In this case, the United States District Court, for the Western District of Missouri, denied the plaintiff’s motion to remand finding that the CAFA’s home state controversy is not applicable when the plaintiff charged the foreign corporation as directly liable for the injuries. (Editors’ Note: See the CAFA Law Blog analysis of Gardner’s companion case, Helms v. Rockwool Industries, published on April 13, 2010.)
The plaintiff, Cyndee Gardner, filed her property damage class action petition in the Circuit Court of Clinton County, Missouri holding all of the defendants responsible for the injuries caused to the properties of the plaintiff and other class members because the defendants allegedly released lead, arsenic, and other chemicals. The defendants in the complaint included Rockwool Industries, Inc.; The Susquehanna Corporation (“Susquehanna”); Eteroutremer S.A. (“Eteroutremer”); SEEI Holdings, Inc. (“SEEI”); Midwest Hanger Co. ("Midwest Hanger"); and Loren Brookshier (collectively “the Rockwool Defendants”). The plaintiff amended her complaint to include Prime Tanning Corp. (“Missouri Prime”); Prime Tanning Co., Inc (“Prime Holding”); National Beef Leathers Co. LLC (“NBL”); and Rick Ream.
Missouri Prime was a wholly-owned subsidiary of Prime Holding, and throughout the amended petition, the plaintiff referred to both Missouri Prime and Prime Holding as one, and did not distinguish the liability sought from Prime Holding as vicarious. The plaintiff made four separate counts against all of the defendants and one count against Missouri Prime and Prime Holding without distinguishing each defendant’s alleged conduct that made it liable for the damages to the plaintiff’s and other class members’ properties. Among the defendants, Prime Holding was a Maine corporation, Suquehanna was a foreign corporation with its principal place of business in Colorado, Eteroutremer was a Belgian corporation, and SEEI was a Delaware corporation. The remaining defendants and at least two-thirds of all the plaintiffs were Missouri citizens.
After NBL filed the Notice of Removal, the plaintiff expressed her intention to dismiss the Rockwool defendants from the action. Although, the parties agreed that the basic elements of the CAFA jurisdiction in this case, the plaintiff argued that the home state controversy exception to CAFA jurisdiction was applicable. The plaintiff sought remand of this case contending that Prime Holding – a Maine citizen – was not a primary defendant as she allegedly imposed vicarious liability on it.
The District Court found that the amended petition clearly evidenced the plaintiff’s intention to impose a direct liability as opposed to a vicarious liability on Prime Holding. The District Court ruled that the when a complaint fails to distinguish among defendants as to theories of liability, as in this case, all defendants are considered primary defendants. Therefore, the District Court concluded that the threshold requirements of CAFA removal were satisfied and denied the plaintiff’s motion for remand.