[00:00:07] Speaker 00:
Good morning, Your Honors.

[00:00:08] Speaker 00:
My name is Michelle Nesbitt.

[00:00:10] Speaker 00:
I'm here for the appellants, David and Bonnie Falk.

[00:00:15] Speaker 00:
This case is about windows, which may seem inconsequential or even silly at this point, given- We remodel our house.

[00:00:23] Speaker 02:
It's not silly.

[00:00:24] Speaker 00:
I appreciate that.

[00:00:26] Speaker 00:
And in this particular case, our clients were building an 18,000 square foot home overlooking the water in Alaska.

[00:00:34] Speaker 00:
And the windows were the primary focal point of this home.

[00:00:38] Speaker 00:
So it was very important to the aesthetics of this home and the beauty of the home.

[00:00:43] Speaker 00:
But I want to jump straight to subject matter jurisdiction and address Royal Canaan, which the court brought to the party's attention.

[00:00:51] Speaker 00:
That case is applicable to the subject matter jurisdiction in this case.

[00:00:57] Speaker 00:
The language in Royal Canaan is clear that it applies across the board.

[00:01:04] Speaker 00:
There are multiple instances within the opinion that Justice Kagan references other jurisdictional statutes outside of 1331, which was the specific statute at issue in that case.

[00:01:18] Speaker 00:
However, she terms it as original jurisdiction.

[00:01:22] Speaker 00:
And again,

[00:01:23] Speaker 00:
Both federal question jurisdiction and diversity jurisdiction are types of original jurisdiction.

[00:01:29] Speaker 00:
She also references the diversity jurisdiction 28 USC 1332, which is the diversity jurisdiction statute, which also includes the CAFA class action type of diversity jurisdiction in this case.

[00:01:45] Speaker 05:
So what is the proper bottom line from our court?

[00:01:50] Speaker 00:
Our position is that this should be remanded to the district court with specific instructions to remand it to the state court.

[00:02:03] Speaker 05:
for lack of ... Well, would it be dismissal or would it be ... I guess that specifically is more my question.

[00:02:12] Speaker 05:
Would the district court simply dismiss the action as lacking jurisdiction or would it have the authority to

[00:02:21] Speaker 00:
Remanded to state court so our clients filed two motions to remand and both of those were denied by the district court because the district court count found that CAFA jurisdiction applied Because they did not consider the amended complaint, which is improper according to royal Canaan got it and so at that point is when as soon as that second amended complaint was filed the court lost jurisdiction and

[00:02:45] Speaker 00:
Does it matter practically?

[00:02:47] Speaker 04:
Because if, I mean, you may be right about this, but even if it was dismissed, wouldn't that toll the statute of limitations, this pending case, so you could just go refile on state court anyway?

[00:02:58] Speaker 00:
I don't know that that's clearly true.

[00:03:00] Speaker 00:
And the reason I say that is because in one of the footnotes in Royal Canaan, Justice Kagan was discussing the fact about foreign manipulation that a plaintiff could dismiss their case in federal court and refile in state court as long as they were within the statute of limitations.

[00:03:20] Speaker 05:
So it would depend on state law then as to whether there was a tolling.

[00:03:24] Speaker 00:
Correct.

[00:03:25] Speaker 00:
And so our ask is that the court give specific direction to the district court because the district court has already considered the issue to apply royal canon and grant our clients motion to remand to the state court, which is where it belongs given that all of the issues in this case are entirely dependent on.

[00:03:46] Speaker 04:
So now you agree this case for us is not about windows.

[00:03:49] Speaker 04:
This case is about what we do.

[00:03:51] Speaker 04:
with our technical jurisdictions.

[00:03:54] Speaker 04:
So the merits are, in your view, which I think is the one that we'll hear, maybe they will disagree, but we're done on the merits is what you're saying.

[00:04:04] Speaker 00:
Yes.

[00:04:07] Speaker 00:
But given that, I do also still want to address the merits in case the court disagrees with us on that.

[00:04:15] Speaker 05:
You want to save that in case your other counsel don't raise the merits?

[00:04:21] Speaker 00:
Well, I can save that.

[00:04:25] Speaker 04:
Let me talk about the windows.

[00:04:27] Speaker 04:
I get it.

[00:04:28] Speaker 04:
I've been to Alaska.

[00:04:29] Speaker 04:
I've seen some homes with cool windows.

[00:04:31] Speaker 04:
I get that windows are important here.

[00:04:33] Speaker 00:
Yes.

[00:04:34] Speaker 00:
There were 150 windows.

[00:04:37] Speaker 00:
One of the main points I wanted to make on that is that our clients have alleged that they were given a lifetime warranty.

[00:04:43] Speaker 00:
And that was the entire reason they bought these particular windows.

[00:04:48] Speaker 00:
They had many discussions with Spinard Builders, who they had a long-standing relationship, and they were assured many, many times by Spinard Builder that these windows came with a lifetime warranty.

[00:04:59] Speaker 00:
That is alleged in the complaint, and the court must accept that as true.

[00:05:03] Speaker 00:
So moving forward in all of the analysis, it has to be founded on the fact that there was a lifetime warranty provided at the time of sale.

