SUPREME COURT OF THE UNITED STATES
_________________
No. 17–1471
_________________
HOME DEPOT U. S. A., INC., PETITIONER
v. GEORGE W. JACKSON
on writ of certiorari to the united states
court of appeals for the fourth circuit
[May 28, 2019]
Justice Alito, with whom The Chief Justice,
Justice Gorsuch, and Justice Kavanaugh join, dissenting.
The rule of law requires neutral forums for
resolving disputes. Courts are designed to provide just that. But
our legal system takes seriously the risk that for certain cases,
some neutral forums might be more neutral than others. Or it might
appear that way, which is almost as deleterious. For example, a
party bringing suit in its own State’s courts might (seem to)
enjoy, so to speak, a home court advantage against outsiders. Thus,
from 1789 Congress has opened federal courts to certain disputes
between citizens of different States. Plaintiffs, of course, can
avail themselves of the federal option in such cases by simply
choosing to
file a case in federal court. But since their
defendants cannot, the law has always given defendants the option
to
remove (transfer) cases to federal court.
Shamrock Oil
& Gas Corp. v.
Sheets,
313
U.S. 100, 105 (1941). The general removal statute, which
authorizes removal by “the defendant or the defendants,” thus
ensures that defendants get an equal chance to choose a federal
forum. 28 U. S. C. §1441(a).
But defendants cannot remove a case unless it
meets certain conditions. Some of those conditions have long made
important (and often costly) consumer class actions virtually
impossible to remove. Congress, concerned that state courts were
biased against defendants to such actions, passed a law
facilitating their removal. The Class Action Fairness Act of 2005
(CAFA) allows removal of certain class actions “by any defendant.”
28 U. S. C. §1453(b). Our job is not to judge whether
Congress’s fears about state-court bias in class actions were
warranted or indeed whether CAFA should allay them. We are to
determine the scope of the term “defendant” under CAFA as well as
the general removal provision, §1441.
All agree that if one party sues another, the
latter—the original defendant—is a “defendant” under both removal
laws. But suppose the original defendant then countersues, bringing
claims against both the plaintiff and a new party. Is this new
defendant—the “third-party defendant”—also a “defendant” under CAFA
and §1441? There are, of course, some differences between original
and third-party defendants. One is brought into a case by the first
major filing, the other by the second. The one filing is called a
complaint, the other a countercomplaint.
But both kinds of parties are defendants to
legal claims. Neither chose to be in state court. Both might face
bias there, and with it the potential for crippling unjust losses.
Yet today’s Court holds that third-party defendants are not
“defendants.” It holds that Congress left them unprotected under
CAFA and §1441. This reads an irrational distinction into both
removal laws and flouts their plain meaning, a meaning that context
confirms and today’s majority simply ignores.
I
A
To appreciate what Congress sought to achieve
with CAFA, consider what Congress failed to accomplish a decade
earlier with the Private Securities Litigation Reform Act of 1995
(Reform Act), 109Stat. 737 (codified at 15 U. S. C.
§§77z–1 and 78u–4). The Reform Act was “targeted at perceived
abuses of the class-action vehicle in litigation involving
nationally traded securities,” including spurious lawsuits,
“vexatious discovery requests, and ‘manipulation by class action
lawyers of the clients whom they purportedly represent.’ ”
Merrill Lynch, Pierce, Fenner & Smith Inc. v.
Dabit,
547 U.S.
71, 81 (2006) (quoting H. R. Conf. Rep. No. 104–369, p. 31
(1995)). As a result of these abuses, Congress found, companies
were often forced to enter “extortionate settlements” in frivolous
cases, just to avoid the litigation costs—a burden with scant
benefits to anyone. 547 U. S., at 81. To curb these
inefficiencies, the Reform Act “limit[ed] recoverable damages and
attorney’s fees, . . . impose[d] new restrictions on the
selection of (and compensation awarded to) lead plaintiffs,
mandate[d] imposition of sanctions for frivolous litigation, and
authorize[d] a stay of discovery pending resolution of any motion
to dismiss.”
Ibid.
But “at least some members of the plaintiffs’
bar” found a workaround: They avoided the Reform Act’s limits on
federal litigation by “avoid[ing] the federal forum altogether” and
heading to state court.
Id., at 82. Once there, they were
able to keep defendants from taking them back to federal court
(under the rules then in force) simply by naming an in-state
defendant. See §1441(b)(2). And the change in plaintiffs’ strategy
was marked: While state-court litigation of such class actions had
been “rare” before the Reform Act’s passage,
id., at 82,
within a decade state courts were handling most such cases, see S.
Rep. No. 109–14, p. 4 (2005).
Some in Congress feared that plaintiffs’ lawyers
were able to “ ‘game’ the procedural rules and keep nationwide
or multi-state class actions in state courts whose judges have
reputations for readily certifying classes and approving
settlements without regard to class member interests.”
Ibid.
The result, in Congress’s judgment, was that “State and local
courts” were keeping issues of “national importance” out of federal
court, “acting in ways that demonstrate[d] bias against
out-of-State defendants” and imposing burdens that hindered
“innovation” and drove up “consumer prices.” §§2(a)(4), (b),
119Stat. 5.
