Summary of a Recent
Judicial Development in
Biotechnology

Removal of Lawsuit Involving Genetically Modified Rice Held to be
Improper Pursuant to Class Action Fairness Act

Eric H. Foy
National AgLaw Center Research Associate

Summary of Decision

In Webb v. Riceland Foods, Inc., No. 4:08-CV-01048-WRW, 2008 WL 4820565 (E.D. Ark. Nov. 4, 2008), the United States District Court for the Eastern District of Arkansas granted plaintiffs' motion to remand the pending action. Plaintiffs successfully asserted that removal jurisdiction was improper under the Class Action Fairness Act of 2005, because two-thirds or more of all proposed plaintiffs and defendants were citizens of Arkansas and there was no federal question jurisdiction pursuant to 28 U.S.C. § 1331.

Background

In response to an announcement from the United States Department of Agriculture (USDA) stating that low levels of genetically modified rice were found in some commercial long-grain rice varieties, plaintiffs filed a class action lawsuit in the Circuit Court of Lonoke County alleging that defendant was liable for negligence, strict liability, and breach of contract. Id. at *1. Defendant Riceland Foods Inc. sought to remove the action to federal court. Id. Thereafter, plaintiffs filed the instant motion to remand. Id.

Arguments

Plaintiffs asserted that removal jurisdiction was improper under the Class Action Fairness Act of 2005 (CAFA), because two-thirds or more of all proposed plaintiffs and defendants were citizens of Arkansas, the home-state. Id. Additionally, plaintiffs alleged a lack of federal question jurisdiction pursuant to 28 U.S.C. § 1331. Id.

Analysis and Holdings

When an action is removed under CAFA, the defendant carries the burden of proof. Id. The instant action, however, involved the home-state controversy exception, which shifts the burden of proof to the plaintiff. Id. Under the home-state controversy exception of CAFA, removal is improper if two-thirds or more of all class members are citizens of Arkansas, and defendant is a citizen of Arkansas. Id. Plaintiff failed to meet the burden for a mandatory remand by a preponderance of the evidence because the court adopted defendant's calculation of the putative class. Id. at *2.

Although plaintiffs' attempt at procuring a mandatory remand failed, plaintiffs alternatively sought a discretionary remand. Id. CAFA permits a federal court to decline jurisdiction if between one-third and two-thirds of all class members are citizens of Arkansas, and defendant is also a citizen of Arkansas. Id. Once the initial requirements are satisfied, as they were in the instant case, CAFA requires the court to consider the following six balancing factors:

(A) whether the claims asserted involve matters of national or interstate interest; (B) whether the claims asserted will be governed by laws of the State in which the action was originally filed or by the laws of other States; (C) whether the class action has been pleaded in a manner that seeks to avoid Federal jurisdiction; (D) whether the action was brought in a forum with a distinct nexus with the class members, the alleged harm, or the defendants; (E) whether the number of citizens of the State in which the action was originally filed in all proposed plaintiff classes in the aggregate is substantially larger than the number of citizens from any other State, and the citizenship of the other members of the proposed class is dispersed among a substantial number of States; and (F) whether, during the 3-year period preceding the filing of that class action, 1 or more other class actions asserting the same or similar claims on behalf of the same or other persons have been filed. Id. (citing 28 U.S.C. § 1332(d)(3)). The instant court applied each of the factors and determined that four of the six discretionary remand factors weighed in favor of plaintiff; therefore, plaintiffs met their burden and the court held that the matter should be remanded.
Id. at *4.

For the court to exercise federal question jurisdiction pursuant to 28 U.S.C. § 1331, Riceland was required to show that the state-law claim necessarily raised a disputed and substantial federal issue. Id. Defendant argued that plaintiffs' complaint alleged violations of the Federal Plant Protection Act. Id. at *3. The court viewed plaintiffs' listing of CAFA merely as support of plaintiffs' claim under the Arkansas Plant Protection Act. Id. at 4. Ultimately, the court held that plaintiffs' passing reference to the federal act did not raise a disputed or substantial federal issue. Id.

The case was decided on November 4, 2008.