Reddick v. Global Contact Solutions, LLC
Filing
17
OPINION AND ORDER AND ORDER TO SHOW CAUSE: The parties are ordered to show cause, within 45 days of the date hereof, why this action should not be remanded to state court pursuant to 28 U.S.C. § 1332(d)(3) or 28 U.S.C. § 1332(d)(4), and all other further proceedings in this action are Stayed other than discovery tailored as discussed above to the limited purpose of uncovering evidence sufficient to permit a finding of fact as to the proportion of Reddick's proposed class of plaintiffs that were residents of states other than Oregon as of March 13, 2015. Signed on 6/1/15 by Magistrate Judge Paul Papak. (gm)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
ROSS REDDICK,
Plaintiff,
3:15-CV-425-PK
OPINION AND ORDER
AND ORDER TO SHOW
CAUSE
v.
GLOBAL CONTACT SOLUTIONS, LLC,
Defendant.
PAP AK, Magistrate Judge:
Plaintiff Ross Reddick filed this putative class action against defendant Global Contact
Solutions, LLC ("GCS"), in the Multnomah County Circuit Court on behalf of himself and all
others similarly situated on January 29, 2015. By and through his state-court complaint, Reddick
alleged GCS' liability under Oregon statut01y law for failure to pay wages and for failure to pay
all wages due and owing at the termination of employment, both such failures arising out of GCS'
alleged practice of requiring all of its employees to attend mandato1y training at the beginning of
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their employment, without compensation. GCS removed Reddick's action to this court effective
March 13, 2015, on the purported basis of original federal jurisdiction under the Class Action
Fairness Act of2005 ("CAFA"). Reddick moved for remand of this action to the Multnomah
County Court on April 15, 2015, and oral argument was held in connection with Reddick's
motion on May 26, 2015.
It is well established that a defendant may remove to federal court any civil action filed in
state court that could have been filed originally in federal court. See 28 U.S.C. § 1441. The
plaintiff in such an action may thereafter seek to have the removed case remanded to state court
ifthe district court lacks subject-matter jurisdiction over the action notwithstanding its removal,
or if there was any defect in the defendant's fulfillment of the procedural requirements attending
removal. See 28 U.S.C. § 1447(c). The removal statutes are generally construed restrictively, so
as to limit removal jurisdiction. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-109
(1941); see also, e.g., Gaus v. lvfiles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) ("We strictly
construe the removal statute against removal jurisdiction") (citations omitted).
If at any time prior to final judgment it appears that a federal court lacks subject-matter
jurisdiction over a removed case, the court must remand the action to state comi. See 28 U.S.C.
§ 1447(c). Cases first filed in state comt and then removed to federal court are generally subject
to a "strong presumption" against finding removal jurisdiction. See Gaus, 980 F.2d at 566; St.
Paul lvfercwy lnde111. Co. v. Red Cab Co., 303 U.S. 283, 288-292 (1938). However, in the
context ofpurpo1ted federal subject-matter jurisdiction arising under CAFA, "no antiremoval
presumption" applies, because CAPA was enacted specifically "to facilitate adjudication of
ce1tain class actions in federal court," specifically large class actions that are essentially interstate
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or multi-state in character. Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S. Ct. 547,
554 (2014).
The burden of establishing federal subject-matter jurisdiction for purposes of removal is
on the pmiy seeking removal, see Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir.
2004), see also Abrego Abrego v. The Dow Chemical Co., 443 F.3d 676, 685 (9th Cir. 2006), and
factual questions regarding the basis for removal are generally to be resolved in favor of
remanding the case to state comi, see lvlatheson v. Progressive Specialty Ins. Co., 319 F.3d 1089,
1090 (9th Cir. 2003). Where federal subject-matter jurisdiction purpmiedly arises under CAFA
and the elements of such jurisdiction cannot be established on the sole basis of the allegations of
the plaintiff's complaint, the burden of the defendant seeking removal or resisting a challenge to
removal is to establish "by a preponderance of the evidence" that the elements not established on
the face of the pleading are present. Ibarra v. }vfanheim Investments, Inc., 775 F.3d 1193, 1197
(9th Cir. 2015); Rodriguez v. AT & T 1'1/obility Servs. LLC, 728 F.3d 975, 977 (9th Cir. 2013).
Once jurisdiction under CAFA is established by a preponderance of the evidence, it becomes the
burden of the pmiy challenging federal subject-matter jurisdiction to establish the applicability of
any statutory exception to CAFAjurisdiction. See Serrano v. 180 Connect, Inc., 478 F.3d 1018,
1024 (9th Cir. 2007).