So Congress again took action. But rather than
get at the problem by imposing limits on federal litigation that
plaintiffs could sidestep by taking defendants to state court,
Congress sought to make it easier for defendants to remove to
federal court: thus CAFA.
B
To grasp how CAFA changed the procedural
landscape for class actions, it helps to review the rules that
govern removal in the mine run of cases, and that once limited
removal of all class actions as well. Those general rules appear in
28 U. S. C. §§1441 and 1446.
Under §1441(a), “any civil action brought in a
State court . . . may be removed by the defendant or the
defendants” as long as federal district courts would have “original
jurisdiction” over the case. Such jurisdiction comes in two
varieties. Federal courts have “federal question ju- risdiction” if
the case “aris[es] under” federal law—for instance, if the
plaintiff alleges violations of a federal statute. §1331. But even
when the plaintiff brings only state-law claims—alleging a breach
of a contract, for example—federal courts have “diversity
jurisdiction” if the amount in controversy exceeds $75,000 and
there is complete diversity of parties, meaning that no plaintiff
is a citizen of the same State as any defendant. §1332(a);
Lincoln Property Co. v.
Roche,
546 U.S.
81, 89 (2005). While §1441 normally allows removal of either
kind of case, it bars removal in diversity cases brought in the
home State of any defendant. §1441(b)(2).
Another subsection of §1441 addresses removal of
a subset of claims (not an entire action) when a case involves some
claims that would be removable because they arise under federal law
and others that would not (because they involve state-law claims
falling outside both the original
and the supplemental
jurisdiction of federal courts[
1]). In these hybrid cases, §1441(c)(2) allows the federal
claims to be removed while the state-law claims are severed and
sent back to state court.
The procedural rules for removing an action or
claim from state to federal court under §1441 are set forth in
§1446. Section 1446(b)(2)(A) requires the consent of all the
defendants before an entire case may be re- moved under §1441(a).
(If a defendant instead invokes §1441(c)(2), to remove a subset of
claims, consent is required only from defendants to the claims that
are removed.) And if diversity jurisdiction arises later in
litigation—which may occur if, for instance, dismissal of an
original defendant creates complete diversity—§1446(c)(1) allows
removal only within one year of the start of the action in state
court.
To this general removal regime, CAFA made
several changes specific to class actions. Instead of allowing
removal by “the defendant or the defendants,” see §1441(a), §5 of
CAFA allowed removal by “any defendant” to certain class actions,
§1453(b), even when the other defendants do not consent, the case
was filed in a defendant’s home forum, or the case has been pending
in state court for more than a year. See 119Stat. 12–13.
Of course, these changes would be of no use to a
class-action defendant hoping to remove if there were no federal
jurisdiction over its case. So CAFA also lowered the barriers to
diversity jurisdiction. While complete diversity of parties is
normally required, CAFA eliminates that rule for class actions
involving at least 100 members and more than $5 million in
controversy. In such cases, CAFA vests district courts with
diversity jurisdiction anytime there is minimal diversity—which
occurs when at least one plaintiff and defendant reside in
different States. See 28 U. S. C. §§1332(d)(2),
(d)(5)(B).
We were asked to decide whether these loosened
requirements are best read to allow removal by third-party
defendants like Home Depot. The answer is clear when one considers
Home Depot’s situation against CAFA’s language and history.
C
This case began as a garden-variety
debt-collection action: Citibank sued respondent George Jackson in
state court seeking payment on his purchase from petitioner Home
Depot of a product made by Carolina Water Systems (CWS). Jackson
came back with a counterclaim class action that roped in Home Depot
and CWS as codefendants. (Until then, neither Home Depot nor CWS
had been a party.) Citibank then dismissed its claim against
Jackson, and Jackson amended his complaint to remove any mention of
Citibank. So now all that remains in this case is Jackson’s
class-action counterclaims against Home Depot and CWS.
Invoking CAFA, Home Depot filed a notice of
removal; it also moved to realign the parties to make Jackson the
plaintiff, and CWS, Home Depot, and Citibank the defendants (just
before Citibank had dropped out entirely). The District Court
denied the motion and remanded the case to state court, holding
that Home Depot cannot remove under CAFA because CAFA’s “any
defendant” excludes defendants to
counterclaim class
actions. The Court of Appeals affirmed, citing Circuit precedent
that hung on this Court’s decision in
Shamrock Oil & Gas
Corp. v.
Sheets,
313 U.S.
100 (1941). We granted certiorari to decide whether the lower
court’s reading of
Shamrock Oil is correct and whether CAFA
allows third-party defendants like Home Depot to remove an action
to federal court.
All agree that the one dispute that now
constitutes this lawsuit—Jackson’s class action against Home Depot
and CWS—would have been removable under CAFA had it been present
from the start of a case. Is it ineligible for removal just because
it was not contained in the filing that launched this lawsuit?
Several lower courts think so. In holding as
much, they have created what Judge Niemeyer called a “loophole”
that only this Court “can now rectify.”
Palisades Collections
LLC v.
