Jennifer Mason v. Lockwood, Andrews & Newnam
842 F.3d 383
| 6th Cir. | 2016Background
- Flint switched its water source to the Flint River in April 2014; anti-corrosion measures were not implemented, producing lead contamination and other health harms. Plaintiffs (Flint residents/property owners) sued engineering firms (Lockwood entities and Leo A. Daly) in Michigan state court for professional negligence on behalf of a class of Flint water users.
- Defendants removed under CAFA (28 U.S.C. § 1332(d)(2)); plaintiffs moved to remand invoking CAFA’s mandatory local-controversy exception (§ 1332(d)(4)(A)).
- Plaintiffs alleged the class consisted of Flint residents/property owners, that principal injuries occurred in Michigan, that no similar class action was filed in the prior 3 years, and that LAN, P.C. (a Michigan corporation) materially participated in the services (quality control).
- District court granted remand, finding plaintiffs met the greater-than-two-thirds-in-state citizenship element (presuming domicile from residence) and that LAN, P.C.’s alleged conduct formed a significant basis of the claims.
- Sixth Circuit majority affirmed: (1) the local-controversy exception is an exception to the exercise (not existence) of jurisdiction; (2) movant bears preponderance burden to prove the exception; (3) in CAFA-exception context, a rebuttable presumption that resident class members are domiciled in the forum state is appropriate; (4) LAN, P.C.’s alleged quality-control role sufficed as a "significant basis." Dissent would require affirmative evidence of citizenship and treats the complaint’s allegations as insufficient.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who bears burden to prove CAFA local-controversy exception? | Plaintiffs: they (movants) must prove exception by preponderance. | Defendants: agreed on burden but disputed application. | Court: movant must prove each element by preponderance. |
| Whether >2/3 of proposed class are citizens of Michigan | Plaintiffs: class defined as Flint residents/property owners; residency gives rebuttable presumption of domicile. | Defendants: mere allegations of residence do not establish citizenship/domicile; need evidence. | Court: in CAFA-exception context, residency creates a rebuttable presumption of domicile; plaintiffs met preponderance due to presumption plus no rebuttal. |
| Whether a Michigan defendant’s conduct "forms a significant basis" for claims | Plaintiffs: LAN, P.C. performed quality control and work was conducted “through LAN, P.C.” so its conduct is a significant basis. | Defendants: substantive contracting was with LAN, Inc. (Texas); LAN, P.C. not shown to be significant. | Court: allegations that work was provided through LAN, P.C. and that it was responsible for quality control make its conduct a significant basis. |
| Remand versus federal exercise of jurisdiction under CAFA | Plaintiffs: local-controversy exception applies; remand required. | Defendants: CAFA jurisdiction proper; exception not established. | Court: remand affirmed; case is a quintessential local controversy. |
Key Cases Cited
- Coffey v. Freeport-McMoran Copper & Gold, 581 F.3d 1240 (10th Cir.) (CAFA enacted to curb perceived abuses of state courts)
- Breuer v. Jim’s Concrete of Brevard, Inc., 538 U.S. 691 (2003) (plaintiff must show exceptions to removal)
- Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (1994) (federal courts are courts of limited jurisdiction)
- Robertson v. Cease, 97 U.S. 646 (1878) (mere allegation of residence insufficient to establish citizenship in federal-jurisdiction context)
- McNutt v. General Motors Acceptance Corp., 298 U.S. 178 (1936) (jurisdictional facts must be affirmatively alleged)
- Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976) (abstention is narrow, extraordinary exception)
- St. Mary’s Honor Center v. Hicks, 509 U.S. 502 (1993) (example of using rebuttable presumptions in substantive law)