The Sixth Circuit yesterday answered this question, holding that under the Class Action Fairness Act of 2005 (“CAFA”), a third-party defendant is not a “defendant” permitted to remove an underlying state court action to federal court. In re Mortgage Electronic Registration Systems, Case No. 12-501 (PDF). In reaching this conclusion, the Court joined the Fourth, Seventh and Ninth Circuits in concluding that CAFA does not change the general rule of removal that counterclaim or third-party defendants do not have a right of removal.
This decision serves as a good refresher of the differences between removal in and out of the class action context. CAFA eliminates three constrictions on removal that are present in cases not under the Act: (1) the one-year general limit on removal of a case after the commencement of the state court action; (2) the rule that a “home-state” defendant may not remove the case; and (3) the requirement that all of the defendants must consent to the removal.
It also sets forth the technical requirements for appealing an order of a district court granting or denying a motion to remand a class action. While a district court’s order remanding a case to state court for lack of subject-matter jurisdiction or defects in removal procedures is not appealable outside of the class action context, it is in the class action context so long as application for leave to appeal is made “not more than 10 days after entry of the order.” Furthermore, if the Circuit Court accepts the appeal, it must generally render its decision within 60 days of when the Court decides to grant the petition for permission to appeal.
