Lancaster et al v. Daymar Colleges Group, LLC et al

Filing 47

MEMORANDUM OPINION & ORDER denying 10 Motion to Remand; denying 37 Motion to Compel; Telephone Conference set for 2/16/2012 at 2:30 PM before Senior Judge Thomas B. Russell. Signed by Senior Judge Thomas B. Russell on 2/14/2012. cc:counsel (KJA)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
LOUISVILLE DIVISION
CASE NO: 3:11-CV-157
REBECCA LANCASTER, et al.

PLAINTIFFS

v.
DAYMAR COLLEGES GROUP, LLC, et al.

DEFENDANTS

MEMORANDUM OPINION AND ORDER
MEMORANDUM OPINION2012. ORDER
A telephonic conference was held on February 10, AND
This matter is before the Court on the Plaintiffs’ Motion to Remand pursuant to 28 U.S.C.
§ 1332(d)(4)(B) or, in the alternative, pursuant to 28 U.S.C. § 1332(d)(3). Docket Number
(“DN”) 10. The parties have filed multiple responses, replies, and supplemental replies in this
matter. See DN 16, 19, 26, 29, 44, 45. Additionally,a telephonic conference of the parties was
held on February 10, 2012. The motion to remand is now ripe for adjudication. Also pending
before the Court is the Plaintiffs’ Motion to Compel. DN 37. The Defendants have responded
responded. DN 40. The Plaintiffs have replied. DN 43. For the following reasons the
Plaintiffs’ Motion to Compel is DENIED, and the Plaintiffs’ Motion to Remand is DENIED.
BACKGROUND
The facts at this nascent stage are straight forward. The Plaintiffs are current and former
attendees of the various for-profit schools operated by the Defendants. They bring suit for
injunctive, declaratory, and compensatory relief from harms they allege resulted from the
Defendants’ various illegal practices. The Plaintiffs base their causes of action on “KRS Chapter
165A et seq., the Kentucky Consumer Protection Act, Kentucky antitrust laws, and common law
misrepresentation, fraud, fraudulent inducement, breach of contract, breach of implied contract,
conspiracy, and injunctive and declaratory relief.” Mem. Op. & Order of June 14, 2011, DN 21,
pp. 1-2. The named Plaintiffs seek to bring their claims on behalf of themselves and as
representatives of a proposed plaintiff class. The proposed class includes “current and prior
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attendees of the various Daymar Colleges (the “Class”) in Kentucky, Indiana, and Ohio.” Am.
Compl., DN 22, ¶ 8.
The Class is composed of present and former students of Daymar in Kentucky,
Indiana and Ohio who have been fraudulently solicited to attend Daymar
educational institutions with the promise of receiving Degrees transferable to the
vast majority of institutions of higher learning, and for whom these
representations were both false and the Degrees and credits non-transferable.
Further, Plaintiffs seek to represent a class of those individuals who secured loans
to pay for Degrees fraudulently solicited by Daymar, and these Degrees, although
promised by Daymar, were not transferable to the vast majority of other
institutions of higher learning and had little or no value for the purposes to which
Daymar induced or promised to the Plaintiffs.
Further, Plaintiffs seek to represent a class of those individuals who were
promised jobs in their field of study following graduation from Daymar
institutions in Kentucky, Indiana and Ohio, but who received no such jobs and
received no assistance from Daymar in finding employment in their field of study.
Plaintiffs also seek to represent a class of those individuals who attended Daymar
in Kentucky, Indiana and Ohio who were misled and deceived about the terms
and availability of financial aid.
Id. at ¶¶ 8-11.
Although the facts are straight forward, the procedural posture of this case has been
anything but. The crux of the procedural disputes is whether this Court has jurisdiction. More
specifically, the Plaintiffs claim that the Court is divested of jurisdiction under the “home state”
exception to the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d), because more than
two-thirds of the members of the proposed class are citizens of Kentucky.
The Plaintiffs filed their original complaint against the Defendants in the Jefferson
County Circuit Court on February 18, 2011. DN 1-1; DN 1-2. On March 14, 2011, the
Defendants removed to this Court on the basis of diversity jurisdiction under the provisions of
CAFA, 28 U.S.C. § 1332(d). DN 1. The Plaintiffs then moved to remand, arguing that the
Defendants had failed to show that CAFA’s amount in controversy requirement was satisfied,
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and, in the alternative, that the “home state” or “discretionary” exceptions to CAFA jurisdiction
applied. Mot. to Remand, DN 10. After considering the parties’ briefs, the Court determined
that the Defendants met CAFA’s threshold for jurisdiction, including the $5 million amount in
controversy requirement. Mem. Op. & Order of June 14, 2011, DN 21, p. 5. The Court could
not determine, however, whether the “home state” or “discretionary” exceptions applied because
the Plaintiffs’ class allegations were ambiguous. Id. at pp. 5-8. The Court ordered the Plaintiffs
to amend their complaint so as to “properly define the class they seek to represent.” Id. at p. 8.
The Plaintiffs filed their amended complaint on June 21, 2011. Am. Compl., DN 22.
Subsequent to receiving the amended complaint, the Defendants filed a supplemental
reply in opposition to remand. Defs.’ Supplemental Reply, DN 26. The Defendants included
evidence allegedly showing that the Plaintiffs’ class was less than two-thirds Kentucky residents,
much less citizens. Second Aff. of Michael Leathers, DN 26-2. Additionally, the Defendants
argued that the “discretionary” exception was inapplicable. Defs.’ Supplemental Reply, DN 26,
pp. 12-15. The Plaintiffs opposed these arguments in their own supplemental reply. Pls.’
Supplemental Reply, DN 29. They took issue with the Defendants’ statistics and asked the Court
for leave to conduct limited discovery in order to determine the citizenship of the proposed class.
Id. at 7. On August 19, 2011, the Court granted the Plaintiffs’ motion for jurisdictional
discovery. Mem. Op. & Order of August 19, 2011, DN 35. Through a series of joint motions
from the parties, the Court extended the discovery deadline to January 4, 2012. Order of
November 22, 2011, DN 39.
At the close of jurisdictional discovery, the Plaintiffs filed a second supplemental reply
and claim to have produced evidence showing that more than two-thirds of the members of the
proposed class are citizens of Kentucky. Pls.’ Second Supplemental Reply, DN 44. The

