John C. Kitchin; North West Auto Body; Mary Menke, on behalf of themselves and all others similarly situated v. Bridgeton Landfill, LLC; Republic Services, Inc.; Allied Services; Rock Road Industries, Inc.
No. 19-2072
United States Court of Appeals for the Eighth Circuit
July 8, 2021
United States Court of Appeals
For the Eighth Circuit
___________________________
No. 19-2072
___________________________
John C. Kitchin; North West Auto Body; Mary Menke, on behalf of themselves
and all others similarly situated
Plaintiffs - Appellees
v.
Bridgeton Landfill, LLC; Republic Services, Inc.; Allied Services; Rock Road
Industries, Inc.
Defendants - Appellants
____________
Appeal from United States District Court
for the Eastern District of Missouri - St. Louis
____________
Submitted: January 14, 2021
Filed: July 8, 2021
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Before GRUENDER, BENTON, and STRAS, Circuit Judges.
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I.
At first in connection with the Manhattan Project during World War II and then for the federal government after the war, a government contractor refined uranium at a facility in downtown St. Louis, Missouri in the 1940s and 1950s.1
Unsurprisingly, this activity created radioactive waste. Accordingly, the Manhattan
Project acquired a tract of land near the present-day St. Louis Lambert International
Airport in St. Louis County to store the waste. The Cotter Corporation (which is not
a party in this action) later acquired some of this waste, and in 1973 it dumped more
than 46,000 tons of a soil-and-radioactive-waste mixture at the West Lake Landfill
in Bridgeton, Missouri. That soil-waste mixture was then used as cover for
municipal refuse dumped in the landfill. In 1990, the Environmental Protection
Agency (“EPA”) placed the West Lake Landfill on the Superfund National Priorities
List for site investigation and cleanup. See
Since 1995, John C. Kitchin, Jr., has owned property in Bridgeton, Missouri
adjacent to the West Lake Landfill, where his family owns and operates the North
West Auto Body Company. Mary Menke also owns property in Bridgeton, Missouri
near the
tort claims and sought compensatory damages, punitive damages, and injunctive relief.
It is undisputed here that, of the Defendants, only Rock Road Industries was a citizen of Missouri at the time Plaintiffs filed their complaint. Shortly after Plaintiffs filed their complaint, however, Rock Road Industries merged into Bridgeton Landfill, with Bridgeton Landfill being the surviving entity.
Appellants then removed the action to federal court. As grounds for removal,
Appellants claimed that federal-question jurisdiction existed under the Price-Anderson Act (“PAA”),
II.
Before proceeding to the merits, first we must address Plaintiffs’ claim that
we lack jurisdiction over this appeal. See, e.g., Arnold Crossroads, L.L.C. v. Gander
Mountain Co., 751 F.3d 935, 938 (8th Cir. 2014) (“Our first consideration on review
is whether we have appellate jurisdiction over [the defendant’s] appeal of the district
court’s remand order.”). Under
argue that we lack appellate jurisdiction under
Our precedent forecloses these arguments. In Jacks v. Meridian Resource
Co., 701 F.3d 1224, 1229 (8th Cir. 2012), we held that a remand order was both “final and appealable as a collateral order
under
Accordingly, we proceed to the merits.
III.
The sole issue on appeal is whether CAFA’s local-controversy exception requires remand in this case, as the district court found. We review this issue de novo. Graphic Commc’ns Local 1B Health & Welfare Fund A v. CVS Caremark Corp., 636 F.3d 971, 973 (8th Cir. 2011); Opelousas Gen. Hosp. Auth. v. FairPay Sols., Inc., 655 F.3d 358, 360 (5th Cir. 2011).
CAFA gives federal district courts subject-matter jurisdiction over class
actions like this one, where the parties are minimally diverse (meaning any class
member and any defendant are citizens of different states), all proposed plaintiff
classes include
(i) over a class action in which— (I) greater than two-thirds of the members of all proposed plaintiff classes in the aggregate are citizens of the State in which the action was originally filed; (II) at least 1 defendant is a defendant— (aa) from whom significant relief is sought by members of the plaintiff class; (bb) whose alleged conduct forms a significant basis for the claims asserted by the proposed plaintiff class; and (cc) who is a citizen of the State in which the action was originally filed; and (III) principal injuries resulting from the alleged conduct or any related conduct of each defendant were incurred in the State in which the action was originally filed; and (ii) during the 3-year period preceding the filing of that class action, no other class action has been filed asserting the same or similar factual allegations against any of the defendants on behalf of the same or other persons . . . .
