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

Plaintiff’s Unrefuted Evidence Regarding Citizenship Of Putative Class Members Required Remand Under CAFA’S Home-State Exception

Posted in Case Summaries, Wage and Hour

Reddick v. Global Contact Solutions, LLC, No. 15-425, 2015 WL 5056186 (D. Or. Aug. 26, 2015)

In this wage-payment dispute, the court remanded the case under CAFA’s home-state exception, 28 U.S.C. § 1332(d)(4)(B), based on plaintiff’s unrebutted evidence that over 97.5% of the absentee class members were citizens of the forum state, Oregon.

Plaintiff filed this putative class action in Oregon state court, alleging defendant violated Oregon law by failing to pay plaintiff and other similarly situated individuals all wages due upon termination of their employment with defendant. Defendant filed a notice of removal under CAFA, and plaintiff filed a motion to remand.

After hearing oral argument on plaintiff’s remand motion, the court ordered the parties to submit further evidence regarding whether CAFA’s mandatory abstention rules, namely, the local-controversy and home-state exceptions, required the court to decline to exercise subject-matter jurisdiction under CAFA. The court explained that CAFA’s home-state exception requires a federal court to decline subject-matter jurisdiction over any putative class action in which “two-thirds or more of the members of all proposed plaintiff classes in the aggregate, and the primary defendants, are citizens of the State in which the action was originally filed.” 28 U.S.C. § 1332(d)(4)(B).

In response to the court’s show-cause order, plaintiff produced defendant’s records that showed approximately 97.5% of the proposed class members had Oregon addresses. While such evidence is ordinarily insufficient to establish with certainty that the absent class members were all Oregon citizens, the court noted that “evidence of the putative class members’ residence prior to the date of removal is nevertheless material to the relevant determination of the putative class members’ citizenship at the time of removal.” Further supporting application of the home-state exception, neither party disputed that defendant was an Oregon LLC principally doing business in the State of Oregon.

For its part, defendant did not provide any evidence to rebut its own records that showed over two-thirds of the proposed class members had Oregon addresses as of the date the class members’ addresses were last known to defendant. Instead, defendant produced a litany of irrelevant evidence concerning its financial hardships and efforts to cure the statutory wage violations alleged by plaintiff. Absent any rebuttal evidence or evidence to establish that a significant portion of the absent class members were not Oregon citizens, the court found that at least two-thirds of the absent class members were citizens of Oregon on the date of removal. Accordingly, the court remanded the case to Oregon state court.

Whether the home-state exception is raised by the plaintiff or by the court sua sponte, this remand order illustrates that a defendant who wishes to stay in federal court must produce relevant evidence to defeat the application of CAFA’s mandatory abstention rules.