Bennett v. Board of Commissioners for East Jefferson Levee Dist., No. 07-3130, 07-3131, 2007 WL 2571942 (E.D. La. 2007).
If it keeps on rainin, levees goin to break,
If it keeps on rainin, levees goin to break,
When the levee breaks Ill have no place to stay.¹
We all knew that Robert Plant was a visionary, but little did we know that he was foreshadowing the application of the local controversy exception to federal jurisdiction under CAFA to a class action arising out of Hurricane Katrina. Lucky for the putative plaintiffs in Bennett v. Board of Commissioners for East Jefferson Levee District (Bennett), their claims did not relate to medical treatment during Hurricane. Also, lucky for these plaintiffs they did not live in Orleans Parish where there was a mass exodus following the hurricane. These plaintiffs merely lived in Jefferson Parish when the levees broke. Importantly, these plaintiffs not only lived in Jefferson Parish when the levees broke, but they stayed in Jefferson Parish after the storm and were there at the time they filed their lawsuit. Man, if only we all had luck like that.
Mean old levee taught me to weep and moan,
Lord, mean old levee taught me to weep and moan,
Got what it takes to make a mountain man leave his home,
Oh, well, oh, well, oh, well.
The putative members of this consolidated class action were all residents, business owners, and property owners residing or present on the day of the Hurricane (August 29, 2005) residing in an area in Jefferson Parish known as “Hoey’s Basin” (the area is specifically described in the pleadings by being bounded by three specific streets and the Mississippi River). Defendants included various local and state governmental entities as well as one foreign insurer, American Alternative Insurance Company.
The case the district court faced arose out of two consolidated cases filed in state court. The de la Houssaye plaintiffs filed suit on October 27, 2005 and the Bennett plaintiffs filed suit on August 28, 2006. Both cases involved the same claims and putative class members. Plaintiffs in both cases claimed that the defendants failed to secure and/or close the flood gate causing waters to flow from the 17th Street Canal through the drainage system and into their houses. Prior to consolidating the cases, the de la Houssaye plaintiffs added American Alternative Insurance as a defendant. After the cases were consolidated, the Sewage and Water Board of New Orleans (SWB) removed the consolidated cases to federal district court.
The first issue before the district court in Bennett was whether the removal to federal court had been timely filed. SWB argued that it timely removed the case because it was not added to the de la Houssaye case, in which the foreign insurer was a party, until the cases were consolidated. The plaintiffs attempted to rely on the holding in Hood v. Beacon Therapeutic, 1997 WL 323782 (N.D. Ill. June 9, 1997) which stands for the proposition that consolidation does not give grounds for removal because it is not a new claim. The Bennett court distinguished Hood by noting that SWB had no opportunity to remove the case until the cases were consolidated. In what ultimately proved to be an empty victory, the Court determined that Bennett had been timely removed.
The principle issue addressed by the district court in Bennett was whether the court should abstain from the exercise of subject matter jurisdiction under CAFA under the local controversy exception. In making the decision that the exception applied in this case, the Bennett Court relied upon and discussed in detail the 5th Circuit’s analysis in Preston I and Preston II regarding the evidence needed to meet the burden of proof required for the application of the exception.
As readers of the CAFA LAWBLOG will recall, the Preston cases involved claims made by plaintiffs who allegedly suffered injuries during Hurricane Katrina while being treated by the defendant healthcare providers. (Editors’ Note: See the CAFA Law Blog analysis of Preston I posted on June 5, 2007 and the CAFA Law Blog analysis of Preston II a/k/a Weems posted on June 7, 2007).
Dont it make you feel bad
When you’re tryin to find your way home,
You don’t know which way to go?
You wonder if this is the way the 5th Circuit felt when they were deciding whether remand was appropriate in Preston I and II, two cases with virtually identical facts. Virtually identical is not identical, however, and the 5th Circuit ruled remand was appropriate in Preston I, but not in Preston II. The 5th Circuit held in both Preston I and II that the burden of proof was on the party seeking remand to establish by a preponderance of the evidence that two thirds of the putative class members were domiciled in Louisiana at the time suit was filed. The key difference in the two cases relative to remand and the application of the local controversy exception was the evidence provided by the party seeking remand regarding the class members domicile at the time suit was filed. This determination was complicated by the diaspora following Hurricane Katrina.
The Preston I Court found the party seeking remand did meet its burden of proving that greater than two thirds of the putative class members were Louisiana residents at the time suit was filed. The burden of proof was met in Preston I by providing primary billing addresses in medical records, emergency contact information for the deceased patients, current addresses for some of the class members and eight affidavits stating the plaintiffs’ intent to return to New Orleans. A key fact in the 5th Circuit upholding remand in Preston I was that the case was filed two months after the storm, at time at which the putative class members would not have decided to locate elsewhere permanently.
The Court in Preston II found that the party seeking remand did not meet its burden of proof despite presenting much of the same evidence of residence as did the plaintiffs in Preston I. In Preston II, however, there was no evidence of the class members’ intent to return to Louisiana. Additionally, the Preston II case, was filed more than one year after the storm. Apparently the 5th Circuit felt that if the plaintiffs in Preston II were going to “Come Home to Louisiana”, they should have done it within a year.
Cryin wont help you, prayin wont do you no good,
Now, cryin wont help you, prayin wont do you no good,
When the levee breaks, mama, you got to move.
But according to the 5th Circuit, mama better get herself back to Louisiana before she files a class action. Or better yet, like the plaintiffs in Bennett, file her class action before leaving Louisiana. The fact that the plaintiffs in Bennett were not involved in a mass exodus like the plaintiffs in Preston I and II was a significant fact to the district court in Bennett.
The putative class in Bennett consisted specifically of those persons residing in the Hoey Basin area of Jefferson Parish at the time of the flood. Significantly, there was no mass exodus of Jefferson Parish as there was of Orleans Parish (where the Preston I and II plaintiffs haled from). Because there was no exodus of Jefferson Parish, the court in Bennett held that the case was distinguishable from Preston I and II where the mass exodus of the class members out the issue of residence at the time suit was filed at issue. The court in Bennett held that it was reasonable to infer that greater than two thirds of the class members in Bennett were Louisiana residents at the time suit was filed because there was no exodus of the parish after the storm. The district court remanded Bennett for trial in Louisiana state court.
Finally, the court addressed defendant SWB’s argument that the case could not be remanded because all the primary defendants were not from Louisiana. Perhaps the court was doing more than jammin’ to Led Zeppelin while making this analysis. The court determined that American Alliance, the foreign insurer, was not a “primary defendant.” The court recognized that “primary defendant” is not defined in CAFA. Clearly, the court continued, CAFA intended there to be a substantive difference between “primary defendants” and “significant defendants.” The court turned to Webster’s Dictionary for guidance. Webster defined “primary” as “first in importance” while significant is defined as merely “important.” In a moment of clarity that only John Bonham could appreciate, the court stated, “ These definitions appear particularly apt in the context of CAFA, meaning that a significant defendant is of less importance than a primary defendant. Additionally, a significant defendant is obviously one who is something more than insignificant which is defined as “having little or no importance” or “trivial.” The Bennett court found American Alliance was not a primary defendant because its maximum liability was its policy limits of $4,000,000, which was minor in light of the vast amount of damages suffered by the putative class.
Rock on Dudes.
¹ Wikipedia tells us that "When the Levee Breaks" is a blues song written and first recorded by husband and wife Kansas Joe McCoy and Memphis Minnie in 1929. The song is in reaction to the upheaval caused by the Great Mississippi Flood of 1927.