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

A Removing Defendant Under CAFA Is Not Required To Allege Facts In Its Notice Of Removal Showing The Inapplicability Of The Local Controversy Exception

Posted in Case Summaries, Wage and Hour

Henry Hernandez v. Sysco Corp., 2017 WL 358021 (N.D. Cal., Jan. 25, 2017)

In this wage and hour class action, while denying the plaintiff’s motion to remand, a District Court in California found that it was the plaintiff’s burden to show that the local controversy requirement applied, not the defendants’ burden to show that it did not, and that the defendants need not allege facts in the notice of removal showing the inapplicability of the local controversy exception.

The plaintiff brought a putative class action in Alameda County Superior Court alleging that the defendants, inter alia, failed to pay minimum wage and overtime compensation, and provide meal and rest periods in violation of the California Labor Code.

The defendants removed the case to federal court pursuant to CAFA. The plaintiff moved to remand the action to state court, which the District Court denied.  The defendants alleged that removal was proper under CAFA because the case had more than 100 putative class members, the amount in controversy exceeded $5,000,000, and the plaintiff was a citizen of California whereas the defendants were citizens of Delaware and Texas.

The plaintiff contended that remand was appropriate under the “local controversy” exception to CAFA removal jurisdiction. The District Court, however, found that the plaintiff had not met his burden of showing that the local controversy exception applied because he had not shown that during the three years preceding the filing of the instant action no other class action had been filed asserting the same or similar claims against the same defendants.  To the contrary, the plaintiff did not dispute the defendants’ proffered evidence that a similar class action complaint was filed in San Diego Superior Court.  The District Court thus found that the plaintiff had not shown that each required element of the local controversy exception was satisfied.

The plaintiff insisted that the District Court should nonetheless apply the local controversy exception and decline jurisdiction because the defendants did not identify the previous class action in its notice of removal. The District Court, however, opined that the plaintiff’s argument was premised on there being a strong presumption against removal jurisdiction.  The District Court found that “no antiremoval presumption attends cases invoking CAFA, which Congress enacted to facilitate adjudication of certain class actions in federal court.”  The District Court further found that the plaintiff’s argument ignored that it was the plaintiff’s burden to show that the local controversy requirement applied and not the defendants’ burden to show that it did not.  Additionally, the plaintiff did not cite, and the District Court was not aware of, any case which held that a defendant removing a case under CAFA must allege facts in the notice of removal that showed that the local controversy requirement did not apply.

The District Court therefore ruled that the plaintiff had not met his burden of establishing the local controversy exception to CAFA jurisdiction and accordingly, denied the plaintiff’s motion to remand.

-Melissa M. Grand