Conard v. Rothman Furniture Stores, Inc., Slip Copy, 2010 WL 1692973 (E.D. Mo. Apr 27, 2010) (No. 4:09CV2059 TIA).

A Magistrate Judge in Missouri ordered limited discovery for obtaining information whether at least two-thirds of the class resided in Missouri, and, thus deferred his ruling whether CAFA’s home-state controversy exception applied in this case.

Frank Conard, a Missouri resident, brought a class action against Rothman Furniture Stores, Inc., a citizen of Missouri, in a Missouri 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 $600.00 each and sought punitive damages, an aggregate claim in excess of $9 million.

Rothman removed the case to the federal court, invoking its diversity jurisdiction under CAFA.  In the notice of removal, Rothman stated that it operated five Missouri retail facilities and two Illinois retail facilities. 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 contended that under the home-state controversy exception, the Court must decline jurisdiction and remand the action to state court, or, in the alternative, allow limited discovery to ascertain the percentage of class members that were Missouri citizens.

The Court noted that when more than two-thirds of all plaintiffs are citizens of the state where the action is filed, and all primary defendants are citizens of the state where the action is filed, the home-state controversy exception under 28 U.S.C. § 1332(d)(4)(B) could be applied. The Court, however, found that the current record did not provide sufficient information to determine whether, at the time Conard filed his cause of action, it was likely that at least two-thirds of the class resided in Missouri or even whether more than one-third of the class resided in Missouri.  Accordingly, the Court granted Conard’s alternative request to conduct limited discovery for the purpose of obtaining such information.