Shorts, 552 F.3d 327, 345 (CA4 2008) (dissenting
from denial of rehearing en banc). The potential for that
“loophole” was first spotted by a civil procedure scholar writing
shortly after CAFA took effect. See Tidmarsh, Finding Room for
State Class Actions in a Post-CAFA World: The Case of the
Counterclaim Class Action, 35 W. St. U. L. Rev. 193, 198 (2007).
The article outlined a “tactic” for plaintiffs to employ if they
wanted to thwart a defendant’s attempt to remove a class action to
federal court under CAFA: They could raise their class-action claim
as a
counterclaim and “hope that CAFA does not authorize
removal.”
Ibid. In a single stroke, the article observed, a
defendant’s routine attempt to collect a debt from a single
consumer could be leveraged into an unremovable attack on the
defendant’s “credit and lending policies” brought on behalf of a
whole class of plaintiffs—all in the very state courts that CAFA
was designed to help class-action defendants avoid.
Id., at
199.
The article is right to call this approach a
tactic; it subverts CAFA’s evident aims. I cannot imagine why a
Congress eager to remedy alleged state-court abuses in class
actions would have chosen to discriminate between two kinds of
defendants, neither of whom had ever chosen the allegedly abusive
state forum, all based on whether the claim against them had
initiated the lawsuit or arisen just one filing later (in the
countercomplaint). Of course, what finally matters is the text, and
in reading texts we must remember that “no legislation pursues its
purposes at all costs,”
Rodriguez v.
United States,
480 U.S.
522, 525–526 (1987) (
per curiam); Congress must often
strike a balance between competing purposes. But a good interpreter
also reads a text charitably, not lightly ascribing irrationality
to its author; and I can think of no rational purpose for this
limit on which defendants may remove. Even respondent does not try
to defend its rationality, suggesting instead that it simply
reflects a legislative compromise. Yet there is no evidence that
anyone thought of this potential loophole before CAFA was enacted,
and it is hard to believe that any of CAFA’s would-be opponents
agreed to vote for it in exchange for this way of keeping some
cases in state court. The question is whether the uncharitable
reading here is inescapable—whether, unwittingly or despite itself,
Congress adopted text that compels this bizarre result.
II
There are different schools of thought about
statutory interpretation, but I would have thought this much was
common ground: If it is hard to imagine any purpose served by a
proposed interpretation of CAFA, if that reading appears nowhere in
the statutory or legislative history or our cases on CAFA, if it
makes no sense as a policy matter, it had better purport to reflect
the best reading of the text, or any decision embracing it is
groundless. Indeed, far from relegating the text to an
afterthought, our shared approach to statutory interpretation, “as
we always say,
begins with the text.”
Ross v.
Blake, 578 U. S. ___, ___ (2016) (slip op., at 4)
(emphasis added). After all, as we have unanimously declared, a
“plain and unambiguous” text “must” be enforced “according to its
terms.”
Hardt v.
Reliance Standard Life Ins. Co.,
560 U.S.
242, 251 (2010). And yet, though the text and key term here is
“any defendant,” 28 U. S. C. §1453(b), the majority has
not one jot or tittle of analysis on the plain meaning of
“defendant.”
Any such analysis would have compelled a
different result. According to legal as well as standard dictionary
definitions available in 2005, a “defendant” is a “person sued in a
civil proceeding,” Black’s Law Dictionary 450 (8th ed. 2004), and
the term is “opposed to” (contrasted with) the word
“
plaintiff,” Webster’s Third New International Dictionary
591 (2002) (Webster). See also 4 Oxford English Dictionary 377 (2d
ed. 1989) (OED) (“[a] person sued in a court of law; the party in a
suit who defends; opposed to
plaintiff”). What we have
before us is a civil proceeding in which Home Depot is not a
plaintiff and is being sued. So Home Depot is a defendant, as that
term is ordinarily understood.
The fact that Home Depot is considered a
“
third-party defendant” changes nothing here. See N. C. Rule
Civ. Proc. 14(a) (2018). Adjectives like “third-party” “modify
nouns—they pick out a subset of a category that possesses a certain
quality.”
Weyerhaeuser Co. v.
United States Fish and
Wildlife Serv., 586 U. S. ___, ___ (2018) (slip op., at
8). They do not “alter the meaning of the word” that they modify.
Rimini Street, Inc. v.
Oracle USA, Inc., 586
U. S. ___, ___ (2019) (slip op., at 6). And so, just as a
“ ‘critical habitat’ ” is a habitat,
Weyerhaeuser
Co.,
supra, at ___ (slip op., at 9), and “ ‘full
costs’ ” are costs,
Rimini Street, Inc.,
supra,
at ___ (slip op., at 7), zebra finches are finches and third-party
defendants are, well, defendants.
If further confirmation were needed, it could be
found in CAFA’s use of the word “any” to modify “defendant.” Unlike
the general removal provision, which allows removal by “the
defendant or the defendants,” §1441(a), CAFA’s authorization
extends to “
any defendant.” §1453(b) (emphasis added). As we
have emphasized repeatedly, “ ‘the word “any” has an expansive
meaning, that is, “one or some indiscriminately of whatever
kind.” ’ ”
Ali v.
Federal Bureau of
Prisons,
552 U.S.
214, 219–220 (2008) (quoting
United States v.
