Third Circuit issues important decision about Class Action Fairness Act’s “mass action” provision

by Brian Wolfman

Last Friday's Third Circuit ruling in Abraham v. St. Croix Rennaisance Group considered whether the Class Action Fairness Act (CAFA) provides federal "mass action" jurisdiction over a suit against a plant that continuously exposed nearby residents to toxic chemicals over an extended period.

First, some background. CAFA provides jurisdiction in federal district court (originally and by removal) for most minimally diverse class actions and for so-called "mass actions." Under CAFA, a mass action is

any civil action (except a civil action within the scope of section 1711(2)) in which monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact, except that jurisdiction shall exist only over those plaintiffs whose claims in a mass action satisfy the jurisdictional amount requirements under subsection (a).

But there are exceptions to the definition of "mass action," one of which is for local controversies. That exception involves cases in which

all of the claims in the action arise from an event or occurrence in the State in which the action was filed, and that allegedly resulted in injuries in that State or in States contiguous to that State.

With that background in mind, take a look at this key passage from the Third Circuit's opinion, which describes the facts and the holding:

The complaint alleges circumstances that persisted over a fixed period of time–specifically, from 2002, when SCRG acquired the former alumina refinery, to the present. These circumstances included: (1) the presence throughout the former refinery site of the red mud and the various hazardous substances that were buried therein; (2) the plaintiffs’ continual exposure to the red mud and its particulates as a result of erosion by wind and water; and (3) the persistent failure of SCRG to contain or abate the hazardous substances and to remediate the premises. In short, the condition of the site during the period of SCRG’s ownership provided a source for the ongoing emission of the red mud and the hazardous substances and the subsequent dispersion onto the plaintiffs’ persons and their property. We believe that these circumstances, which the District Court characterized as the “continuous release of toxic substances from a single facility located in the Virgin Islands,” constituted “an event or occurrence” for purposes of the mass-action exclusion. [citation omitted]

Kudos to CL&P contributor Leah Nicholls, who briefed and argued the appeal for the plaintiffs.


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