Here’s a quick refresher (plus a lesson) on CAFA’s local-controversy exception: a district court must decline jurisdiction when more than two-thirds of the proposed class members are citizens of the state in which the action was filed.  The two-thirds is determined as of the date of the filing of the complaint.  The party seeking remand (typically the class representative / plaintiff) has the burden of proving the exception applies.

So what’s the lesson?

You cannot prove citizenship using solely a putative class member’s last-known address.  Residency does not establish citizenship – i.e. the fact that a class member has (or once had) a residential address in Missouri does not mean that person is a citizen of Missouri.

So how may class representatives meet their burden to prove CAFA’s local-controversy exception?  Two ways:

  1. submit affidavit evidence or statistically significant surveys showing two-thirds of the class members are local citizens, or
  2. redefine the class as only local citizens.

Approach #1 requires some statistical rigor.  You cannot just mail a survey to the putative class members and then extrapolate the results of those who responded to get the required two-thirds.  But that’s what the district court did in Hood (which we blogged about here).  The Eighth Circuit explained “fallacy” of that approach:

The district court extrapolates the citizenship of the Missouri citizens who responded, to the citizenship for those potential class members who did not respond. The fallacy is apparent. Those still at the last-known address were more likely to respond, and those not at the last-known address were less likely to respond (and more likely not to be Missouri citizens, or even have a valid address).

See Hood v. Gilster-Mary Lee Corp., No.  15-1458 (8th Cir. May 1, 2015).  The Eighth Circuit reversed the district court’s decision to remand under the local-controversy exception.

We’ll continue to watch this case and see if Plaintiffs seek remand again using one of the Eighth Circuit’s recommended approaches to prove CAFA’s local-controversy exception.