AND PROCEEDINGS BELOW
On February 17, 2005, Bush filed a civil class action in
Superior Court, Los Angeles County, alleging that Cheap-
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tickets had imposed illegitimate “taxes and fees” in connec-
tion with the sale of online travel and accommodations ser-
vices, and that this conduct violates California’s Unfair
Business Practices Act and constitutes unlawful conversion.
Cheaptickets responded that there are multiple lawsuits assert-
ing similar charges and seeking nationwide class certification,
that several of the named plaintiffs-appellees appear in a num-
ber of these cases, and that these plaintiff classes are repre-
sented by many of the same attorneys.
On February 18, 2005, the day after Bush filed his com-
plaint in state court, the President signed into law the Class
Action Fairness Act (CAFA), Pub. L. 109-2, 119 Stat. 4
(2005). CAFA amends, inter alia, the federal diversity statute,
28 U.S.C. § 1332, and now vests original jurisdiction for class
actions in federal court where there is minimal diversity and
the amount in controversy exceeds $5,000,000. 28 U.S.C.
§ 1332(d). By its own terms, the Act became effective for all
actions that “commenced on or after” February 18, 2005. Pub.
L. 109-2, § 9.
On March 28, 2005, Cheaptickets removed the class action
to the United States District Court for the Central District of
California, asserting jurisdiction under 28 U.S.C. § 1332(d),
the new codification of CAFA’s jurisdictional prerequisites.
The district court remanded the action to state court on May
5, 2005, holding that a class action was “commenced” for pur-
poses of CAFA when the original complaint was filed in state
court, not when it was removed to federal court, and finding
that the action commenced in state court on February 17,
2005, the day before CAFA’s enactment. The remand order
was entered on May 9, and Cheaptickets filed its appeal on
May 16, 2005. We accepted the appeal on July 13.
II. JURISDICTION
[1] We have jurisdiction to hear Cheaptickets’ petition
under 28 U.S.C. § 1453(c)(1), recently enacted as part of
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CAFA. Section 1453(c) provides that an appellate court “may
accept an appeal from an order of a district court granting or
denying a motion to remand a class action to the State court,”
provided that the appeal is filed “not less than 7 days” after
entry of the remand order.
We have a preliminary question to resolve: whether Cheap-
tickets filed a timely appeal from the district court’s order.
The statute provides that application must be made “not less
than 7 days after entry of the order.” 28 U.S.C. § 1454(c)(1)
(emphasis added). Literally, a party who filed an appeal “less
than” seven days after the district court entered its remand
order would have appealed too early. Only if the appeal is
filed seven or more days after entry of the order would the
appeal be “not less than” seven days. Moreover, there is
apparently no upper limit on when an appeal may be taken so
long as it is filed after more than seven days.
[2] The Tenth Circuit has recently offered its opinion that
the statute contains a “typographical error” and must be read
to say “not more than 7 days after entry of the order.” Prit-
chett v. Office Depot, Inc., 420 F.3d 1090, 1093 n.2 (10th Cir.
2005) (“Given Congress’ stated intent to impose time limits
on appeals of class action remand orders and the limited avail-
ability of appeals prior to the statute’s enactment, we can
think of no plausible reason why the text of the Act would
instead impose a seven-day waiting period followed by a lim-
itless window for appeal.”).
[3] Fortunately, though we note the apparent drafting error
and the Tenth Circuit’s analysis, we are not called upon to
speculate whether it is appropriate or even permissible for this
Court to correct Congress’s “typographical” mistake in this
case.1 Cheaptickets filed its appeal on the seventh day follow-
1See In re Century Cleaning Servs., Inc., 195 F.3d 1053, 1063-64 (9th
Cir. 1999) (to find that a statute contains a drafting or scrivener’s error,
the court must determine that the literal application of the statute will pro-
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ing the district court’s remand order which is, happily for
Cheaptickets, “not less than” seven days after the district
court ordered the remand. Even under the Tenth Circuit’s
“corrected” reading of the Act, Cheaptickets filed a timely
appeal because, having filed on the seventh day, it was “not
more than” seven days.