Gonzales,
520 U.S.
1, 5 (1997), in turn quoting Webster’s Third New International
Dictionary 97 (1976)). In case after case, we have given effect to
this expansive sense of “any.” See
Small v.
United
States,
544 U.S.
385, 396 (2005) (Thomas, J., dissenting) (collecting cases). So
too here: Contrary to the Court’s analysis, Congress’s use of “any”
covers defendants of “whatever kind,”
Ali,
supra, at
220, including third-party defendants like petitioner. “In
concluding that ‘any’ means not what it says, but rather ‘a subset
of any,’ the Court distorts the plain meaning of the statute and
departs from established principles of statutory construction.”
Small,
supra, at 395 (Thomas, J., dissenting).
For these reasons, unless third-party defendants
like Home Depot differ in some way that is relevant to removal (as
a matter of text, precedent, or common sense),[
2] they fall within CAFA’s coverage of “any
defendant.” §1453(b).
III
Respondent and the majority contend that
Congress meant to incorporate into CAFA a specialized sense of
“defendant,” derived from its use in the general removal statute,
§1441. And in §1441, they assert, “defendant” refers only to an
original defendant—one named in the plaintiff’s complaint.
As I will show, they are mistaken about §1441. See Part IV,
infra. But even if that general removal law
were best
read to leave out third-party defendants, there would be ample
grounds to conclude that such defendants are covered by CAFA. And
the majority’s and respondent’s objections to this reading of CAFA,
based on comparisons to other federal laws, are unconvincing.
A
1
The first basis for reading CAFA to extend
more broadly than §1441 is that CAFA’s
text is broader. As
discussed, see
supra, at 10, CAFA sweeps in “
any
defendant,” §1453(b) (emphasis added), in contrast to §1441’s “the
defendant or the defendants.” So even if we read the latter phrase
narrowly, we would have to acknowledge that “Congress did not adopt
that ready alternative.”
Advocate Health Care Network v.
Stapleton, 581 U. S. ___, ___ (2017) (slip op., at 8).
“Instead, it added language whose most natural reading is to
enable”
any defendant to remove, and “[t]hat drafting
decision indicates that Congress did not in fact want” to replicate
in CAFA the (purportedly) narrower reach of §1441.
Ibid.
Respondent scoffs at the idea that the word
“any” could make the difference. In his view, “any defendant” in
CAFA means “any
one of the defendants,” not “any
kind
of defendant.” Thus, he contends, if §1441 covers only one kind
of defendant—the original kind, the kind named in a complaint—CAFA
must do the same. On this account, CAFA refers to “any defendant”
only because it was meant to eliminate (for class actions) §1441’s
requirement that
all “the defendants” agree to remove.
Respondent is right that the word “any” in CAFA eliminated the
defendant-unanimity rule. But the modifier’s overall effect on the
plain meaning of CAFA’s removal provision is what counts in a case
interpreting CAFA; and that effect is to guarantee a broad reach
for the word “defendant.”
Nor is it baffling how “any” could be expansive
in the way respondent finds so risible. In ordinary language,
replacing “the Xs” with “any X” will often make the term “X” go
from covering only paradigm instances of X to covering all cases.
Compare:
•“Visitors to the prison may not use the phones
except at designated times.”
•“Visitors to the prison may not use any phone
except at designated times.”
On a natural reading, “the phones” refers to
telephones provided by the prison, whereas “any phone” includes
visitors’ cellphones. Likewise, even if the phrase “the defendant”
reached only original defendants, the phrase “any defendant” would
presumptively encompass all kinds. Again, putting the word “any”
into a “phrase . . . suggests a broad meaning.”
Ali, 552 U. S., at 218–219.
In fact, the text makes it indisputable that
CAFA’s “any defendant” is broader in some ways. CAFA reaches at
least two sets of defendants left out by §1441: in-state (or
“forum”) defendants, and nondiverse defendants. See §§1332(d)(2),
1453(b). So respondent and the majority are reduced to claiming
that when CAFA says “any defendant,” it is stretching farther than
§1441’s “the defendant” in some directions but not others—picking
up forum defendants and nondiverse defendants while avoiding all
contact with third-party defendants. But the shape of “any” is not
so contorted. If context shows that “any defendant” covers
some additional kinds, common sense tells us it
presumptively covers the others.
2
Respondent’s answer from precedent backfires.
Against our many cases reading the word “any” capaciously (which is
to say, naturally), see
Small, 544 U. S., at 396
(Thomas, J., dissenting) (collecting cases), he cites two cases
that assigned the word a narrower scope. But in both, context
compelled that departure from plain meaning. In
United
States v.
Palmer, 3 Wheat. 610, 631–632 (1818), we read
“any person” to refer exclusively to those over whom the United
States had jurisdiction, but only because that was the undisputed
scope of other instances of the same phrase in the same Act. Here,
by contrast, even the majority agrees that petitioner’s reading of
“any defendant” in CAFA is “plausible.”
Ante, at 5. And in
Small,
supra, at 388–389, the Court read “any court”
to refer only to domestic courts because of the “legal presumption
that Congress ordinarily intends its statutes to have domestic, not
extraterritorial, application.” No presumption helps respondent
here.
