Background
After Missouri legalized recreational marijuana, counties imposed additional sales taxes that dispensaries passed on to customers. The Missouri Supreme Court later held that counties could not impose those taxes on dispensaries located within incorporated municipalities. Customers then sued dispensaries that had collected the taxes, alleging that the businesses sought to retain unlawfully collected revenue as a private windfall.
The dispensaries removed the proposed class action to federal court under the Class Action Fairness Act. The district court initially found that the plaintiffs had established three elements of CAFA’s local-controversy exception but had not shown that more than two-thirds of the proposed class members were Missouri citizens. The plaintiffs then amended the class definition to include only people who were Missouri citizens as of June 13, 2025, and the district court remanded the case to state court.
The Court’s Holding
The Eighth Circuit affirmed. Applying the Supreme Court’s decision in Royal Canin U.S.A., Inc. v. Wullschleger, the court held that the second amended complaint superseded the prior complaint and became the operative pleading for determining federal jurisdiction. A plaintiff’s post-removal amendment may therefore alter the claims or parties in a way that eliminates federal subject-matter jurisdiction, including jurisdiction under CAFA.
The court rejected the dispensaries’ argument that earlier Eighth Circuit decisions permanently fixed jurisdiction according to the complaint in effect at removal. It distinguished precedent applying the time-of-filing rule to the amount in controversy and concluded that an earlier suggestion against redefining a class to trigger the local-controversy exception could not survive Royal Canin. Because the amended class consisted only of Missouri citizens and the dispensaries did not challenge the district court’s findings on the exception’s other elements, remand was proper.
Key Takeaways
- A post-removal amended complaint supersedes the earlier pleading and may eliminate CAFA jurisdiction.
- CAFA’s rule fixing when class members’ citizenship is measured does not permanently lock in the original class definition or federal jurisdiction.
- Once the class was limited to Missouri citizens, the unchallenged findings on the remaining statutory elements established CAFA’s local-controversy exception.
Why It Matters
The decision confirms in the Eighth Circuit that plaintiffs may amend a complaint after removal in a way that changes the jurisdictional analysis, including by narrowing a proposed class to local citizens. It also limits the reach of prior circuit precedent suggesting that CAFA jurisdiction must remain fixed according to the class definition at removal.
For class-action litigants, the ruling makes the operative pleading—not necessarily the pleading removed—the central document when evaluating whether CAFA continues to support federal jurisdiction.