Category Archives CAFA

CAFA provides for federal jurisdiction over class actions if the amount “in controversy” exceeds $5 million. This is not always a complicated exercise, with the calculation often resting on the total potential number of class members multiplied by the amount of individual damages.  But what about when the class definition requires an additional, fact-intensive inquiry, thus realistically reducing the actual number of class members—and, as a result, the total amount of damages truly “in controversy”?  The Tenth Circuit faced this question in Hammond v. Stamps.com, 844 F.3d 909 (10th Cir. 2016), concluding in a published opinion that the total “conceivab[le]” damages are what matters, not what the plaintiff will likely be able to prove. For a $15.99 monthly fee, Stamps.com allows subscribers to print postage from home. According to Ms. Hammond, the site fails to adequately disclose the subscription charges, leading her to erroneously believe that she would only be…

Plaintiffs may not avoid removal under CAFA by amending their complaint after removal to restrict the class to nondiverse individuals, held the court in Pudlowski v. The St. Louis Rams, LLC, No. 4:16-CV-189-RLW, 2016 WL 5660237 (E.D. Mo. Sep. 29, 2016). In Pudlowski, Plaintiffs sued the Rams in a Missouri state court under the Missouri Merchandising Practices Act (“MMPA”), alleging that the Rams mislead them about the team’s future location and thus caused them to buy tickets, merchandise, and concessions. Id. at *1. Defendants removed the case to federal court under CAFA, the District Court granted Plaintiffs’ motion to remand back to state court, and Defendants then appealed to the Eighth Circuit, which remanded to the Eastern District of Missouri, instructing the District Court to weigh two declarations from alleged class members. Id. at *2. Under CAFA, federal district courts have jurisdiction over class actions only if (among other requirements) there…

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

Everybody’s talkin’ all this stuff about LLCs. Well, not exactly, but the Tenth Circuit is talking about LLC citizenship. Joining the chorus of every other circuit court to consider the issue, the Tenth Circuit recently held that citizenship of an unincorporated association (e.g., an LLC) for removal-diversity purposes is to be determined by reference to the citizenship of each of its members. See Siloam Springs Hotel, L.L.C. v. Century Sur. Co., No. 14-6119, 2015 WL 1430335 (10th Cir. Mar. 31, 2015). Were this a class action, the result would be different. For purposes of CAFA, said the Court in footnote 1, an LLC’s citizenship for removal-diversity purposes is determined in the same manner as a corporation—by its state of organization and principal place of business. Why the different result under CAFA? As the Tenth Circuit put it: Not my prerogative. The prerogative to expand the established citizenship rule for corporations…

How does one prove the citizenship of members of the putative class for purposes of applying CAFA’s jurisdictional exceptions?  For instance, the Local Controversy Exception under 28 U.S.C. Section 1332(d)(4) requires the federal district court to decline to exercise CAFA jurisdiction if (among other requirements) two-thirds of the putative class members are citizens of the state in which the action was originally filed.  But since absent class members are typically absent, how do you know? This issue popped up before Judge Harpool when the defendant which operated a microwave popcorn packaging plant in Jasper Missouri used CAFA to remove yet another diacetyl class.  While it is well-settled that the party seeking remand must prove the application of one of CAFA’s exceptions, this is easier said than done. Rather than apply strict proof, the district court elected to rely on “common sense” and “logic.”  Although only 41% of the class actually…

The United States Supreme Court held on Monday that a defendant seeking removal under CAFA need only allege the jurisdictional amount in its notice of removal.  Gone are the days when a defendant must quickly muster an affidavit or other evidence to include in a notice of removal to prove the jurisdictional amount-in-controversy under CAFA. This case began when the District of Kansas remanded back to state court a class action concerning allegedly deficient royalty payments.  See Owens v. Dart Cherokee Basin Operating Co., No. 12-4157, 2013 WL 2237740 (D. Kan. May 21, 2013).  (We covered the history of this case here and here).  In Dart’s removal papers, it stated that the three requirements of CAFA had been met, and more specifically with regard to the amount-in-controversy, Dart stated the putative class members’ claims totaled more than $8.2 million.  Owens moved to remand the case to state court, asserting that…

Do consumers who buy kosher products for non-religious reasons have a legitimate "beef" with the manufacturer if the product turns out not to be kosher? In Wallace v. ConAgra Foods, Inc., 747 F.3d 1025 (8th Cir. 2014) the plaintiffs brought a putative nationwide class action alleging that food-industry conglomerate ConAgra violated various consumer protection laws by labeling their Hebrew National franks (hot dogs) as “Made with Premium Cuts of 100% Kosher Beef.” The plaintiffs alleged that the kosher inspection process was "defective and unreliable" because of the company's manufacturing quotas.  The district court granted ConAgra's motion to dismiss based on a lack of subject matter jurisdiction, agreeing that the plaintiff's claims were "barred"  because "the determination of whether a product is in fact 'kosher' [is] intrinsically religious in nature." Id. at 1028. The 8th Circuit, however, disagreed and vacated the district court's dismissal because it held that the plaintiffs actually lacked Article III standing,…

Happy belated New Year everyone.  We had a great first year here at the Missouri Kansas Class Action Blog and look to continue the trend into 2014.  Let's start off the new year with a look at a recent Supreme Court opinion involving the Class Action Fairness Act of 2005 (CAFA).  Although the 2012-13 term produced some important class action jurisprudence from the nation's highest court (which we wrote about here and here), the Supreme Court's decision in Mississippi ex rel. Hood v. AU Optronics Corp., No. 12-1036 (U.S. Jan. 14, 2014) will probably not affect most practitioners; it is, however, blog-worthy because the Court resolved a circuit split on the issue and arguably narrows the reach of the statute based on the its plain meaning. In the case, the Mississippi attorney general filed a parens patriae action in state court against several liquid crystal display (LCD) manufacturers for violating state antitrust and consumer protection…

Last week, the Eighth Circuit published its decision in Atwell v. Boston Scientific Corp., Nos. 13-8031, 13-8032, 13-8033, 2013 WL 6050762 (8th Cir. Nov. 18, 2013), where it held that three multiple-plaintiff actions alleging injury from transvaginal mesh collectively constituted a "mass action" under CAFA (the Class Action Fairness Act of 2005). Because of our firm's involvement in the case, we are going to direct you to the fine synopsis put together by the Drug & Device Law Blog.  Another comprehensive summary was published by Law360. We would also like to thank everyone who has read the blog during our first year of publication.  Have a great Thanksgiving!

In the notice of removal, apparently, because it may be too late if you simply plead satisfaction of the amount in controversy and wait until the amount is challenged to prove the underlying calculations.  In Dart Cherokee Basin Operating Co., LLC v. Owens, 730 F.3d 1234 (10th Cir,. September 17, 2013), Judge Hartz, joined by Judges Kelly, Tymkovich and Phillips, dissented from the Court's denial of en banc review of this issue by an equally divided vote.    In this case, the Petitioner/Defendant had removed the case pursuant to CAFA, and pleaded facts supporting satisfaction of the $5 million amount in controversy, but had waited until the Respondent/Plaintiff challenged the notice of removal to submit a declaration setting forth a calculation of potential liability.  The District Court remanded the case, holding that the declaration was untimely. Judge Hartz would have granted review, and argued that the Tenth Circuit owed a duty…

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