18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 441 remand was required under several exceptions of the CAFA. The Court ordered the parties to conduct limited jurisdictional discovery to determine whether the CAFA’s minimal diversity jurisdictional requirement was satisfied. Id. at *14-16. First, the Court held that the amount-in-controversy was not at issue, since Plaintiffs’ prior mediation statement sought damages in excess of $5 million, and Plaintiffs did not dispute the amount. Id. at *11-12. Turning to the CAFA’s minimal diversity requirement, the Court held that it was unclear whether this component was satisfied. While Defendants argued in support of removal that Goya was a New Jersey corporation with its principal place of business in New Jersey, they conceded that it was impossible to determine at the time of removal the state of citizenship of the named Plaintiff. The Court opined that Defendants failed, at the time of removal, to meet their burden of establishing federal subject-matter jurisdiction in this case. Id. at *14. However, the Court indicated it would allow the parties to engage in limited jurisdictional discovery on this issue, and it limited the discovery to the minimal diversity requirement as it related to the parties in the first amended complaint, which was the operative complaint at the time of Defendants’ removal. Following the limited jurisdictional discovery, the Court ordered that Defendants would need to show cause as to whether the Court had subject-matter jurisdiction pursuant to the CAFA. Id . at *15. Accordingly, the Court ordered that Plaintiffs’ motion to remand was administratively terminated pending jurisdictional discovery and adjudication of the Court’s order to show cause. Id. at *15-16. (iv) Fourth Circuit Peterson, et al. v. Allina Health System, 2021 U.S. Dist. LEXIS 91870 (D.S.C. May 14, 2021). Plaintiff filed a class action alleging that Defendants improperly released health records in a data breach. Invoking the CAFA, Defendants removed the action where it was later transferred and consolidated with other putative class actions arising out of the ransomware attack. Plaintiff subsequently filed a motion to remand. The Court denied Plaintiff’s motion to remand on the grounds that the action was properly removed because the CAFA conferred subject- matter jurisdiction and the local controversy and discretionary jurisdiction exceptions did not apply. Id. at *20. Plaintiff argued that the Court lacked subject-matter jurisdiction under the CAFA because the amount-in- controversy did not meet the CAFA’s jurisdictional threshold and minimal diversity did not exist. The Court rejected the amount-in-controversy argument. It found that if each class member had similar damages to Plaintiff, and the class was comprised of 1,000 members, the total damage claim would exceed $50 million. Id. at *14. The Court also rejected Plaintiff’s argument that minimal diversity did not exist, since Plaintiff was a resident of Minnesota and Defendants were residents of Delaware and South Carolina. The Court held that the local controversy exception did not apply, since Plaintiff failed to demonstrate that more than two-thirds of the members of the proposed class were citizens of Minnesota. Id. at *16. Finally, the Court ruled that the discretionary jurisdiction exception did not apply because the interests of justice and the totality of the circumstances weighed against declining jurisdiction. Id. at *18. For these reasons, the Court held that the action was properly removed because the CAFA conferred subject-matter jurisdiction and the local controversy and discretionary jurisdiction exceptions did not apply. Therefore, the Court denied Plaintiff’s motion to remand. Id. at *20. (v) Fifth Circuit Madison, et al. v. ADT, LLC, 11 F.4th 325 (5th Cir. 2021). Plaintiffs, a group of homeowners, filed a state court class action alleging that the primary Defendant, Telesforo Aviles, an ADT LLC ("ADT") employee, installed ADT home-security surveillance systems in their homes and used his access privileges to spy on customers. ADT intervened in the lawsuit and removed the action to the District Court pursuant to the CAFA. Plaintiffs moved to remand the action to the state court, and the District Court granted the motion pursuant to the home state exception to the CAFA. ADT appealed, and the Fifth Circuit reversed and remanded the District Court’s ruling. The Fifth Circuit reasoned that the issue was whether ADT, a non-citizen of Texas, was also a "primary Defendant" under the CAFA. Id . at 327. The Fifth Circuit explained that it had only addressed this particular issue previously with little reasoning and there was little case law to review or guide it. The Fifth Circuit noted that the Third Circuit provided two approaches used by District Courts to define a primary Defendant, including: (i) the first approach is used to "capture those Defendants who are directly liable to the proposed class, as opposed to being vicariously or secondarily liable based upon theories of contribution or indemnification;" and (ii) the second approach is used "to identify Defendants expected to sustain the greatest loss if liability were found . . . and whether such Defendants have substantial exposure to significant portions of the proposed