Broadway Grill, Inc. v. Visa Inc.
856 F.3d 1274
9th Cir.2017Background
- Broadway Grill, a California restaurant, sued Visa and related companies in California state court alleging violations of California antitrust and unfair competition laws for preventing merchant surcharges on Visa transactions.
- The original state-court complaint defined the class as “all California individuals, businesses and other entities who accepted Visa-branded cards in California,” including non-California citizens who do business in California.
- Visa removed the case to federal court under CAFA, asserting minimal diversity because at least one class member was a citizen of a state different from a defendant.
- Broadway Grill moved to remand and, after the district court denied remand, sought leave to amend the complaint post-removal to redefine the class as limited to California citizens (thereby attempting to eliminate minimal diversity).
- The district court allowed the amendment and remanded. The Ninth Circuit panel majority reversed, holding post-removal amendments that change the class makeup cannot defeat CAFA jurisdiction; a narrow Benko exception permitting clarifying amendments does not extend this far.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a plaintiff may amend a complaint after CAFA removal to redefine the class (e.g., restrict to in-state citizens) to destroy minimal diversity and force remand | Broadway Grill: Post-removal amendment merely clarifies the class and the nature of the action under Benko; thus remand is appropriate | Visa: Jurisdiction is fixed at time of removal; post-removal amendments cannot divest a federal court of CAFA jurisdiction | Held: No — citizenship for minimal diversity is determined by the pleadings at removal; post-removal changes to class composition cannot defeat CAFA jurisdiction |
| Scope of Benko v. Quality Loan Service Corp. exception (when post-removal amendment may be considered) | Broadway Grill: Benko allows amendments clarifying class definition and jurisdictional facts; this amendment fits Benko | Visa: Benko’s narrow exception permits only clarification of facts about the effect on a particular defendant (e.g., percent of claims), not changes to class makeup | Held: Benko’s exception is narrow — limited to clarifying jurisdictionally relevant facts (e.g., significance of an in-state defendant); it does not permit altering class definition, adding/removing defendants or claims to defeat jurisdiction |
Key Cases Cited
- Benko v. Quality Loan Serv. Corp., 789 F.3d 1111 (9th Cir. 2015) (limited exception permitting post-removal amendments to clarify jurisdictional facts)
- Pullman Co. v. Jenkins, 305 U.S. 534 (1940) (jurisdiction evaluated on pleadings at time of removal)
- Mondragon v. Capital One Auto Fin., 736 F.3d 880 (9th Cir. 2013) (CAFA jurisdiction determined as of removal)
- In re Burlington N. Santa Fe Ry. Co., 606 F.3d 379 (7th Cir. 2010) (post-removal amendments should not affect jurisdiction; forum manipulation concern)
- Hargett v. Rev-Claims, LLC, 854 F.3d 962 (8th Cir. 2017) (refusing to give effect to post-removal amendment narrowing class to avoid CAFA jurisdiction)
- Doyle v. OneWest Bank, FSB, 764 F.3d 1097 (9th Cir. 2014) (citizenship determined from complaint as of removal)
- Cedar Lodge Plantation, L.L.C. v. CSHV Fairway View I, L.L.C., 768 F.3d 425 (5th Cir. 2014) (post-removal amendments cannot avoid federal jurisdiction)
- Bridewell-Sledge v. Blue Cross of Cal., 798 F.3d 923 (9th Cir. 2015) (de novo review of remand orders)
- In Touch Concepts, Inc. v. Cellco P’ship, 788 F.3d 98 (2d Cir. 2015) (jurisdiction fixed at removal; later filings do not affect jurisdiction)