Adams v. Macon County Greyhound Park, Inc., No. 3:11-CV-125-WKW [WO], 2011 WL 5294732 (M.D. Ala. Nov. 3, 2011).

What a sexy claim!! Cry baby gamblers of bingo in ‘Bama.  After being bright enough to lose their money playing electronic bingo (WTF? Electronic Bingo?? You can almost hear the mechanical voice holler B19, B19) they sue to get their lost money back asserting it is illegal to gamble.

Ultimately, the federal court refused to remand the case to the state court finding that the CAFA exceptions were inapplicable to the plaintiffs’ claims.

The plaintiffs in this case, 816 people who spent millions of dollars playing electronic bingo machines, brought a single claim under § 8-1-150 of the Alabama Code seeking to recover money that they lost playing electronic bingo machines at Victoryland and Quincy’s 777.

The defendant, Macon County Greyhound Park, Inc. (“MCGP”), offered pay-to-play electronic bingo machines to the public at its facility under the names of Victoryland and Quincy’s 777. MCGP was incorporated in Alabama.

The plaintiffs also asserted claims against various owners and operators of the bingo machines, all of whom were not from Alabama.

The plaintiffs alleged that they entered into wagers with the defendants, that those wages were founded upon illegal gambling contracts, and that the contracts were void pursuant to Ala. Code. § 8-1-150. The plaintiffs sought recovery of monies paid to the defendants for wagers on improper and illegal bingo games conducted by them at Victoryland.

The plaintiffs initially filed this lawsuit in the Circuit Court of Macon County, Alabama, but the defendants removed it to the federal court under the mass action, jurisdictional provision of CAFA.

The plaintiffs sought to remand presenting four grounds in support of their motion. First, they argued that the amount in controversy requirement for removal of a mass action under CAFA was not satisfied. Second, the plaintiffs contended that the lawsuit did not fit within the definition of a mass action found in 28 U.S.C. § 1332(d)(11)(B)(ii)(I), but rather fell within the statutory exception. Third, they asserted that even if this was a mass action, the local controversy exception 28 U.S.C. § 1332(d)(4)(A) & (B), mandated remand. Finally, the plaintiffs contended that, alternatively, the Court should, in its discretion, decline jurisdiction under 28 U.S.C. § 1332(d)(3).

As to the amount in controversy, the Court noted that in their notice of removal, the defendants asserted that the aggregate $5 million was satisfied from the face of the complaint. For its calculation, the defendants pointed to the fact that there were 816 named plaintiffs, and each of their claims individually exceeded $10,000 exclusive of interest and costs, which would amount to claims in excess of $8,160,000. The Court agreed, and ruled that the amount in controversy exceeded $5 million.

Next, the Court noted that CAFA defines a mass action as any civil action, in which monetary relief claims of 100 or more persons were proposed to be tried jointly on the ground that the plaintiffs’ claims involved common questions of law or fact. There are several exceptions to the mass action definition, and plaintiffs argued that this case fell within the exception set forth in § 1332(d)(11)(B)(ii)(I), which provides that a mass action does not include a civil action in which all of the claims arose from ‘an event or occurrence’ in the State in which the action was filed, and that allegedly resulted in injuries in that State or in States contiguous to that State.

As CAFA does not define the phrase ‘an event or occurrence’, the Court looked at the legislative history for its interpretation. The Court noted that the purpose of this exception was to allow cases involving environmental torts such as a chemical spill to remain in state court if both the event and injuries were truly local, even though there are some out of state defendants. The Court also noted that this exception would not apply to a product liability or insurance case.

The plaintiffs relied upon Carr v. Arvin Industries, No. 05-J-1283-J (N.D. Ala. July 20, 2005), where the district court remanded the case to the state court. In Carr, the employees of a manufacturing plant, who alleged that they were injured by a toxic chemical used at the plant in the manufacturing process of automotive mufflers, and that the failure of the employer to provide them protective clothing denied them a safe workplace. The Court noted that in remanding the case, the Carr court found that because the plaintiffs’ injuries occurred at one specific location in Alabama, the facts were more similar to an environmental tort such as chemical spill, as opposed to a product liability case, where the alleged injuries would be spread out over more than one state.

The Court observed that even if it was to conclude that the statutory language required amplification from the legislative history, the conclusion would be the same.  There was no tension between the statutory phrase – ‘an event or occurrence’ – and the legislative history.  Because this action did not involve injuries flowing from the adverse effects of a chemical spill or a discrete, catastrophic, environmental event, as contemplated in the Senate Report for inclusion in § 1332(d)(11)(B)(ii)(I). Accordingly, the Court ruled that the action was not excluded from the definition of a mass action.

Next, the Court concluded that the complaint made no distinction between MCGP and the electronic machine supplier defendants for the purposes of assessing liability or damages. Because no defendant was alleged to be exposed to any greater liability than another was, no defendant was alleged to have caused any greater injury than another; and no defendant was alleged to be any more culpable than another was. Accordingly, the Court ruled that the § 1132(d)(4)(B) exception was not applicable to this case.

Finally, the plaintiffs argued that this action should be remanded under a discretionary exception to CAFA jurisdiction. The Court noted that § 1332(d)(3) provides that a district court may in the interests of justice and looking at the totality of circumstances, decline to exercise jurisdiction over a class action in which greater than one-third but less than two-thirds of the members of all proposed plaintiff classes in the aggregate and the primary defendants were citizens of the State in which the action was originally filed. The Court observed that the statutory exception contained an express numerical limitation, i.e., it was limited to a mass action in which greater than one-third but less than two-thirds of the plaintiffs were citizens of the forum state. The Court noted that the statute contains no ‘if’, ‘or’, or ‘unless’ to this size restriction. Based on the statutory language, the Court concluded that this exception too did not support a remand.

Accordingly, the Court declined to remand this action to state court.