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

Class Definition Can Be The Determinative Factor in Deciding CAFA Diversity Jurisdiction

Posted in Case Summaries

Kates v. Chad Franklin National Auto Sales North LLC, 2008 WL 3065009, Case No. 08-0384-CV-W-FJG (W.D. Missouri July 30, 2008).

In Kates, the plaintiff filed suit in Missouri state court alleging damages resulting from his purchase of a Suzuki Grand Vitara from a dealership in Kansas City, Kansas, and operated by the defendants. The plaintiff alleged that he purchased the vehicle under a promotional plan offered by the dealership and that misrepresentations were made regarding the plan. Among other claims, the plaintiff sought relief under the Missouri Merchandising Practices Act (MMPA) and the federal Truth in Lending Act (TILA). 

The plaintiff sought to represent a putative class defined as “[a]ll natural persons who…purchased cars from Defendants…and enrolled in the Promotional Plan….” Notably, the plaintiff did not limit his class definition to Missouri residents.

The defendants removed the case to federal court on the basis of federal question jurisdiction because of the TILA claim and CAFA diversity jurisdiction. In response, the plaintiff moved to dismiss his own TILA claim and also moved to remand, arguing that without the TILA claim, there was no basis for federal question jurisdiction. The plaintiff argued that dismissal of the TILA claim was warranted because “he concluded” that the relief available under TILA was duplicative of the relief that could be awarded under the MMPA.

The United States District Court for the Western District of Missouri denied both motions. With regard to the plaintiff’s Motion to Dismiss, the court held that the plaintiff was not permitted to voluntarily dismiss the TILA claim solely to seek a more favorable forum. The court also found that dismissal of the TILA claim could be detrimental to the putative class since the class definition was not limited to Missouri residents and therefore included persons who might not be covered under the MMPA. 

With regard to the Motion to Remand, the court held that federal question jurisdiction existed due to the TILA claim. The court also held that even if the plaintiff would have been permitted to dismiss the TILA claim, jurisdiction was present under CAFA because at least one member of the putative class was a citizen of a state different from any defendant and the amount in controversy exceeded five million dollars.