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Defendants also submitted a second supplemental reply, attacked the Plaintiffs’ evidence, and
asked this Court to deny the motion to remand. Defs.’ Second Supplemental Reply, DN 45.
Based on the briefs and evidence produced by the parties, the Court has been sufficiently
advised on the pertinent issues and will now rule on the Plaintiffs’ motion to remand.
STANDARD
The Class Action Fairness Act (“CAFA”) provides that “[t]he district court shall have
original jurisdiction of any civil action in which the matter in controversy exceeds the sum or
value of $5,000,000, exclusive of interest and costs, and is a class action in which . . . any
member of a class of plaintiffs is a citizen of a State different from any defendant . . . .” 28
U.S.C. § 1332(d)(2). Additionally, the proposed class must contain 100 or more individuals. 28
U.S.C. § 1332(d)(5)(B). The party asserting jurisdiction pursuant to CAFA - a defendant
removing from state court in most circumstances - bears the burden of proving, by a
preponderance of the evidence, that the statute’s jurisdictional requirements have been met.
Smith v. Nationwide Prop. & Cas. Ins. Co., 505 F.3d 401, 404-05 (6th Cir. 2007) (citations
omitted). If these requirements are met, the district court has jurisdiction to hear the case.
A district court’s jurisdiction under CAFA is not without exception, however. CAFA
prescribes three statutory circumstances in which a court can or must decline jurisdiction. Under
the “home state” exception, a court is divested of jurisdiction if more than two-thirds of the
members of the proposed class and the primary defendants are citizens of the state where the
action was originally filed. 28 U.S.C. § 1332(d)(4)(B). Under the “local-controversy”
exception, a court’s jurisdiction is removed if two-thirds of the members of the proposed class
are citizens of the state in which the action was originally filed; the plaintiffs seek significant
relief from at least one defendant who is from the state where the action was originally filed and

