Foundry Employees’ Action is a “Mass Action” Subject to Removal Under the Class Action Fairness Act

The Eleventh Circuit has clarified the scope of the “local event exception” to the federal-court jurisdiction over “mass actions” conferred by the Class Action Fairness Act (“CAFA”), holding that claims by former foundry employees against manufacturers and distributors of products used at the foundry are not within the exception.  Spencer v. Specialty Foundry Prods. Inc., 2020 WL 1270276 (11th Cir. Mar. 17, 2020).

The plaintiffs in the case are 230 former workers at a now-closed Alabama foundry.  They worked in different jobs at different times, but all claim that they were harmed by exposure to hazardous chemicals during their employment.  The defendants are unrelated companies that manufactured (and in some cases distributed) chemical products used at the foundry, including sands, resins, gases, and other substances of various formulations.  The plaintiffs’ complaint, originally filed in state court, includes several claims, all arising from the allegation that the “normal and foreseeable” use of the defendants’ products at the foundry caused the “formation and release of hazardous and carcinogenic chemical substances,” which harmed them.

One defendant removed the case to federal court under CAFA’s “mass action” provision, which provides, generally, that an action brought by 100 or more plaintiffs collectively seeking over $5,000,000 may be considered a class action under CAFA.  The plaintiffs moved to remand, on two bases.  First, they argued that the case is not a “mass action” removable under CAFA because it falls under the so-called “local event exception” to the definition of “mass action,” in that “all of the claims . . . arise from an event or occurrence in the State in which the action was filed” and the event or occurrence “allegedly resulted in injuries in that State or in States contiguous to that State.”  Second, the plaintiffs argued that the case should be remanded under CAFA’s “local controversy exception,” which requires remand if two-thirds of the plaintiffs and a significant defendant are citizens of the state in which the case was filed, and the principal injury or related conduct occurred there.  The district court granted the motion to remand based on the local event exception, and did not consider the local controversy exception.

The Eleventh Circuit, in an opinion written by Judge Martin and joined by Judges Rosenbaum and Newsom, vacated the remand order.  The critical question was whether the plaintiffs’ allegations constituted “an event or occurrence” within the meaning of the local event exception.  Does the exception apply only to a single discrete event, as the defendants argued, or to a continuing set of “truly local” circumstances, as the plaintiffs claimed?  Neither, according to the Eleventh Circuit:  “We conclude that ‘an event or occurrence’ refers to a series of connected, harm-causing incidents that culminate in one event or occurrence giving rise to plaintiffs’ claims.”  The court found support for this conclusion in the dictionary definitions of “event” and “occurrence,” and noted that while the article “an” indicates singularity, a connected series can constitute a single item.  (Here, the court employed a baseball analogy:  an inning, a baseball game, and the World Series each can be described as “an event,” even though there are multiple innings in a game and multiple games in the Series.)  The Eleventh Circuit’s construction of the phrase is similar to those of the Third and Fifth Circuits, Abraham v. St. Croix Renaissance Group, L.L.L.P., 719 F.3d 270 (3d Cir. 2013), and Rainbow Gun Club, Inc. v. Danbury Onshore, L.L.C., 760 F.3d 405 (5th Cir. 2014), but differs from the Ninth Circuit’s, under which the phrase an “event or occurrence” refers to a “single happening,” Allen v. Boeing Co., 784 F.3d 625 (9th Cir. 2015).

Applying its definition to the foundry employees’ allegations, the court found them insufficient to fall within the exception, for three reasons.  First, the defendants manufactured (or distributed) different products, used in different ways, alleged to have caused different types of harm.  Second, the plaintiffs failed to allege a single “culminating event,” as opposed to a “string of events over time and later-resulting harm.”  Third, the plaintiffs’ allegations fell short of claiming that the defendants somehow came together to cause a single “event or occurrence”—“The foundry was open for decades, but the Plaintiffs do not say when the Defendants committed the alleged torts or how and when the Plaintiffs were harmed.”

Posted by Valerie Sanders.

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