[00:05:11] Speaker 00:
And then the question goes on to, at what point was that breached?

[00:05:18] Speaker 00:
And our argument in our briefing was that

[00:05:21] Speaker 00:
It was a repair and replace remedy.

[00:05:24] Speaker 00:
And under Alaska case law and the statute, a repair and replace remedy is the only remedy until that fails its essential purpose.

[00:05:34] Speaker 00:
And only then can the buyer sue on the contract.

[00:05:38] Speaker 00:
And our position is that that repair or replace warranty was working for many years.

[00:05:43] Speaker 00:
Gelden was replacing and or repairing the windows up until July 31, 2020, when they repudiated the contract.

[00:05:51] Speaker 00:
And at that is the point when our clients had a right to sue under the contract for failure to respect the lifetime repair and replace remedy that was provided at the time of sale.

[00:06:15] Speaker 00:
I also wanted to point out that the limited warranty that was received by our clients two years post purchase is not applicable and our position is that it does not give our clients notice regarding

[00:06:31] Speaker 00:
anything to do with their warranty because the UCC law is that terms received after the purchase are not enforceable against the buyer and our clients should be able to rely on that law in retaining their rights and knowing that that is not applicable to them and to move forward in their actions with Spenard and Deldwin knowing that that's not applicable to them, which is exactly what they did in this case.

[00:06:57] Speaker 00:
In addition, the conduct of both parties, all parties involved, was consistent with a lifetime warranty.

[00:07:05] Speaker 00:
They continued to repair and replace the windows and continued to make specific promises to our clients.

[00:07:12] Speaker 00:
Every time our client dealt with them and engaged with them about the issues with the windows, they were promised, we will continue to replace these windows as they fail.

[00:07:21] Speaker 00:
So anytime our clients raise those concerns, their mind was set at ease because they were promised, we'll continue to replace these.

[00:07:28] Speaker 00:
And that's both an enforceable promise.

[00:07:31] Speaker 00:
If we're looking outside the actual contract, then promissory estoppel is created by those separate promises made by employees of Geldwin.

[00:07:40] Speaker 00:
And those same facts act as equitable estoppel to Geldwin's now claim of the statute of limitations.

[00:07:47] Speaker 00:
And our client was never allowed to amend their complaint to include a more specific

[00:07:54] Speaker 00:
allegation regarding promissory estoppel or equitable estoppel.

[00:07:58] Speaker 00:
The facts regarding that are included in the complaint, but in this case,

[00:08:03] Speaker 00:
Once they filed the motion to remand, the court's first order on that limited the scope of their ability to amend the complaint to only the facts related to CAFA jurisdiction.

[00:08:17] Speaker 00:
And so the court told them, before they filed any amended complaint, I will strike your complaint if it is outside any CAFA facts.

[00:08:25] Speaker 00:
So they were constrained by that.

[00:08:26] Speaker 00:
They filed a first amended complaint.

[00:08:28] Speaker 00:
And that complaint was stricken because it did not follow the court's order, which is now an error that they could only amend to address the CAFA litigation.

[00:08:38] Speaker 00:
And so then they filed their second amended complaint, which only addressed the CAFA litigation.

[00:08:43] Speaker 00:
And then it was dismissed on the defendant's motion to dismiss without leave to amend.

[00:08:49] Speaker 00:
So they have not had multiple chances to amend their complaint.

[00:08:52] Speaker 00:
They've never had a chance to amend their complaint.

[00:08:54] Speaker 00:
to make a specific or more clear promissory estoppel.

[00:08:58] Speaker 04:
If this gets remanded to state court, presumably you would have the opportunity to fix all that.

[00:09:03] Speaker 00:
Absolutely.

[00:09:04] Speaker 00:
Yes.

[00:09:06] Speaker 04:
I mean, I don't know, but you know.

[00:09:08] Speaker 00:
We would file a motion to amend the complaint at that time.

[00:09:11] Speaker 00:
And that would be up to the state court to whether we were allowed to do that.

[00:09:14] Speaker 00:
But that is what we are asking the court to do.

[00:09:17] Speaker 00:
I'll reserve the rest of my time for rebuttal.

[00:09:18] Speaker 00:
Thank you.

[00:09:19] Speaker 00:
Thank you.

[00:09:22] Speaker 02:
And before we begin, so you have 12 minutes, is that right?

[00:09:26] Speaker 03:
Correct.

[00:09:27] Speaker 02:
OK, so I'm going to hold you to 12, so Mr. Nolan will get a chance to hear from you.

[00:09:31] Speaker 02:
If he goes over, he's not going to go over time is what I'm saying.

[00:09:38] Speaker 02:
OK, fair enough.

[00:09:40] Speaker 02:
All right.

[00:09:41] Speaker 03:
Good morning.

[00:09:41] Speaker 03:
Richard Sieving appearing on behalf of the appellees, Jeld Wen and Mr. Wendt.

[00:09:47] Speaker 03:
May it please the court.

[00:09:49] Speaker 03:
I'm going to quote Judge McFadden back in the District Court for District of Columbia who was looked at this exact issue, CAFA jurisdiction.