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whose conduct forms a significant basis for the plaintiffs’ claims; and the injuries resulting from
the alleged conduct were incurred in the state in which the action was originally filed. 28 U.S.C.
§ 1332(d)(4)(A). Finally, a court is permitted, but is not required, to decline jurisdiction under
the “discretionary” exception. 28 U.S.C. § 1332(d)(3). If more than one-third but less than twothirds of the proposed plaintiffs’ class and the primary defendants are citizens of the state in
which the action was originally filed, the court may decline jurisdiction after examining the
“totality of the circumstances” and several factors explicitly listed in the statute. Id. If a court is
barred from exercising jurisdiction or declines to do so under any of the three CAFA exceptions,
it must dismiss the action - if an original federal action - or remand to the state court from which
it was removed.
A party seeking remand must show that one of the CAFA exceptions applies by a
preponderance of the evidence. See In Re Sprint Nextel Corp., 593 F.3d 669, 673 (7th Cir. 2010)
(home state exception must be proven by preponderance of the evidence); Preston v. Tenet
Healthsystem Mem’l Med. Ctr. Inc., 485 F.3d 793, 797 (5th Cir. 2007) (local controversy
exception must be proven by a preponderance of the evidence); Serrano v. 180 Connect, Inc.,
478 F.3d 1018, 1024 (9th Cir. 2007) (“[O]nce federal jurisdiction has been established under [§
1332(d)(2)], the objecting party bears the burden of proof as to the applicability of any express
statutory exception under §§ 1332(d)(4)(A) and (B).”); Evans v. Walter Indus., 449 F.3d 1156,
1164 (11th Cir. 2006) (“[W]hen a party seeks to avail itself of an express statutory exception to
federal jurisdiction granted under CAFA, as in this case, we hold that the party seeking remand
bears the burden of proof with regard to that exception.”). In sum, the party asserting
jurisdiction under CAFA bears the burden of proof. Once jurisdiction is established, however,
the burden shifts to the party opposing jurisdiction to prove that one of the CAFA exceptions

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applies.
DISCUSSION
The Court previously held that the Defendants met the requirements of 28 U.S.C. §
1332(d)(2) and had properly removed to this Court under CAFA. Mem. Op. & Order of June 14,
2011, DN 21, pp. 3-5. The Plaintiffs now seek to remand this case to state court and assert two
grounds for doing so. First, they claim that the Court is divested of jurisdiction by CAFA’s
“home state” exception found in 28 U.S.C. § 1332(d)(4)(B) because more than two-thirds of the
members of the proposed class are citizens of Kentucky. In the alterative, the Plaintiffs would
have the Court decline jurisdiction under the “discretionary” exception. The Court addresses
each of these arguments in turn.
A. The “Home State” Exception.
A federal district court is divested of jurisdiction under CAFA where two-thirds or more
of the members of the proposed plaintiffs’ class and the primary defendants are citizens of the
state in which the action was originally filed. 28 U.S.C. § 1332(d)(4)(B). The parties agree that
the primary defendants are citizens of Kentucky. The real issue in this case is whether two-thirds
of the members of the proposed class are citizens of Kentucky. The Plaintiffs bear the burden of
proving class citizenship by a preponderance of the evidence. See In Re Sprint Nextel Corp., 593
F.3d at 673. The Plaintiffs contend that they have discovered evidence conclusively showing
that more than two-thirds of the members of the proposed class are citizens of Kentucky.
1. Standard for Citizenship.
Before examining the Plaintiffs’ evidence, the Court finds it necessary to discuss and
review how courts determine citizenship for the purposes of the diversity statute, including
CAFA. The citizenship of a natural person is equated with his or her domicile. Certain

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Interested Underwriters at Lloyd’s v. Layne, 26 F.3d 39, 41 (6th Cir. 1994); Von Dunser v.
Aronoff, 915 F.2d 1071, 1072 (6th Cir. 1990) (“State citizenship for the purpose of the diversity
requirement is equated with domicile.”); see 15 Moore's Federal Practice § 102.34 (Matthew
Bender 3d Ed. 2011) (in the context of diversity, “‘citizenship’ of a state and ‘domicile’ are
synonymous terms”). “To acquire domicile within a particular state, a person must be physically
present in the state and must have either the intention to make his home there indefinitely or the
absence of an intention to make his home elsewhere.” Stifel v. Hopkins, 477 F.2d 1116, 1120
(6th Cir. 1973); see Miss. Band of Choctaw Indians v. Holyfield, 490 U.S. 30, 48 (1989) (“For
adults, domicile is established by physical presence in a place in connection with a certain state
of mind concerning one’s intent to remain there.”). Thus, a person’s citizenship or domicile is
composed of an objective and subjective component.
The objective component of citizenship is fulfilled by showing one’s physical presence in
a state. The subjective component of citizenship - the intent to remain in a particular state - is the
more difficult inquiry. Although a person’s place of residence is an indicia of his or her
domicile, “‘[d]omicile’ is not necessarily synonymous with ‘residence,’ and one can reside in
one place but be domiciled in another.” Holyfield, 490 U.S. at 48 (citations omitted). It has
repeatedly been held that “[a] party’s residence in a state alone does not establish domicile.”
Preston v. Tenet Healthsystem Mem’l Med. Ctr., Inc., 485 F.3d 793, 798 (5th Cir. 2007); see,
e.g., Palazzo v. Corio, 232 F.3d 38, 42 (2d Cir. 2000) (noting that residency without intent to
remain fails to establish domicile). Indeed, an individual’s residence is but one of many factors
courts examine when determining a person’s domicile. See Garcia Perez v. Santeaella, 364 F.3d
348, 351 (1st Cir. 2004) (when determining domicile a court should consider factors like current
residence, voting registration and voting practices, locations of personal and real property, place

