Cedar Lodge Plantation, L.L.C. v. CSHV Fairway View I, L.L.C.
768 F.3d 425
5th Cir.2014Background
- Cedar Lodge filed a putative class action in Louisiana state court alleging sewage leaks at Fairway View Apartments caused contamination and injury to residents and nearby property owners.
- Fairway Defendants removed the case to federal court under CAFA (28 U.S.C. § 1332(d)); original complaint met CAFA’s diversity and amount-in-controversy requirements.
- After removal, Cedar Lodge filed an amended complaint adding Sewer Treatment Specialists, L.L.C. (STS), a Louisiana citizen, alleging STS’s negligence; Cedar Lodge moved to remand based on CAFA’s local controversy exception.
- The district court (via magistrate) granted remand, concluding the post-removal addition of STS triggered the local controversy exception; the Fairway Defendants appealed.
- The Fifth Circuit considered whether the local controversy exception is assessed at the time of removal (the pleadings as filed) or may be triggered by post-removal amendments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CAFA’s local controversy exception is assessed based on pleadings at time of removal or can be triggered by post-removal amendment adding a local defendant | Cedar Lodge: the exception applies whenever, during litigation and absent manipulation, the class falls within the exception—so adding STS post-removal requires remand | Fairway Defendants: the exception is governed by the statute’s time-of-removal language; post-removal events cannot defeat CAFA jurisdiction | The exception is determined by the pleadings at the time of removal; post-removal addition of a local defendant does not trigger remand (reversed remand) |
| Whether allegations against a post- removal defendant are sufficient to deem that defendant a “significant” local defendant for the exception | Cedar Lodge: STS is a significant local defendant whose alleged conduct forms a significant basis of the claims | Fairway Defendants: (alternative) even if considered, allegations do not show STS is a “significant” defendant | Court did not decide this alternate argument because it held the exception is time-of-removal; remanded for further proceedings consistent with that holding |
Key Cases Cited
- Grupo Dataflux v. Atlas Global Grp., L.P., 541 U.S. 567 (recognizing the time-of-filing/removal rule)
- State of Louisiana v. American Nat’l Prop. & Cas. Co., 746 F.3d 633 (5th Cir.) (post-removal events do not oust CAFA jurisdiction)
- Hollinger v. Home State Mut. Ins. Co., 654 F.3d 564 (5th Cir.) (describing local controversy exception as mandatory abstention provision of CAFA)
- Graphic Commc’ns Local 1B Health & Welfare Fund A v. CVS Caremark Corp., 636 F.3d 971 (8th Cir.) (local controversy exception operates as an abstention doctrine)
- Evans v. Walter Indus., 449 F.3d 1159 (11th Cir.) (CAFA contemplates broad federal jurisdiction with narrow exceptions)
- Kaufman v. Allstate New Jersey Ins. Co., 561 F.3d 144 (3d Cir.) (discussing attempts to manipulate forum by adding local defendants)
- Opelousas Gen. Hosp. Auth. v. FairPay Solutions, Inc., 655 F.3d 358 (5th Cir.) (discussing significance inquiry under the local controversy exception)