Thursday, April 08, 2010

Seventh Circuit Blocks Class Action from Returning to Kansas Court

The ABA Journal's Litigation News is reporting on a Seventh Circuit case involving an interpretation of the home-state exception to the Class Action Fairness Act:

In a decision further shaping the landscape for class action jurisdictional issues, the U.S. Court of Appeals for the Seventh Circuit recently overruled a decision by the U.S. District Court for the Northern District of Illinois that would have sent a class action back to Kansas state court. In re Sprint Nextel Corp. . . .

After receiving the case, the district court accepted the plaintiffs’ argument that the home-state exception required it be remanded. . . .

The Seventh Circuit reversed. . . . The Seventh Circuit agreed with Sprint Nextel—and disagreed with the district court—on the evidentiary issue. “Once Sprint Nextel established that CAFA jurisdiction exists, the burden fell on the plaintiffs, who were seeking remand, to show that the home-state exception applies,” the court said.

The plaintiffs had to establish by a preponderance of the evidence that two-thirds of the proposed class members were Kansas citizens, the court ruled. The plaintiffs did not submit any evidence regarding citizenship. Nevertheless, the district court held that the class definition itself—focusing on Kansas cell phone numbers and mailing addresses—made it more likely than not that two-thirds of the class were Kansas citizens.

Although the Seventh Circuit admitted that the district court’s approach “has some appeal,” the court ultimately disagreed with that analysis, characterizing it as ‘[s]ensible guesswork, based on a sense of how the world works, but guesswork nonetheless.”


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