Keltner v. Krystle Towers, LLC,  No. 2:05-CV-1126, 2006 WL 1663547 (D. Nev. June 7, 2006).

Defendants in this Nevada litigation pulled a line of lemons from U.S. District Judge Brian Sandoval, who shipped this case back to Heartbreak Hotel (state court), saying that the action fit the local controversy exception to the Class Action Fairness Act.  The defendants were all Shook Up by the decision.

Apparently, the defendants did not Love Me Tender.  In facts, things got a little rowdy. Calling the complaint a “duplicative sham pleading,” the defendants told the court that the plaintiffs were part of the same crowd involved in two other class actions removed to federal court, and that this case should be consolidated with those suits.

Unfazed, the plaintiffs said they themselves lacked class, legally speaking. Without 100 of them altogether, plaintiffs said they did not fit CAFA’s definition of a class action under 28 U.S.C. §1332(d)(5)(B).

The defendants’ consolidation argument was like a Hound Dog that didn’t hunt.  Judge Sandoval pointed out that his colleague, U.S. District Judge James C. Mahan, declined to exercise jurisdiction under the local controversy exception to CAFA, 28 U.S.C. § 1332 (d)(3), in the two other class actions. The Court pointed out that since the other two class actions had been remanded, the defendants’ argument that this case should be in federal court and consolidated with the other two class actions just did not make sense now that the two other class actions were back in state court. 

The plaintiffs asserted that even if there were more than 100 class members, more than 1/3 of them were from Nevada, along with a significant defendant, giving the Court the option to send the case back. Sandoval wasn’t positive he had a true class action in front of him, but decided to take the same route as Judge Mahan, tapping into his discretionary authority to decline to exercise federal jurisdiction.  Elvis left the federal district court in Nevada and returned to state court.