Friday, September 7, 2018
Stipulation on Class Members’ Addresses Didn’t Establish Citizenship
By a MetNews Staff Writer
A U.S. District Court judge improperly remanded a putative class action against a California Kentucky Fried Chicken franchisee to the Superior Court because a stipulation by the defendant as to two-thirds of the class members’ addresses was not enough to establish their California citizenship, the Ninth U.S. Circuit Court of Appeals held yesterday.
The opinion by Circuit Judge Richard R. Clifton reverses a remand order by U.S. District Judge George H. Wu of the Central District of California.
Named plaintiff Celena King initially filed the action, alleging violations of California wage-and-hour laws, in the Los Angeles Superior Court, but the franchisee, Great American Chicken Corp, Inc. (“GAC”) removed the case pursuant to the federal Class Action Fairness Act (“CAFA”).
CAFA allows removal of cases involving a class of more than 100 persons where one class member is a citizen of a different state from that of the defendant and the aggregate amount in controversy exceeds $5 million.
King did not dispute that the case was removable, but moved to remand the case under a CAFA provision allowing a bounce-back to state court where more than two-thirds of the class are citizens of the forum state. She sought jurisdictional discovery to support the motion, but GAC resisted her efforts.
Instead, the defendant proposed a stipulation that at least two-thirds of the class members’ last-known addresses were in California. King rejected this stipulation, but Wu ordered her to accept it and then ruled that it was sufficient to support her remand motion.
At oral argument in Pasadena on Aug. 10, Clifton said to Mark D. Kemple, attorney for the defendant:
“[Y]ou suggested to the court that was sufficient to meet the plaintiffs’ needs and the court accepted that proposition. But now you are arguing it’s not sufficient. I’m having trouble understanding why that doesn’t invite, at best, sending it back to the district court so plaintiffs can do the discovery that you insist is needed, even though you weren’t prepared to give that discovery over before.”
Kemple rejected the judge’s characterization of his client’s position.
“To be clear, your honor, we were emphatic and clear that it was not our position that that would be sufficient,” he countered.
Clifton ultimately credited Kemple’s position as to the stipulation’s sufficiency. He noted that there was no definitive record of the stipulation, and that it had been variously referred to as being either “at least two-thirds” or “at least 67 percent.”
The jurist wrote:
“On its face, a stipulation that spoke to ‘at least two-thirds’ of the class members would be insufficient, because ‘at least’ is not the same as ‘greater.’
“The alternative understanding of the stipulation, ‘at least 67 percent,’ would produce a figure ‘greater than two-thirds,’ but by an extremely narrow margin.”
He pointed out that the stipulation only referred to the last known address of the class members, but that the class members’ actual citizenship in a state is required for the CAFA remand. He said:
“A person’s state of citizenship is established by domicile, not simply residence, and a residential address in California does not guarantee that the person’s legal domicile was in California.”
Clifton also explained that in order to be a citizen of a state, a person must first be a citizen of the United States.
“In sum, given the narrow cushion provided by the stipulation, the likelihood that some putative class members were legally domiciled in or subsequently relocated to another state, and the probability that some class members were not United States citizens, we cannot conclude that there was sufficient evidence to support a finding that greater than two-thirds of the putative class members were California citizens.”
Plaintiff’s Second Chance
“Though we have concluded that King did not prove by a preponderance of the evidence that greater than two-thirds of the putative class members were California citizens, it is clear from the record that King did not have a full opportunity to do so. GAC resisted King’s requests for jurisdictional discovery.”
He instructed the District Court to permit King to continue her discovery attempts and renew her request for remand. Clifton added:
“If GAC complains that the burden placed on it is too onerous, it is free to propose a stipulation that would better address King’s burden.”
The case is King v. Great American Chicken Corp, Inc., No. 18-55911.
Kemple, whose office is in Los Angeles, is co-chair of Greenberg Traurig LLP’s Labor & Employment Class and Collective Action practice and heads its Southern California Labor & Employment Practice. Scott A. Brooks of Matern Law Group, PC in Los Angeles argued for King.
Copyright 2018, Metropolitan News Company