Indeed, our presumptions in this area cut
against the majority and respondent’s view. That view
insists on reading CAFA’s “any defendant” narrowly, to match the
allegedly narrower scope of “the defendant” in §1441. But our case
law teaches precisely that CAFA should
not be read as
narrowly as §1441. While removal under §1441 is presumed narrow in
various ways out of respect for States’ “rightful independence,”
Shamrock Oil, 313 U. S., at 109, we have expressly
limited this “antiremoval” presumption to cases interpreting §1441.
As Justice Ginsburg recently wrote for the Court:
“
[N]o antiremoval presumption
attends cases invoking CAFA, which Congress enacted to facilitate
adjudication of certain class actions in federal court. See
Standard Fire Ins. Co., 568 U. S., at 595 (‘CAFA’s
primary objective’ is to ‘ensur[e] “Federal court consideration of
interstate cases of national importance.” ’ (quoting §2(b)(2),
119Stat. 5)); S. Rep. No. 109–14, p. 43 (2005) (CAFA’s ‘provisions
should be read broadly, with a strong preference that interstate
class actions should be heard in a federal court if properly
removed by any defendant.’).”
Dart Cherokee Basin Operating
Co. v.
Owens, 574 U.S. 81, 89 (2014) (emphasis
added).
So the strongest argument for reading §1441 to
exclude third-party defendants is an interpretive canon that we
have pointedly
refused to apply to CAFA. Our precedent on
this point is thus a second basis—apart from the plain meaning of
“any defendant”—for holding that CAFA covers third-party defendants
even if §1441 does not.
B
Respondent and the majority object that this
reading ignores the backdrop against which CAFA was enacted and the
significance of CAFA’s contrast with the language of other
(subject-matter-specific) removal statutes. And to these
objections, respondent adds a third and bolder claim: that CAFA
does not empower petitioner to remove because it does not create
removal authority at all, but only channels removals already
authorized by §1441 (on which petitioner cannot rely in this case).
All three objections fail.
1
In respondent’s telling, it has been the
uniform view of the lower courts that a third-party defendant is
not among “the defendants” empowered to remove under §1441. Since
those courts’ decisions studded the legal “backdrop” when Congress
enacted CAFA, respondent contends, we should presume CAFA used
“defendant” in the same narrow sense. But this story exaggerates
both the degree of lower court harmony and the salience of the
resulting “backdrop” to Congress’s work on CAFA.
First, though respondent repeatedly
declares that the lower courts have reached a “consensus,” see
Brief for Respondent i, 1, 14, 19, 32, 35, they have not. “Several
cases . . . have permitted removal on the basis of a
third party claim where a separate and independent controversy is
stated.”
Carl Heck Engineers, Inc. v.
Lafourche Parish
Police Jury, 622 F.2d 133, 135–136 (CA5 1980) (collecting
cases). Before CAFA, at least a half-dozen district courts took
this view.[
3] And though courts
of appeals rarely get to opine on this issue (because §1447(d)
blocks most appeals from district court orders sending a removed
case back to state court), two Circuits have actually allowed
third-party defendants to remove under §1441. See
Texas ex rel.
Bd. of Regents of Univ. of Tex. System v.
Walker,
142 F.3d 813, 816 (CA5 1998);
United Benefit Life Ins.
Co. v.
United States Life Ins. Co.,
36 F.3d 1063, 1064, n. 1 (CA11 1994). Even a treatise cited by
respondent destroys his “consensus” claim, as it admits that courts
take “myriad and diverging views on whether third-party defendants
may remove an action.” 16 J. Moore, D. Coquillette, G. Joseph,
& G. Vario, Moore’s Federal Practice §107.41[6] (3d ed.
2019).
Second, even if the lower courts all
agreed, the “legal backdrop” created by their decisions would
matter only insofar as it told us what we can “safely assume” about
what Congress “intend[ed].”
McFarland v.
Scott,
512 U.S.
849, 856 (1994). So the less salient that backdrop would have
been to Congress, the less relevant it is to interpreting
Congress’s actions. And I doubt the backdrop here would have been
very salient. For one thing, it consisted mostly of trial court
decisions; and the lower the courts, the less visible the backdrop.
Indeed, I can find no case where we have read a special meaning
into a federal statutory term based mainly on trial court
interpretations.
But even if several higher courts had spoken—and
spoken with one voice—there would be a problem: We have no evidence
Congress was listening. In preparing and passing CAFA, Congress
never adverted to third-party defendants’ status. By respondent’s
admission, Congress was “silen[t]” on them in the seven years of
hearings, drafts, and debates leading up to CAFA’s adoption. Brief
for Respondent 45. Yet if Congress was not thinking about a
question, neither was it thinking about lower courts’ answer to the
question. So we cannot presume it adopted that answer.
2
Respondent also thinks we should read CAFA to
exclude third-party defendants in light of the contrast between
CAFA’s “any defendant” and the language of two other removal laws
that more clearly encompass third-party defendants. The America
Invents Act (AIA), for example, allows “any party” to remove a
lawsuit involving patent or copyright claims. 28 U. S. C.
§§1454(a), (b)(1). The Bankruptcy Code likewise allows “[a] party”
to remove in cases related to bankruptcy. §1452(a). Thus,
respondent says, when Congress
wanted to include more than
original defendants, it knew how. It used terms like “any party”
and “a party”—as CAFA did not.
