Monday, April 02, 2007

E.D. Louisiana Discusses Local Controversy Exception to CAFA

Per Martin v. Lafon Nursing Facility of the Holy Family, Inc., 2007 WL 162813 (E.D. La. Jan. 18, 2007):

Defendant is the owner and operator of a nursing home located in New Orleans, Louisiana. Plaintiff alleges that when Hurricane Katrina struck the area on August 29, 2005, defendant had failed to take the necessary precautions to protect plaintiff's mother and other residents of the home from the storm's effects. Plaintiff alleges that, because of defendant's negligence, her mother suffered mentally and physically during the storm and died on defendant's premises. Plaintiff filed this action in state court, seeking damages for defendant's negligence and requesting that the matter be certified as a class action. On August 28, 2006, defendant removed this case to federal court, arguing that federal jurisdiction exists pursuant to the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d)(2), the Federal Officer Removal Statute, 28 U.S.C. § 1442(a)(1), and the Multiparty, Multiforum Trial Jurisdiction Act (“MMTJA”), 28 U.S.C. § 1369. Plaintiff filed her motion to remand on September 27, 2006. . . .

28 U.S.C. § 1332(d)(2) conveys federal jurisdiction over class actions when there is minimal diversity, that is, where at least one plaintiff and one defendant are from different states, and the amount in controversy exceeds $5,000,000, exclusive of interests and costs. Excepted from the § 1332(d) grant of jurisdiction are those cases that are purely local controversies. Pursuant to this local controversy exception, a district court must decline to exercise jurisdiction in cases where four requirements are met: (1) more than two-thirds of the members of the proposed plaintiff class are citizens of the original filing state; (2) at least one defendant is a defendant from whom members of the proposed plaintiff class seek significant relief, whose alleged conduct forms a significant basis of the asserted claims, and who is a citizen of the original filing state; (3) the principal injuries were incurred in the original filing state; and (4) no other class action asserting the same or similar factual allegations has been filed against any of the defendants within the three years preceding the filing of the case. Hart v. FedEx Ground Package Sys., 457 F.3d 675, 679 (7th Cir.2006) (citing 8 U.S.C. § 1332(d)(4)(A)). . . . In its notice of removal, defendant states that the matter in controversy exceeds the sum or value of $5,000,000 and that the minimal diversity exists, satisfying the requirements for federal jurisdiction under the CAFA. Plaintiff does not contest these assertions; instead, plaintiff argues that this matter falls within the “local controversy” exception of § 1332(d)(4)(A) and presents a situation in which the Court must decline to exercise its jurisdiction. The controversy in this case lies with the citizenship of the proposed class; defendant contests no other aspect of plaintiff's CAFA argument. . . .

Defendant appropriately cites to Frazier v. Pioneer Americas LLC, 455 F.3d 542, 546 (5th Cir.2006), a case in which the Fifth Circuit held that the burden of proving an exception to the CAFA fell to the plaintiff arguing for its application. There, the court noted the “longstanding § 1441(a) doctrine placing the burden on plaintiffs to show exceptions to jurisdiction.” Id. (citing Breuer v. Jim's Concrete of Brevard, Inc., 538 U.S. 691, 697-98, 123 S.Ct. 1882, 1885, 155 L.Ed.2d 923 (2003)). . . . Plaintiff's assertion that defendant is in possession of information bearing on the citizenship of the putative class and should be compelled to produce this evidence is unavailing. In both Frazier and Evans, the courts noted that the plaintiffs were better positioned to produce the information necessary to carry the burden of proving the exceptions to the CAFA. Frazier, 455 F.3d at 546 (“This result is supported by the reality that plaintiffs are better positioned than defendants to carry this burden.”); Evans, 449 F.3d at 1164 n. 3 (“Moreover, placing the burden of proof on the plaintiff in this situation is not only consistent with the statutory design, we believe it places the burden on the party most capable of bearing it.”). . . . The burden of proving the local controversy exception to the CAFA clearly rests with plaintiff. The Court finds no need, however, to require the production of any information from defendant or expedite the discovery process that the parties will undoubtedly conduct. Plaintiff is free to move for remand if and when the appropriate information relevant to subject matter jurisdiction becomes available.


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