[00:10:00] Speaker 03:
The plaintiffs then removed the CAFA allegations.

[00:10:04] Speaker 03:
Look at Royal Caning comes down and they say, well, there's no more jurisdiction.

[00:10:08] Speaker 03:
You have to send it back and his quote was, not so fast.

[00:10:11] Speaker 03:
That's what we have here.

[00:10:13] Speaker 03:
It's undisputed that when the plaintiffs filed this complaint in Alaska State Court that we pulled it up to federal court.

[00:10:24] Speaker 03:
Federal court had clearly had jurisdiction under CAFA.

[00:10:27] Speaker 03:
The issue before you is whether or not Royal Canaan now divests this court and the district court from subject matter jurisdiction under CAFA.

[00:10:36] Speaker 03:
It doesn't.

[00:10:37] Speaker 03:
And here's why.

[00:10:38] Speaker 03:
And here's what Judge McFadden ruled in.

[00:10:42] Speaker 02:
What's the case?

[00:10:43] Speaker 03:
Okay.

[00:10:43] Speaker 03:
There's a case called Nichols versus 300 M Street development.

[00:10:48] Speaker 03:
Now, again, this is a district court case up back in District of Columbia.

[00:10:52] Speaker 03:
It's 25 U.S.

[00:10:53] Speaker 03:
District Lexus 93062.

[00:10:56] Speaker 03:
There's another case out of, well, let me just talk about Nichols for a moment.

[00:11:03] Speaker 03:
What happened in that case was exactly what happened in this case.

[00:11:07] Speaker 03:
And the rationale was.

[00:11:10] Speaker 05:
Published or unpublished?

[00:11:12] Speaker 03:
It's a district court case.

[00:11:14] Speaker 05:
Well, some of them are published.

[00:11:15] Speaker 03:
It's published, I believe.

[00:11:18] Speaker 02:
It is.

[00:11:18] Speaker 02:
Well, here's what I'd like if you could.

[00:11:20] Speaker 02:
And again, I want to get to your point.

[00:11:21] Speaker 02:
But as soon as argument is over, you could file a 28-J letter with these cases, because this would be very helpful for us.

[00:11:27] Speaker 02:
There's about four of them.

[00:11:28] Speaker 02:
Perfect.

[00:11:29] Speaker 02:
Put them all in the letter.

[00:11:30] Speaker 03:
Go for it.

[00:11:30] Speaker 03:
I will do that.

[00:11:31] Speaker 03:
Absolutely.

[00:11:32] Speaker 03:
So here's the issue.

[00:11:34] Speaker 03:
Royal Canaan was a federal question case.

[00:11:36] Speaker 03:
Royal Canaan was a situation where they alleged a violation of federal statute gets removed up, then they dismiss it, the federal case, and the issue was whether or not the federal question jurisdiction existed afterwards.

[00:11:52] Speaker 03:
This is a CAFE case, and the law in the Ninth Circuit was clear that you are bound by what you originally file in the state court.

[00:12:00] Speaker 03:
You can't go fiddling with it later.

[00:12:02] Speaker 03:
and take out and say it's only 99 instead of the 100 under CAFA members of the class.

[00:12:08] Speaker 03:
You can't go say it's 4.9 million instead of the 5 million.

[00:12:13] Speaker 03:
You can't do any of that to mess with CAFA.

[00:12:16] Speaker 03:
You are set.

[00:12:17] Speaker 03:
That was the law.

[00:12:19] Speaker 04:
That's true, but that's not what happened here.

[00:12:21] Speaker 03:
No, it's not what happened here.

[00:12:24] Speaker 05:
What do you make of the

[00:12:28] Speaker 05:
of the blanket statement at Royal Canaan, when a plaintiff amends her complaint following her suit's removal, a federal court's jurisdiction depends on what the new complaint says.

[00:12:41] Speaker 05:
So why doesn't it always depend on what the

[00:12:45] Speaker 03:
The current operative complaint says... Because footnote eight in Royal Canaan says our opinion here does not affect the St.

[00:12:56] Speaker 03:
Paul Mercury case, a prior Supreme Court case.

[00:12:59] Speaker 03:
And St.

[00:12:59] Speaker 03:
Paul Mercury says if you only reduce the amount of the claim, reduce the monetary recovery that you're seeking,

[00:13:09] Speaker 03:
That doesn't come into play for the purposes of jurisdictional issues.

[00:13:12] Speaker 03:
In other words, in diversity, if you go below the $75,000, you can't use that later and say, well, now it's less than $75,000.

[00:13:17] Speaker 03:
That's St.

[00:13:18] Speaker 03:
Paul Mercury.

[00:13:20] Speaker 03:
So what this court needs to decide is, is this case

[00:13:25] Speaker 04:
But wait, I'm reading footnote 8.

[00:13:27] Speaker 04:
That's an amendment reducing the alleged amount in controversy to below the statutory threshold.

[00:13:33] Speaker 03:
That's exactly right.

[00:13:33] Speaker 03:
And that's exactly what happened here because none of the substantive claims were amended after the first amended complaint.

[00:13:42] Speaker 03:
The only thing the second amended complaint did was remove the class action allegations.

