Smith v. Honeywell International, Inc., 2013 WL 2181277 (D.N.J. May 20, 2013).
The plaintiffs sued defendants, PPG Industries, Inc. (“PPG”) and Honeywell International Inc. (“Honeywell”), alleging that the chromium ore processing residue (“COPR”) used by the defendants to fill in residential and commercial areas in Jersey City exposed the class members to hazardous materials which contaminated them and the surrounding properties. The plaintiffs’ proposed class consisted of a medical monitoring class and a property value diminution class. The plaintiffs claimed that more than two-thirds of the members of the proposed classes were New Jersey citizens. PPG is a Pennsylvania corporation with its principal place of business in Pennsylvania, and Honeywell is a Delaware corporation with its principal place of business located in New Jersey.
Pursuant to CAFA, PPG removed the action from the Superior Court of New Jersey, Hudson County to the District Court. Although the plaintiffs did not move for remand, the Magistrate Judge expressed concern that the Court may not have jurisdiction under 28 U.S.C. § 1332(d)(4)(A)(i)(II). The Magistrate Judge noted that the threshold requirements of CAFA jurisdiction under 28 U.S.C. § 1332(d)(2)(A) were met in this case. The Magistrate Judge, however, observed that CAFA underlines two mandatory exceptions, specifically the local controversy exception and the home state exception, which restrict a district court’s ability to exercise jurisdiction.
First, under the local controversy exception of 28 U.S.C. § 1332(d)(4)(A), a district court should decline to exercise its jurisdiction over a class action in which: (I) greater than two-thirds of the members of all proposed plaintiff classes in the aggregate are citizens of the State in which the action was originally filed; (II) at least one defendant is a defendant– (aa) from whom significant relief is sought by members of the plaintiff class; (bb) whose alleged conduct forms a significant basis for the claims asserted by the proposed plaintiff class; and (cc) who is a citizen of the State in which the action was originally filed; and (III) principal injuries resulting from the alleged conduct or any related conduct of each defendant were incurred in the State in which the action was originally filed; and (ii) during the three-year period preceding the filing of that class action, no other class action has been filed asserting the same or similar factual allegations against any of the defendants on behalf of the same persons.
The plaintiffs alleged that more than two-thirds of the members of the proposed classes were citizens of the State of New Jersey. Moreover, Honeywell, a defendant from whom significant relief was sought, likewise is a citizen of New Jersey. Additionally, the principle injuries were incurred in the state in which the action was originally filed, and the pleadings did not contain any reference to another class action asserting the same or similar allegations involving these parties.
Because the requirements of 28 U.S.C. § 1332(d)(4)(A) are conjunctive, the defendants focused on the § 1332(A)(i)(I) requirement that over a two-thirds aggregate of both of the proposed medical monitoring and property damage classes be New Jersey citizens. The plaintiffs did not defend their allegation that more than two-thirds of the members of the proposed classes were citizens of the State of New Jersey. The defendants argued that the plaintiffs could not argue credibly that two-thirds of the tens of thousands of persons who had ever lived, worked, or gone to school for six months within the range of the many New Jersey COPR sites over a 115-year period or who currently own any property in the class, were New Jersey citizens.
Because of the absence of facts to support the two-thirds allegations in the pleadings, the Magistrate Judge concluded that the first element of the local controversy exception was inapplicable. Thus, it was unnecessary to address the remaining elements of the local controversy exception.
As for the home state exception, under 28 U.S.C. § 1332(d)(4)(B), a district court must decline to exercise jurisdiction two-thirds or more of the members of all proposed plaintiff classes in the aggregate, and the primary defendants, are citizens of the State in which the action was originally filed.
The Magistrate Judge stated that the two-thirds requirement for the home state exception is similar to that under the local controversy exception. Because the plaintiffs did not currently have facts to support the two-thirds requirement, the Magistrate Judge opined that it was not necessary to address the other elements of the home state exception.
The Magistrate Judge, therefore, recommended that CAFA jurisdiction existed, and the District Court adopted the Magistrate Judge’s report and recommendation.