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CAFA Law Blog Information, cases and insights regarding the Class Action Fairness Act of 2005

Continuing Jurisdiction – You Can’t Always Get what you Want, or what you Need….

Posted in Case Summaries

Taragan v. Nissan N. Am., Inc., No: C 09-03660 SBA, 2011 WL 941132 (N.D. Cal. March 16, 2011).  

After dismissal of class claims, it seems that both parties wanted to stay in federal court to decide the claims of the individual plaintiffs, but you can’t always get what you want, or even what you need.   The court said no supplemental jurisdiction, go forth and file elsewhere, if you want.  

In this case, the Northern District of California held that the court has no continuing jurisdiction under CAFA with respect to individual state law causes of action when CAFA-based claims are no longer pending. 

The plaintiffs, Helen Taragan, along with Frances Jeanette Taylor and Clarence Taylor, filed a complaint in the district court for damages and equitable relief, alleging six claims for relief against Nissan North America, Inc., and Nissan Motor Company, Ltd. The plaintiffs brought four class claims — (1) breach of express warranty; (2) breach of implied warranty; (3) violations of State Consumer Protection Statutes; and (4) unjust enrichment, all pursuant to CAFA on the theory that Nissan violated the Federal Motor Vehicle Safety Standard 114 because the automobile key fob can be removed from the vehicle while it is turned off, even when the transmission gear is not in “park.”

In addition to the class claims, the complaint alleged two individual state law claims brought solely on behalf of the named plaintiffs, who are residents of Louisiana. The named plaintiffs’ individual claims were a design defect/failure to warn products liability claim based on Louisiana law, and a negligent infliction of emotional distress claim, which arose from an accident involving their Nissan Murano in Louisiana in August 2008. The Complaint alleged that the court had supplemental jurisdiction over these individual state law claims under 28 U.S.C. § 1367(a). 

Subsequently, the court dismissed all the four class claims, without leave to amend. As a result, the court directed the parties to brief the issue of whether it had original jurisdiction over the remaining individual state law claims brought by the named plaintiffs, and if not, whether the court should exercise supplemental jurisdiction over them.

Both parties timely filed memoranda in response to the court’s order. Specifically, Nissan, concurring with the plaintiffs, asserted that the parties were diverse and that more than $75,000 in controversy was at issue; thus, the court had jurisdiction pursuant to 28 U.S.C. § 1332(a). Second, Nissan contended that the court had “continuing jurisdiction” under CAFA, 28 U.S.C. § 1332(b). Finally, Nissan urged, as an alternative matter, that the court assert supplemental jurisdiction over the named plaintiffs’ claims under 28 U.S.C. § 1367(a). 

The court found that the complaint did not contain any allegation that jurisdiction was based on diversity under § 1332(a) nor were there any allegations that the amount in controversy exceeded $75,000. Rather, the pleadings merely alleged that the court had original jurisdiction over the class claims pursuant to CAFA, and supplemental jurisdiction with respect to the remaining state law causes of action. The court pointed that the basis of the district court’s jurisdiction must be expressly alleged in the pleadings, and where the complaint fails to allege the basis of diversity jurisdiction, including the amount in controversy, the complaint is subject to dismissal. Because the plaintiffs failed to allege jurisdiction under § 1332(a), the court rejected the parties’ belated attempt to predicate the Court’s subject matter jurisdiction on that basis.

Also, citing United States v. Shell Oil Co., 602 F.3d 1087, 1089 (9th Cir. 2010), Nissan contended that the court should maintain continuing jurisdiction over the individual claims under CAFA, notwithstanding the Court’s prior dismissal of the plaintiffs’ class claims. In Shell Oil, the Ninth Circuit held that the denial of class certification does not divest a federal court of jurisdiction over cases removed under CAFA. The court, however, found that Shell Oil was distinguishable because, unlike Shell Oil, the instant action was not removed from state court; rather, it was initiated in the district court. Moreover, although the district court in Shell Oil denied class certification, the claims over which the district court had original jurisdiction remained pending. In contrast, the class claims — over which the court had original jurisdiction under CAFA — had been dismissed. 

The court noted that Nissan had not presented the court with any authority demonstrating that the court had continuing jurisdiction under CAFA with respect to individual state law causes of action where, as here, the CAFA-based claims are no longer pending. Therefore, the court concluded that it had no continuing jurisdiction over the individual claims under CAFA.

Finally, the court found that the fact that the court dismissed the plaintiffs’ class claims at the pleading stage militated against retaining jurisdiction. Accordingly, the court declined to assert supplemental jurisdiction over the individual claims of named plaintiffs, and dismissed them without prejudice to refiling said claims in an appropriate forum.