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

Absent Facts Regarding The Size Of The Entire Class, The Court Cannot Determine Whether Two-Thirds Of All Class Members Are In-State Citizens

Posted in Case Summaries

 

In Brinkley v Monterey Financial Services Inc., the Ninth Circuit vacated the district court’s remand order, and held that a plaintiff cannot remand an otherwise valid CAFA case to state court when only a portion of the class meets the two-thirds citizenship requirement. 

The plaintiff filed a putative class action in California state court alleging that the defendants recorded or monitored its telephone conversations with customers without providing proper notice.  The plaintiff asserted claims for invasion of privacy, unlawful recording of telephone calls, and violation of California’s Unfair Competition Law.

After the defendants removed the action to the federal court under CAFA, the plaintiff moved to remand, which the district court granted.  On appeal, the Ninth Circuit vacated the district court’s remand order.

The district court granted the plaintiff’s motion pursuant to CAFA’s home-state controversy exception finding that at least two-thirds of class members were California citizens.  During jurisdictional discovery, the court ordered the defendants to produce a list of putative California and Washington class members, and the plaintiff requested a list of putative class members.  The plaintiff hired statistician Dr. James Lackritz and relied on his analysis of the list produced by the defendants in her attempt to prove that two-thirds of all class members were California citizens.  Dr. Lackritz’s report contained no evidence of individuals who were physically located in, but were not residents of, California or Washington when they made or received a phone call with the defendants.

The Ninth Circuit opined that in order to determine whether two-thirds of class members were California citizens, it must first determine the size of the class as a whole.  The Ninth Circuit noted that the class included individuals who were physically located in, but were not residents of, California or Washington when they made or received a call with the defendants (the “located in” subgroup).

The Ninth Circuit found that the list addressed only those who were “residing in California and Washington” when they made or received a call with Monterey but did not address, or contain information about, the size of the “located in” subgroup.  The Ninth Circuit further found that the plaintiff never sought more information about the size of the class after she obtained the defendants’ list.  The Ninth Circuit thus found that even if the defendants had information about the “located in” subgroup, the plaintiff did not pursue the information during discovery nor submitted any evidence regarding the “located in” subgroup.  The Ninth Circuit opined that without knowing the size of the subgroup, the size of the entire class was unknown, and the district court could not determine whether two-thirds of all class members were California citizens.  The Ninth Circuit therefore held that the plaintiff had not met her burden to show that the home-state controversy exception applied.

Additionally, the Ninth Circuit noted that the defendants had informed the court and the plaintiff that the plaintiff’s class definition was problematic because it included the “located in” subgroup, and it could not identify who fell within that subgroup.  The Ninth Circuit thus found that despite the defendants alerting the plaintiff to the class definition issue, the plaintiff did not attempt to resolve it during discovery.

The plaintiff argued that her class definition problem was a red herring because the defendants failed to identify a single non-California or Washington citizen whose telephone conversation it recorded.  The Ninth Circuit, however, held that the burden was not on the defendants but was on the plaintiff, as the party seeking remand, to prove the applicability of a CAFA exception.  The Ninth Circuit thus ruled that the size of the entire class was unknown and the plaintiff had failed to prove that two-thirds of class members were California citizens because there was no evidence regarding the citizenship of class members who made or received a phone call from the defendants while located in, but not residing in, California or Washington.

Accordingly, the Ninth Circuit vacated the district court’s order remanding the action to the state court.