Angelo et al v. Stewart Title & Trust of Phoenix Incorporated

Filing 21

ORDER that the Clerk shall remand this case to Yavapai County Superior Court. Signed by Judge David G Campbell on 5/23/2013. (Attachments: # 1 Letter to Yavapai County Superior Court)(LFIG)

1

WO

2
3
4
5
6

IN THE UNITED STATES DISTRICT COURT

7

FOR THE DISTRICT OF ARIZONA

8
9
10

Robert Angelo, Trent Cosse, Don Davis,
Hans Epprecht, Lucien Riley, and Does 1–
238, on their own behalf and on behalf of
all others similarly situated,

11
12

No. CV13-8031 PCT DGC
ORDER

Plaintiffs,
v.

13
14
15

Stewart Title & Trust of Phoenix, Inc.,
Defendant.

16

Defendant Stewart Title & Trust of Phoenix, Inc., has filed a motion to dismiss.

17

Doc. 6. Before ruling on the motion, the Court ordered the parties to show cause why the

18

Court should not remand this case pursuant to either the discretionary or mandatory

19

exceptions to subject-matter jurisdiction under the Class Action Fairness Act (“CAFA”).

20

Doc. 16. The parties have submitted responsive memoranda. Docs. 19, 20.

21

Congress enacted CAFA, in part, to “‘restore the intent of the framers of the

22

United States Constitution by providing for Federal court consideration of interstate cases

23

of national importance under diversity jurisdiction.’”

24

Loans Servicing LP, 533 F.3d 1031, 1033-34 (9th Cir. 2008) (quoting Pub. L. No. 109–2,

25

§ 2(b)(2), 119 Stat. 4, 5). As explained by the Ninth Circuit,

26
27
28

Luther v. Countrywide Home

CAFA applies to “class action” lawsuits where the aggregate number of
members of all proposed plaintiff classes is 100 or more persons and where
the primary defendants are not “States, State officials, or other

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

governmental entities against whom the district court may be foreclosed
from ordering relief.” § 1332(d)(5) . . . . Once the prerequisites of
§ 1332(d)(5) are satisfied, CAFA vests federal courts with “original”
diversity jurisdiction over class actions if: (1) the aggregate amount in
controversy exceeds $5,000,000, and (2) any class member is a citizen of a
state different from any defendant. § 1332(d)(2). Thus, under CAFA,
complete diversity is not required; “minimal diversity” suffices.
Serrano v. 180 Connect, Inc., 478 F.3d 1018, 1020–21 (9th Cir. 2007) (footnote omitted).
In this case, the prerequisites for subject-matter jurisdiction under CAFA are
satisfied. Plaintiffs bring their case on behalf of 238 putative class members. Doc. 1-2,
¶ 1. Defendant is not a state or state official. See Doc. 1-1. The case involves a dispute
over membership deposits of $26,804,350. Doc. 1-2, ¶ 1. Finally, minimal diversity
exists, as one of the named plaintiffs is a resident of Texas (Id., ¶ 7), unnamed class
members may include citizens of other states and countries (Id., ¶ 19), and Defendant is a
Delaware corporation with its principal place of business in Arizona (Doc. 1-1).
Although these prerequisites are satisfied, CAFA also has provisions under which
this Court either “may” or “shall” decline to exercise jurisdiction.

28 U.S.C.

§ 1332(d)(3)-(4). As explained by the Ninth Circuit,

16
17
18
19
20
21

[§ 1332(d)(2)] sets out the contours of original jurisdiction. In contrast,
§ 1332(d)(3) describes situations where district courts may “decline to
exercise jurisdiction” “in the interests of justice and looking at the totality
of the circumstances”; and § 1332(d)(4) sets out two circumstances that
require district courts to decline jurisdiction, the so-called “local
controversy” and “home-state controversy” exceptions. Implicit in both
subsections (d)(3) and (d)(4) is that the court has jurisdiction, but the court
either may or must decline to exercise such jurisdiction.

22
23

Serrano, 478 F.3d at 1022 (footnote omitted) (emphasis in original).

24

discretionary and mandatory exceptions to CAFA jurisdiction depend on the citizenship

25

of the class members. For the discretionary exception to apply, “greater than one-third

26

but less than two-thirds of the members of all proposed plaintiff classes and the primary

27

defendants [must be] citizens of the State in which the action was originally filed.”

28

§ 1332(d)(3). For the mandatory exceptions to apply, greater than two-thirds of the

-2-

Both the

1

members of all proposed plaintiff classes must be citizens of the State in which the action

2

was originally filed. § 1332(d)(4).

3

The parties agree that the mandatory exceptions do not apply. Doc. 19 at 2;

4

Doc. 20 at 2. With respect to the discretionary exception, Plaintiffs submit that 53.4% of

5

the class members are Arizona residents. Doc. 19 at 2. Defendants do not dispute that

6

more than one-third of the proposed class members are citizens of Arizona. And as noted

7

above, Defendant has its principal place of business in Arizona.

8

The Court must consider six factors in deciding whether to exercise its discretion

9

to remand the case to state court. 28 U.S.C. § 1332(d)(3)(A)-(F). The parties agree that

10

the second, third, and fourth factors favor remand (Doc. 19 at 2-4; Doc. 20 at 3-4), and

11

the Court finds that all six factors clearly favor remand.

12

Defendant’s administration of an escrow account, a matter that is not of significant

13

national or interstate interest. The complaint asserts claims that will be governed by

14

Arizona law, and was not pled to avoid federal jurisdiction. Yavapai County is a forum

15

with a distinct nexus to this action because the alleged harm relates to the handling of an

16

escrow account dedicated to the construction of a facility in Yavapai County. Doc. 1-1,

17

¶ 6. More than one-half of the members of the proposed class are citizens of Arizona,

18

and after considering the citizenship of the non-Arizona class members, the Court finds

19

that no other state has an interest comparable to Arizona’s. See, e.g., Doc. 20 at 4

20

(“[47%] of the putative Plaintiffs are dispersed all across the United States, with at least

21

three Plaintiffs living in Switzerland and Canada.” (emphasis added)). Finally, no other

22

class action involving similar claims has been filed during the three-year period

23

preceding the filing of this action, and the filing of a related bankruptcy action is not a

24

consideration identified in the statute.

This case concerns the

25

In summary, “this case does not possess the interstate character or bear the

26

interstate implications that underpin CAFA’s enlargement of federal jurisdiction.”

27

Hirschbach v. NVE Bank, 496 F. Supp. 2d 451, 462 (D.N.J. 2007). The Court therefore

28

will decline to exercise subject matter jurisdiction.
-3-

1
2
3

IT IS ORDERED that the Clerk shall remand this case to Yavapai County
Superior Court.
Dated this 23rd day of May, 2013.

4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
-4-