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CAFA Law Blog

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

A Post-Removal Amendment to Elaborate on Estimates of the Percentages of Total Claims Asserted Against a Defendant is Permissible under CAFA

Posted in Case Summaries

Benko v. Quality Loan Serv. Corp., 789 F.3d 1111 (9th Cir., 2015)

The Ninth Circuit found that a post-removal amendment to the complaint made not to eliminate a federal question (and thereby avoid federal jurisdiction), but made to elaborate on estimates of the percentage of total claims asserted against an in-state defendant is permissible under CAFA.

In this case, the plaintiffs brought a putative class action in state court alleging that the defendants engaged in illegal debt collection practices in the course of carrying out non-judicial foreclosures. The plaintiffs took loans against Nevada real properties.  When the plaintiffs defaulted on the loans, the defendants, trustees on the foreclosed deeds, engaged in claim collection under Nevada Revised Statutes (“NRS”) Section 649.  The plaintiffs argued that Nevada law required the trustees be licensed, and the defendants’ failure to register as “collection agencies” constituted deceptive trade practice.  The defendants removed the action to the District Court under the CAFA.

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Using an Amended Complaint to Clarify Jurisdictional Facts is an Exception to the General Rule that Courts Must Look at Pre-Removal Filings to Determine Jurisdiction

Posted in Case Summaries

Smilow, et al. v. Anthem Blue Cross Life and Health Insurance Co., 2015 WL 4778824 (C.D. Cal. Aug. 13, 2015).

In this action, a district court in California found that a plaintiff’s motion to amend the complaint to change the class description so it referred to ‘citizens’ of California instead of ‘residents’ of California would constitute a clarification and not an amendment. The Court was allowed to consider the amended complaint in determining whether remand to the state court was appropriate. In so concluding, the Court explained that using an amended complaint to clarify certain jurisdictional facts is an exception to the general rule that courts must look at pre-removal filings to determine jurisdiction.

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Courts May Use Address as Proxy to Determine Citizenship of Putative Class Members

Posted in Case Summaries

Garcia v. Task Ventures LLC, 2016 WL 7093915 (S.D. Cal. Dec. 6, 2016).

In this action granting the plaintiff’s motion to remand, a District Court in California found that under CAFA’s local-controversy exception, citizenship of the putative class members can be determined through a sampling method, and that the mailing addresses of the employees serves as a proxy for their citizenship.

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Internal Affairs Doctrine Dictates That The Law Of The State Of Incorporation Governs Claims For Breach Of Fiduciary Duty and Unjust Enrichment

Posted in Case Summaries

Schartz v Parish, 2016 WL 7231613 (N.D. Ill. Dec. 14, 2016).

In this action, the United States District Court, Northern District of Illinois, granted Plaintiff Brian Schartz’s (“Plaintiff”) motion to remand finding the Class Action Fairness Act’s (“CAFA”) internal affairs doctrine applied to the Plaintiff’s Breach of Fiduciary duty  and Unjust Enrichment claims which were solely alleged against a Wisconsin corporation and the allegations solely involved directors and/or officers of a Wisconsin corporation.

Plaintiff, a shareholder, brought a putative class action in State Court alleging defendants violated Wisconsin Business and Corporation Law (“WBCL”) by merging Aspen Park Pharmaceuticals, Inc. (“Aspen Park”) into defendant Female Health Company (“Female Health”) without the affirmative vote of at least two thirds of the shareholders.  Plaintiff included in his complaint breach of fiduciary duty claims brought against Female Health’s pre-merger directors, aiding and abetting breach of fiduciary duty claims brought against Female Health’s post-merger directors, and unjust enrichment claims brought against the defendants Mitchell S. Steiner and Harry Fisch.

The defendants removed the action to the federal court pursuant to CAFA.  The plaintiff moved to remand the action to state court, which the District Court granted.

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A Controversy Is Local If All The Plaintiffs Reside In The Same City!

Posted in Case Summaries

Mason, et al., v. Lockwood, Andrews & Newman, 2016 WL 6777325 (6th Cir. Nov. 16, 2016).

