After filing a mass tort action on behalf of 26 insurers in the San Bernardino Superior Court against EZ FLO International, Inc, a California manufacturer of water supply lines, EZ FLO attempted to remove the case to Federal Court under the Class Action Fairness Act of 2005. EZ FLO alleged that the 145 individual insureds or subrogors referenced in the lawsuit must be considered Plaintiffs, and therefore the CAFA requirement that non-class action cases involving “monetary relief claims of 100 or more persons” had been met. (See 28 USC1332(d)(5)(B)).
In this case of first impression The United States District Court, Central District of California, rejected the argument, finding that under the US Supreme Court’s unanimous decision in Mississippi ex rel. Hood v. AU Optronics Corp.,134 S. Ct. 736 (2014)100 the language “100 or more persons” refers to the actual Plaintiffs in a suit, which here were the 26 insurance companies, and that “[t]o conclude otherwise would flout the Supreme Court’s holding and all but ignore its thorough textual analysis.” Further the Court held that simply naming the insureds as subrogors “does not make them named plaintiffs that should be included in the CAFA calculus.” The matter was therefore ordered remanded to the San Bernardino Superior Court for further proceedings. EZ FLO has sought permission to appeal the ruling to the 9th Circuit Court of Appeals.
This appears to be the first mass action property subrogation case in which removal was sought under CAFA. Stutman Law attorneys aggressively fought EZ FLO‘s removal (AND WON) because of the dangerous precedent that could have been established. To view a copy of the judge’s decision, click here.