Conard v. Rothman Furniture Stores, Inc., No. 4:09CV2059 TIA, 2010 WL 2835565 (E.D. Mo. July 16, 2010).

Applying CAFA’s home-state exception, a District Court in Missouri granted the plaintiff’s second motion to remand after it determined through limited discovery that more than two-thirds of all plaintiffs are citizens of Missouri.

Frank Conard, a Missouri resident, filed a class action against Rothman Furniture Stores, Inc., a citizen of Missouri, in state court, alleging that Rothman failed to provide gas or grocery vouchers to its customers who purchased furniture in reliance of Rothman’s promise to provide redemption vouchers.  Conard asserted a purported class of 15,000 persons with claims of $600 each and sought punitive damages, an aggregate claim in excess of $9 million.

Naturally, Rothman removed the case to the federal court invoking the diversity jurisdiction under CAFA.  In the notice of removal, Rothman stated that it operated five Missouri retail facilities and two Illinois retail facilities and consequently many of Rothman’s customers were residents of states other than Missouri.  

In opposition, Conard argued that inasmuch as five out of Rothman’s seven retail locations were in Missouri, most likely more than two-thirds of the class members were Missouri citizens.  Thus, Conard filed his first motion to remand contending that under the home-state controversy exception, 28 U.S.C. §1332(d)(4)(B), the Court must decline jurisdiction, or, in the alternative, allow limited discovery to ascertain the percentage of class members that are Missouri citizens.

The Court stated that to demonstrate that the home-state controversy exception applied, Conard had to show that more than two-thirds of all plaintiffs were citizens of Missouri. Because Conard failed to establish this fact, the Court granted Conard’s alternative request to conduct limited discovery for the purpose of obtaining such information in order to ascertain the percentage of class members that were Missouri citizens.

Upon completion of discovery, Conard refiled the motion to remand.

In response, Rothman concurred that remand to the state court was proper inasmuch as federal jurisdiction under CAFA could not be satisfied.

Because the parties agreed after conducting limited discovery that Conard’s putative class could not meet the requirements for federal jurisdiction under CAFA, the Court found that Conard met his burden by providing sufficient information to determine at the time he filed this action, it was likely that at least two-thirds of the proposed class members were citizens of Missouri.  The Court further found that after completion of the limited discovery, Conard’s current class could not satisfy CAFA’s aggregate amount in controversy ($5 million) requirement.  Accordingly, the Court did not delve more into the application of the home-state exception. So, we didn’t either.