ATLAS DATA PRIVACY CORPORATION v. TELNYX LLC
1:24-cv-04354
D.N.J.Nov 20, 2024Background
- Plaintiffs (Atlas Data Privacy Corp. and several individuals) brought forty actions alleging violations of New Jersey's Daniel’s Law, which restricts disclosure of personal info of certain public officials.
- Plaintiffs include Atlas (a Delaware corporation with principal place in NJ, acting as assignee of 19,000 covered individuals' rights), and individual NJ law enforcement officers.
- Defendants are various data broker companies; in each action, at least one defendant is also a Delaware citizen, defeating complete diversity on the face of the pleadings.
- Defendants removed the actions to federal court, asserting federal jurisdiction under diversity (§ 1332(a)), the Class Action Fairness Act (CAFA), and "mass action" provisions, also alleging some joinder/fraud/collusion.
- Plaintiffs moved to remand to state court for lack of subject matter jurisdiction; court allowed discovery on jurisdictional issues, including assignments and joinder.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is Atlas the real party in interest for diversity? | Yes; Atlas holds absolute assignments and controls suit | No; real parties are the individual assignors (users) | Atlas is the real party in interest; its citizenship counts |
| Were assignments/joinder collusive to defeat diversity? | No; assignments are legitimate and contemplated by law | Yes; assignments/joinder were made to evade federal forum | No collusion or improper motive shown; assignments valid |
| Was there fraudulent joinder of non-diverse defendants? | No; joined defendants are proper parties | Yes (in 2 cases); some non-diverse defendants have no connection | Fraudulent joinder found only in MyHeritage (USA); dismissed |
| Does CAFA (class/mass action) create federal jurisdiction? | No; cases not filed as class/mass actions under statute | Yes; claims are functionally class or mass actions | No CAFA jurisdiction: not class/mass under statutory definition |
Key Cases Cited
- Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546 (complete diversity requirement under § 1332)
- Navarro Sav. Ass'n v. Lee, 446 U.S. 458 (real party in interest controls diversity jurisdiction)
- Sprint Communications Co., L.P. v. APCC Servs. Inc., 554 U.S. 269 (assignee with absolute assignment has standing/interest)
- Kramer v. Caribbean Mills, Ltd., 394 U.S. 823 (collusive assignment to create jurisdiction is improper)
- Batoff v. State Farm Ins. Co., 977 F.2d 848 (fraudulent joinder standard)
- Mississippi ex rel. Hood v. AU Optronics Corp., 571 U.S. 161 (CAFA mass action requires 100+ named plaintiffs)
- State Farm Fire & Cas. Co. v. Tashire, 386 U.S. 523 (minimal diversity under CAFA)
- Waite v. City of Santa Cruz, 184 U.S. 302 (assignment for collection does not destroy diversity if good faith)