Tiffany BRINKLEY, on behalf of herself and others similarly situated, Plaintiff-Appellee, v. MONTEREY FINANCIAL SERVICES, INC.; Monterey Financial Services, LLC, Defendants-Appellants.
No. 17-56335
United States Court of Appeals, Ninth Circuit
October 20, 2017
Argued and Submitted October 3, 2017—Pasadena, California
Federal courts have a history of improperly elevating the prerequisites for relief to the status of jurisdictional hurdles. See Lexmark Int‘l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 134 S.Ct. 1377, 1387-88 & n.4, 188 L.Ed.2d 392 (2014). Notably, although Lyons is now widely credited as the origin of the rulе that injunctive relief always requires its own standing inquiry, see, e.g., Hodgers-Durgin, 199 F.3d at 1040 n.1, that case, as I read it, did not make that jurisdiction/remedy mistake. Rather, after determining that there was no independent standing to seek injunctive relief, Lyons separately noted that there was also a рending request for damages. Lyons, 461 U.S. at 111, 103 S.Ct. 1660. The Court then inquired into whether the nonjurisdictional requirements for equitable prospective relief were met, and concluded they were not. Id. at 111-12, 103 S.Ct. 1660. In my view, this aspect of Lyons recognized that there was a case or controversy regarding liability issues beсause of the damages claim, but precluded injunctive relief on nonjurisdictional grounds specific to the equitable requirements for such relief—the absence of irreparable harm. Id. Were this not what Lyons meant, the entire discussion of the equitable principles govеrning prospective relief would have been superfluous.
Conflating the elements of relief with the elements of standing is of little consequence in most cases following Lyons. Where the availability of injunctive relief is governed by federal common law, the cоmmon-law prerequisites for injunctive relief must eventually be satisfied, and largely mirror the standing prerequisites. See also, e.g., Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 184-88, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000) (conducting a separate standing analysis of civil penalties, but concluding that deterrence of ongoing harm suffices for constitutional standing). But collapsing the inquiries becomes problematic when it imposes substantive limits on the availability of relief under state law, in the service of constitutional interests that aren‘t actually under threat.
I nonetheless concur fully in the majority opinion. Hodgers-Durgin is binding law, and it does rеquire a separate standing analysis with regard to prospective relief. As the majority opinion well explains, as long as a separate standing analysis is necessary despite the state prescription of more or less automatic prospective relief, that requirement is met here.
William P. Cole (argued) and Matthew R. Orr, Call & Jensen APC, Newport Beach, California, for Defendants-Appellants.
Patrick N. Keegan (argued) and James M. Treglio, Keegan & Baker LLP, Carlsbad, California; Steven A. Wickman and Christina E. Wickman, Wickman & Wickman, Escondido, California; for Plaintiff-Appellee.
Before: DIANA GRIBBON MOTZ,* MILAN D. SMITH, JR., and JACQUELINE H. NGUYEN, Circuit Judges.
M. SMITH, Circuit Judge:
Monterey Financial Services, Inc. and Monterey Financiаl Services, LLC (collectively, Monterey) appeal the district court‘s grant of Tiffany Brinkley‘s (Brinkley) motion to remand this class action to California state court. We conclude that Brinkley did not meet the requirements of the Class Action Fairness Act‘s (CAFA) home-state controversy exception because she did not prove that two-thirds of all class members are California citizens. We therefore vacate the district court‘s remand order, and remand to that court for further proceedings.
FACTUAL AND PROCEDURAL BACKGROUND
Monterey, a financial services company, allegedly recorded or monitored its telephone conversations with Brinkley without giving her notice. On October 15, 2013, Brinkley brought this action in California state court against Monterey, alleging (1) invasion of privacy in violation of California and Washington state law; (2) unlawful recording of telephone calls under California law; and (3) violation of
[a]ll persons who, while physically located or residing in California and Washington, made or received one or more telephone calls with [Monterey] during the four year period preceding the filing of this lawsuit (the “Class Period“) and did not receive notice at the beginning of the telephone call that their telephone conversatiоn may be recorded or monitored[.]