[00:13:47] Speaker 05:
Well, that's a big deal.

[00:13:48] Speaker 03:
It is a very big deal.

[00:13:50] Speaker 05:
It's a big deal for the plaintiff.

[00:13:51] Speaker 05:
The plaintiff is paying a price by deleting class claims that presumably can't come back in in state court.

[00:14:00] Speaker 05:
So they're eliminating a claim, not just an amount in controversy.

[00:14:06] Speaker 04:
These cases that I'll put in the letter to the court deal with that exact issue and say it was an issue where they dropped the class action allegations I just want I mean you said footnote eight controls, and I think you're wrong because here the complaint that

[00:14:23] Speaker 04:
I mean, maybe there's other cases, but I just want to deal with footnote eight.

[00:14:27] Speaker 04:
As I understand it, as I'm reading this, they dropped the class action complaint, but there's no question that there's diversity.

[00:14:38] Speaker 04:
And there's no question that the amount of controversy for, or excuse me, there's no question that there's not diversity and there's also, I guess amount of controversy doesn't matter now.

[00:14:50] Speaker 04:
I mean, there's an Alaska plaintiff and Alaska defendant.

[00:14:54] Speaker 04:
End of story.

[00:14:55] Speaker 04:
There's no federal jurisdiction at this point.

[00:14:59] Speaker 03:
Well, there is under CAFA.

[00:15:00] Speaker 05:
But CAFA's gone from the complaint.

[00:15:03] Speaker 05:
That's the point.

[00:15:04] Speaker 03:
But that's not the law in the Ninth Circuit is that they're bound by the original complaint.

[00:15:10] Speaker 05:
That was all pre-Royal Canaan.

[00:15:13] Speaker 03:
It was, but Royal Canaan is distinguishable because it didn't apply in the cases that... It's not distinguishable because of footnote 8.

[00:15:23] Speaker 03:
Look, none of the substantive claims in the amended complaint that removed the class action allegations were changed.

[00:15:30] Speaker 03:
The substantive claims- Exactly.

[00:15:32] Speaker 04:
In footnote eight, they did.

[00:15:34] Speaker 04:
They reduced the amount in controversy.

[00:15:38] Speaker 05:
Facts on the ground, that's what they're worried about.

[00:15:42] Speaker 05:
And this isn't about facts on the ground.

[00:15:44] Speaker 05:
It's about the pleadings and whether there's diversity jurisdiction under ordinary principles.

[00:15:50] Speaker 03:
Under CAFA jurisdiction.

[00:15:52] Speaker 05:
CAFA claims are gone.

[00:15:54] Speaker 05:
I mean, what this case seems to say to me is that it's sort of the embodiment of what we all learned in law school that the

[00:16:03] Speaker 05:
plaintiff as master or mistress of her complaint, master of his complaint.

[00:16:09] Speaker 05:
And if you choose not to bring a CAFA claim, if that CAFA claim had never been there, you wouldn't be in federal court, right?

[00:16:19] Speaker 03:
If there was not CAFA jurisdiction, we would not have been in federal court, correct.

[00:16:23] Speaker 03:
And our position is,

[00:16:25] Speaker 03:
that the Beachwater Hut case and all those cases that talk about forum manipulation and not that you can't later amend your complaint to remove CAFA.

[00:16:37] Speaker 04:
That was a good argument before Royl Canaan.

[00:16:40] Speaker 04:
There's a disconnect here because Royl Canaan looked at that specific issue and said, yes, we understand that there's a potential problem with forum manipulation here.

[00:16:50] Speaker 04:
and they still held that you got to look to jurisdiction after CAFAs removed.

[00:16:58] Speaker 03:
Well, Royal Canaan wasn't a CAFA case.

[00:17:00] Speaker 03:
It was a federal question.

[00:17:02] Speaker 03:
And that's, you're exactly right, Judge Graber.

[00:17:05] Speaker 03:
The plaintiff is the master of their complaint.

[00:17:08] Speaker 03:
And in Royal Canaan, they voluntarily removed the only hook they had to get into federal court.

[00:17:13] Speaker 05:
It has happened here.

[00:17:14] Speaker 05:
They removed the

[00:17:15] Speaker 05:
But you said earlier, you agreed that without the CAFA claim, there's no federal jurisdiction.

[00:17:22] Speaker 05:
They voluntarily removed that.

[00:17:25] Speaker 05:
And it's not because there are facts on the ground showing the wrong amount of controversy.

[00:17:32] Speaker 05:
It's because the entire claim is gone.

[00:17:35] Speaker 03:
But class action in and of itself is functionally only to increase the amount that you're seeking in the lawsuit.

[00:17:43] Speaker 03:
You're filing it on behalf of a group of people.

[00:17:46] Speaker 03:
It's not a separate...

[00:17:50] Speaker 04:
I'd like to hear what McFadden said.

[00:17:52] Speaker 04:
I think you went down a wrong rabbit hole.

[00:17:58] Speaker 04:
Maybe you have something here.

[00:17:59] Speaker 04:
You say you have four other cases.

[00:18:01] Speaker 04:
I'd like to hear what, maybe you can explain a little bit better what Judge McFadden.

