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Shelby v. Oak River Insurance Co.

United States District Court, W.D. Missouri, Western Division

December 5, 2017

QUENTON SHELBY, Individually and on Behalf of Others Similarly Situated, Plaintiff,



         This putative class-action lawsuit arises from an attempt to recover on a judgment entered in a separate class-action lawsuit. This lawsuit was filed in the Circuit Court of Jackson County, Missouri. Defendant Oak River Insurance Company (“Oak River”) removed it to federal court by invoking the Court's jurisdiction under the Class Action Fairness Act (“CAFA”), 28 U.S.C. §§ 1332, 1441, and 1446.

         Now before the Court is Plaintiff's Motion to Remand (Doc. 7). Finding that Oak River timely filed its notice of removal, and that the Court should not exercise its discretion to remand under CAFA's “interests of justice” exception, the motion is DENIED.


         This dispute stems from a separate lawsuit (“the underlying litigation”) brought by a used car dealer, Miller Investment Group (“MIG”), seeking to recover against Plaintiff Quenton Shelby for a deficiency on his secured car loan. In response, Plaintiff filed a class-action counter-claim alleging MIG violated the UCC and engaged in a deceptive pattern in repossessing cars. MIG subsequently entered into a class-wide settlement with Plaintiff in which MIG assigned any claims it had against its insurers to Plaintiff and the other class members.

         Oak River is an insurance company that issued garage liability insurance policies to MIG. It is a citizen of Nebraska, with its principal place of business in Omaha, Nebraska. Oak River denied coverage in the underlying litigation, purportedly because the underlying litigation concerned statutory penalties arising out of financing activities and not any activity associated with MIG's operation of a garage.

         On July 22, 2016, Plaintiff filed suit against Oak River in the Circuit Court of Jackson County, Missouri, seeking to recover under Oak River's policies. Oak River contends it was initially unclear whether the case was a class-action lawsuit. It notes, for example, the Petition did not indicate that Plaintiff was bringing the case on behalf of others, and that the caption denoted Mr. Shelby as the only Plaintiff. Pet. (Doc. 10-2). Oak River responded by asserting an affirmative defense that the Petition failed as a matter of law because it failed to join proper parties-that is, the class members in the underlying litigation-to the action.

         Oak River subsequently engaged in discovery to confirm that the case was not a class action. On February 8, 2017, Plaintiff stated in a sworn interrogatory response that, “This is not a class action.” Am. Answers and Objs. to Def.'s First Interrogs. to Pl. at 3 (Doc. 10-4).

         Less than thirty days later, on March 8, 2017, Plaintiff sought leave to file an amended petition asserting that the case was, in fact, a class action lawsuit. Among other things, the proposed First Amended Petition stated, “Shelby is asserting MIG's and the Class's claims . . .” First Am. Pet. at ¶ 2 (Doc. 10-7) (emphasis added). It also revised the prayer for relief clause in Count II to state it was seeking damages for “Shelby and the Class.” Id. at 7, ¶ B (emphasis added).

         On March 28, 2017, Oak River removed the case to federal court by asserting CAFA jurisdiction, arguing the motion to amend and proposed First Amended Petition were the first sufficiently detailed and unequivocal statements from which it could unambiguously ascertain that this was a class action.

         Plaintiff now moves for remand, arguing Oak River's removal was untimely, and even if it was timely, the Court should decline to hear the dispute under CAFA's “interests of justice” exception.


         The statute governing removal provides in relevant part that “[a]ny civil action brought in a State court . . . may be removed by the defendant or the defendants” if the federal court has original jurisdiction over it. 28 U.S.C. § 1441(a). The removing party bears the burden of establishing federal jurisdiction. Bell v. Hershey Co., 557 F.3d 953, 956 (8th Cir. 2009). All doubts about removal are resolved in favor of remand. Cent. Iowa Power Co-op. v. Midwest Indep. Transmission Sys. Operator, Inc., 561 F.3d 904, 912 (8th Cir. 2009).

         To establish CAFA jurisdiction, the removing party must show that the aggregate amount in controversy in the class action exceeds $5, 000, 000 and “there is minimal (as opposed to complete) diversity among the parties, i.e., any class member and any defendant are citizens of different states; and there are at least 100 members in the class.” Westerfeld v. Indep. Processing LLC, 621 F.3d 819, 822 (8th Cir. 2010) (citing 28 U.S.C. § 1332(d)). Generally speaking, a defendant has thirty days to invoke CAFA jurisdiction from the time the complaint is filed or the defendant receives “an amended pleading, motion, order, or other paper” from which it may first be ascertained that the case has become removable. 28 U.S.C. § 1446(b).

         Once the removing party establishes CAFA jurisdiction, the burden shifts to the party seeking remand to establish that one of CAFA's three jurisdictional exceptions applies. Westerfeld, 621 F.3d at ...

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