Although the exception is an abstention doctrine rather than a jurisdictional rule, Graphic Commc’ns, 636 F.3d at 973, it is mandatory, Westerfeld, 621 F.3d at 822. The party seeking remand on this basis has the burden to establish that the exception applies. Westerfeld, 621 F.3d at 822. And, given that the exception’s provisions are listed in the conjunctive, see Erdahl v. Comm’r, 930 F.2d 585, 591 n.8 (8th Cir. 1991), the proponent of remand must show that each provision is met in order to trigger mandatory abstention, see, e.g., Atwood v. Peterson, 936 F.3d 835,
841 & n.5 (8th Cir. 2019) (per curiam); Opelousas, 655 F.3d at 361; Coleman v. Estes Express Lines, Inc., 631 F.3d 1010, 1013 (9th Cir. 2011). In considering whether the party seeking remand has met this burden, we must bear in mind that the “language and structure of CAFA” indicate that Congress contemplated broad federal court jurisdiction, see Westerfeld, 621 F.3d at 822, and that the local-controversy exception is a “narrow,” nonjurisdictional exception to CAFA’s grant of jurisdiction, see Hargett v. RevClaims, LLC, 854 F.3d 962, 965 (8th Cir. 2017); Graphic Commc’ns, 636 F.3d at 973. Thus, “any doubt about the applicability of CAFA’s local-controversy exception” must be resolved against the party seeking remand and in favor of retaining jurisdiction over the case. Westerfeld, 621 F.3d at 823. After all, “federal courts ‘have a strict duty to exercise the jurisdiction that is conferred upon them by Congress,’” abstention is an “‘extraordinary and narrow exception’ to that duty,” and thus “only the ‘clearest of justifications’ will justify abstention.” Mason v. Lockwood, Andrews & Newnam, P.C., 842 F.3d 383, 397 (6th Cir. 2016) (Kethledge, J., dissenting) (quoting first Quackenbush, 517 U.S. at 716, then Colo. River Water Conservation Dist. v. United States, 424 U.S. 800, 813 (1976), then Rouse v. DaimlerChrysler Corp., 300 F.3d 711, 715 (6th Cir. 2002))) (discussing the local-controversy exception).
Appellants argue that Plaintiffs failed to show that any subpart of
A.
Under the significant-basis requirement, the party seeking remand must show
that a local defendant’s “alleged conduct forms a significant basis for the claims
asserted by the proposed plaintiff class.”
“CAFA itself does not describe the type or character of conduct that would form a ‘significant basis’ of plaintiffs’ claims . . . .” Woods v. Standard Ins., 771 F.3d 1257, 1265 (10th Cir. 2014). That said, in Westerfeld, we adopted the Third Circuit’s comparative approach to analyzing this issue. 621 F.3d at 825 (following Kaufman v. Allstate N.J. Ins., 561 F.3d 144 (3d Cir. 2009)). In Kaufman, the Third Circuit reasoned that, “[i]n relating the local defendant’s alleged conduct to all the claims asserted in the action, the significant basis provision effectively calls for comparing the local defendant’s alleged conduct to the alleged conduct of all the Defendants.” 561 F.3d at 156. Thus, deciding whether the significant-basis requirement is met “requires a substantive analysis comparing the local defendant’s alleged conduct to the alleged conduct of all the Defendants.” Id. Given the plain meaning of “significant,” this comparative approach requires that the party seeking remand show that the local defendant’s conduct is “an important ground for the asserted claims in view of the alleged conduct of all the Defendants.” Id. at 157; see also “Significant,” Black’s Law Dictionary (11th ed. 2019) (defining “significant” to mean “[o]f special importance; momentous”).