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of employment, driver’s licenses, and payments of taxes); Stifel, 477 at 1122 (“[I]ndicia of intent
[to remain] include affidavits of intention . . . opening bank accounts, addressing tax returns,
motive for establishing domicile, and other physical facts evidencing [a] desire to remain . . . .”).
An objective showing of a person’s place of residence is insufficient to establish his or her
domicile without evidence of subjective intent to remain in a particular state.
2. The Plaintiffs’ Evidence of the “Home State” Exception.
At all times in this litigation the Plaintiffs have maintained that two-thirds of the
members of the proposed class are citizens of Kentucky. In support of this position the Plaintiffs
submitted evidence purporting to show that the Court is divested of jurisdiction under the “home
state” exception. The Court now examines this evidence and concludes that it fails to
demonstrate that two-thirds of the members of the proposed class are citizens of Kentucky. The
evidence is insufficient because the Plaintiffs have wrongly assumed that they may prove the
citizenship of the proposed class solely by establishing the residence of its members.
a. Evidence Submitted with the Original Motion to Remand.
The Plaintiffs’ original motion to remand included a table of data purporting to show that
65.95% of students attending the Defendants’ schools in Kentucky, Indiana, and Ohio during the
2009 school year were citizens of Kentucky. Pls.’ Mot. to Remand, DN 10-1, p. 14. Through
exhibits attached to their motion, the Plaintiffs submitted the data used to create the table. See
DN 10-16; DN 10-17. The Court has examined this data and finds that the conclusions drawn
from it are flawed for three reasons. First, and most troubling of all, the Plaintiffs claim that
certain percentages in the table show the percentage of in-state citizens attending each campus in
2009. By way of example, the table shows that 77% of the students attending the Daymar
campus in Louisville were citizens of Kentucky. The Plaintiffs draw this conclusion from

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reports of the National Center for Education Statistics (NCES). The NCES report for Daymar’s
Louisville campus lists the total number of students attending in the fall of 2009 and also
provides a graph of “undergraduate student residence.” DN 10-17, p. 62 (emphasis added). This
graph shows that 77% of Daymar’s Louisville students were residents of Kentucky. As
discussed above, residence, alone, does not equate to citizenship. See Holyfield, 490 U.S. at 48.
Although the NCES reports may show what percentage of Daymar’s Louisville students are
objectively present in Kentucky, it does nothing to demonstrate their subjective intent to stay in
the state. Therefore, the Plaintiffs’ reliance on the NCES data is misplaced. The NCES data is
not evidence that members of the proposed class are citizens of Kentucky.
Second, although the Plaintiffs present the percentages on the NCES forms as data from
2009, an examination of the forms shows that the in-state residency percentages are actually
reported for 2008. Every NCES form states, just below the graph showing the percentage of
“undergraduate student residence,” that “Residence data are reported for first-time
degree/certificate-seeking undergraduates, Fall 2008.” DN 10-17, pp. 4, 11, 18, 25, 32, 39, 46,
54, 62, 70, 76 (emphasis added). The Plaintiffs attempt to determine the number of Kentucky
citizens attending Daymar’s campuses by multiplying the total number of Daymar students on
each campus in 2009 by the percentage of “undergraduate student residence” for 2008. This type
of cross-year multiplication voids any measure of validity in the data. The Court can draw no
reliable conclusions about the citizenship of the class when total numbers from 2009 are
multiplied by percentages from 2008.
Finally, the table in the Plaintiffs’ motion to remand uses two different sources to
establish the total number of students attending Daymar campuses in 2009. The total numbers of
students attending Daymar’s schools in Ohio, as well as the campus in Madisonville, Kentucky,