[00:18:06] Speaker 03:
What he said was he distinguished Royal Canaan and St.

[00:18:11] Speaker 03:
Paul Mercury and said if you're going to volunteer, it's a federal question under Royal Canaan,

[00:18:17] Speaker 03:
But in his case, same as this case, you had a plaintiff, filed a class action, gets removed, then they drop the class action allegations.

[00:18:26] Speaker 03:
He says what that is functionally is simply a reduction in the amount that the lawsuit is seeking.

[00:18:32] Speaker 03:
It is not dropping claims.

[00:18:34] Speaker 03:
It is only reducing how much the defendants could potentially be on the hook for.

[00:18:38] Speaker 03:
And that falls on the St.

[00:18:40] Speaker 03:
Paul Mercury side of the fence.

[00:18:42] Speaker 03:
not on the Royal Canaan side of the fence.

[00:18:46] Speaker 04:
He said that the diversity part doesn't matter, the party diversity doesn't matter.

[00:18:53] Speaker 03:
it does because it all has to relate back to the original filing.

[00:18:57] Speaker 05:
I guess the question maybe I have the same question as Judge Nelson I think which is did that case involve a situation in which there was imperfect diversity without the CAFA claim because it's one thing if there's still complete diversity and you drop the CAFA claim for some reason so what but here we no longer have

[00:19:23] Speaker 05:
a complete diversity.

[00:19:25] Speaker 05:
And there's a CAFE claim.

[00:19:27] Speaker 03:
I believe the Nichols case, there was complete diversity.

[00:19:33] Speaker 05:
Why doesn't that matter to the outcome?

[00:19:36] Speaker 03:
Because that's not how the court ruled on whether or not the dropping of the CAFA was, in fact, divest the Court of Justice.

[00:19:43] Speaker 04:
You're asking me to challenge this without reading the case.

[00:19:47] Speaker 04:
But I'm suspecting that if I go read the case, what he's going to say is the only thing that mattered there was a amount of controversy, because there was complete diversity.

[00:19:57] Speaker 04:
And here, there's not complete diversity.

[00:20:00] Speaker 03:
Am I wrong about that?

[00:20:02] Speaker 04:
Was there complete diversity in?

[00:20:04] Speaker 04:
in the Judge McFadden case?

[00:20:09] Speaker 03:
I believe there was, but that wasn't his analysis.

[00:20:13] Speaker 03:
Well, we'll go read it.

[00:20:14] Speaker 03:
I'll get you the case.

[00:20:15] Speaker 03:
I think I'm out of time now.

[00:20:17] Speaker 03:
No, no, you still have a minute.

[00:20:20] Speaker 03:
We think it's distinguishable, Royal Canaan.

[00:20:23] Speaker 03:
We think this court has jurisdiction.

[00:20:24] Speaker 03:
I just want to touch on the merits for a moment.

[00:20:26] Speaker 03:
And that is, counsel's argument is

[00:20:32] Speaker 03:
ignores the fact that the district court in granting the 12b 6 motion specifically looked at the allegations specifically paragraph 35 of the second amendment complaint where the plaintiffs admitted receiving the limited warranty we had asked the court to take judicial notice of the limited warranty the court declined to do that but instead Incorporate looked at under the corporate incorporation by reference doctrine because it was in fact a

[00:20:57] Speaker 03:
referenced in the complaint.

[00:21:00] Speaker 03:
And what it says in paragraph 35 is that the plaintiffs received a copy of the Posey, the Geldwin, limited warranty in December of 2002.

[00:21:08] Speaker 03:
They claimed throughout their complaint that they believed that they received a lifetime oral warranty that covered installation and all new windows from Spenard.

[00:21:20] Speaker 03:
When they received that warranty in December of 2002, the district court correctly determined that that triggered the statute of limitations for all of these.

[00:21:29] Speaker 03:
They didn't file this lawsuit until 2022.

[00:21:31] Speaker 03:
The court said 2002, December of 2002, was when the

[00:21:42] Speaker 03:
was a triggering event.

[00:21:43] Speaker 03:
They knew or should have known.

[00:21:44] Speaker 03:
They had a claim related to Windows at that time.

[00:21:47] Speaker 03:
And then two years later, when Spenard tells them, no, we're not going to do anything else for you under the terms of the warranty, they claim Spenard gave them a lifetime warranty, an oral lifetime warranty.

[00:21:57] Speaker 03:
Spenard says no in 2004.

[00:21:59] Speaker 03:
Certainly, that triggered the statute of limitations for all these claims.

[00:22:04] Speaker 03:
And the court did not interpret the terms of the warranty as counsel

[00:22:09] Speaker 03:
Says in their reply the court simply said you admitted getting the warranty that started the statute running and you're Procluded from all these claims are time barred Thank you counsel, thank you, oh well no wait he gets to go This is the car money time all right

[00:22:31] Speaker 01:
Thank you for your time for those of you that traveled here today and thank you for both of your respective arguments as well.

[00:22:39] Speaker 01:
With my limited time I'm just going to launch right into that.