Since the time we followed Kaufman in Westerfeld, other circuits have done the same. E.g., Mason, 842 F.3d at 395-96 (majority opinion); Benko v. Quality Loan Serv. Corp., 789 F.3d 1111, 1118 (9th Cir. 2015); Woods, 771 F.3d at 1266; Opelousas, 655 F.3d at 361. Even so, courts applying this approach have split regarding what it requires. Some courts, like the district court here, have adopted the view that allegations that the local and nonlocal defendants “all engaged in the same conduct” suffice to show that the local defendant’s conduct meets the significant-basis requirement. See, e.g., City of O’Fallon v. CenturyLink, Inc., 930 F. Supp. 2d 1035, 1049-51 (E.D. Mo. 2013) (citing Coleman, 631 F.3d at 1020).
this showing gave “no insight” into the local defendant’s comparative “role in the alleged contamination”). Under Atwood, “CAFA removal is not foreclosed by [a] complaint’s conclusory allegations that the local defendants engaged in the same conduct as the [nonlocal] defendant.” 936 F.3d at 840-41 (disagreeing with the “rulings to the contrary” in Coleman, 631 F.3d 1010).
Thus, following Atwood, the district court’s reasoning—that Plaintiffs’ allegations of how Defendants “all engaged in the same conduct” suffice to satisfy the significant-basis requirement—contravenes the law of this circuit. If “nothing in the complaint distinguishes the conduct of [Rock Road Industries] from the conduct of the other defendants,” Opelousas, 655 F.3d at 362, then the allegations in the complaint do not satisfy the significant-basis requirement. Such collective allegations leave “doubt” about the comparative significance of Rock Road Industries’ conduct, preventing remand under the local-controversy exception. See Westerfeld, 621 F.3d at 823.
B.
Besides defending the district court’s reasoning, Plaintiffs also point out that they “do make different allegations” about Rock Road Industries’ conduct compared to the other defendants’ conduct. They call our attention to four sentences in three paragraphs of their 199-paragraph complaint that specifically mention Rock Road Industries, and they contend that these allegations suffice to establish that Rock Road Industries’ conduct is “significant” for CAFA purposes. We disagree.
The first allegation is that “Rock Road Industries, Inc. . . . owned or owns the
West Lake Landfill.” But in corresponding allegations about the other defendants,
Plaintiffs alleged that Bridgeton Landfill also owns the West Lake Landfill; that
Allied Services “operates . . . [the] West Lake Landfill[]”; and that Republic
Services “owns, oversees, and directs the environmental decisions and conduct” of
the
and operated the landfill, we fail to see how this allegation shows that Rock Road Industries’ conduct is “an important ground for the asserted claims in view of the alleged conduct of all the Defendants.” See Westerfeld, 621 F.3d at 825. If anything, the allegation that Republic Services “owns, oversees, and directs the environmental decisions and conduct” of Rock Road Industries as well as the other two defendants suggests the opposite. See Atwood, 936 F.3d at 838, 840-41 (concluding that a local defendant’s conduct was not “significant” because extrinsic evidence showed that the local defendant’s injury-causing conduct was mandated by the nonlocal defendant); Mason, 842 F.3d at 400 (Kethledge, J., dissenting) (concluding the same in light of similar allegations in the complaint at issue there).
The second allegation is that “[t]his lawsuit arises out of damages that resulted from Rock Road Industries, Inc.’s acts and omissions within the State of Missouri.” But the complaint contains verbatim allegations about the other three defendants. Nothing about this allegation “distinguishes the conduct of [Rock Road Industries] from the conduct of the other defendants.” See Opelousas, 655 F.3d at 362. To the contrary, this cut-and-paste approach illustrates how Plaintiffs’ complaint fails to differentiate meaningfully between Rock Road Industries’ conduct and the other defendants’ conduct.
The third allegation is that “Rock Road Industries has maintained daily operational and managerial control over the management and environmental decisions of the West Lake Landfill, decisions which gave rise to the violations of law and damage to property alleged in this [complaint].” But in corresponding allegations about the other three defendants, the complaint includes materially identical allegations about their conduct. To the extent these parallel allegations differ, they do so because Plaintiffs alleged more about the other defendants’ conduct than they did about Rock Road Industries’ conduct. Thus, any “substantive distinctions” revealed by these allegations undermine rather than support the conclusion that Rock Road Industries’ conduct “forms a significant basis for [Plaintiffs’] claim[s].” See Atwood, 936 F.3d at 840.