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are drawn from the NCES reports. DN 10-17, pp. 3, 10, 17, 24, 31. Although enrollment
numbers for the other campuses are also available from the NCES reports, the Plaintiffs choose
to supplement the numbers for Daymar’s Kentucky campuses with enrollment statistics from the
Kentucky State Board for Proprietary Education (KYSBPE). DN 10-16. The Plaintiffs provide
no explanation why the KYSBPE numbers should be substituted for the numbers provided by the
NCES. An explanation is readily apparent, however. For unexplained reasons, the total number
of Daymar students in the KYSBPE report is greater than the total number in the NCES reports.
Multiplying the larger KYSBPE numbers by the NCES residency percentages naturally results in
a greater number of Daymar attendees who are supposedly Kentucky citizens. The Plaintiffs
provide no explanation why the Court should accept the greater total numbers provided by the
KYSBPE while retaining the NCES numbers for Daymar’s Ohio and Madisonville campuses.
Overall, the Court finds that the data originally submitted with the Plaintiffs’ motion to
remand is inconclusive and unreliable for determining the citizenship of the proposed class. The
data confuses residence with citizenship, compares statistics from two different years, and
includes data from two different sources without providing any justification for doing so. The
Court’s jurisdiction is not removed by this data because it does not show that two-thirds or more
of the members of the proposed class are citizens of Kentucky.
b. Evidence Submitted with the Plaintiffs’ Second Supplemental Reply.
As detailed in the procedural history, the Court allowed the Plaintiffs to amend their
complaint and conduct jurisdictional discovery. Subsequent to completing discovery the
Plaintiffs submitted a second supplemental reply in which they claim to have proven that more
than 70% of the members of the proposed class are citizens of Kentucky.
Attached to their second supplemental reply, the Plaintiffs included data derived from

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Integrated Post-Secondary Education Data Systems (“IPEDS”)1 reports, which contain multiple
years of enrollment information across eleven Daymar campuses in Kentucky, Ohio, and
Daymar’s online program.2 DN 44-6. According to the Plaintiffs, the IPEDS reports contain
citizenship statistics about all first-time Daymar enrollees. Although the proposed Plaintiffs’
class includes all current and former Daymar students in Kentucky, Ohio, and Indiana, and not
just first-time enrollees, the Plaintiffs claim that “there is no evidence to suggest the citizenship
statistics [of non-first-time enrollees] would vary significantly from students included in the
IPEDS reports.” Pls.’ Second Supplemental Reply, DN 44, p. 7 n.19. After examination, the
Court finds that the report attached to the Plaintiffs’ second supplemental reply suffers from the
same primary deficiency as the data attached to the motion to remand. The new report wrongly
supposes that a person’s state of residence is analogous to his or her state of citizenship.
The Defendants filed a second supplemental reply in which they attack the Plaintiffs’
reliance on the statistics derived from the IPEDS reports. In particular, the Defendants included
two noteworthy exhibits with their reply. The first is a sample IPEDS report containing no data.
DN 45-3. The second is a completed IPEDS report for the Owensboro campus containing
enrollment data for the fall of 2008. DN 45-5. Both of these documents contain a section in
which the campus is required to report the “Residence of first-time undergraduate students.” DN
45-3, pp. 14-17 (emphasis added); DN 45-5, pp. 7-10 (emphasis added). The Plaintiffs claim
that the IPEDS reports demonstrate the citizenship of first-time enrollees, but this is simply not

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The IPEDS reports contain data the Defendants submitted to the U.S. Department of Education. The reports were
produced through discovery in the related case of Wiggins v. Daymar College Group, LLC, 5:11-CV-00036-TBR.
The Wiggins case is factual and procedurally analogous to this case and has been filed against the same defendants.
In Wiggins, this Court also granted limited discovery on the issue of whether two-thirds or more of the members of
the proposed class are citizens of Kentucky.
2
The aggregated data submitted by the Plaintiffs cover Daymar’s campuses in Madisonville, Owensboro, Paducah,
Bellevue, and Scottsville, Kentucky. The data also cover Daymar’s online program and the physical campuses at
Lancaster, Jackson, Chillicothe, and New Boston Ohio. The data available are varied, but generally cover different
enrollment periods from 2005 to 2010.

