An Illinois federal district court recently credited sampling data as evidence sufficient to establish the citizenship of putative class members for purposes of invoking the local controversy exception to CAFA jurisdiction.

Plaintiffs filed a putative class action lawsuit in Illinois state court alleging that their property is being contaminated by silt particles released from defendants’ steel mill facility in Granite City, Illinois. They asserted common law claims for temporary nuisance, trespass, and negligence. After defendants removed to federal court asserting CAFA jurisdiction, plaintiffs moved to remand, arguing that CAFA’s “local controversy exception” applied.

The court noted that the purpose of the local controversy exception is to balance competing interests in making a federal forum available to genuinely national litigation, and allowing state courts to retain cases when the controversy is strongly linked to the state in which the case was filed. It applies, and requires a district court to decline to exercise CAFA jurisdiction, when:

(1) Greater than two-thirds of the members of the putative class are citizens of the State in which the action was originally filed;

(2) At least one defendant is a citizen of the State in which the action was originally filed from whom significant relief is sought by members of the class and whose alleged conduct forms a significant basis for the class claims; and

(3) Principal injuries resulting from the alleged unlawful conduct or any related conduct were incurred in the State in which the action was originally filed.

In this case, only the first element was in dispute, that is, whether two-thirds of the putative class members were Illinois citizens. Citizenship means domicile—where a person resides and intends to remain. It was plaintiffs’ burden to establish the applicability of the exception by a preponderance of the evidence.

In considering plaintiffs’ evidence, the court cited Seventh Circuit precedent rejecting the least expensive and least reliable method for establishing citizenship—simply analyzing phone numbers and mailing addresses of the putative class members. The Seventh Circuit, however, also has held that it is not necessary to use the most expensive and reliable method—surveying each putative class member to determine citizenship. Rather, there are methods for establishing class member citizenship between these two extremes that the Seventh Circuit has endorsed.

One method is to simply tailor the class definition to include citizens of only the state in which the case is filed. Another is to rely on class member affidavits or survey responses and to apply statistical principles to reach a conclusion as to the likelihood that a given state’s citizens comprise at least two-thirds of the entire class, with the assistance of a statistician if the results do not provide a clear answer. Under this approach, according to the Seventh Circuit, any degree of certainty greater than 50 percent would permit a court to conclude that plaintiffs had met their burden of establishing that the two-thirds citizenship element is satisfied by a preponderance of evidence.

In this case, plaintiffs limited the proposed class definition to current or recent residents of Illinois. In addition, they obtained 181 putative class member declarations attesting that the declarants currently reside and intend to remain in Illinois. Finally, plaintiffs provided multiple declarations of an expert statistician who, after studying the class area and surveying a random sample of class members, concluded with 95 percent certainty that more than two-thirds of the class members reside in Illinois and intend to remain there.

Over defendants’ objections that the class member declarations represented only a tiny and potentially non-representative portion of the putative class members, and that the expert statistician’s survey methodology was faulty, the district court concluded that plaintiffs offered sufficient evidence to establish that at least two-thirds of the putative class members were Illinois residents, and met their burden with respect to the local controversy exception.  Accordingly, the court granted plaintiffs’ motion to remand the case back to Illinois state court.

Keltner v. Suncoke Energy, Inc., No. 3:14-cv-01374-DRH-PMF (S. D. Ill. May 26, 2015).