Sanchez v. Ameriflight, LLC, 2018 WL 654170 (9th Cir. Feb. 1, 2018).
Here, the Ninth Circuit found that where parties were not diverse at the onset of the action, a post-filing change in citizenship cannot cure the original defect in diversity jurisdiction.
David Sanchez (“Plaintiff”), a California resident and former Ameriflight, LLC (“Ameriflight”) cargo pilot, brought a putative class action in the Superior Court of the State of California alleging that Ameriflight improperly paid wages in violation of the California Labor Code and the California Business and Professions Code. Ameriflight is an interstate air cargo carrier with operations in more than 10 states, organized under Nevada law, with its headquarters in Texas. However, at the time Plaintiff filed suit, Ameriflight was headquartered in California.Ameriflight removed the action to the United States District Court for the Southern District of California (“District Court”) alleging that minimal diversity was satisfied under the Class Action Fairness Act (“CAFA”). Plaintiff responded with a motion to remand, which the District Court granted, finding that as of the time of filing, the parties were not diverse. Ameriflight was granted permission to appeal.
In its appeal, Ameriflight argued that as of the date of removal, minimal diversity was satisfied under CAFA. The Ninth Circuit, however, found that where parties are not diverse at the time of filing, a post-filing change in citizenship cannot cure the original defect in diversity jurisdiction. The Ninth Circuit opined that because CAFA is an extension of traditional diversity jurisdiction, it would apply the same rule in this case. The Ninth Circuit found that Ameriflight did not dispute that it wasn’t diverse from Plaintiff when the complaint was filed. Therefore, the Ninth Circuit ruled that Ameriflight’s post-filing change in citizenship did not render the parties minimally diverse under CAFA.
Ameriflight argued in the alternative that minimal diversity had been met because some members of the putative class included non-California citizens. However, the Ninth Circuit found that Ameriflight failed to meet its burden of establishing minimal diversity with at least one putative class member. The Ninth Circuit noted that none of the declarations that Ameriflight relied upon identified any specific putative class member that was diverse from it as of the date the suit was commenced.
Finally, the Ninth Circuit found that even if Ameriflight could satisfy the minimum diversity requirement, the amount in controversy requirement remained unmet. The Ninth Circuit noted that Ameriflight’s reliance on an off-hand remark by counsel of estimated damages was insufficient to establish the amount in controversy.
Accordingly, the Ninth Circuit affirmed the District Court’s order.
In the dissent, Judge Friedman opined that the District Court erred in rejecting as untimely Ameriflight’s argument that minimal diversity existed with the putative class. The dissent further stated that the District Court cited only one of the three declarations proffered by Ameriflight and failed to discuss the other declarations, which suggested that a significant percentage of putative class members were diverse from Ameriflight.