Note, however, that the cited terms would have
covered even original plaintiffs, whom
no one thinks CAFA
meant to reach (and for good reason, see Part II,
supra). So
CAFA’s terms had to be narrower than (say) the AIA’s “any party,”
regardless of whether CAFA was going to cover third-party
defendants. Its failure to use the AIA’s and Bankruptcy Code’s
broader terms, then, tells us nothing about third-party defendants’
status under CAFA. Only the meaning of CAFA’s “any defendant” does
that. And it favors petitioner. See Parts II, III–A,
supra.
3
Respondent’s final and most radical argument
against petitioner’s CAFA claim is that CAFA’s removal language
does not independently authorize removal at all. On this view, all
that §1453(b) does is “make a few surgical changes [in certain
class-action cases] to the
procedures that ordinarily govern
removal,” while the actual power to remove comes from the general
removal provision, §1441(a). Brief for Respondent 49 (emphasis
added). And so, the argument goes, removals under CAFA are still
subject to §1441(a)’s restriction to “civil action[s]” over which
federal courts have “original jurisdiction.” Since this limitation
is often read to mean that federal jurisdiction must have existed
from the start of the civil action, see Part IV–C,
infra,
and that was not the case here, no removal is possible.
The premise of this objection is as weak as it
is audacious. If CAFA does not authorize removal, then neither does
§1441. After all, they use the same operative language, with the
one providing that a class action “may be removed,” §1453(b), and
the other providing that a civil action “may be removed,” §1441(a).
So §1453(b) must, after all, be its own font of removal power and
not a conduit for removals sourced by §1441(a).
Respondent argues that this reading of CAFA’s
§1453(b) would render it unconstitutional. The argument is as
follows: Section 1453(b) provides that a “class action” may be
removed, but it does not specify that the class action must fall
within federal courts’ jurisdiction. So if §1453(b) were a separate
source of removal authority, it would authorize removals of class
actions over which federal courts lacked jurisdiction, contrary to
Article III of the Constitution. By contrast, §1441(a) limits
itself to authorizing removal of cases over which federal courts
have “original jurisdiction.” Thus, only if §1441(a)—including its
jurisdictional limit—governs the removals described in CAFA will
CAFA’s removal language be constitutional.
This argument fails. Section 1453 implicitly
limits removal to class actions where there is minimal diversity,
thus satisfying Article III. After all, §1453(a) incorporates the
definition of “class action” found in the first paragraph of
§1332(d). See §1332(d)(1). But the very next paragraph,
§1332(d)(2), codifies the part of CAFA that created federal
jurisdiction over class actions involving minimal diversity. This
proves that the class actions addressed by CAFA’s removal language,
in §1453(b), are those involving minimal diversity, as described in
§1332(d). In fact, respondent effectively
concedes that
§1453(b) applies only to actions described in §1332(d), since the
latter is also what codifies those CAFA-removal rules that
respondent does acknowledge, see Brief for Respondent 52—the
requirements of more than $5 million in controversy but only
minimal diversity, see §1332(d)(2). Because CAFA’s removal language
in §1453(b) applies only to class actions described in §1332(d), it
raises no constitutional trouble to read §1453(b) as its own source
of removal authority and not a funnel for §1441(a).
IV
So far I have accepted,
arguendo, the
majority and respondent’s view that third-party defendants are
not covered by the general removal provision, §1441. But I
agree with petitioner that this is incorrect. On a proper reading
of §1441, too, third-party defendants are “defendants” entitled to
remove. Though a majority of District Courts would disagree, their
exclusion of third-party defendants has rested (in virtually every
instance) on a misunderstanding of a previous case of ours, and the
mere fact that this misreading has spread is no reason for us to go
along with it. Nor, contrary to the majority, does a refusal to
recognize third-party defendants under §1441 find support in our
precedent embracing the so-called “well-pleaded complaint” rule,
which is all about how a plaintiff can make its case unremovable,
not about which defendants may seek removal in those cases that
can be removed.
A
Look at lower court cases excluding
third-party defendants from §1441. Trace their lines of
authority—the cases and sources they cite, and those
they
cite—and the lines will invariably converge on one point: our
decision in
Shamrock Oil. But nothing in that case justifies
the common reading of §1441 among the lower courts, a reading that
treats some defendants who never chose the state forum differently
from others.
As a preliminary matter,
Shamrock Oil is
too sensible to produce such an arbitrary result. That case
involved a close ancestor of today’s general removal provision, one
that allowed removal of certain state-court actions at the motion
of “the defendant or defendants therein.” 313 U. S., at 104,
n. 1. And our holding was simple: If
A sues
B in
state court, and
B brings a counterclaim against
A,
this does not then allow
A to remove the case to federal
court. As the original plaintiff who chose the forum,
A does
not get to change its mind now. That is all that
Shamrock
Oil held. The issue of third-party defendants never arose. And
none of the Court’s three rationales would support a bar on removal
by parties
other than original plaintiffs.