The Sixth Circuit affirmed an order remanding the action to the state court finding that the district court rightly applied the local controversy exception holding that, when all the plaintiffs were from the same city, it is all but obvious that the controversy is local.  This is one such case where the circuit court reiterated that a defendant must come forward with much more than their “assumptions” to get over CAFA’s local controversy exception.

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Partial Dismissal of Claims Results in Reconsideration of CAFA Jurisdiction Over Remaining Claim

Posted in Case Summaries

Truglio v. Planet Fitness, Inc., 2016 WL 4084030 (D.N.J. July 28, 2016).

In this action, while dismissing the plaintiff’s claims in part, a District Court in New Jersey questioned whether it had subject-matter jurisdiction under CAFA over the plaintiff’s remaining claim and ordered the defendants to show cause as to why the action should not be remanded to state court based on a lack of subject-matter jurisdiction under CAFA.

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Amend All You Want, But The Case Stays In Federal Court, Says the Second Circuit.

Posted in Case Summaries

In Touch Concepts, Inc. v. Cellco P’ship, 788 F.3d 98 (2nd Cir. 2015).

The Second Circuit held that a post-removal amendment dropping the class allegations does not divest a district court of the federal jurisdiction.

In this case, the plaintiff was a former retail sales agent.  He brought a putative class action in the New York state court asserting several state and common law violations against the defendants after they terminated his and other agents’ sales-agent relationship.  After the defendants removed the case under CAFA, the plaintiff filed an amended complaint and dropped all class action allegations. Despite the lack of any federal claims, lack of complete diversity, and lack of any class allegations, the District Court still maintained subject-matter jurisdiction and ultimately dismissed several claims on the merits.  The plaintiff voluntarily dismissed the remaining claims, then appealed.

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Successful Class Certification Is Not A Prerequisite To CAFA Jurisdiction

Posted in Case Summaries

Slocum v. International Paper Company, 2016 WL 6543301 (E.D. La. Nov. 4, 2016).

A Louisiana District Court denied the plaintiffs’ motion to remand in a consolidated class action, finding that the defendant was not required to demonstrate that class certification would be successful in order to establish CAFA jurisdiction. Continue Reading

California District Court Remands Putative Class Action Due to Defendant’s Failure to Provide Evidence to Support its Calculations of the Amount in Controversy

Posted in Case Summaries, Wage and Hour

Cisneros v. Lerner New York, Inc., 2016 WL 4059612 (C.D. Cal. July 25, 2016).

Plaintiffs, Ana Ciseneros and Farank Safa, filed this putative class action in the Los Angeles County Superior Court against their employer, Lerner New York, Inc. (“Lerner”), alleging eight causes of action including, failure to provide accurate wage statements, failure to pay overtime compensation, failure to pay wages on regularly established paydays and several violations of the California Labor Code. Lerner is a specialty manufacturer and retailer of women’s clothing and accessories. Plaintiff Ana Cisneros is an hourly employee in Lerner’s retail store and working as a Store Sales Leader and Faranak Safa is a former employee, and who was previously employed as a store manager.

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Removing Party Need Not Confess Liability To Show That The Controversy Exceeds CAFA’s Thresholds

Posted in Case Summaries

Reno Cova v. Charter Communications, 2016 WL 4368100 (E.D. Mo. Aug. 16, 2016)

The District Court denied plaintiffs’ motion to remand, finding that a defendant is not required to admit the allegations in plaintiffs’ complaint, and thus deprive itself of potential defenses, to avail itself of a federal forum under CAFA.

The plaintiffs, subscribers of defendant’s services, brought a putative class action in the Circuit Court of St. Louis, Missouri, alleging that the defendant’s advertisements and agreements with its subscribers of its internet, television and phone services were deceptive, fraudulent, misleading; violated their rights to privacy and of publicity; and constituted fraud or negligent inducement to purchase its products and services in violation of the Missouri Merchandising Practices Act (“MMPA”). Continue Reading