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the case. As with the previous evidence submitted in this case, the Plaintiffs have wrongfully
equated residence with citizenship. Because the IPEDS reports only show that 70% of first-time
enrollees are residents of Kentucky, the Plaintiffs have failed to prove that two-thirds or more of
the members of proposed class are citizens of Kentucky. The “home state” exception is
inapplicable because the Plaintiffs have failed to show that two-thirds or more of the members of
the proposed class are citizens of Kentucky.
c. Other CAFA cases have refused to equate residency with citizenship.
The Court has determined that evidence regarding the citizenship of the proposed
Plaintiffs’ class is insufficient to trigger the “home state” exception. Although the Plaintiffs have
put forth evidence regarding the residence of the class members, residence alone is insufficient to
establish citizenship. This position is supported by numerous cases addressing the CAFA
exceptions.
In Sprint Nextel Corp., the plaintiffs sought to bring a class action in state court on
“behalf of themselves and ‘all Kansas residents’ who purchased text messaging from Sprint
Nextel . . . between January 2005 and October 2008[.]” In re Sprint Nextel Corp., 593 F.3d at
671. The plaintiffs limited their class to “those who (1) had a Kansas cell phone number, (2)
received their cell phone bill at a Kansas mailing address, and (3) paid a Kansas ‘USF fee,’
which is applied to all long-distance calls within Kansas.” Id. The defendant removed the case
to federal court under the provisions of CAFA, and the plaintiffs sought to remand under the
“home state” exception. Id. The district court granted removal because “the class definition
itself, keyed as it is to Kansas cell phone numbers and mailing addresses, made it more likely
than not that two-thirds of the putative class members are Kansas citizens.” Id. at 673. Although
the Seventh Circuit Court of Appeals was “inclined to think that at least two-thirds of those who

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have Kansas cell phone numbers and use Kansas mailing addresses for their cell phone bills are
probably Kansas citizens,” the court reversed the decision to remand. Id. at 674. The court’s
assumption about the citizenship of the class was “[s]ensible guesswork based on a sense of how
the world works, but guesswork nonetheless.” Id. The court refused to remand and agreed “with
the majority of district courts that a court may not draw conclusions about the citizenship of class
members based on things like their phone numbers and mailing addresses.” Id.
In Preston v. Tenet Healthsystem, the plaintiffs sought to bring a class action on behalf of
patients who were injured or killed as a result of unreasonably dangerous conditions on the
premises of the defendants’ hospital in the wake of Hurricane Katrina. Preston, 485 F.3d at 79596. The defendants removed from state court pursuant to CAFA, but the district court remanded,
finding that “the best evidence that is available at this time indicates that more than two-thirds of
the proposed class are citizens of Louisiana.” Id. at 796. The plaintiffs used the pre-Katrina
addresses of the hospitalized patients and their medical records as evidence of their citizenship.
Id. at 798. The defendants even “confirmed that 200 of the 242 patients listed in [one plaintiff’s]
affidavit provided an Orleans Parish address as their primary residence.” Id. In spite of this fact,
the Fifth Circuit Court of Appeals reversed because “[the plaintiffs] presented no evidence . . . to
demonstrate that these patients not only resided in Orleans Parish at the given addresses but also
were domiciled in Louisiana at the time of Hurricane Katrina. A party’s residence in a state
alone does not establish domicile.” Id. (emphasis original) (citation omitted). Domicile requires
evidence of intention to remain in a place, and without “evidence of intent . . . the district court
could not make the requisite credible estimate to remand . . . .” Id. at 801. “Without anything
more than the patients [sic] primary billing addresses, the district court lacked grounds for
making a credible estimate that at least two-thirds of the patients and other proposed class

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members were citizens of Louisiana during the relevant time period.” Id.
In McMorris v. TJX Cos., the McMorris class sought to represent “[r]esidents of
Massachusetts who made purchases and paid by credit or debit card or check or who made a
return at one of more [of the defendant’s stores] in the United States from 2002 to the end of
2006.” McMorris v. TJX Cos., 493 F. Supp. 2d 158, 161 (D. Mass 2007). The court refused to
remand under the “home state” exception because the class definition was overly broad. Use of
terms “residents” instead of “citizens” in the class made is so that the class might “include
foreign citizens who resided in Massachusetts during that period and who made purchases at
TJX.” Id. at 162. Furthermore, the court rejected the plaintiffs’ argument that “residence and
citizenship are to be used interchangeably for the purposes of ascertaining diversity jurisdiction
under CAFA.” Id. Finally, it was insufficient for the plaintiffs to assert that all the named
plaintiffs were citizens of Massachusetts and extrapolate that at least two-thirds of the class were
also. Id. at 165-66.
In Anthony v. Small Tube Mfg. Corp., 535 F. Supp. 2d 506, 508-09 (E.D. Pa. 2007), the
plaintiffs’ class was defined as “[a]ll current and former employees of the U.S. Gauge facility
who have been exposed to one or more of the Defendants’ beryllium-containing products for a
period of at least one (1) month while employed at the U.S. Gauge facility.” The class was
alleged to “consist of at least several thousand members,” and the plaintiffs sought remand under
the “home state” exception. Id. at 509. The court declined to remand because the composition
of the class was speculative and “the citizenship of the entire class was never defined.” Id. at
517. Most importantly, the class was composed of employees who worked at the facility during
a 35-year period, and the plaintiffs provided no evidence that the thousands of members of the
proposed class “were ever, or have remained domiciled in Pennsylvania. Though this may be a