In considering a post-removal challenge to federal subject-matter jurisdiction, the comi
assumes the truth of the allegations in the complaint and that a ju1y will ultimately return a
verdict in the plaintiff's favor on all claims alleged therein. See, e.g., Kenneth Rothschild Trust v.
A/organ Stanley Dean Witter, 199 F. Supp. 2d 993, 1001 (C.D. Cal. 2002). In addition, the court
may consider the contents of the defendant's removal petition, relevant "summary-judgement-
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type evidence" proffered at the time of removal, and supplemental evidence proffered at the time
federal subject-matter jurisdiction is challenged. Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117
(9th Cir. 2004); see also Cohn v. Petsmart, Inc., 281 F.3d 837, 840 n. 1 (9th Cir. 2002). It is well
established that "[c]onclusory allegations" or allegations based on "information and belief" are
insufficient to satisfy the defendant's burden. i'vfatheson, 319 F.3d at 1090-1091; Valdez, 372 at
1117. If, after consideration of all material allegations and evidence, "doubt regarding the right
to removal exists, [the] case should be remanded to state court." lvfatheson, 319 F.3d at 1090.
Here, Reddick challenges both whether federal subject-matter jurisdiction over his action arises
under CAFA in the first instance and whether his action is within the scope of either of two
statutory mandatory abstention rules, pursuant to which the federal courts are required to decline
to exercise jurisdiction over controversies essentially intrastate in character.
Under CAFA, the federal district courts have original jurisdiction over any class action in
which: (1) the amount in controversy exceeds five million dollms exclusive of interest and costs,
(2) any plaintiff class member is a citizen of a state different from any defendant, (3) the primary
defendants are not states, state officials, or other govermnent entities against whom the district
court may be foreclosed from ordering relief, and (4) the number of plaintiffs in the class or
classes at issue is at least 100. See 28 U.S.C. §§ 1332(d)(2), (d)(5); Serrano v. 180 Connect, Inc.,
478 F.3d 1018, 1020-1021, 1021 n. 3, 1021n.4 (9th Cir. 2007) (citations omitted).
However, the district courts are required to decline to exercise jurisdiction under Section
1332(d)(2) under both the "local controversy" abstention rule codified at 28 U.S.C. §
1332(d)(4)(A) and the "home-state controversy" abstention rule codified at 28 U.S.C. §
1332(d)(4)(B). The "local controversy" abstention rule requires the federal courts to decline to
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exercise CAFA jurisdiction over any class action in which:
(I)
greater than two-thirds of the members of all proposed plaintiff
classes in the aggregate are citizens of the State in which the action
was originally filed;
(II)
at least 1 defendant is a defendant(aa)
(bb)
whose alleged conduct forms a significant basis for the
claims asserted by the proposed plaintiff class; and
(cc)
(Ill)
from whom significant relief is sought by members of the
plaintiff class;
who is a citizen of the State in which the action was
originally filed; and
principal injuries resulting from the alleged conduct or any related
conduct of each defendant were incurred in the State in which the
action was originally filed; and
during the 3-year period preceding the filing of that class action, no other class
action has been filed asserting the same or similar factual allegations against any
of the defendants on behalf of the same or other persons
28 U.S.C. § 1332(d)(4)(A). The "home-state controversy" abstention rule similarly requires the
federal comts to decline to exercise CAFA jmisdiction over any class action in which "two-thirds
or more of the members of all proposed plaintiff classes in the aggregate, and the primmy
defendants, are citizens of the State in which the action was originally filed." 28 U.S.C. §
1332(d)(4)(B). The Ninth Circuit treats these provisions as setting forth "exceptions to
jurisdiction" under CAFA. Serrano, 478 F.3d at 1023.
In addition, CAFA expressly provides that, under ce1iain circumstances, the courts are
permitted in their discretion to decline to exercise jurisdiction under Section 1332(d)(2). Such
discretion to decline to exercise federal subject-matter jurisdiction is available where "greater
than one-third but less than two-thirds of the members of all proposed plaintiff classes in the
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aggregate and the primary defendants are citizens of the State in which the action was originally
filed," 28 U.S.C. § 1332(d)(3), and is to be based on consideration of:
(A)
whether the claims assetied involve matters of national or interstate
interest;
(B)
whether the claims assetied will be governed by laws of the State in which
the action was originally filed or by the laws of other States;
(C)
whether the class action has been pleaded in a manner that seeks to avoid
Federal jurisdiction;
(D)
whether the action was brought in a fornm with a distinct nexus with the
class members, the alleged hatm, or the defendants;
(E)
whether the number of citizens of the State in which the action was
originally filed in all proposed plaintiff classes in the aggregate is
substantially larger than the number of citizens from any other State, and
the citizenship of the other members of the proposed class is dispersed
among a substantial number of States; and
(F)
whether, during the 3-year period preceding the filing of that class action,
1 or more other class actions asserting the same or similar claims on behalf
of the same or other persons have been filed.
