Coffey v. Freeport-McMoran Copper & Gold, Inc., 2009 WL 1138051 (W.D. Okla. Apr. 27, 2009).

“And the waving wheat can sure smell sweet when the wind comes right behind the rain.” You probably didn’t even recognize those are the lyrics from the musical Oklahoma, did you? I didn’t know them either. Thank you, Google.

Well, there’s nothing like a good ol’ musical to get anyone excited about CAFA, right? So naturally I thought I would use Oklahoma as the backdrop to give you the latest CAFA developments from that state.

In this case, the farmers plaintiffs filed suit in Oklahoma state court asserting several causes of action, based on the cowboys’ trespass to land defendants’ alleged contamination of their property through operation of a zinc smelter. The defendants removed the case to federal court under CAFA Calf-A, but the plaintiffs argued that their action should be remanded back to state court because it was a “truly local dispute,” which fell within the “local controversy” exception to Calf-A.

Drafters of Calf-A wrangled with the local controversy exception because they wanted it to be “a narrow exception that was carefully drafted to ensure that it [did] not become a jurisdiction loophole.” For the exception to be applicable, the plaintiffs needed to prove that the defendants were “significant defendants,” as set out in the second cattle prong of the local controversy exception. That is, they had to prove that they sought “significant relief from an in-state defendant whose conduct form[ed] a significant basis for their claims.” Sounds simple enough, right?

First, the defendants argued that they were not an in-state corporation because they were incorporated way back east in New York, had no principal place of business in the Sooner State, and had not conducted sufficient business there since 1999. The court, however, was not persuaded by the defendants’ bulls**t (This is a western themed post, after all.) because the corporation continued to conduct or oversee various environmental response activities that began in the 1990’s on the contaminated land, and those activities were sufficient to establish Oklahoma as the defendant’s principal place of business.

But the plaintiffs hadn’t won the Calf-A Remand Rodeo just yet. They still had to “show that they [sought] significant relief from the former smelter operator and that [the defendant’s] conduct form[ed] a significant basis for their claims.”

The defendants argued that the plaintiffs couldn’t seek significant relief from them because of their alleged lack of assets and inability to satisfy any judgment entered against them. According to them, “a class can only seek ‘significant relief’ under [Calf-A] from a defendant with ‘appreciable assets,’” such as black gold or Texas tea. Further, they wanted the court to construe the phrase “from whom significant relief is sought” as “from whom significant relief may actually be obtained.”

“Say it ain’t so,” said the court when it concluded that, based on the circumstances present in this case, the “defendant’s inability to satisfy a judgment . . . [was] not determinative.” According to the court, “the [Calf-A] exception refers to a defendant from whom significant relief is ‘sought,’ rather than a defendant from whom the relief ‘may be obtained’ or ‘can be collected’ or words of similar import.”

Thus, the plaintiffs successfully proved the requisite prongs of the local controversy exception, and the court concluded that it did not have subject matter jurisdiction to hear the case under Calf-A. Accordingly, the parties rode their horses off in the sunset back to the Oklahoma state court.

By:  Michael R. Rahmn