A case involving a client of Rashad Blossom saw the United States Supreme Court get involved. To skip ahead to the conclusion, the Supreme Court made it more difficult for third-party defendants to have cases removed from state courts to federal courts.
Rashad Blossom represents Mr. Jackson, a North Carolina consumer who filed a putative class action lawsuit in state court against American hardware titan, The Home Depot, and a related defendant, Carolina Water Systems. Home Depot, after being served with the complaint, removed the lawsuit from state court to federal court, which it believed would strengthen its odds of a victory in the courtroom. The federal district court, however, sent the case back to the North Carolina state court, where it decided the case belongs. Home Depot disagreed with the federal court’s decision, appealed to the federal Fourth Circuit Court of Appeals, and eventually convinced the U.S. Supreme Court to hear its argument that “any” defendant can have a case removed from state court to federal court.
However, the Supreme Court, through Justice Clarence Thomas’s majority 5-4 opinion on May 28, 2019, affirmed the federal court’s decision. In other words, the lower federal courts got it right. The case belonged in state court. The Supreme Court relied on the plain meaning of the applicable statutes, which do not expressly provide for removal by third-party defendants, and held that only “any” original defendants can remove.
The problem for Home Depot is that it was not an original defendant. It was a third-party defendant. The only original defendant was Mr. Jackson because Citibank initially sued him in state court to collect on the debt that he incurred to purchase a home water filtration system from Home Depot and Carolina Water Systems. Upon being sued on the debt, Mr. Jackson merely filed third-party lawsuits against Home Depot and Carolina Water Systems, alleging that they, through a fraudulent referral scheme, swindled him into buying a $9,000 filtration system in the first instance.
Class actions are normally initiated by plaintiffs, not by someone like Mr. Jackson who was the initial defendant in this case and who then became a third-party plaintiff upon suing Home Depot and Carolina Water Systems. In that respect, Mr. Jackson’s case is rather unusual.
Nonetheless, Rashad Blossom was encouraged by the decision, considered it a huge victory and believed it helped shed clarity on a common misconception. He explained, saying, “there is a misconception that state courts are plaintiff friendly and that is totally unfounded, especially in North Carolina. It does not have a reputation of having jackpot juries or as being a plaintiff-oriented state.” Blossom further stated, “the Supreme Court’s ruling will help change that perception. It appears that the Supreme Court is convinced that state courts, in general, and North Carolina state courts, in particular, are fully capable of administering justice and deciding cases fairly.”
In other Supreme Court class action cases this year, the Court denied certiorari in an attack on cy pres settlements in Frank v. Gaos and did not allow the use of equitable tolling to excuse the failure to file a Rule 23(f) appeal within fourteen days in Neutraceutical Corp. v. Lambert.