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

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Posted in Case Summaries

Dicuio v. Brother Int’l Corp., 2011 WL 5557528 (D.N.J. Nov. 15, 2011).

A District Court in New Jersey held that with the moving population and frequent relocations, citizenship for the purpose of the home state exception to CAFA cannot be determined based only on domicile. 

The plaintiff, Robert Dicuio, brought this putative class action under CAFA, alleging that the defendant Brother International Corporation, designed its color ink cartridges to deplete one color faster than others in order to increase sales. 

The plaintiff, a resident of New Jersey, purchased a color printer, manufactured by the defendant, a Delaware corporation with its principal place of business in New Jersey, in December of 2008. (And he probably needed new ink cartridges by January, 2009). According to the complaint, this type of printer contained four different toner cartridges, one in black, one in yellow, one in magenta and one in cyan. (What a name for a color! Magenta is pushing it. Cyan is way overboard. Cyan is not even in any Crayola Crayon box. Even the huge ones with the built in sharpener. My thought is if it is not a Crayola Crayon color, then it can’t be an ink color!)

The plaintiff alleged that when any one ink color is depleted, all must be replaced in order for the printer to function. The plaintiff sought injunctive relief and compensatory damages for himself and a class, stemming from an alleged breach of implied and express warranties, breach of contract and violation the New Jersey Consumer Fraud Act. The putative class consisted of all purchasers in New Jersey, who since 2005 purchased Brother Laser Printers of similar models to the plaintiff’s and required the same color ink cartridges. 

The defendant removed the case to the District Court pursuant to CAFA. (The notice of removal was printed in cyan). 

The plaintiff requested to remand under both “the home state” and “the local controversy” exceptions to CAFA jurisdiction. (The notice to remand was printed in a mixture of colors since the plaintiff kept running out black ink).

The District Court, however, denied the motion.

In absence of the Third Circuit’s precedential decisions on the home state exception, the Court looked to the decisions of other circuits. In In re Hannaford Bros. Co. Customer Data Security Breach Litig., 564 F.3d 75, 76-77 (1st Cir. 2009), the First Circuit found that a complaint alleging a class entirely comprised of “citizens from one state” was permissible under CAFA. 

In In re Sprint Nextel Corp., 593 F.3d 669 (7th Cir. 2010), the plaintiff brought suit claiming the defendant artificially imposed high prices for text-messaging service, and limited the class to anyone who (1) had a Kansas cell phone number, (2) received their cell phone bill at a Kansas mailing address, and (3) paid a Kansas ‘USF fee.’ The Seventh Circuit, however, held that it could “not draw conclusions about the citizenship of class members based on things like their phone numbers or mailing addresses.” Notably, the Seventh Circuit suggested two instances in which the plaintiff class would have met the home state requirements: First, the plaintiff could have alleged in the complaint that all members of the class were “Kansas citizens.” Second, the Seventh Circuit noted, the plaintiff could have issued surveys to the class to determine the percentage of the citizenship based on a sample size.  (Editors’ Note:  See the CAFA Law Blog analysis of In Re Sprint Nextel posted on March 28, 2010).

Other district courts within the Third Circuit have denied motions to remand where the plaintiff failed to provide any evidence of citizenship. In Anthony v. Small Tube Mfg. Corp., 535 F. Supp. 2d 506, 517 (E.D. Pa. 2007) a district court in the Eastern District of Pennsylvania determined the applicability of the home state exception to a class defined as any worker of a particular Pennsylvania factory. Because the plaintiff in that case failed to provide evidence to support the citizenship of the class, or define the class as Pennsylvania citizens, the court found that the home state exception did not apply. The court reasoned that, although one could infer that the factory workers were domiciled in Pennsylvania, such an inference did not satisfy the plaintiff’s burden of proof: “Individual employees may retire and move away. Employees may change jobs and move to another State or country. Employees may also commute from an out-of-state location.” (Editors’ Note:  See the CAFA Law Blog analysis of Anthony posted on July 1, 2008.)

Similarly, the court in Schwartz v. Comcast Corp., 2006 WL 487915, at *3 (E.D. Pa. Feb. 28, 2006) denied remand where the putative class was defined as all persons and entities residing or doing business in the Commonwealth of Pennsylvania who subscribed to Comcast’s high-speed internet service. The court reasoned that, at best, the purchase of internet service indicates residency and residency does not equate with domicile or citizenship.  (Editors’ Note: See the CAFA Law Blog analysis of Schwartz posted on March 30, 2006.)

Based on the persuasive authority outlined above, the Court held that the motion to remand should be denied for several reasons. As an initial matter, the Court remarked that rather than defining the class as “all purchasers in New Jersey” who purchased Brother Printers and color ink replacement cartridges since 2005, the plaintiff could have defined the class as “all New Jersey citizens who have purchased a Brother Printer and/or color ink replacement cartridges since 2005.” The Court pointed that having failed to define the class as New Jersey citizens, the plaintiff bore the burden of supplying evidence that two-thirds of the putative class members were New Jersey citizens in order for remand to be mandatory. The plaintiff, however, failed to meet his burden. 

Specifically, the Court stated that the class here was not limited to New Jersey residents or employees but was comprised of people who merely purchased goods in New Jersey. New York, Pennsylvania, and Delaware residents often travel through and commute to New Jersey, purchasing goods along their travels. Thus, the Court saw no basis for presuming that two-thirds of those who purchase goods in New Jersey are New Jersey citizens. Moreover, because the proposed class included all purchasers since 2005, those who were New Jersey residents several years ago in 2005, 2006, and 2007, may have since relocated and become citizens of other states.

Next, in a belated attempt to gather the information to determine the citizenship of each putative class member, the plaintiff made a broad, unspecific discovery request in his reply brief. The Court noted that CAFA’s legislative history suggests that Congress intended for jurisdiction to be determined “largely on the basis of readily available information,” and that courts should not grant broad discovery requests.

Here, the Court found that one-sentence discovery request in the plaintiff’s reply brief did not state with reasonably particularity what sort of discovery the plaintiff would need to ascertain class member citizenship. While the plaintiff suggested that the defendant would have information on the purchasers’ citizenship, the Court said this was unlikely. Specifically, for non-cash purchases, the defendant could have retained the purchasers’ credit card zip code information but, at best, that information would indicate only residency. For cash purchases, the defendant would not likely have retained any information about the purchaser. The Court thus concluded that the plaintiff’s failure to specify the type of discovery he sought was nothing but a fishing expedition. Accordingly, the Court denied the plaintiff’s blanket request for discovery.

Because the complaint did not define the class as “New Jersey citizens”, and the plaintiff did not produce evidence suggesting that two-thirds of the class is comprised of New Jersey citizens, the Court denied the plaintiff’s request to remand based on the home state exception to CAFA. Similarly, the Court denied the plaintiff’s motion to remand based on the local controversy exception.