821 F.3d 1111
9th Cir.2016Background
- Plaintiffs (108+ Washington residents) sued Boeing (out-of-state) and Landau (Washington) alleging long‑running solvent contamination (TCE, PCE, etc.) from Boeing’s Auburn plant and negligent investigation/remediation by Landau beginning in 2002.
- Plaintiffs asserted state-law claims: negligence and nuisance/trespass against Boeing; negligence against Landau; they seek monetary and equitable relief (property diminution, remediation costs, medical monitoring, etc.).
- Boeing removed under CAFA; district court remanded based on CAFA’s single-event exception; Ninth Circuit vacated that holding and remanded for the district court to consider CAFA’s local controversy exception (§1332(d)(4)).
- On remand the district court found the local controversy exception applied because (a) >2/3 of plaintiffs are Washington citizens, (b) Landau is an in‑state defendant from whom significant relief is sought and whose conduct forms a significant basis for the claims, and (c) principal injuries were incurred in Washington; it remanded to state court.
- Ninth Circuit affirmed: applying Coleman and Benko, the court looked only to the FAC, held plaintiffs alleged "significant relief" sought from Landau and that Landau’s conduct forms a "significant basis" for the class claims; the court declined to resolve merits (duty/viability) at the jurisdictional stage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs seek "significant relief" from in‑state defendant (§1332(d)(4)(A)(i)(II)(aa)) | Plaintiffs seek the same categories of damages and equitable relief from Landau as from Boeing (property diminution, remediation, medical monitoring, etc.), pleaded against all class members. | Boeing: plaintiffs fail to specify relief apportionable to Landau; Boeing’s historical role in creating contamination dwarfs Landau’s liability, so relief from Landau is insignificant. | Held: FAC, read at face value, alleges significant relief from Landau; plaintiffs need not allocate damages among defendants at this stage. |
| Whether the in‑state defendant’s alleged conduct "forms a significant basis" for the claims ( §1332(d)(4)(A)(i)(II)(bb)) | Landau is one of only two defendants and is alleged to have independently failed for a decade+ to investigate/remediate migrating plumes—claims against Landau are important and pleaded for the whole class. | Boeing: Landau’s role is minor relative to Boeing (creator of pollutants); plaintiffs failed to distinguish Landau’s conduct and thus cannot show a significant basis. | Held: Under the comparative approach from Benko, allegations against Landau (one of two defendants, asserted against all plaintiffs) are sufficient to show a significant basis. |
| Whether plaintiffs plausibly state a negligence claim against Landau under Washington law (third‑party beneficiary/duty) | Plaintiffs allege Landau contracted to investigate/remediate contamination, and plaintiffs (nearby property owners) are the intended and direct beneficiaries of that work. | Boeing: Washington law limits duties; knowledge of future harm alone doesn’t create duty; reliance or increased risk rules (citing Burg) undermine a third‑party beneficiary negligence theory. | Held: For jurisdictional purposes, the FAC adequately pleads a negligence claim against Landau (plausible third‑party beneficiary theory). The court declined to resolve merits—jurisdictional inquiry limited to the complaint. |
Key Cases Cited
- Coleman v. Estes Express Lines, 631 F.3d 1010 (9th Cir. 2011) (directs district courts to decide CAFA local‑controversy criteria by looking only to the complaint and warns against merits‑style factual inquiries)
- Benko v. Quality Loan Serv. Corp., 789 F.3d 1111 (9th Cir. 2015) (applies Coleman; establishes remedies‑and‑comparative approaches for §§1332(d)(4)(A)(i)(II)(aa) and (bb))
- Coffey v. Freeport‑McMoRan Copper & Gold, 581 F.3d 1240 (10th Cir. 2009) (courts should not resolve defendant financial viability or engage in time‑consuming factual inquiries when assessing "significant relief")
- Dart Cherokee Basin Operating Co. v. Owens, 135 S. Ct. 547 (2014) (no presumption against removal in CAFA cases)
- Bell v. Hood, 327 U.S. 678 (1946) (distinguishes jurisdictional inquiries from merits determinations)
- Bell Atlantic v. Twombly, 550 U.S. 544 (2007) (plausibility standard for pleading)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must permit reasonable inference of defendant liability)
- Opelousas Gen. Hosp. Auth. v. FairPay Sols., 655 F.3d 358 (5th Cir. 2011) (considered local‑controversy "significant basis" inquiry; discussed in comparative context)
- Kaufman v. Allstate N.J. Ins. Co., 561 F.3d 144 (3d Cir. 2009) (comparative analysis reasoning cited in Benko)