The fourth allegation is that Rock Road Industries is a Missouri citizen “whose
conduct forms a significant basis” for Plaintiffs’ claims. This allegation, parroting
the language of the significant-basis requirement, is a legal conclusion. See
C.
Finally, going beyond the allegations in their complaint, Plaintiffs invite us to take judicial notice of the EPA’s 2018 Amended Record of Decision concerning the West Lake Landfill and a 1993 Consent Order referred to in that document. They argue that these materials, showing that the EPA deemed Rock Road Industries (along with three other entities) a “potentially responsible party” (“PRP”) for cleaning up the landfill under CERCLA, demonstrate that Rock Road Industries’ conduct meets the significant-basis requirement. See Atwood, 936 F.3d at 840 (holding that extrinsic evidence may be considered in determining whether the significant-basis requirement is met). Even assuming that we may take judicial notice of and consider this factual material seemingly presented for the first time on appeal, but see Kohley v. United States, 784 F.2d 332, 334 (8th Cir. 1986) (per curiam), we do not find that these materials carry Plaintiffs’ burden.
Under CERCLA, “even parties not responsible for contamination may fall
within the broad definitions of PRPs” in
The 2018 Amended Record of Decision simply indicates that Rock Road Industries was designated a PRP; it does not explain why. In light of the fact that even an “innocent” party can be designated a PRP, Solutia, 726 F. Supp. 2d at 1331, this designation without more does not demonstrate, and certainly not beyond “doubt,” that Rock Road Industries’ conduct forms a significant basis for Plaintiffs’ claims, see Westerfeld, 621 F.3d at 823.
In contrast, the 1993 Consent Order does suggest why the EPA designated
Rock Road Industries a PRP, but the information it contains on this point does not
carry Plaintiffs’ burden. In that order, the EPA designated four entities as PRPs:
Rock Road Industries; Laidlaw Waste Systems (Bridgeton), Inc., which later merged
into Bridgeton Landfill; Cotter Corporation; and the Department of Energy.
Notably, while the EPA indicated that Cotter Corporation and the Department of
Energy were designated PRPs because they arranged for the disposal of the
radioactive waste at the landfill, see
under
* * *
In sum, Plaintiffs’ allegations that Defendants all engaged in the same conduct giving rise to Plaintiffs’ claims do not satisfy the significant-basis requirement. The few allegations in Plaintiffs’ complaint that refer specifically to Rock Road Industries and its conduct also fail to satisfy this requirement. And the extrinsic evidence Plaintiffs call our attention to does not carry their burden to show this requirement is satisfied. Accordingly, the local-controversy exception does not apply in this case, and the district court erred in concluding otherwise.
IV.
For the foregoing reasons, we reverse the district court’s order remanding this action back to state court, and we remand for further proceedings.
STRAS, Circuit Judge, concurring in the judgment.
The court’s conclusion is the right one, but I would follow a simpler route to get there. Under the local-controversy exception, “[a] district court shall decline to
exercise jurisdiction” if, among other requirements, “at least 1 defendant is a
defendant . . . who is a citizen of the State in which the action was originally filed.”
The text provides the answer. It twice uses the present-tense verb “is,” id.,
and “the present tense generally does not include the past,” Carr v. United States,
560 U.S. 438, 448 (2010). So what matters is whether a local defendant exists when
the district court “exercise[s] jurisdiction,” which happens at the time of removal in
cases like this one, not at initial filing.
All signs, in other words, point to evaluating the defendants’ citizenship under
the local-controversy exception at the time of removal. Cf. Mansfield, Coldwater &
Lake Mich. Ry. v. Swan, 111 U.S. 379, 381–82 (1884) (stating that “the difference
of citizenship on which the right of removal depends must have existed . . . at the
time of the removal” (emphasis added)). By then, Rock Road was gone and there
was no one left to fill the role of “a defendant . . . who is a citizen of the State in
which the action was originally filed.”
Without a local defendant, there is no local controversy, so I agree that this case must remain in federal court.