May 28, 2019
Decided May 28, 2019
Home Depot U.S.A., Inc. v. George W. Jackson, No. 17-1471
Today, the Supreme Court held 5-4 that when a defendant in a state court action files a counterclaim against a third party as a class action, the third-party defendant may not remove the class action counterclaim to federal court.
Citibank filed an action in state court to collect on a credit card debt. In response, the debtor filed a class action counterclaim under state consumer protection law against Citibank and named Home Depot—a third-party retailer not previously involved in the case—as an additional defendant. Relying upon the Class Action Fairness Act of 2005 (CAFA), which permits “any defendant” to remove certain state class actions to federal court, see 28 U.S.C. § 1453(b), as well as the general removal provision, 28 U.S.C. § 1441(a), Home Depot sought to remove the case to federal court. A federal district court concluded that Home Depot could not do so because Home Depot was not a defendant in the original debt-collection action and therefore was not a “defendant” within the meaning of the removal statute. The Fourth Circuit affirmed.
Does a third-party defending itself against a class action counterclaim qualify as a “defendant” under the general removal provision or the removal provision of CAFA, such that the third-party may remove the case from state to federal court?
No. The term “defendant” in the removal statutes means only “the party sued by the original plaintiff,” not a counterclaim defendant or third-party joined in the case by a defendant.
“[T]he limits that Congress has imposed on removal show that it did not intend to allow all defendants an unqualified right to remove.”
Justice Thomas, writing for the majority
What It Means:
As always, Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Supreme Court. Please feel free to contact the following practice leaders:
Appellate and Constitutional Law Practice
|Allyson N. Ho
|Mark A. Perry
Related Practice: Class Actions
|Theodore J. Boutrous, Jr.
© 2019 Gibson, Dunn & Crutcher LLP
Attorney Advertising: The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.