[00:22:41] Speaker 01:
I actually had a completely different plan for this argument but I noticed that the court is very focused on the lack of diversity in this matter and I think I will respectfully disagree with you that there is a diversity issue here.

[00:22:52] Speaker 01:
Spun our builder supplies undeniably located in Alaska the Fox are also Absolutely, I'm trying not to shout into the hot mic I have a lot of speakers in my ears having said that the

[00:23:04] Speaker 01:
A defendant.

[00:23:05] Speaker 04:
You're saying that Spenard is not an Alaska corporation?

[00:23:08] Speaker 01:
No, we are, absolutely.

[00:23:09] Speaker 01:
And the Fox are absolutely Alaska residents.

[00:23:12] Speaker 01:
But the Ninth Circuit has significant precedent on fraudulent jointer of a local party.

[00:23:17] Speaker 01:
And none of us have addressed that at all here.

[00:23:19] Speaker 01:
So even if I am local, and by the way, I hate the name for that legal regime.

[00:23:23] Speaker 01:
It makes it sound like I'm casting aspersions.

[00:23:25] Speaker 04:
So you want an opportunity, I mean, you want an opportunity before the district court

[00:23:31] Speaker 04:
before we order it to be dismissed to raise the fraudulent joiner.

[00:23:35] Speaker 01:
Absolutely.

[00:23:36] Speaker 01:
That wasn't briefed below and it has not been briefed here because Royal Canyon came out.

[00:23:39] Speaker 04:
We just sprung this on you.

[00:23:40] Speaker 01:
Exactly.

[00:23:42] Speaker 01:
And respectfully, I think we all saw Royal Canyon being argued in the District Court on its way up to the Supreme Court, but I didn't anticipate that that would be the outcome from that case.

[00:23:50] Speaker 01:
Having said that, fraudulent joiner in this matter is fairly clear.

[00:23:53] Speaker 04:
Well, OK.

[00:23:54] Speaker 04:
So I guess the question is what do we do with fraudulent joiner?

[00:24:00] Speaker 04:
Is there precedent for allowing you to raise that?

[00:24:04] Speaker 04:
I don't know the answer to that.

[00:24:06] Speaker 04:
Maybe if we're getting a 28-J letter, we could get something on that.

[00:24:10] Speaker 04:
I mean, I just wonder.

[00:24:11] Speaker 04:
It doesn't seem to be the best position for you to argue that in the first instance before us.

[00:24:17] Speaker 04:
I'm wondering if we're going to remand it if there's precedent for saying, hey,

[00:24:24] Speaker 04:
before you send it back to the state court, take a look at this.

[00:24:27] Speaker 01:
No, this is a fairly unprecedented matter because we are before the court on CAFA and we're essentially asking, I would be asking the court, whether it's the district court or you, to reconsider whether, in absence of a CAFA claim, whether actual diversity still exists.

[00:24:40] Speaker 04:
I thought, I mean, it's a very confusing issue because my recollection of fraudulent jointers, it has to be brought within a certain amount of time.

[00:24:48] Speaker 04:
And so I'm wondering whether fraudulent jointer,

[00:24:52] Speaker 04:
I mean, fraudulent joiner does have to be brought within, I mean, the exception to that would be if it was discovered later, but I don't know how that would apply here.

[00:25:02] Speaker 04:
But I wonder whether the district court shouldn't just figure that out.

[00:25:05] Speaker 01:
That is likely a better question for the district court.

[00:25:08] Speaker 01:
I fundamentally feel uncomfortable bringing up something novel in front at this stage in the game, but it's with Royal Canyon and something I'm obligated to do on behalf of my client.

[00:25:17] Speaker 01:
Having said that, fraudulent jointer is a fairly nasty term.

[00:25:20] Speaker 01:
I don't like the terminology for that regime, but it's two prongs.

[00:25:23] Speaker 01:
The first is actual fraud in the pleading.

[00:25:25] Speaker 01:
That is not what I'd be arguing here.

[00:25:27] Speaker 01:
The second prong is whether there is a cognizable claim against Bernard Builder Supply specifically.

[00:25:32] Speaker 01:
And based on the plaintiff's complaint, specifically paragraphs 3, 45, and 31, taken as a whole, they affirmatively allege that Spinard Builders Supply, quote, abandoned all warranty obligations in 2004.

[00:25:45] Speaker 01:
Now, I would take the position, as I do today,

[00:25:49] Speaker 01:
That there were no warranty obligations, an oral lifetime warranty made by a retail employee, cannot bind a third-party manufacturer, that strikes me as difficult.

[00:25:59] Speaker 01:
Having said that, the plaintiffs have affirmatively alleged that we abandoned any obligation, even if they did exist, in 2004.

[00:26:06] Speaker 01:
And under Alaska state law, that's with statute of limitations which would apply here, the longest statute available to the plaintiffs, to the Fox here,

[00:26:14] Speaker 01:
would be 10 years under the unjust enrichment statute, that would have expired in 2014.

[00:26:23] Speaker 01:
The Fox didn't file suit for another eight years after that.

[00:26:26] Speaker 01:
There isn't a cognizable legal claim against Bernard Builder.

