Kitazato v. Black Diamond Hospitality Investments, LLC, Slip Copy, 2009 WL 3824851 (D.Hawai’i, Nov 13, 2009) (NO. CV.09-00271 DAE-LEK).
The United States District Court of Hawaii agreed with the magistrate judge’s recommendation that the defendants offered no evidence that the plaintiffs outnumbered the requisite 100 member CAFA requirement. The District Court also agreed with the recommendation that as the plaintiffs’ complaint did not seek any monetary relief, any exercise of jurisdiction under CAFA would be inappropriate. (Editors’ Note: See the CAFA Law Blog analysis of the Magistrate Judge’s recommendation in Kitazato posted on May 20, 2010).
The Society to Protect Diamond Hawaii (“Plaintiff Society”), and its members brought an action in the state court alleging that the defendants violated Hawaii Revised Statutes Chapter 414D (Hawaii Non-Profit Corporations Act).
The defendants removed the action to the United States District Court of Hawaii contending that the action was a mass action and that because the society had over 490 Resort owners, the plaintiffs met the numerosity requirement.
The magistrate judge noted that the mass action involves monetary relief claims of 100 or more persons proposed to be tried jointly. He recommended that the removing defendants had not satisfied the requirement because this action neither involved 100 or more people nor did the complaint sought any monetary relief. The Removing defendants filed their objections to the magistrate judge’s recommendation.
The District Court noted that the magistrate judge’s finding that the mass actions, unlike class actions, do not allow for the representation of parties not before the court based on Tanoh v. Dow Chemical Co., 561 F.3d 945, 952 (9th Cir. 2009).
The District Court noted that ordinarily, a plaintiff cannot assert the rights of third persons in a representational capacity. Here, however, the Plaintiff Society is an association with an interest in this litigation only because of its comprising members, and it sues on behalf of its members. The Society was acting for its members only as a proxy as evidenced by the fact that its membership is comprised of those tenant-in-common who request that the Society vote on their behalf.
The District Court found that whether or not the Society members are counted, the Removing Defendants could not show that there were 100 persons for CAFA numerosity purposes. The District Court concluded that the evidence before the Court fell well short of the showing necessary for the numerosity requirement under CAFA and, therefore, it lacked jurisdiction on this ground alone.
The District Court noted that the Magistrate Judge found that CAFA’s plain language mandated that the plaintiffs’ claims be for monetary relief. The defendants contended that this Court may consider facts beyond the face of the complaint in order to determine the value of the object of the plaintiffs’ case, including consideration of a purported settlement letter allegedly from the plaintiffs that was submitted as evidence by the Removing Defendants.
The District Court rejected this argument finding that under CAFA, only actions qualifying as a mass action may be deemed a class action and be analyzed to determine whether the action meets the additional requirements including valuation of the plaintiffs’ claim. Because the complaint did not seek any monetary relief, the District Court concluded that the removal as a mass action under the CAFA was inappropriate.
The District Court however, reversed the magistrate judge’s award of attorney fees to the plaintiffs.