Gale v. Chicago Title Insurance Company
Opinion
*76
Plaintiff-Appellant John Q. Gale is a Connecticut attorney, who, along with John Q. Gale, LLC, FKA Gale & Kowalyshyn, LLC, different iterations of his law firm (collectively "Plaintiffs"), sued Defendants-Appellees, a group of title insurance companies, alleging that they violated a Connecticut law that allows only attorneys admitted to practice in Connecticut to act as real estate title agents. In the original complaint, Plaintiffs included class-action allegations and maintained those allegations through three subsequent amendments to the original complaint. The District Court exercised federal jurisdiction over the initial and the amended complaints under the Class Action Fairness Act ("CAFA"), which confers jurisdiction when, among other things, the case "is a class action."
After approximately twelve years of litigation, Plaintiffs filed a Fourth Amended Complaint ("FAC") that removed all class-action allegations and asserted only state law claims on behalf of the individual plaintiffs. The United States District Court for the District of Connecticut (Chatigny, J .) concluded that the withdrawal of the class-action allegations divested it of CAFA jurisdiction and dismissed the FAC without prejudice.
Plaintiffs appeal, principally contending that the amendment did not divest the District Court of jurisdiction. We agree with Judge Chatigny that when (i) federal jurisdiction in a case filed originally in federal court rests solely on CAFA, (ii) the jurisdiction-granting class-action allegations are eliminated from the complaint, and (iii) no new jurisdiction-granting allegations are added, the district court is divested of CAFA jurisdiction and must dismiss the complaint.
BACKGROUND
John Q. Gale is a Connecticut attorney who also works as a real estate title agent, writing title policies. Generally, under Connecticut law, only attorneys licensed to practice in Connecticut may act as title agents in that state. See Conn. Gen. Stat. § 38a-402(13). Gale claims, however, that Defendants-Appellees, title insurance companies that do business in Connecticut, have been employing for work as title agents individuals who are not licensed Connecticut attorneys.
In 2006, Gale sued Defendants, contending that they had tortiously interfered with business opportunities and violated Connecticut statutes regulating trade practices. Jurisdiction was predicated on CAFA. Gale sought to represent a class consisting of Connecticut attorneys and law firms that worked in the title insurance industry, and he sought injunctive and declaratory relief as well as damages. The District Court certified the class under Fed. R. Civ. P. 23(b)(2). In 2011 the Supreme Court decided
Wal-Mart Stores, Inc. v. Dukes
,
After the class was decertified, Plaintiffs informed the court that in order to facilitate the resolution of the case they would be willing to litigate the case in their individual capacities rather than as a class action. See Joint App'x 137 (Plaintiffs' letter to the District Court). 1 At a pre-trial conference addressing this request, Plaintiffs offered to "withdraw in any form the class allegations." Joint App'x 146. Defendants then explained that "the first order of business ... is for Plaintiffs to move to amend" so that Defendants could "review [the FAC] and see the claims that are then asserted." Joint App'x 148. After this conference, Plaintiffs filed the FAC, which omitted the class-action allegations but added no new bases for federal jurisdiction. Defendants then moved to dismiss the complaint, arguing that the FAC's omission of the class action allegations had divested the court of CAFA jurisdiction.
The FAC does not allege any statutory basis for the District Court's jurisdiction other than CAFA. The District Court agreed with Defendants that CAFA jurisdiction was lacking and dismissed the complaint. Plaintiffs appealed. This Court reviews a district court's dismissal of a complaint for lack of subject matter jurisdiction
de novo
.
Ford v. D.C. 37 Union Local 1549
,
DISCUSSION
I.
Plaintiffs' original complaint, as well as the first three amended complaints, contained class-action allegations under CAFA, which confers original jurisdiction over class actions where there is minimal diversity between the parties and the amount in controversy exceeds $5,000,000.
See
In
Rockwell Int'l Corp. v. United States
,
In Touch Concepts, Inc. v. Cellco Partnership
Plaintiffs' main contention is that this case should be governed by the time-of-filing rule, which states that "the jurisdiction of the court depends upon the state of things at the time of the action brought."
Grupo Dataflux v. Atlas Glob. Grp., L.P.
,
CONCLUSION
The judgment of the District Court is AFFIRMED .
Plaintiffs advised the court that they were willing to abandon their class claims and proceed exclusively with their individual claims so as to expedite matters while "eliminat[ing] any risk of violating the 'one-way intervention' rule." Joint App'x 137. (That judicially made rule bars class-action plaintiffs from seeking pre-class-certification merits rulings.
See, e.g.,
Brecher v. Republic of Argentina
,
The Court noted that this rule would not apply to cases that were removed to federal court: "[W]hen a defendant removes a case to federal court based on the presence of a federal claim, an amendment eliminating the original basis for federal jurisdiction generally does not defeat jurisdiction."
Rockwell
,
Reference
- Full Case Name
- John Q. GALE, John Q. Gale, LLC, FKA Gale & Kowalyshyn, LLC, Plaintiffs-Appellants, Gale & Kowalyshyn, LLC, Plaintiff-Intervenor, v. CHICAGO TITLE INSURANCE COMPANY, Commonwealth Land Title Insurance Company, First American Title Insurance Company, Lawyers Title Insurance Corporation, Individually and as a Successor in Interest to Transnation Title Insurance Company, Old Republic National Title Insurance Company, Stewart Title Guaranty Company, Ticor Title Insurance Company, Ticor Title Insurance Company of Florida, Fidelity National Title Insurance Company, United General Title Insurance Company, Defendants-Appellees, Transnation Title Insurance Company, Defendant.
- Cited By
- 13 cases
- Status
- Published