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reasonable inference, it does not satisfy the plaintiff’s burden of proof.” Id.
Finally, in Nicholas v. Progressive Direct Ins. Co., Civil Action No. 06-146-DLB, 2007
U.S. Dist. LEXIS 29689, at *9-10 (E.D. Ky. March 31, 2007), the court denied a motion to
remand under the “home state” exception. The court refused to remand because the class was
proposed to cover five years and “to conclude that over this period at least two-thirds of these
persons remained citizens of the state would be sheer speculation at this stage.” Id. at *10.
All of these cases are instructive in the present case. In Sprint Nextel and Preston, the
plaintiffs sought to establish the citizenship of the class by presenting the court with the mailing
and billing addresses of its members. Both courts found that addresses alone, as evidence of
residence, were insufficient to establish domicile. In the present case, the Plaintiffs claim to
show citizenship by relying on evidence of residence as detailed above. This evidence is not
sufficient and fails to establish domicile. In McMorris, remand was not warranted when the
plaintiffs asserted a class on behalf of Massachusetts residents and claimed that all of the named
plaintiffs were Massachusetts citizens. In the present case, even the named Plaintiffs fail to
allege that they are citizens of Kentucky. The original complaint, which identifies the 39 named
plaintiffs and was incorporated by reference into the amended complaint, only states that 32 of
the named plaintiffs are residents, not citizens, of Kentucky. Compl., DN 1-2, ¶¶ 1-9, 11-21, 24,
26, 28-31, 33, 34, 36-39. The other named plaintiffs are alleged to be residents of Indiana. Id. at
¶¶ 10, 22-23, 25, 27, 32, 35. There is no reference to their citizenship. Furthermore, the
proposed class is silent as to citizenship. It is asserted only on behalf of “current and prior
attendees of the various Daymar Colleges in Kentucky, Indiana, and Ohio.” Am. Compl., DN
22, ¶ 8. Finally, the scope and duration of the proposed classes in Anthony and Nicholas
rendered the “home state” exception inapplicable. In Anthony, the class was comprised of

15

employees who worked at a facility over a 35-year period, and in Nicholas it was composed of
individuals who bought insurance during a 5-year span. In the present case, the evidence
presented by the Plaintiffs spans approximately 5 years, and through their pending motion to
compel, they seeks to obtain information about class citizenship reaching back a total of 15
years. Pfs.’ Mot. to Compel, DN 37. In the words of Nicholas, “[t]o conclude that over this
period at least two-thirds of these persons remained citizens of the state would be sheer
speculation . . . .” Nicholas, 2007 U.S. Dist. LEXIS 28689, at *10. Overall, the Court holds that
the Plaintiffs have failed to prove that two-thirds of the members of the proposed class are
citizens of Kentucky. The “home state” exception will not divest the Court of jurisdiction.
B. The “Discretionary” Exception.
In addition to the “home state” exception, the Plaintiffs ask this Court to decline
jurisdiction under CAFA’s “discretionary” exception. The “discretionary” exception allows a
court, after considering a number of statutory factors, to decline jurisdiction if “greater than onethird but less than two-thirds of the members of all proposed plaintiffs classes in the aggregate
and the primary defendants are citizens of the State in which the action was originally filed . . . .”
28 U.S.C. § 1332(d)(3). The Court need not spend much time analyzing whether it should
decline jurisdiction under the “discretionary exception.” This exception does not apply.
For the present case, the “discretionary” exception requires the Plaintiffs to show that
more than one-third of the members of the proposed class are citizens of Kentucky. As
demonstrated above, the Plaintiffs have only submitted evidence regarding the residence of the
members of the proposed class, not their citizenship. As such, the Court cannot determine
whether more than one-third of the members of the proposed class are citizens of Kentucky, a
factor that must be present to trigger the discretionary analysis. The Court holds that it will not

