Thursday, March 16, 2006

WD La. Holds that Determining "Significant Relief" for CAFA's Local Controversy Exception Requires Comparison with Relief Sought From Other Defendants

Per Robinson v. Cheetah Transp. 2006 WL 468820 (W.D. La. Feb. 27, 2006):

Plaintiff, Betty Robinson ("Robinson"), originally filed this action in state court on November 28, 2005, as the putative class representative for a class consisting of all persons and businesses that resided or worked in Caldwell Parish on October 7, 2004, and were affected by the closure of the Columbia bridge. The bridge's closure occurred when John E. Gaston, a truck driver and employee of Cheetah Transportation, struck the bridge with a tractor-trailer owned by Kenworth of Jackson. The tractor-trailer's payload consisted of a yellow crane owned by defendant, Union Pacific. Robinson claims that she and the individuals she is suing on behalf of suffered lost income, physical pain and suffering, mental anguish, inconvenience, lost wages, and loss of earning capacity.

. . .

The central dispute in this case involves the second requirement of the "Local Controversy" exception: at least one defendant is a defendant from whom members of the putative class seek significant relief and who is a citizen of the state in which the action is filed. While Liberty contends that the relevant defendant, Gaston, is not a Louisiana citizen, its primary argument is that the putative class does not seek significant relief from him. The undersigned agrees.

Although no case law appears to address the meaning of "significant relief" and the role it plays in determining whether to retain jurisdiction over class actions, CAFA's legislative history, namely the Senate Report, sheds some light on what Congress intended. Liberty cites two sentences of the report stating that a significant defendant must be a defendant "from whom significant relief would be sought by the plaintiff class viewed as a whole." S.Rep. No. 109- 14, at 40 (2005), as reprinted in 2005 U.S.C.C.A.N. 3, 38. A careful reading of the section of the report containing these quotes, however, reveals that they relate more to whether only a subset of the class seeks relief from the defendant, rather than to the actual amount of relief the class as whole, seeks from an in-state defendant. See id. Insight on the latter issue is found in an example the Senate used to illustrate when the "Local Controversy" exception would not apply. See id. at 41. There, the Senate described a products liability class action suit on behalf of Florida residents against an out-of-state automobile manufacturer and a few in-state dealers. In finding that this case did not involve an in-state defendant from whom significant relief was sought, the Senate stated, "Even if the plaintiffs are truly seeking relief from the dealers, the relief is just small change compared to what they are seeking from the manufacturers." Id. As this statement makes clear, whether a putative class seeks significant relief from an in-state defendant includes not only an assessment of how many members of the class were harmed by the defendant's actions, but also a comparison of the relief sought between all defendants and each defendant's ability to pay a potential judgment.

Under the inquiry described above, Gaston, the driver of the tractor-trailer, is not a defendant from whom significant relief is sought. As Liberty notes, Gaston is the only individual named as a defendant in this suit; the other defendants are the following out-of-state national companies: Cheetah Transportation, a corporation engaged in the trucking industry; Union Pacific Railroad, a major railroad corporation; Kenworth of Jackson, a tractor-trailer dealer; and Liberty, a prominent insurance company. Gaston is, as the Senate stated in its report, "just small change" in comparison to what the putative class is seeking from the other defendants. As the driver of the tractor-trailer, Gaston's alleged negligence may have substantially contributed to the class members' damages; however, it does not follow that the class members seek significant relief from him. With an amount in controversy of at least $5,000,000, the plaintiffs will seek most of that relief from those who are capable of paying it: the corporate defendants. Furthermore, the class members' failure to execute service of process on Gaston as of the date of this ruling is additional circumstantial evidence that they do not seek significant relief from him. See Document No. 3. As the party with the burden of proof at this point, Robinson, the putative class representative, has failed to provide any evidence that significant relief is sought from Gatson. Therefore, the "Local Controversy" exception to this Court's jurisdiction under CAFA does not apply, and the plaintiff's Motion to Remand is DENIED.


Post a Comment

<< Home