Ellis v. Costco Wholesale

28 U.S.C. § 1453(b), created by The Class Action Fairness Act of 2005 (The Act), allows only original defendants to remove an action to federal court.

Westwood Apex originally brought a breach of contract claim in San Bernardino Superior Court against Contreras for failure to repay student loans. Contreras answered the complaint and filed a class action counterclaim against Westwood Apex and its affiliates alleging violation of California consumer protection laws. All counterclaim defendants, except Westwood Apex, filed a notice of removal to federal court. The counterclaim defendants claimed that the removal was authorized by 28 U.S.C. §1453(b). The relevant portion of §1453(b) reads: “a class action may be removed by any defendant without the consent of all defendants.” This case gives the court the occasion to determine the meaning of this section of The Act. The court examined the legislative history and legal context leading to the creation of The Act and found that this section this act, among other things, overrides the judge-created requirement that all defendant consent to removal. Defendants contend that they are defendants for the purpose of this section. The court finds first that the meaning of defendant for the purpose of this section is established in Chapter 89 of the Judicial Code and means ‘original defendant”. Second, the court looks at the interpretation of the predecessor statute and finds that Congress used the term “defendant” as well as the phrase “either party”. The court concluded that at the time Congress enacted The Act they were aware of the statutory history and choose the term “defendant” and excluded “counterclaim defendants” and “third-party defendants”. AFFIRMED in part; VACATED in part; REMANDED.