Myers v. Jani-King of Philadelphia, Inc., Slip Copy, 2009 WL 2394362 (E.D. Pa., Aug 04, 2009)(No. CIV.A. 09-1738).
If you are the mob and you are desperately seeking Susan, then don’t be confused by Roberta. If you are the plaintiff and you are desperately seeking remand, then you better allege all CAFA exceptions in your remand motion.
In denying the motion to remand, the Pennsylvania District Court found that because greater than two-thirds of the plaintiffs were citizens of Pennsylvania, the plaintiffs should have asserted in their motion to remand CAFA’s “mandatory” home-state controversy and local controversy exceptions, and not “discretionary” home-state controversy exception. Although the plaintiffs invoked the mandatory exceptions as a ground for state-court jurisdiction in the complaint, they did not, in their motion; thus, the District Court held that they had abandoned it.
The plaintiffs, for themselves and on behalf of all persons who performed cleaning services for the defendants in Pennsylvania, brought a class action in state court asserting that the defendants, violated the Pennsylvania Minimum Wage Act and Wage Payment and Collection Law. The plaintiffs alleged that the defendants sold them and the class members rights to the defendants’ cleaning services franchise and that the franchise agreements that secured those rights were, in reality, illegal employment agreements.
The defendant, Jani-King of Philadelphia, Inc., is a Texas corporation with its principal place of business in Pennsylvania; Jani-King, Inc., and Jani-King International, Inc., are Texas corporations with principal places of business in Texas. The plaintiffs calculated that the group of potential class members from the first year of the class period consisted of about 185 individuals with addresses in Pennsylvania and about 61 with addresses outside of Pennsylvania.
The defendants removed the action to the federal court pursuant to CAFA, and the plaintiffs sought remand under 28 U.S.C. § 1332(d)(3)’s “discretionary” home-state controversy exception.
The District Court noted that according to the plaintiffs’ own calculations, roughly three quarters (75.2%) of the potential class members were likely to be citizens of Pennsylvania. Because CAFA only affords district courts discretion under § 1332(d)(3) over those actions where between one-third (33.3%) and two-thirds (66.7%) of the plaintiffs are citizens of the state in which the suit was originally filed, the Court found that it had no discretion to determine whether remand was appropriate under § 1332 (d)(3).
The Court stated that cases in which greater than two-thirds of the plaintiffs are citizens of the state in which the suit was originally filed potentially implicates CAFA’s “mandatory” home-state controversy and local controversy exceptions, §§ 1332(d)(4)(A), (B). Although, the plaintiffs invoked the mandatory exceptions as a ground for state-court jurisdiction in the complaint, they did not invoke the mandatory exceptions in their motion to remand. Thus, the Court concluded that by not invoking the issue in the instant motion, the plaintiffs had abandoned it.
The Court, however, considered CAFA’s mandatory home-state controversy and local controversy exceptions, and found that they were not available to the plaintiffs.
The Court stated that the local controversy exception did not apply to the plaintiffs’ case because two class actions asserting similar allegations against at least one of the defendants had been filed within three years of the plaintiffs’ filing their suit–De Giovanni v. Jani-King International, Inc., No. 07-10066 (D. Mass. 2007), and Moua v. Jam-King of Minnesota, Inc., No. 08-4942 (D. Minn. 2008).
The Court found that the mandatory home-state controversy exception, which requires that the “primary defendants” be citizens of the State in which the action was originally filed, also did not apply. The Court noted that in Moua, the court held that Jani-King International, Inc. was a primary defendant under the home-state controversy exception to CAFA. Here, the Court found that Jani-King, Inc., and Jani-King International, Inc., citizens of Texas, were both primary defendants because the complaint apportioned liability among the defendants equally without distinguishing one from another, and sought the same relief from the defendants as a group.