Id.
Assuming arguendo that GCS has been or will be successful in establishing the four
elements of federal subject-matter jurisdiction under CAFA, the court will be called upon to
detetmine whether Reddick's action falls within the scope of either of the two mandatmy
abstention rules set fotih at Sections 1332(d)(4)(A) and 1332(d)(4)(B) or the discretionaty
abstention rule set fotih at Section 1332(d)(3). All three provisions require the court to make a
finding of fact regarding the proportion of putative class members that were citizens of Oregon as
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of March 13, 2015, the date GCS removed Reddick's action to this court. 1
The only evidence ofrecord bearing even marginally on this question is the declaration
testimony of John Kania, proffered by GCS, that "there is at least one member ofth[e] putative
class [as defined by Reddick] who is a citizen of a State other than Oregon," and that "GCS has
two office locations, which are 13-15 miles, respectively [sic], from the Washington/Oregon
border." Declaration of John Kania,
~~
5-6. In addition, this court may properly take judicial
notice, pursuant to Fed. R. Evid. 201, that as of the date the data underlying the 2010 U.S.
Census were collected, approximately 80% of the population of the so-called PortlandVancouver-Hillsboro, OR-WA Metropolitan Statistical Area (in which region it is likely, but not
established by evidence, that all or nearly all class members resided during the time of their
employment by GCS) were residents of Oregon. It is reasonable to conclude from such evidence
that it is empirically unlikely that in excess of one third of all class members were, as of March
13, 2015, residents of states other than Oregon, but it is not reasonable to conclude that that fact
has been established to any degree of certainty.
In light of the Ninth Circuit's recent holding that "there must ordinarily be at least some
facts in evidence from which the district court may make findings regarding class members'
citizenship for purposes of CAFA's local controversy exception," "11fondragon v. Capital One
Auto Fin., 736 F.3d 880, 884 (9th Cir. 2013), it would be improvident for this cou1t to base
analysis of the applicability of the statuto1y abstention rules discussed above on the sole basis of
1
It is undisputed that GCS, the sole defendant herein, is an Oregon company with its
principal place of business in Oregon, and similarly undisputed that the injuries allegedly flowing
from GCS' complained-of conduct were incurred in Oregon, where GCS does business. Reddick
offers his counsel's unsupported asse1tion that no class action based on facts similar to those
underlying this action has been filed against GCS in the past three years.
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judicially noticed evidence whose materiality is even partly conjectural. However, because the
judicially noticed evidence discussed above is sufficient to create significant doubt as to whether
this court could properly exercise subject-matter jurisdiction over Reddick's claims, and because
of the imp01tance of avoiding federal disposition of any claim not subject to federal jurisdiction,
the parties are hereby ordered to show cause, within 45 days of the date hereof, why this action is
not subject to mandatory remand under 28 U.S.C. § 1332(d)(4) or to discretionary remand under
28 U.S.C. § 1332(d)(3). For the same reasons, all other fmther proceedings in this action are
stayed pending GCS' response to this comt's order to show cause, other than discovery calculated
to lead to the production of admissible evidence regarding the place of citizenship of the
members ofReddick's proposed class of plaintiffs as of the date this action was removed.'
CONCLUSION
For the reasons set f01th above, the parties are ordered to show cause, within 45 days of
the date hereof, why this action should not be remanded to state comt pursuant to 28 U.S.C. §
1332(d)(3) or 28 U.S.C. § 1332(d)(4), and all other fmther proceedings in this action are stayed
other than discovery tailored as discussed above to the limited purpose of uncovering evidence
I II
II I
II I
Ill
2
Discussion in lvlondragon, supra, establishes that evidence of the putative class
members' domicile or residence, whether as of or prior to the date of removal, while not
dispositive of the citizenship question, is neve1theless material to dete1mination of the putative
class members' citizenship at the material time. See J\Iondragon, 736 F.3d at 885-886.
Page 8 - OPINION AND ORDER AND ORDER TO SHOW CAUSE
sufficient to pennit a finding of fact as to the proportion of Reddick's proposed class of plaintiffs
that were residents of states other than Oregon as of March 13, 2015.
Dated this 1st day of June, 2015.
onorable Paul Papak
United States Magistrate Judge
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