Shamrock Oil looked to statutory history,
text, and purpose. As to history, it noted that removal laws had
evolved to give the power to remove first to “defendants,” then to
“ ‘either party, or any one or more of the plaintiffs or
defendants,’ ” and finally to “defendants” again. The last
revision must have been designed to withdraw removal power from
someone, we inferred, and the only candidate was the plaintiff.
Id., at 105–108. Second, we said there was no basis in the
text for distinguishing mere plaintiffs from plaintiffs who had
been countersued, so we would treat them the same; neither could
remove.
Id., at 108. Third, we offered a policy rationale:
“[T]he plaintiff, having submitted himself to the jurisdiction of
the state court, was not entitled to avail himself of a right of
removal conferred only on a defendant who has not submitted himself
to the jurisdiction.”
Id., at 106. In this vein, we quoted a
House Report calling it “ ‘just and proper to require the
plaintiff to abide his selection of a forum.’ ”
Ibid.,
n. 2 (quoting H. R. Rep. No. 1078, 49th Cong., 1st Sess., 1
(1886)). So history, language, and logic demanded that original
plaintiffs remain unable to remove even if countersued.
None of these considerations applies to
third-party defendants. If anything, all three point the other way.
First, the statutory history cited by the Court shows that Congress
(and the
Shamrock Oil Court itself) took “the plaintiffs or
defendants” to be jointly exhaustive categories. By that logic,
since third-party defendants are certainly not plaintiffs—in any
sense—they must be “defendants” under §1441. Cf. Webster 591
(defining “defendant” as “opposed to
plaintiff”); 4 OED 377
(same). Second, and relatedly, the text of the general removal
statute, then and now, does not distinguish original from
third-party defendants when it comes to granting removal power—any
more than it had distinguished plaintiffs who were and were not
countersued when it came to
withdrawing the right to remove,
as
Shamrock Oil emphasized. And finally,
Shamrock
Oil’s focus on fairness—reflected in its point that plaintiffs
may fairly be stuck with the forum they chose—urges the opposite
treatment for third-party defendants. Like original defendants,
they never chose to submit themselves to the state-court forum.
Thus, all three grounds for excluding original
plaintiffs in
Shamrock Oil actually support
allowing
third-party defendants to remove under §1441.
B
Respondent leans on his claim that District
Courts to address the issue have reached a “consensus” that
Shamrock Oil bars third-party defendants from removing. But
as we saw above, rumors of a “consensus” have been greatly
exaggerated. See Part III–B–1,
supra. And in any case, no
interpretive principle requires leaving intact the lower courts’
misreading of a case of ours.
Certainly there is no reason to presume that
Congress embraces the lower courts’ majority view. For one thing,
the cases distorting §1441 postdate the last revision of the
relevant statutory language, so they could not have informed
Congress’s view of what it was signing onto. And it would be naive
to assume that Congress now agrees with those lower court cases
just because it has not reacted to them. Congress does not accept
the common reading of every law it leaves alone. Because life is
short, the U. S. Code is long, and court cases are legion, it
normally takes more than a court’s misreading of a law to rouse
Congress to issue a correction. That is why “ ‘Congressional
inaction lacks persuasive significance’ in most circumstances.”
Star Athletica, L. L. C. v.
Varsity Brands, Inc., 580
U. S. ___, ___ (2017) (slip op., at 17) (quoting
Pension
Benefit Guaranty Corporation v.
LTV Corp.,
496 U.S.
633, 650 (1990); quotation altered). In particular, “it is
inappropriate to give weight to ‘Congress’ unenacted opinion’ when
construing judge-made doctrines, because doing so allows the Court
to create law and then ‘effectively codif[y]’ it ‘based only on
Congress’ failure to address it.’ ”
Halliburton Co. v.
Erica P. John Fund, Inc., 573 U.S. 258, 299 (2014) (Thomas,
J., concurring in judgment). Because the decisions misreading
Shamrock Oil are not a reliable indicator of Congress’s
intent regarding §1441, we owe them no deference.
C
Finally, according to the majority, reading
§1441 to include third-party defendants would run afoul of our
precedent establishing the “well-pleaded complaint” rule (WPC
rule). Assuming that I have been able to reconstruct the majority’s
argument from this rule accurately, I think it rests on a non
sequitur. The WPC rule is all about a plaintiff’s ability to choose
the forum in which its case is heard, by controlling whether there
is federal jurisdiction; the rule has nothing to do with the
division of labor or authority among defendants.
Under the WPC rule, we consider only the
plaintiff’s claims to see if there is federal-question
jurisdiction. Whether the defendant raises federal counterclaims
(or even federal defenses) is irrelevant. See,
e.g.,
Holmes Group, Inc. v.
Vornado Air Circulation Systems,
Inc.,
535 U.S.
826, 831 (2002). Likewise, in a case involving standard
diversity jurisdiction (based on complete diversity under §1332(a)
rather than minimal diversity under CAFA), it is “the sum demanded
. . . in the initial pleading” that determines whether
the amount in controversy is large enough. §1446(c)(2). In both
kinds of cases, a federal court trying to figure out if it has
“original jurisdiction,” as required for removal of cases under
§1441(a), must shut its eyes to the defendant’s filings. Only the
plaintiff’s complaint counts. So says the WPC rule.