[00:26:29] Speaker 01:
I mean, the practical ramifications of this is I believe we were added simply to destroy diversity.

[00:26:35] Speaker 04:
Well, now you're getting into a motion to dismiss territory.

[00:26:37] Speaker 04:
Exactly.

[00:26:39] Speaker 04:
But anyway.

[00:26:40] Speaker 01:
To the extent that the court is concerned about whether there continues to be jurisdiction, there are multiple paths to federal jurisdiction here that just we haven't had a chance to brief yet.

[00:26:48] Speaker 01:
Worst case scenario for my client is we go back to district court, re-brief the fraudulent joiner action, which I think is fairly clear that there isn't a cognizable legal claim against Spenard Builders Supply.

[00:26:58] Speaker 01:
That would remove my client from this case, and then you would have standard issue federal jurisdiction from diverse parties, which should be the outcome here.

[00:27:05] Speaker 01:
I understand the procedural ramifications that you may not be willing to make that finding.

[00:27:10] Speaker 01:
You are reviewing this de novo though.

[00:27:12] Speaker 01:
So you can look at the allegations in the plaintiff's complaint and you could find that there isn't a cognizable legal claim.

[00:27:17] Speaker 01:
What makes me a little uncomfortable with that?

[00:27:20] Speaker 04:
And you're over.

[00:27:21] Speaker 04:
But I mean, I think the problem with the argument that I'm hearing now, and I'm hearing it for the first time, is you're mixing up fraudulent jointer with cognizable legal claim.

[00:27:30] Speaker 04:
And those are two separate issues.

[00:27:31] Speaker 04:
But we'll take a closer look at it.

[00:27:34] Speaker 01:
Right.

[00:27:35] Speaker 01:
And actually, I can just give you the case data right here.

[00:27:36] Speaker 01:
It's Grand Care LLC versus Thrower, 889, F3rd, 543.

[00:27:40] Speaker 01:
The pin site is 548, 9th Circuit, 2018.

[00:27:44] Speaker 02:
Like I told your fellow council, if you could put that in 28 J. Absolutely.

[00:27:48] Speaker 02:
That'd be great.

[00:27:48] Speaker 02:
OK.

[00:27:49] Speaker 02:
Well, look, you have definitely preserved the issue.

[00:27:51] Speaker 02:
You've made it clear that was your goal today.

[00:27:53] Speaker 02:
I think you've accomplished that.

[00:27:57] Speaker 00:
Thank you.

[00:27:58] Speaker 00:
I would like to address the Nichols versus 300 M Street case that Jeldwin's council brought up.

[00:28:05] Speaker 00:
In that case, it is similar posture to this case.

[00:28:09] Speaker 00:
But again, that was a district court case.

[00:28:11] Speaker 00:
And it was twisted logic.

[00:28:13] Speaker 00:
So in that sense, the plaintiffs did remove the class allegations.

[00:28:17] Speaker 00:
And the court looked at that feeling still bound by Seventh Circuit law, similar to how we have in the Ninth Circuit.

[00:28:24] Speaker 00:
Seventh Circuit law.

[00:28:25] Speaker 04:
I believe this was DC.

[00:28:28] Speaker 00:
Maybe it was DC.

[00:28:30] Speaker 00:
I'm sorry.

[00:28:31] Speaker 00:
I don't have the case in front of me.

[00:28:33] Speaker 04:
Was there diversity jurisdiction in the DC case?

[00:28:39] Speaker 00:
I don't believe there was complete diversity.

[00:28:45] Speaker 00:
So then it was analogous to here.

[00:28:48] Speaker 00:
It is analogous to here.

[00:28:50] Speaker 00:
But it's twisted logic in the sense that the court looked at the plaintiffs removing the class actions and said, well, what they're really doing is just reducing the amount of controversy.

[00:29:02] Speaker 00:
But that doesn't make sense, and it's contrary to the text of the statute, because 28 U.S.C.

[00:29:07] Speaker 00:
1332 D5

[00:29:09] Speaker 00:
is a separate subsection of CAFA jurisdiction, which states that it does not apply when there are less than 100 plaintiffs.

[00:29:18] Speaker 00:
That is separate from the amount in controversy.

[00:29:21] Speaker 00:
So you can't combine the two and say, oh, they're really the same thing.

[00:29:24] Speaker 00:
It's a completely different subsection that states there is no CAFA jurisdiction if there's less than 100 plaintiffs.

[00:29:31] Speaker 00:
And interestingly, while Royal Canaan at the Supreme Court level was

[00:29:35] Speaker 00:
looking at federal question jurisdiction, it was originally a class action case filed in state court.

[00:29:41] Speaker 00:
It was then removed to the federal district court on the basis of federal question and CAFA jurisdiction.

[00:29:48] Speaker 00:
And the plaintiffs, when they amended their complaint, got around CAFA jurisdiction's minimal diversity requirement by removing the diverse defendants

[00:30:00] Speaker 00:
and naming them as non-party co-conspirators.

[00:30:03] Speaker 00:
And that was allowed by the court.

[00:30:05] Speaker 00:
And that went up to the Supreme Court.

[00:30:07] Speaker 00:
And they didn't even address that issue.

