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

Evidence of Proposed Class Members’ Residency Sufficient to Show Citizenship for Home State and Local Controversy Exceptions, Even Without Residency-Domicile Presumption

Posted in Case Summaries

Ellis v. Montgomery County, 2017 WL 440737 (E.D. Penn. Jan. 27, 2017)

A Pennsylvania District Court found it more likely than not that over two-thirds of a proposed class’s members were citizens of Pennsylvania, triggering CAFA’s home state exception, based primarily on evidence that 90% of those individuals resided in Pennsylvania. The Third Circuit has not ruled on whether a residency-domicile presumption should be recognized in these circumstances, as the Sixth Circuit did recently. But here, the District Court found it didn’t matter. Under either the residency-domicile presumption or the more holistic factual approach required by the Fifth and Ninth Circuits, the court found the defendants’ evidence satisfied their burden. It was undisputed that the other elements of CAFA’s home state exception were met, and accordingly the court declined jurisdiction and dismissed the action.

The plaintiffs brought this putative state-law class action asserting federal jurisdiction under CAFA on behalf of individuals whose arrest records and personal information were made widely available on the internet through the Inmate Locator maintained by defendants Montgomery County, Pennsylvania and the Montgomery County Correctional Facility (“MCCF”). One of the two named plaintiffs, a Pennsylvania citizen who had recently been released from the MCCF, had his height, weight, sex, date of birth, eye color, identification numbers from the FBI and Pennsylvania, and arrest notes posted on the Inmate Locator.  The second plaintiff was a New Jersey citizen, who had been neither arrested nor an inmate at MCCF. An unidentified MCCF inmate had used the second plaintiff’s personal information during his own booking, however, and as a result, his personal details were posted on the Inmate Locator and associated with unidentified inmate’s arrest records.  The Inmate Locator profiles for the plaintiffs were obtained by Mugshots.com, which then re-published the information.  The plaintiffs alleged that friends and family viewed the information on either site and claimed that they experienced emotional damage, humiliation, and loss of reputation because of the Inmate Locator’s publication of their personal information and association with a criminal record.

The defendants filed a motion to dismiss for lack of subject matter jurisdiction, arguing that the court was required to dismiss the case for two reasons: 1) the plaintiffs failed to identify an injury-in-fact and therefore lacked standing, and 2) CAFA’s home state and local controversy exceptions required the court to decline jurisdiction. The court noted that while the CAFA exceptions are not jurisdictional, they should be analyzed first because the court would be required to decline jurisdiction if one of the exceptions applied, regardless of standing.

In support of the CAFA exceptions, the defendants argued that the case was fundamentally a local dispute between predominately Pennsylvania plaintiffs and two Pennsylvania municipal defendants, concerning alleged violations of a Pennsylvania law and arising from actions that took place in Pennsylvania.

After rejecting the plaintiff’s argument that the CAFA exceptions only applied to cases removed from the state court, the District Court moved on to analyze the citizenship of the proposed class members. The court noted that both exceptions would only apply if two-thirds of the class members were citizens of Pennsylvania, but ultimately only analyzed the home state exception, as the other two requirements for the exception (i.e., the proposed class exceeded 100 members and that the defendants were citizens of Pennsylvania) were undisputed.

To prove the class members’ citizenship, the defendants relied on evidence of their residency.  The District Court observed that the Third Circuit had not addressed whether a residency-domicile presumption applied to CAFA, and noted that authority from other courts was divided.  The Sixth Circuit, however, in Mason v. Lockwood, Andrews & Newnam, P.C., 842 F.3d 383 (6th Cir. 2016), endorsed the application of the long-standing presumption of domicile based on residency in the CAFA context.  (Editor’s Note:  See the CAFA Law Blog analysis of Mason, posted on March 20, 2017).  The Sixth Circuit acknowledged that domicile consisted of both residency and an intent to remain, but further recognized that the law of domicile had long been one of presumptions, including that the primacy of residency in the domicile calculus.  The Sixth Circuit concluded that the circuits which rejected the presumption or inference from residency to domicile had relied too directly on precedent developed in the context of diversity jurisdiction, in which the longstanding residency-domicile presumption conflicted with the presumption against federal diversity jurisdiction.

The plaintiffs suggested that even if the insufficiency of residency to prove domicile emerged only from jurisdictional cases, it should be extended to the CAFA exception context because CAFA was intended to expand federal jurisdiction and a party invoking an exception to that expanded jurisdiction should not be able to rely on an evidentiary presumption.  The District Court rejected this argument, finding that CAFA’s legislative history suggested that the citizenship inquiry should be made largely on the basis of readily available information.  Therefore, the court concluded that a class member’s residency created a rebuttable presumption of citizenship for the purposes of establishing the home state and the local controversy exceptions to CAFA jurisdiction.

The court next acknowledged that the residency information submitted by the defendants was imperfect.  The fact that more than 90% of the individuals booked at the MCCF reported Pennsylvania addresses when they were booked did not necessarily reveal residency as of the date on which the case was filed.  However, the court remarked that the defendants need not prove the citizenship of every member of the class with precision; they need only show that it was more likely than not that more than two-thirds were citizens of Pennsylvania.

Here, MCCF booking information was used as a proxy for class membership, showing approximately 90% of individuals reported a Pennsylvania residence at the time of booking. Additionally, the defendants searched public records for current addressed for a sample of the proposed class, which showed a non-Pennsylvania address for only 5% of the sample. Based on that evidence, and the lack of any evidence from the plaintiffs showing the proposed class members were unusually transient, the court concluded the proportion of potential class members who resided in Pennsylvania at the time of filing was likely approximated by the percentage who reported a Pennsylvania at the time of booking.

The court then moved on to consider domicile and concluded that the none of the circumstances of the case suggested that the link between residency and domicile was broken for a large percentage of the class. In reaching that conclusion, the court took note of the fact that the Pennsylvania county did not border another state and the lack of any evidence from the plaintiffs suggesting widespread displacement may have occurred, such as a significant natural, man-made, or economic event. The District Court also noted it was not relying solely on the residency-domicile presumption, but was considering the record as a whole, which would also satisfy the more holistic factual approach required by the Fifth and Ninth Circuits.

Based on these considerations, the court found the defendants showed by a preponderance of the evidence that over two-thirds of the class members were citizens of Pennsylvania. Because it was undisputed that the proposed class exceeded 100 members and the defendants were citizens of Pennsylvania, the court concluded that CAFA’s home state exception required it to decline jurisdiction and dismissed the action.

– Kevin Lampone