Cheaptickets filed a timely appeal. We accepted the appeal
on July 13, 2005, set a briefing schedule, and set oral argu-
ment for the next available panel. Unless extended, the period
within which we must issue judgment would expire on Sep-
tember 12, 2005, four days prior to oral argument (set for
September 16, 2005).2 The parties have filed a joint supple-
mental brief, agreeing under § 1453(c)(3)(A) to such time as
the court needs to render judgment following oral arguments,
and we have issued an order extending the time for judgment.
III. ANALYSIS
Cheaptickets advances two primary arguments in their peti-
tion. First, Cheaptickets asserts that the action “commenced”
when it was removed to federal court. Since the action was
removed in March 2005, more than a month after the enact-
ment of CAFA, Cheaptickets contends that CAFA applies and
the remand was in error. Second, Cheaptickets avers that for
purposes of removal, an action is “commenced” when process
duce a result that is clearly at odds with the intention of its drafters); Natu-
ral Res’s. Def. Council v. EPA, 915 F.2d 1314, 1321 (9th Cir. 1990) (in
analyzing potential scrivener’s error, the “ordinary presumption is that
Congress’ drafting of the text is deliberate”).
2Section 1453(c)(2) provides that if the circuit accepts a timely appeal,
the circuit “shall complete all action on such appeal, including rendering
judgment,” within 60 days after the date on which the appeal was filed.
Under § 1453(c)(3), we may grant an extension of the 60-day period
where (1) all parties to the proceeding agree to an extension and a given
period for the extension, or (2) the extension is for good cause shown and
in the interests of justice. The latter extension is limited to ten days.
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is served upon a defendant; given that Cheaptickets was
served with process on February 24, 2005, a week following
CAFA’s enactment, Cheaptickets argues that removal was
timely. As we consider CAFA’s requirements, we may review
the construction, interpretation, or applicability of a statute de
novo. United States v. Ventre, 338 F.3d 1047, 1052 (9th Cir.
2003).
[4] Section 9 of CAFA provides that “[t]he amendments
made by this Act shall apply to any civil action commenced
on or after the date of enactment of this Act.” Pub. L. 109-2,
§ 9. CAFA broadens diversity jurisdiction for certain qualify-
ing class actions and authorizes their removal; given its con-
text, CAFA’s “commenced” language surely refers to when
the action was originally commenced in state court. It is axi-
omatic that an individual or entity may not remove a dispute
before it has commenced in state court. The removal statute,
28 U.S.C. § 1441, is quite clear that only a “defendant” may
remove the action to federal court, see Shamrock Oil & Gas
Corp. v. Sheets, 313 U.S. 100 (1941), and there is no defen-
dant until a lawsuit has been properly initiated in state court.
[5] A state’s own laws and rules of procedure determine
when a dispute may be deemed a cognizable legal action in
state court. See Herb v. Pitcairn, 324 U.S. 117, 120 (1945)
(“Whether any case is pending in the Illinois courts is a ques-
tion to be determined by Illinois law”); Canon v. Kruger Co.,
837 F.2d 660 (8th Cir. 1988) (“It is clear that a federal court
must honor state court rules governing commencement of
civil actions when an action is first brought in state court and
then removed to federal court . . .”). In most states this occurs
either when the suit is filed or when the complaint or sum-
mons is served. See Murphy Bros. v. Michetti Pipe Stringing,
Inc., 526 U.S. 344, 351-52 (1999) (noting that in some states,
such as New York, service of the summons commences the
action); Pritchett, 420 F.3d at 1094 (noting that filing com-
monly commences the action, but that in Connecticut the
action commences by service; citing CONN. GEN. STAT. § 52-
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45a (2003)). In California, as in the federal courts, a suit is
“commenced” upon filing. CAL. CIV. PROC. CODE § 350 (“An
action is commenced, within the meaning of this Title, when
the complaint is filed.”); see FED. R. CIV. P. 3 (“A civil action
is commenced by filing a complaint with the court.”). Accord-
ingly, under California law, Bush commenced his class-action
lawsuit on February 17, 2005.