[00:30:09] Speaker 00:
So CAFA was before the Supreme Court in this case.

[00:30:13] Speaker 00:
And in the oral arguments for Royal Canaan, Justice Barrett asked a very specific question to counsel how this would affect CAFA cases.

[00:30:22] Speaker 00:
And the answer was that it wouldn't, because the minimal diversity requirement will ensure

[00:30:28] Speaker 00:
that the types of cases that Congress was concerned about, which are nationwide class actions, are always going to have minimal diversity.

[00:30:36] Speaker 00:
So the separate requirement of having at least 100 plaintiffs is a very important requirement that was part of what Congress intended.

[00:30:45] Speaker 04:
And I take your argument, but all this is to say, your argument is the district court in DC got it wrong.

[00:30:53] Speaker 00:
Yes.

[00:30:54] Speaker 00:
That is our argument.

[00:30:55] Speaker 00:
And going back to that Senate report that was exclusively focused on nationwide class actions.

[00:31:02] Speaker 00:
That was the whole reason behind enacting CAFA.

[00:31:05] Speaker 00:
The word nationwide appears 49 times in that Senate report.

[00:31:09] Speaker 00:
And that Senate report is what both Banco and Broadway Grill reference when they talk about foreign manipulation and that

[00:31:19] Speaker 00:
There are many examples in that Senate report, one of which is a retailer, a local retailer that had been named in hundreds of lawsuits because naming her destroyed diversity for the purposes of nationwide class actions.

[00:31:33] Speaker 00:
And she was located in a district where that specific state court was known for certifying class actions almost across the board.

[00:31:41] Speaker 00:
Another example was a state farm case where they had used non-original manufactured parts

[00:31:48] Speaker 00:
to make replacements in their insurance repairs.

[00:31:53] Speaker 00:
And the plaintiffs filed a nationwide class action alleging that those parts were inferior.

[00:31:58] Speaker 00:
They filed it in a state court in Madison County, Illinois that's known for approving class actions.

[00:32:05] Speaker 00:
There are many states that have regulations, insurance regulations, the state that is perfectly allowable to use non-originally manufactured parts.

[00:32:13] Speaker 00:
And in fact, there were two states that mandate that insurers use non-original manufactured parts.

[00:32:19] Speaker 00:
And so you have a state court in Illinois

[00:32:21] Speaker 00:
making a decision that is contrary or conflicts with regulations and state statutes all across the nation.

[00:32:29] Speaker 05:
Do you have any response to the so-called fraudulent joinder point?

[00:32:37] Speaker 00:
Your honor, that was never raised before the district court.

[00:32:39] Speaker 00:
There were two rounds of briefing on subject matter jurisdiction in this case, and not once did Spenard raise that issue.

[00:32:47] Speaker 04:
Hold on.

[00:32:50] Speaker 04:
Oh, I, well, but they raised a motion to dismiss, but they never, but fraudulent Joinder, they would have raised on a remand and it would never would have, there wouldn't have been a reason to do it because the whole question was CAFA.

[00:33:04] Speaker 05:
You moved to remand though, right?

[00:33:06] Speaker 05:
We moved twice to remand.

[00:33:08] Speaker 05:
And this argument was not raised?

[00:33:10] Speaker 05:
Correct.

[00:33:12] Speaker 04:
But there wouldn't have been a reason to raise it because the remand all focused on CAFA at the time, right?

[00:33:17] Speaker 00:
The defendants chose to focus on CAFA.

[00:33:20] Speaker 00:
They could have also raised.

[00:33:22] Speaker 04:
No, they couldn't have because if there was federal jurisdiction, they opposed your remand.

[00:33:30] Speaker 04:
But they said there's CAFA jurisdiction.

[00:33:34] Speaker 04:
Well, I'll have to look at it.

[00:33:35] Speaker 00:
Correct.

[00:33:35] Speaker 04:
They did say that you're sort of hinting at a waiver argument, I guess.

[00:33:39] Speaker 00:
Yeah, I'm stating a waiver argument.

[00:33:44] Speaker 02:
Your time's about up.

[00:33:45] Speaker 02:
But if I would, you know, you were also free to file 28 J letter.

[00:33:49] Speaker 02:
in response so you know maybe the best courses is almost like supplemental briefing but if they're going to file a 28J on the Judge McFadden opinion you are welcome to file a response response of 28J as well.

[00:34:00] Speaker 01:
Okay.

[00:34:00] Speaker 02:
I think that would help the court and look we appreciate this case kind of Supreme Court does it sometimes and we all got to kind of reset where we are and this is one of those situations.

[00:34:08] Speaker 00:
Thank you very much.

[00:34:09] Speaker 02:
Thank you.

[00:34:10] Speaker 02:
Thank you both for this interesting civil procedure.

[00:34:13] Speaker 00:
All three.

[00:34:15] Speaker 02:
For our ex-turner in the courtroom, if you take Advanced Civ Pro, here you go.

[00:34:18] Speaker 02:
You got a head start right now.

[00:34:22] Speaker 02:
All right, then we'll call the final case for today.

[00:34:24] Speaker 02:
Samson Tugg.