Evidence = Good; Half Insect/Half Man = Bad

Summerhill v. Terminix, No. 4:08-cv-00659, 2008 WL 4809448, (E.D.Ark. October 30, 2008)

Having problems stopping people from trying to go from one place to another instantly? Your friends keep turning into half man, half insect creatures? No? Of course not, stopping plaintiffs from removing their case using the exceptions to the CAFA grant of federal jurisdiction is easy as fly.

In this case, Judge Goldblum held that while remand from federal court back to state court under the CAFA jurisdiction exceptions is technically possible, plaintiffs claiming these exceptions are applicable bear the burden to demonstrate that their case meets the requirements of these exceptions.

Of course, here, the plaintiffs did not so much provide evidence to support their claims as they simply asserted that the exceptions should apply because, well, they just should. Forgetting to include something like evidence in your pleadings is the type of mistake anyone could make.

Judge Goldblum was sympathetic to this mistake, shaking his mandibles sadly at the plaintiffs, and reminisced about a similar mistake he had made trying to instantly go from one place to another. But, despite this camaraderie, evidence is in fact required to invoke the exceptions to CAFA’s grant of federal jurisdiction.

The plaintiffs first tried to invoke the “Local Controversy” exception, codified at §1332(d)(4)(A), which essentially attempts to preclude federal jurisdiction when the class action claim is local and there are not any similar or identical class actions filed against any of the defendants or on behalf of the plaintiffs in the three years before filing.

The first problem the plaintiffs ran into was that the defendants provided examples of several other similar class actions filed recently against them.

The second problem the plaintiffs ran into was that the fact that the court held that just because all of the plaintiffs owned property in Arkansas, that does not prove that the requisite two thirds of the class were state residents. Rather, the plaintiffs must demonstrate that the persons who contracted with Terminix remained Arkansas citizens after the time of contracting.

Unfortunately for the plaintiffs, it was at this point that Judge Goldblum realized that they had all contracted with Terminix for insect removal. This disturbed Jeff Goldblum highly, causing him to pound his gavels loudly and fly around the courtroom, buzzing with anger, for several minutes.

The third problem the plaintiffs ran into was that none of the defendants from whom they sought significant relief were Arkansas citizens. Terminix, Inc. was the only Arkansas citizen but had sold all of its pest control contracts to Terminix International, who was not an Arkansas citizen, over nine years earlier. Consequently, the plaintiffs were unable to show that they would be able to recover significant relief from Terminix, Inc. because all claims against them were likely to be time barred.

The plaintiffs also tried to invoke the “Home-State Controversy Exception,” codified at §1332(d)(4)(b). The problem with this is that it also requires that two thirds of the proposed plaintiff class be citizens of the state in which the action was originally filed. Here, the court has already outlined why this requirement was not satisfied. Judge Goldblum issued a particularly strong caution against repeating failed experiments without significantly modifying your strategy. Here, he advised they include evidence.

But the plaintiffs also did not satisfy this requirement because they did not prove that the primary defendants were also citizens of the state. Here, none of the named defendants other than Terminix, Inc. were from Arkansas so the exception would have failed even if the class was at least two thirds Arkansas citizens.

In summary, the plaintiffs have the burden to demonstrate that the requirements of the jurisdiction exceptions in CAFA have been satisfied through evidence. Defense attorneys should aggressively push plaintiffs to satisfy each requirement in order to prevent instant teleportation to state court. Judge Goldblum cautions plaintiffs from engaging in repeated attempts to instantly remove without first providing evidence, and that repeated attempts could have negative transformational effects on the success of their case.

By: Robert Savoie