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decline jurisdiction under the “discretionary” exception because the Plaintiffs have failed to
present evidence that more than one-third of the members of the proposed class are citizen of
Kentucky.
C. The Plaintiffs’ Motion to Compel.
In addition to their motion to remand, the Plaintiffs have filed a motion to compel the
production of documents and supplemental depositions. DN 37. Their motion asks the Court to
compel production on two items. First, the Plaintiffs request that the Defendants produce any
evidence that would aid in determining the citizenship of all students attending Daymar’s
campuses in Kentucky, Indiana, and Ohio during the past fifteen years. Second, the Plaintiffs
seek access to citizenship information about students attending Daymar campuses in Bowling
Green, Russellville, and Clinton, Kentucky. The Court addresses these requests separately.
1. Request for Fifteen Years of Evidence.
The Plaintiffs claim that they have repeatedly requested and been denied access to
information concerning the citizenship of Daymar’s students. Specifically, the Plaintiffs seek
information about the citizenship of all students attending any Daymar college in the past fifteen
years. The Defendants have generally provided this information for students attending in the
past five years, but refuse to reach back beyond this point because any claim older than five
years is barred by the statute of limitations. The Defendants argue that five years is the
applicable statute of limitations on all of the Plaintiffs’ claims because they failed to plead a
breach of written contract. On the other hand, the Plaintiffs argue that they are entitled to fifteen
years’ of citizenship information because they properly pled a claim based on breach of a written
contract. The Court finds it unnecessary to determine which statute of limitations is applicable at
this juncture and takes no position on the issue. The Plaintiffs’ request for discovery will be

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denied, however, because information about the citizenship of the proposed class that is more
than five years old is unreliable and speculative.
It is a fact of life that people move and change their place of domicile from time to time.
This fact is especially true for college students who may transfer schools or establish a domicile
in another state because of a job opportunity after graduation. To think that any information
Daymar possesses regarding the citizenship of its student from fifteen years ago is accurate and
informative in the present case is a bridge too far. And even if Daymar had definitive
information about the citizenship, not just residence, of its students from fifteen years ago, that
information would say nothing about the students’ domiciles at the time the suit was filed. It is a
well-known principle that a party’s domicile is determined as of the date the case is filed, not
based on information from fifteen years before. See 15 Moore's Federal Practice § 102.32
(Matthew Bender 3d. Ed. 2011).
The Court is not alone in coming to this conclusion in a case involving CAFA’s
jurisdictional requirements. As pointed out above, the Nicholas Court found that it would be
mere speculation to conclude that two-thirds of the members of the proposed class remained
citizens of Kentucky as of the date the suit was filed when the class was proposed to cover a
five-year period. Nicholas, 2007 U.S. Dist. LEXIS 28689, at *9-10. Additionally, the Anthony
Court was skeptical that the case could be remanded under the “home state” exception where the
plaintiffs sought to represent a class of individuals who had worked at the defendants’ plant over
a period of thirty-five years. Anthony, 535 F. Supp. 2d at 517. In the present case, any
information regarding the citizenship of the proposed class that could be derived from
information more than five years old is simply speculative and unreliable. The Plaintiffs’ request
in this regard will be denied.

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2. Request for Evidence from the Bowling Green, Russellville, and Clinton, Kentucky
Campuses.
The Plaintiffs also request that the Defendants produce all evidence regarding the
citizenship of the students attending the Daymar campuses in Bowling Green, Russellville, and
Clinton, Kentucky. In their response to the motion to compel, the Defendants claim that they
cannot produce this evidence because they do not own these three facilities. According to the
Defendants, Draughons Junior College (“DJC”), a Tennessee corporation, owns and operates
these campuses in Kentucky and because DJC is not a party to this case, the Defendants cannot
produced information they do not own.
At the present time the Court is uncertain of the relationship between the Defendants,
DJC, and the campuses in Bowling Green, Russellville, and Clinton, Kentucky. No evidence has
been produced to show that DJC actually owns these campuses. If it is shown that DJC owns
these campuses, then it is clear that the Defendants cannot produce evidence regarding the
citizenship of these students because DJC is not a party-defendant. To the extent that the
Defendants do own these campuses, the Court will deny the Plaintiffs’ motion to compel the
production of citizenship information for the purposes of jurisdictional analysis. The evidence
previously produced by the Plaintiffs only demonstrates the residence of the proposed class, and
the Court finds that further discovery on this issue would not produce evidence regarding the
citizenship of the class. If, however, it is shown that the Defendants own the campuses at
Bowling Green, Russellville, and Clinton, then students attending those campuses would be part
of the proposed class and their identities should remain discoverable for any class certification
issues that the Court may be required to address in the future.
CONCLUSION
For the foregoing reasons the Plaintiffs’ Motion to Compel (DN 37) is DENIED and the
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Plaintiffs’ Motion to Remand (DN 10) is DENIED.
IT IS HEREBY ORDERED that a telephonic conference of the parties is set for
February 16, 2012, at 2:30pm EST. The Court shall initiate the call.

February 14, 2012

P/10

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