[6] Cheaptickets would have us read “commenced” to mean
“when removed.” That construction makes unnecessarily
complex what appears to be a very simple provision and statu-
tory scheme. Had Congress wished to permit the removal of
state suits removed after February 18, 2005, it could have pro-
vided that “the amendments made by this Act shall apply to
any court action removed on or after the date of enactment of
this Act.” Cheaptickets would have us give Section 9 an even
more awkward construction, permitting the removal of any
civil action commenced or removed on or after the date of
enactment. The reading it advocates is nonsensical, since
every action that could be removed must have been previ-
ously commenced.3 To date, two of our sister circuits have
considered the question of when a suit “commences” for the
purposes of CAFA’s Section 9 and have reached the same
conclusion we reach here. In Pritchett v. Office Depot, Inc.,
3We decline to adopt the approach typified by Lorraine Motor, Inc. v.
Aetna Casualty and Surety Company, 166 F. Supp. 319 (E.D.N.Y. 1958).
In that case, Congress had recently amended the diversity statute, 28
U.S.C. § 1332, to increase the amount-in-controversy requirement from
$5,000 to $10,000. The district court held that an action removed after the
effective date of the amendments — irrespective of whether the case was
filed before or after the effective date — must satisfy the higher amount-
in-controversy requirement. But see Kieffer v. Travelers Fire Ins., 167 F.
Supp. 398 (D. Md. 1958) (rejecting the approach taken in Lorraine
Motor). The Lorraine Motor rule thus made it more difficult to remove
state cases, a result consistent with the purpose of the amendments. In
CAFA, Congress has made it easier to remove state class actions to federal
court. Section 9 is sufficiently plain that we need not wrench its language
in order to permit even more cases to be removed.
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420 F.3d 1090 (10th Cir. 2005) (amended opinion), the Tenth
Circuit observed that a cause of action is traditionally
commenced when it is first brought in an appropriate
court . . . . When a matter is removed to a federal
court, it is not traditionally viewed as recommenced,
nor as a new cause of action. . . . Although there
exist some unique circumstances in which some
action other than filing a complaint in court is
deemed to “commence” a lawsuit . . . we view these
situations as exceptions to the general federal rule
that a lawsuit is commenced at a discrete moment in
time: the filing of the original complaint in a court
of competent jurisdiction.
Id. at *2 (citations omitted).
In Knudsen v. Liberty Mutual Insurance Co., 411 F.3d 805
(7th Cir. 2005), the Seventh Circuit followed the Tenth Cir-
cuit’s approach in Pritchett. The Court held that the notice of
removal itself does not commence a new case because
“[e]quating filing with commencement is the norm in civil
practice.” In a second case, on facts nearly identical to those
presented here, the Seventh Circuit repeated that “ ‘com-
menced’ indeed means ‘filed’ rather than ‘removed.’ ” Pfizer,
Inc. v. Lott, 417 F.3d 725,726 (7th Cir. 2005). See id. (suit
filed day before CAFA became effective). The court further
noted that
[W]hile it is true that the proceeding in federal court
was “commenced” by the filing of the removal peti-
tion, that filing was not the beginning of the suit. For
what was removed was the suit that had been
brought in the Illinois state court, and under Illinois
law the filing of the complaint had “commenced” the
suit. Nothing changed except the forum. The princi-
ple is recognized in decisions involving the transfer
of cases that were filed in the wrong forum initially;
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the transfer does not commence a new suit for pur-
poses of deciding whether the suit is timely. More-
over, were [defendant-appellant’s] reading adopted,
we would have to rewrite the statute in order to
create an exception for cases such as Knudsen and
Pritchett in which the removed suit had been filed
more than 30 days before removal. That necessity
suggests that [defendant-appellant’s] reading is
incorrect. The injustice of which it complains is not
so great as to justify radical judicial surgery on the
statute.
Id. The federal district courts that have recently considered
the meaning of “commencement” in conjunction with CAFA
have all reached similar results. See, e.g., In re Expedia Hotel
Taxes and Fees Litig., 377 F. Supp.2d 904 (W.D. Wash.
2005); Lander and Berkowitz, P.C. v. Transfirst Health Servs.
