Northern District Of Georgia Rejects “Local Controversy” Exception To CAFA Jurisdiction

by Carlton Fields

In Anderson v. King America Finishing, Inc., No. 1:11-cv-2258-JEC, 2013 WL 1213267 (N.D. Ga. March 25, 2013), class action plaintiffs alleged that defendant released a toxic chemical into the Ogeechee River from its manufacturing plant in Dover, Georgia.  Plaintiffs alleged both damage to surrounding land and physical injuries to those who swam in the river.  The court rejected plaintiff’s attempt to remand based on the “local controversy” exception to CAFA jurisdiction.

The case was originally filed in Fulton County, but defendants later removed to federal court pursuant to CAFA. Plaintiffs agreed that that the case met the requirements for removal to federal court under CAFA, but they sought remand to state court under the “local controversy” exception to CAFA jurisdiction.  This exception provides for remand of a class action that “uniquely affects a particular locality to the exclusion of all others.” Id. at *1 (citations and quotations omitted).

Defendants agreed that plaintiffs met all but one of the requirements to establish a “local controversy” as defined by CAFA.  See 28 U.S.C. § 1332(d)(4)(A).  Specifically, the central issue was whether a greater than two-thirds of the class members were citizens of the state in which the action was originally filed.

The court analyzed the evidence presented by plaintiffs to meet their burden on this issue.  Specifically, plaintiffs sought to verify citizenship of individual and corporate class members by cross-referencing with tax records, voter registration records, individual interviews, and verifying addresses for the corporate plaintiffs with the Secretary of State.

The court recognized potential issues with using tax and voter registration records, but concluded  that these “might provide sufficient information to credibly adduce that two-thirds of the landowner class members are Georgia citizens.”  Id. at 3.  Moreover, as to the personal injury class plaintiffs, the court rejected defendant’s argument that each should be individually interviewed.  However, the court rejected plaintiff’s attempt to verify corporate citizenship through the address on file with the Secretary of State.  The court concluded that the Secretary of State merely lists a Georgia office address and does not shed any light on corporate citizenship (e.g., does not indicate that the corporation has its principal place of business in Georgia).

Ultimately, the court found that plaintiffs’ final calculations as to the number of Georgia citizens were inaccurate and that the total number of potential class plaintiffs was much larger than what plaintiffs suggested.  Thus, the number of Georgia citizens was not two-thirds of the overall class and the “local controversy” exception was not met.

Additionally, the court denied plaintiffs’ motion to amend the complaint to specify that the class included only Georgia citizens.  The court reasoned, in part, that jurisdiction is to be determined at the time of removal and plaintiffs would not be permitted to destroy jurisdiction by a post-removal amendment.


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Carlton Fields

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