Monday, September 17, 2007

E.D. Louisiana Holds CAFA Case to be Decided by Louisiana Law; Denies Motion to Set Aside Ruling that Required Production of Privileged Information

Per Martin v. Lafon Nursing Facility of the Holy Family, Inc., Slip Copy, 2007 WL 2228633 (E.D.La. Jul 31, 2007) (NO. CIV.A. 06-5108):

The language in Garza that Judge Roby cites refers to confusion in federal jurisprudence where "state law claims appear in federal question cases pursuant to the federal court's supplemental jurisdiction." 234 F.R.D. at 624. In this case, however, plaintiff has only alleged state law claims. Applying federal privilege law to the jurisdictional discovery, as Judge Roby ordered, would lead to an awkward result: the privilege would not be recognized at this early stage of the litigation, yet it might later be raised in conjunction with plaintiff's state law claims. See Pearson v. Miller, 211 F.3d 57, 66 (3d Cir.2000), cited in Garza, 234 F.R.D. at 625 (noting that "the problems associated with the application of two separate privilege rules in the same case are readily apparent" and applying federal privilege law where case presented both federal and state law claims); Wm. T. Thompson Co. v. Gen. Nutrition Corp., 671 F.2d 100, 104 (3d Cir.1982) ("Obviously applying two separate disclosure rules with respect to different claims tried to the same jury would be unworkable.") (citations omitted); see also Mem. Hosp. for McHenry County v. Shadur, 664 F.2d 1058, 1061 n. 3 (7th Cir.1981). As noted above, this case does not present a situation in which both federal and state law claims are alleged and where, as noted in Garza, some courts have held that state and federal privilege law could co-exist in the same case.

The dispute in this matter concerns the applicability of CAFA and discovery related to that determination. CAFA is an extension of the district courts' diversity jurisdiction. See Exxon Mobil Corp. v. Allapattah Servs., 545 U.S. 546, 571, 125 S.Ct. 2611, 2627, 162 L.Ed.2d 502 (2005) ("Subject to certain limitations, the CAFA confers federal diversity jurisdiction over class actions where the aggregate amount in controversy exceeds $5 million."); Braud v. Transp. Serv. Co., 445 F.3d 801, 803 (5th Cir.2006) ("CAFA broadens diversity jurisdiction for certain qualifying class actions ....") (citation omitted). CAFA 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. While CAFA is a federal statute, it does not alter the nature of plaintiff's state law claims.

. . .

The Court finds that jurisdiction in this matter is founded solely on the diversity of the parties pursuant to CAFA. Because jurisdiction is based on the diversity of the parties, state law will provide the rule of decision in this case. See Budinich v. Becton Dickinson & Co., 486 U.S. 196, 198, 108 S.Ct. 1717, 1720, 100 L.Ed.2d 178 (1988) ("[S]tate law generally supplies the rules of decision in federal diversity cases ....") (citing 28 U.S.C. ยง 1652; Erie R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938)). Accordingly, Louisiana law will govern the applicable evidentiary privileges.


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