Bryan Madeira v. Converse, Inc.

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS OCT 19 2020 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

BRYAN MADEIRA, an individual, and on No. 20-55958 behalf of others similarly situated, D.C. No. Plaintiff-Appellee, 5:19-cv-00154-CJC-SP

v. MEMORANDUM* CONVERSE, INC., a Delaware corporation,

Defendant-Appellant.

Appeal from the United States District Court for the Central District of California Cormac J. Carney, District Judge, Presiding

Submitted October 15, 2020** Pasadena, California

Before: MURGUIA and OWENS, Circuit Judges, and SETTLE,*** District Judge.

Converse, Inc. appeals the district court’s order remanding the case to state

court. The remand was issued sua sponte after the district court denied Bryan

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). *** The Honorable Benjamin H. Settle, United States District Judge for the Western District of Washington, sitting by designation. Madeira’s motion for class certification, reasoning that the court no longer had

jurisdiction under the Class Action Fairness Act (“CAFA”). We reverse.

We have jurisdiction to hear this appeal under CAFA. 28 U.S.C. § 1453(c).

We review the district court’s order remanding the case back to state court for lack

of CAFA jurisdiction de novo. United Steel, Paper & Forestry, Rubber, Mfg.,

Energy, Allied Indus. & Serv. Workers Int’l Union v. Shell Oil Co., 602 F.3d 1087,

1090 (9th Cir. 2010); Visendi v. Bank of Am., N.A., 733 F.3d 863, 867 (9th Cir. 2013).

The district court’s refusal to exercise supplemental jurisdiction over a state claim is

reviewed for an abuse of discretion. San Pedro Hotel Co., Inc. v. City of L.A., 159

F.3d 470, 478 (9th Cir. 1998).

Madeira filed a class action in state court alleging state law claims for wage-

and-hour violations and a cause of action under the California Private Attorneys

General Act (“PAGA”). Converse removed the case to federal court under CAFA.

Madeira filed a motion for class certification, and when the district court denied

Madeira’s motion it sua sponte remanded the entire action back to state court

reasoning that it no longer had jurisdiction under CAFA.

Where, as here, jurisdiction was proper at the time of removal, subsequent

dismissal of class claims does not defeat the court’s CAFA jurisdiction over

remaining individual claims. United Steel, 602 F.3d at 1092 (“[A] district court’s

subsequent denial of Rule 23 class certification does not divest the court of

2 jurisdiction, and it should not remand the case to state court.”); Visendi, 733 F.3d at

868. The district court therefore erred in remanding Madeira’s individual claims for

lack of jurisdiction.

However, unlike the individual claims subject to CAFA jurisdiction at the

time of removal, the district court did not have original jurisdiction over the PAGA

claims. Instead, the district court had discretion to either exercise supplemental

jurisdiction over the PAGA claims or remand them back to state court. 28 U.S.C.

§ 1367(a), (c). The district court did not provide a reason for declining supplemental

jurisdiction over the PAGA claims, but such an omission is not an abuse of

discretion. San Pedro Hotel, 159 F.3d at 478–79.

However, in the interest of judicial economy, we invite and encourage the

district court to re-evaluate whether to exercise supplemental jurisdiction over the

PAGA claims in light of our holding that it must adjudicate Madeira’s individual

claims. If upon re-evaluation the district court declines to exercise supplemental

jurisdiction over the PAGA claims, it should indicate which § 1367(c) exception

underlies its decision and elaborate on its reasoning to permit a more meaningful

review in the event that decision is appealed.

REVERSED and REMANDED.