The United States District Court for the Western District of Louisiana, Magistrate Judge Hayes, issued a ruling on February 27, 2006, denying remand in a case involving the Class Action Fairness Act of 2005 (“CAFA”). The case is Robinson v. Cheetah Transportation, 2006 WL 468820 (W.D. La. 2/27/06). As I am still somewhat unfamiliar with CAFA, I will examine its application here in a bit more detail than I might otherwise employ with, say, “meat and potatoes” issues like the potestative condition, the doctrine of renvoi, or stipulations pour autrui.

Cautionary note: the district court judge will review the magistrate’s ruling, if objected to, and an appeal could follow. The decision is far from final.

You should also be forewarned that, according to acronymfinder, there are thirty-two (32) different applications for the acronym “CAFA,” including the “Canadian Association of Freediving and Apnea.” But I digress.

On October 7, 2004, a tractor-trailer struck the Columbia bridge on the Ouachita River in Caldwell Parish. The bridge was closed (and I think it’s still closed). Plaintiff brought a class action on November 28, 2005, on behalf of “all persons and businesses that resided or worked in Caldwell Parish on October 7, 2004, and were affected by the closure of the Columbia bridge.” (Here’s a somewhat pensive related news blurb.) Among other consequences of the accident, the Louisiana Art and Folk Festival was cancelled.

Defendants removed the case pursuant to CAFA.

CAFA created the concept of “balanced diversity” in class actions, vesting federal courts with subject matter jurisdiction, notwithstanding some common citizenship between plaintiffs and defendants, so long as at least one “member of a class of plaintiffs is a citizen of a State different from any defendant.” 28 U.S.C. 1332(d)(2)(A).

Two other requirements are necessary to allow “balanced diversity:” (a) the putative class must consist of 100 or more members (28 U.S.C. 1332(d)(5)(B)); and (b) the matter in controversy, as among the putative class, must exceed $5,000,000 (28 U.S.C. 1332(d)).

No one disputed that the statutory elements for balanced diversity were present in Robinson.

There are two exceptions to otherwise-proper balanced diversity jurisdiction under CAFA – the “Home State” exception and the “Local Controversy” exception.

Under the “Home State” exception, if a defendant is sued in its home state and two-thirds or more of the class members are from the defendants’ home state, federal jurisdiction does not lie. That exception did not apply in Robinson.

Plaintiff Robinson focused her argument on the “Local Controversy” exception. This exception to jurisdiction requires a showing of four factors:
a) more than 2/3 of the class are citizens of the forum state;
b) the conduct of at least one in-state defendant forms “a significant basis of the asserted claims,” and the members of the class seek significant relief from that defendant;
c) the principal injuries were incurred in the forum state; and
d) no other class action suit asserting the “same or similar factual allegations” has been filed within three years of the filing of this lawsuit.

The court zeroed in on factor (b). The only Louisiana defendant was the truck driver. Magistrate Hayes examined the legislative history and determined that the following inquiries would determine whether plaintiffs were seeking “significant relief” from the individual driver:
a) how many members of the class were allegedly harmed by his actions;
b) comparison of the relief sought between all defendants; and
c) the defendant’s ability to pay a judgment.

The court concluded that Mr. Gaston was “small change,” and that “plaintiffs will seek most of that relief [$5,000,000] from those who are capable of paying it,” the out-of-state defendants, all national companies.