Life of the South Insurance Company v. Marquetta Carzell
2017 U.S. App. LEXIS 5494
11th Cir.2017Background
- Plaintiffs (Carzell, Carter, Chege) filed a putative class action in Georgia state court asserting state-law claims against Life of the South Insurance Co. and Insurance Company of the South for insurance-related refunds and bad-faith theories.
- Defendants (both incorporated in Georgia; principal places of business in Florida) removed under CAFA, asserting minimal diversity because of their Florida principal places of business and because some class members allegedly hold foreign dual citizenship.
- Plaintiffs amended/restricted the class to “Georgia citizens” (domiciled in Georgia and U.S. citizens); district court remanded for lack of CAFA diversity and defendants sought interlocutory permission to appeal under 28 U.S.C. § 1453(c)(1).
- Defendants bore the burden to prove federal jurisdiction; the key statutory provisions were 28 U.S.C. §§ 1332(d)(2)(A) and (B) and 1332(c)(1) regarding corporate citizenship.
- The district court found, and the Eleventh Circuit agreed, that because the corporations are incorporated in Georgia they are Georgia citizens (even though they also have Florida principal places of business), and because the class members are Georgia (U.S.) citizens, no CAFA minimal diversity exists.
- The court also held that dual U.S./foreign citizenship of putative class members does not create alienage diversity for CAFA purposes because dual nationals are treated as U.S. citizens for diversity jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CAFA minimal diversity exists when corporate defendants have dual citizenship including the forum state | No; corporations incorporated in Georgia are Georgia citizens, so no plaintiff is a citizen of a different state | Yes; defendants may rely on their Florida principal place of business to establish minimal diversity despite Georgia incorporation | Held: No diversity — corporate dual citizenship counts as dual (not alternative) citizenship; defendants could not prove a plaintiff is a citizen of a different state |
| Whether dual U.S./foreign class members create alienage minimal diversity under CAFA § 1332(d)(2)(B) | Class limited to Georgia citizens (U.S. citizens domiciled in Georgia); dual nationals still are U.S. citizens so no alienage | Dual nationals’ foreign citizenship should be counted to create minimal diversity | Held: Dual nationals are treated as U.S. citizens for diversity; foreign citizenship does not create CAFA alienage here |
| Burden of proof for removal jurisdiction under CAFA | Plaintiffs: defendants must establish jurisdiction by preponderance | Defendants: same; argued CAFA allows removal on their asserted minimal diversity facts | Held: Defendants bear burden to prove jurisdiction and failed to do so |
| Effect of Grupo Dataflux dicta on minimal diversity analysis | Plaintiffs: dicta is inapplicable and not controlling | Defendants: Grupo Dataflux suggests minimal diversity might exist despite co-citizenship because of multiple citizenship of parties | Held: Grupo Dataflux dicta not persuasive or controlling; no authority adopting that approach |
Key Cases Cited
- Underwriters at Lloyd’s, London v. Osting-Schwinn, 613 F.3d 1079 (11th Cir.) (de novo review of CAFA jurisdictional interpretation)
- MacGinnitie v. Hobbs Grp., LLC, 420 F.3d 1234 (11th Cir.) (factual findings re: citizenship reviewed for clear error)
- McNutt v. Gen. Motors Acceptance Corp. of Ind., 298 U.S. 178 (1936) (burden on party invoking federal jurisdiction)
- Evans v. Walter Indus., Inc., 449 F.3d 1159 (11th Cir.) (CAFA does not alter removal burden)
- Johnson v. Advance America, 549 F.3d 932 (4th Cir.) (corporate dual citizenship precludes CAFA minimal diversity)
- Molinos Valle Del Cibao, C. por A. v. Lama, 633 F.3d 1330 (11th Cir.) (dual U.S./foreign citizens treated as U.S. citizens for diversity)
- Grupo Dataflux v. Atlas Glob. Grp., L.P., 541 U.S. 567 (2004) (dicta noting theoretical minimal diversity via multiple citizenships; not controlling)