Inc., 374 F. Supp.2d 776 (E.D. Mo. 2005); Natale v. Pfizer,
379 F. Supp.2d 161 (D. Mass. 2005).
[7] We also reject Cheaptickets’ assertion that when the
action “commenced” may also refer to when service of pro-
cess was perfected. There is no basis in the Act or statutory
scheme for this claim. Under § 1453(b), a class action may be
removed in accordance with the procedures described in
§ 1446. Section 1446(b) provides that the notice of removal
must be filed within thirty days of the defendant’s receipt
“through service or otherwise” of the complaint, or within
thirty days of the service of a summons, whichever period is
shorter. See Murphy Bros., 526 U.S. 347-48 (clarifying that
receipt “through service or otherwise” means formal service
and not through service of a courtesy copy of the complaint).
Section 1446(b) has no bearing on when an action is com-
menced under CAFA. Cheaptickets has conflated when
CAFA is effective, which is addressed in Section 9 of the Act,
with when an action may be removed, which is covered in
§ 1446.
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The second paragraph of § 1446(b) provides for removal in
those cases where the action could not have initially been
removed, but became removable because the complaint has
been amended. The rule specifies that, in any event, a case
may not be removed “more than 1 year after commencement
of the action.” 28 U.S.C. § 1446(b) (emphasis added). “Com-
mencement” in this context refers to when the action was ini-
tiated in state court, according to state procedures. As the
Eighth Circuit observed in Canon v. Kruger Co., 837 F.2d
660, 664 (8th Cir. 1988), for purposes of the one-year limita-
tion on removal specified in the second paragraph of
§ 1446(b), it is “clear that a federal court must honor state
court rules governing commencement of civil actions when an
action is first brought in state court and then removed to fed-
eral court, even though the cause of action arises from federal
law.” See also Cofer v. Horsehead Research and Dev. Co.,
805 F. Supp. 541 (E.D. Tenn. 1991) (surveying decisions on
point, concluding that the great majority of federal courts look
to state court rules on commencement for purposes of deter-
mining whether one-year has passed for purposes of
§ 1446(b) removal, and declining to follow the minority
approach of triggering commencement upon service); Perez v.
General Packer, Inc., 790 F. Supp. 1464 (C.D. Cal. 1992)
(concluding that with the exception of two federal district
courts, “all other courts addressing this issue have found that
a case, for purposes of § 1446(b), ‘commences’ when it is
filed in state court. In removal cases the timing of ‘com-
mencement’ is controlled by the law of the state in which the
action originated.”).
Finally, Cheaptickets contends that to read CAFA as pre-
cluding its ability to remove will lead to unanticipated and
undesirable results where state procedure allows for signifi-
cant lapse of time between filing in state court and service
upon a defendant. Thus, Cheaptickets argues, an action may
be commenced by filing on February 17, 2005 (before the
effective date of the Act), but the complaint may not be
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served for months, or even years,4 and yet the action cannot
be removed. These are largely hypothetical worries — we are
not aware of any actions that fall in this category. In any
event, they concern only actions that were filed before Febru-
ary 18, 2005, and will shortly phase themselves out.
IV. CONCLUSION
[8] Bush filed his suit in California state court on February
17, 2005. He therefore “commenced” the suit one day before
CAFA was effective. We therefore affirm the order of the dis-
trict court remanding the suit to state court.
AFFIRMED.
4Cheaptickets points to the procedures in Montana and Idaho as (pre-
sumably the most extreme) examples of state jurisdictions in the Ninth
Circuit where a class-action plaintiff may delay service on actions com-
menced prior to February 18, 2005 to deprive the defendants in such
actions of federal removal jurisdiction. Compare MONT. R. CIV. P. 3 (“A
civil action is commenced by filing a complaint with the court.”) with
MONT. CODE ANN., Ch. 20, Rule 4E (2004) (“A plaintiff shall have 3 years
after filing a complaint to have a summons issued and accomplish ser-
vice.”); compare also IDAHO R. CIV. P. 3(a)(1) (“A civil action is com-
menced by the filing of a complaint with the court . . . .” ) with IDAHO R.
CIV. P. 4(a)(2) (allowing up to six months from the filing of a complaint
within which to effectuate service). At worst, then, any plaintiff class
advantages inherent in state commencement procedure will have an end in
this Circuit on February 18, 2008 at the latest.
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