Sovanarra Nop v. American Water Resources, Inc., 2016 WL 4890412 (D.N.J. Sept. 14, 2016).

A district court in New Jersey retained jurisdiction over an action and rejected the plaintiff’s argument to consider the current year’s voter list (not the year in which the action was filed) for purposes of establishing citizenship.

The plaintiff, Sovanarra Nop, brought a putative class action in the Superior Court of New Jersey alleging several New Jersey state law violations for a contract breach by the defendants. The plaintiff alleged that she purchased a contract from the defendants for protection against unexpected repair costs to her residential property’s water and sewage lines, but the defendants refused to repair her broken sewer line, which ultimately rendered her property’s bathrooms unusable.

The defendants removed the action to the federal court on the basis that there was minimal diversity pursuant to CAFA. Specifically, the defendants asserted that the class included numerous customers who were domiciled in other states but received contract on vacation properties, and others who received the contracts at their domiciles in New Jersey but had since established domiciles in other states.

The plaintiff moved to remand, basing her argument on home state and the local controversy exceptions to CAFA. Because the home state exception requires the plaintiff to show that at least one-third of the class members were in New Jersey, she asked the District Court to permit her to conduct limited jurisdictional discovery. Post discovery, the plaintiff renewed her motion to remand.

The plaintiff argued that because the defendants’ interrogatory answers revealed that 36.7% of its New Jersey property customer list that had a service address or current and/or last known mailing address corresponding with a voter name and voter address on a current New Jersey voter registry, at least one-third of the putative class were citizens of the state of New Jersey.

The District Court observed that the Third Circuit had not defined an individual’s state citizenship for CAFA purposes, but other circuits and district courts provided guidance. For example, in Dicuio v. Brother Intern. Corp., 2011 WL 5557528 (D. N.J. Nov. 15, 2011), the court held that it takes more than proof of residency to infer citizenship of that state because residency does not equate with domicile or citizenship.

Furthermore, the Third Circuit in McCann v. George W. Newman Irrevocable Tr., 458 F. 3d 281 (3d. Cir. 2006), held that citizenship was synonymous with domicile, and in Krasnov v. Dinan, 465 F. 2d 1298 (3d. Cir. 1972), held that an individual’s domicile is proven with residency coupled with a finding of intent to remain indefinitely. The Third Circuit emphasized that both elements must be satisfied to prove an individual’s domicile, which, in turn, demonstrates the individual’s state citizenship.

The plaintiff presented voter registration data from the putative class claiming that 36.7% of the putative class had mailing or service address that corresponded with a voter name and address in a current New Jersey voter registry. The District Court observed that this data was, however, from 2016, not 2015 when the action was filed, which ran contrary to the well settled principle that federal diversity jurisdiction is generally determined based on the circumstances prevailing at the time the suit was filed. Moreover, the District Court opined that the members of the putative class could have left New Jersey and become domiciled elsewhere during that same time-period.

The District Court observed that with the minimum threshold for the court to use its discretion to remand being one-third (33%) of the putative class, there was a possibility that the number of actual putative class members registered to vote in New Jersey would be below that threshold if the data was obtained from the proper time-period.

Accordingly, the District Court remarked that the plaintiff was left with the fact that 2.3% of the defendants’ customers have a current or last known mailing address outside of New Jersey as evidence that, at the least, one-third of the individuals in the putative class are New Jersey citizens. While this revealed more about the likely citizenship of the putative class members, this figure alone was not enough to establish the citizenship of the putative class, the District Court found.

In addition, the District Court observed that In re Sprint Nextel Corp., 593 F.3d 669, 674 (7th Cir. 2010), the Seventh Circuit declined to determine a putative class’s state citizenship based on mailing and billing addresses. (Editors’ Note:  See the CAFA Law Blog analysis of In Re Sprint Nextel posted on March 28, 2010). The court reasoned that, although it seems reasonable to conclude that an individual’s mailing address or residence can signify both residency and an intent to stay in that state, such a conclusion would be mere guesswork based on its perception of what seems logical.

The District Court, therefore, found that the plaintiff failed to meet her burden of proof on the home state exception. Because the plaintiff failed to argue on the local controversy exception, the District Court concluded that CAFA applied to this action, and denied her motion to remand.

-Melissa M. Grand