Liberty Mutual Fire Ins. V. EZ-FLO INT'L - Ninth Circuit

Headline: The panel concluded that “100 or more persons” for the purposes of meeting the Class Action Fairness Act’s numerosity requirement is synonymous with named plaintiffs.

Areas of Law: Civil Procedure

Issues Presented: The panel considered what qualified as a mass action under the Class Action Fairness Act (“CAFA”) more specifically it considered how the term “persons” should be construed as under the “100 or more persons” requirement. This case presents the narrow question of whether a lawsuit filed by 26 insurance companies (the Plaintiffs), in their capacity as subrogees of 145 insured homeowners, qualifies as a mass action under the Class Action Fairness Act (“CAFA”). More specifically, whether the “100 or more persons” numerosity requirement includes the 145 insured homeowner subrogees who were not named plaintiffs.

Brief Summary
: A group of twenty-six insurance companies had made payments to 145 insured policy holders for damages allegedly caused by a defect in defendant’s product. The insurance companies brought suit in state court against EZ-FLO as subrogees of those insured policy holders seeking over $5 million in damages allegedly suffered by the 145 insureds. EZ-FLOR petitioned to remove the case to federal court under CAFA. CAFA provides for diversity jurisdiction over mass actions comprising “100 or more persons” where the aggregate amount in controversy exceeds $5,000,000.00, and requires only minimal diversity. Upon removal to Plaintiffs moved to remand the case back to state court due to lack of jurisdiction and the district court granted the motion. The panel affirmed the decision of the district court holding that the requirement of “100 or more persons” was not satisfied under CAFA holding that CAFA “100 or more persons” numerosity requirement refers to named plaintiffs and not the subrogated policy holders whose insurance claims have been paid.

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