ATLAS DATA PRIVACY CORPORATION v. CHOREOGRAPH LLC
1:24-cv-04271
| D.N.J. | Nov 20, 2024Background
- Plaintiffs (Atlas Data Privacy Corp. and several individuals) filed 40 lawsuits under New Jersey’s Daniel’s Law in state court, seeking damages and injunctive relief for alleged unlawful disclosure of covered persons’ home addresses and unlisted phone numbers.
- Atlas, a Delaware corporation with its principal place of business in New Jersey, acts as assignee for over 19,000 New Jersey covered persons and also brings claims on behalf of individual plaintiffs who are New Jersey citizens.
- Defendants are a variety of data brokers and corporations, including some Delaware entities, who removed the cases to federal court, claiming subject matter jurisdiction under diversity or the Class Action Fairness Act (CAFA).
- Plaintiffs moved to remand the cases to state court, arguing lack of federal jurisdiction due to absence of complete diversity and failure to satisfy CAFA requirements.
- The court consolidated the jurisdictional questions, ordered limited discovery, and addressed arguments on real party in interest, collusion, fraudulent joinder, and the applicability of CAFA class/mass action provisions.
Issues
| Issue | Plaintiff’s Argument | Defendant’s Argument | Held |
|---|---|---|---|
| Is Atlas a real party in interest for diversity? | Atlas, as assignee, is the real party; its citizenship controls | Atlas is not the real party in interest, assignors’ (NJ) citizenship should control | Atlas is real party in interest; its citizenship controls |
| Were the assignments/joinder collusive to defeat jurisdiction? | No collusion; assignments were for legitimate reasons | Assignments/joinder were engineered to defeat federal diversity | No collusion or improper motive found |
| Was there fraudulent joinder of non-diverse defendants? | All defendants are properly joined | Some defendants (e.g., MyHeritage (USA)) are fraudulently joined | No fraudulent joinder except for MyHeritage (USA) |
| Do the suits qualify as class/mass actions under CAFA? | Not class or mass actions; only Atlas and few individuals named | Suits are class actions in disguise or qualify as mass actions | Not class/mass actions under CAFA; CAFA does not apply |
Key Cases Cited
- Sprint Commc’ns Co., L.P. v. APCC Servs. Inc., 554 U.S. 269 (absolute assignees have standing and can sue in their own names)
- Kramer v. Caribbean Mills, Ltd., 394 U.S. 823 (collusive assignments affecting diversity jurisdiction are a factual question)
- Batoff v. State Farm Insurance Co., 977 F.2d 848 (fraudulent joinder requires no colorable basis in fact for the claim)
- Mississippi ex rel. Hood v. AU Optronics Corp., 571 U.S. 161 (mass actions under CAFA require 100 or more named plaintiffs)
- Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546 (complete diversity required under § 1332(a))
- Navarro Sav. Ass’n v. Lee, 446 U.S. 458 (real party in interest controls for diversity jurisdiction)
- Zambelli Fireworks Mfg. Co., Inc. v. Wood, 592 F.3d 412 (LLC citizenship includes all members)
- Abels v. State Farm Fire & Casualty Co., 770 F.2d 26 (court may review facts beyond the complaint for fraudulent joinder)
- Boyer v. Snap-On Tools Corp., 913 F.2d 108 (fraudulent joinder standard in the Third Circuit)