Bauer v. Home Depot U.S.A., Inc.

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Tri-State sued the Bauers in small claims court for the cost of a water treatment system it had installed following a free, in-home assessment of their water. The Bauers answered and filed a counterclaim, asserting a multi-state class action for fraud. Their subsequent, amended class-action counterclaim added Home Depot and Aquion as counterclaim-defendants and asserts that the counterclaim-defendants conducted in-home water tests that did nothing but identify mineral content, rather than contaminants, and thereby misled consumers into buying their water treatment systems. Home Depot filed notice of removal, 28 U.S.C. 1446(b)(1), 1453(b), arguing that although it was not an original “defendant” in the underlying case, its status as an additional counterclaim-defendant in an action meeting criteria of the Class Action Fairness Act (CAFA), 28 U.S.C. 1453(b), entitled it to do so. The Bauers argued that the general removal statute, as modified by CAFA, does not permit any kind of counterclaim-defendant to remove. The district court held that CAFA did not disturb the longstanding rule that only original defendants can remove cases to federal court. The Seventh Circuit affirmed the remand to state court. The court has previously held that a counterclaim-defendant is not entitled to remove a case to federal court under CAFA; the statute does not support treating an original counterclaim-defendant differently from a new one. View "Bauer v. Home Depot U.S.A., Inc." on Justia Law