But that is all about
jurisdiction. The
majority and respondent would take things a step further. Even
after assuring itself of jurisdiction, they urge, a court should
consult only the plaintiff’s complaint to see if a party
is a
“defendant” empowered to remove under §1441. Since third-party
defendants (by definition) are not named until the
countercomplaint, they are not §1441 “defendants.”
I cannot fathom why this rule about who is a
“defendant” should follow from the WPC rule about when there is
federal jurisdiction. And the majority makes no effort to fill the
logical gap; it betrays almost no awareness of the gap, drawing the
relevant inference in two conclusory sentences. See
ante, at
6. But since this Court’s reasons for the WPC rule have sounded in
policy, the argument could only be that the same policy goals would
support today’s restriction on who is a §1441 “defendant.”[
4] What
are the policy goals
behind the WPC rule? We have described them as threefold. See
Holmes Group, Inc., 535 U. S., at 831–832.
First,
“since the plaintiff is ‘the master of the
complaint,’ the well-pleaded-complaint rule enables him, ‘by
eschewing claims based on federal law, . . . to have the
cause heard in state court.’
Caterpillar Inc., [482
U. S.,] at 398–399. [Allowing a defendant’s counterclaims or
defenses to create federal-question jurisdiction], in contrast,
would leave acceptance or rejection of a state forum to the master
of the counterclaim. It would allow a defendant to remove a case
brought in state court under state law, thereby defeating a
plaintiff’s choice of forum, simply by raising a federal
counterclaim.”
Ibid.
But this concern is not implicated here;
adopting petitioner’s reading of “defendant” would in no way reduce
the extent of a plaintiff’s control over the forum. Plaintiffs
would be able to keep state-law cases in state court no matter what
we held about §1441, and any cases remov- able by third-party
defendants would have been removable by original defendants anyway.
In other words, the issue here is
who can remove under that
provision, not
which cases can be removed. However we
resolved that “who” question, removability under §1441(a) would
still require cases to fall within federal courts’ “original
jurisdiction,” §1441(a), and
that would still turn just on
the plaintiff’s choices—on whether the plaintiff had raised federal
claims (or sued diverse parties for enough money). So a case that a
plaintiff had brought “in state court under state law,”
id.,
at 832, would remain beyond federal jurisdiction, and thus
unremovable under §1441(a), even if we held that third-party
defendants are “defendants” under that provision.
By the same token, such a holding would not
undermine the
second policy justification that
Holmes
gave for the WPC rule: namely, to avoid “radically expand[ing] the
class of removable cases, contrary to the ‘[d]ue regard for the
rightful independence of state governments.’ ”
Id., at
832. As noted, our decision on the scope of §1441’s “defendants”
would not expand the class of removable cases
at all,
because it would have no impact on whether a case fell within
federal courts’ jurisdiction. It would only expand the set of
people (“the defendants”) who would have to consent to such
removal: Now third-party
and original defendants would have
to agree.
The majority declares that treating third-party
defendants as among “the defendants” under §1441 “makes little
sense.”
Ante, at 8. Perhaps its concern is that such a
ruling would make no meaningful difference since third-party
defendants would still be powerless to remove unless they secured
the consent of the original defendants, who are their adversaries
in litigation. But for one thing, there may be cases in which
original defendants do consent. Though original and third-party
defendants are rivals as to claims brought by the one against the
other, they may well agree that a federal forum would be
preferable. After all, neither will have chosen the state forum in
which both find themselves prior to removal.[
5]
More to the point, even if third-party
defendants could not secure the agreement needed to remove an
entire civil action under §1441(a), counting them as “defendants”
under §1441 would make a difference by allowing them to invoke
§1441(c)(2), which would permit them to remove certain claims (not
whole actions)
without original defendants’ consent. See
Part I–B,
supra. Being able to remove claims under
§1441(c)(2) has, in fact, been the main benefit to third-party
defendants in those jurisdictions that have ruled that they are
“defendants” under §1441. See
Carl Heck, 622 F. 2d, at
136. But
this effect of such a ruling is immune to the
objection that it would “radically expand the class of removable
cases” since §1441(c)(2) does not address the removal of a whole
case (a “civil action”) at all, but only of some claims within a
case—and only those that could have been brought in federal court
from the start, “in a separate suit from that filed by the original
plaintiff.”
Id., at 136. Notably, then, any claims that were
raised by the original plaintiff would get to remain in state
court. Here too, the WPC rule’s concern to avoid “radically
expand[ing] the class of removable cases” is just not
implicated.
This leaves
Holmes’s final rationale for
the WPC rule: that it promotes “clarity and ease of administration”
in the resolution of procedural disputes. 535 U. S., at 832.
But petitioner’s and respondent’s views on who is a “defendant” are
equally workable, so this last factor does not cut one way or the
other.
In sum, the actual WPC rule, which limits the
filings courts may consult in determining if they have
jurisdiction, is based on policy concerns that do not arise here.
There is, therefore, no justification for inventing an ersatz WPC
rule to limit which filings may be consulted by courts deciding who
is a “defendant” under §1441.
* * *
All the resources of statutory interpretation
confirm that under CAFA and §1441, third-party defendants are
defendants. I respectfully dissent.