Wednesday, December 12, 2007

Fourth Circuit Upholds CAFA Jurisdiction; Declines to Entertain Local Controversy Argument Raised for the First Time on Appeal

Per Lanier v. Norfolk Southern Corp., Slip Copy, 2007 WL 4270847 (4th Cir. Dec. 05, 2007):

For the district court to have original jurisdiction over a class action under CAFA, the proponent of removal must show minimal diversity, and it must be clear from the face of the complaint that the amount in controversy exceeds $5 million. . . .

The district court concluded that the amount in controversy was satisfied and minimal diversity between Lanier and Norfolk was present. Because Lanier's complaint indicated that the purported class consisted of at least 350 people seeking damages, it would take a minimum of $15,000 per person to exceed the $5 million amount in controversy.FN1 Our review of the record shows that minimal diversity is present between the parties and there is nothing in the record that would support a finding to a legal certainty that the judgment would be less than $5 million.FN2 Thus, we conclude that jurisdiction exists under CAFA, and the district court correctly denied Lanier's motion to remand.

FN2. For the first time on appeal, Lanier argues that the local controversy exception under 28 U.S.C.A. § 1332(d)(4) applies. Section 1332(d)(4) states that a district court “shall decline to exercise jurisdiction” over a class action if greater than 2/3 of the class are from the state in which the action was filed; at least one defendant from whom significant relief is sought is from that same state; the principal injuries resulted from conduct within the same state; and that no other class actions have been filed asserting the same thing. 28 U.S.C.A. § 1332(d)(4) (West 2006). This court will generally not consider issues raised for the first time on appeal. Muth v. United States, 1 F.3d 246, 250 (4th Cir.1993). “Exceptions to this general rule are made only in very limited circumstances, such as where refusal to consider the newly-raised issue would be plain error or would result in a fundamental miscarriage of justice.” Id. As Lanier did not raise this argument to the district court and provides no facts warranting a finding of exceptional circumstances, we do not consider this argument. Id.


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