Duruaku v. BB & T Bank, 05-5285, 2006 WL 1805887 (D. N.J. June 29, 2006).

In this action originally filed in state court, twenty-six investors (rumor has it that one of the plaintiffs is named George Costanza, pronounced "Ca-stanz-a" or "Can’t-stand-ya") sued BB&T Bank claiming that the bank’s "Signature Guarantee" notarizing a document convinced them to purchase securities from a third party.  The plaintiffs claimed to have interpreted the bank’s "Signature Guarantee" as proving that the third party actually owned the securities; rather than proving the third party actually signed the documents. Needless to say, and here is the punch line you were waiting for, there were no securities. 

Before the court was a motion to dismiss filed by one of the defendants.  However, Judge Hayden, on her own motion, decided to address whether CAFA jurisdiction existed. Noting that the Bank’s removal papers consisted of nothing more than naked allegations, the Court concluded that CAFA jurisdiction was missing as there were only twenty-six plaintiffs and $3.8 million dollars in controversy.  BB&T was told to clothe those claims by producing evidence of more than 100 plaintiffs and more than $5 million in controversy; otherwise the matter would be remanded.  We may see this case again once BB&T dresses up its allegations in the notice of removal. 

(Important Editors’ Note:  The Court held that the removing party had the burden establishing jurisidiction.  We believe, however, the purposes and legislative history of CAFA, correctly interpreted, combine to create a presumption in favor of finding that federal jurisdiction exists in interstate class actions under the Minimal Diversity standard, and that the burden of proof is on the party opposing federal jurisdiction, despite the contrary decisions of some federal courts which have addressed the burden of proof question.  For a full discussion of the clear mandates of section 2 of CAFA and the burden of proof, see the law review article scheduled for publication in the Spring 2006 edition of the Mississippi College Law Review entitled “CAFA’s New ‘Minimal Diversity’ Standard For Interstate Class Actions Creates A Presumption That Jurisdiction Exists, With The Burden Of Proof Assigned To The Party Opposing Jurisdiction” by Anthony Rollo, Hunter Twiford, and John Rouse.  As an added bonus for you, our loyal readers, the entire article is now available to our loyal CAFA Law Blog readers, pre-publication, here.  Also, see the CAFA Law Blog discussion of this issue posted on May 5, 2005.)

(More Important Editor’s Note: For those of you hoping for an illustration to accompany this post – you’ve got a lot of growing up to do.)