On May 6, 2016, Monterey removed this action to federal district court. Brinkley then moved to remand the case back to California state court pursuant to CAFA‘s home-state controversy exception,
Following a series of discovery disputes regarding Monterey‘s records, the parties conducted two telephonic conferences with the assigned magistrate judge. The magistrate judge subsequently ordered Monterey to produce a list of all putative California and Washington class members. Brinkley did not appeal this order. Purportedly complying with the order, Monterey produced a list of over 152,000 persons who had recorded calls with Montеrey between October 15, 2009, and May 6, 2016, and had a California or Washington mailing address.
Statistician Dr. James Lackritz, hired by Brinkley, analyzed the list produced by Monterey and segregated a random sample of individuals included in that list. Monterey challenged Dr. Lackritz‘s analysis bеcause he did not limit his analysis to individuals who had telephonic contact with Monterey before the class period ended on October 15, 2013. In response, Dr. Lackritz submitted a supplemental report purporting to be limited to individuals who made or received at least one call with Monterey during the defined class period. Dr. Lackritz‘s report contained no evidence of individuals who were physically located in, but were not residents of, California or Washington when they made or received a phоne call with Monterey.
On March 23, 2017, the district court granted Brinkley‘s motion to remand this case to California state court. Based on Dr. Lackritz‘s analysis, the district court found that at least two-thirds of class members are California citizens. Monterey timely moved for pеrmission to appeal pursuant to
We have jurisdiction to review a district court‘s remand order pursuant to
ANALYSIS
Congress passed CAFA with the “overall intent ... to strongly favor the exercise of federal diversity jurisdiction over class actions with interstate ramifications.” S. Rep. No. 109-14, at 35 (2005). CAFA vests federal courts with original diversity jurisdiction over class actions where (1) the aggregate amount in controversy exceeds $5,000,000; (2) any class member is a citizen of a state different from any defendant; and (3) there are at least 100 class members.
Under the home-state controversy exception, a district court must decline to exercise jurisdiction where “two-thirds or more of the members of all proposed plaintiff classes in the aggregate, and the primary defendants, are citizens of the State in which the action was originally filed.”1
In order to determine whether two-thirds of clаss members are California citizens, we must first determine the size of the class as a whole. See Arbuckle Mountain Ranch of Tex., Inc. v. Chesapeake Energy Corp., 810 F.3d 335, 339 (5th Cir. 2016) (“The class definition issue is critical to determine whether the local controversy excеption applies.“). Here, Brinkley‘s class consists of all individuals who made or received a telephone call with Monterey “while physically located or residing in California and Washington.” By its terms, the class includes individuals who were physically located in, but wеre not residents of, California or Washington when they made or received a call with Monterey (the “located in” subgroup).
During jurisdictional discovery the court ordered Monterey to produce a list of putative California and Washington class members, аnd Brinkley requested a list of putative class members. Monterey replied that it would “not produce documents or information in response to the request as propounded” and produced a document “which contains a list of Monterey ac-
Brinkley did not submit any evidence regarding the “located in” subgroup. Without knowing the size of this subgroup, the size of the entire class is unknown. That is, absent “somе facts in evidence” regarding the size of the entire class, the district court cannot determine whether two-thirds of all class members are California citizens. See Mondragon, 736 F.3d at 884; see also
Brinkley was also on notice of her class definition problem. During the telephonic discovery conferences, Monterey informed the court and Brinkley that Brinkley‘s class definition was problematic becаuse it included the “located in” subgroup, and Monterey could not identify who fell within that subgroup. Despite Monterey‘s comments alerting Brinkley to this class definition issue, Brinkley did not attempt to resolve it during discovery. Simply stated, the class definition issue is “of [Brinkley‘s] own making.” See id. at 885.
Brinklеy alternatively argues that her class definition problem is a red herring because Monterey fails to identify a single non-California or Washington citizen whose telephone conversation it recorded. This argument misstates the burden of proof in CAFA exceрtion cases. The burden is not on Monterey to prove the inapplicability of a CAFA exception. Rather, the burden is on Brinkley, as the party seeking remand, to prove the applicability of a CAFA exception. See Serrano, 478 F.3d at 1021-22.
A plaintiff cannot remand an otherwise valid CAFA case to state court when only a portion of the class meets the two-thirds citizenship requirement. See
We vacate the district court‘s order remаnding this action to California state court, and remand this action to the district court for further proceedings.
Costs are to be taxed against the appellee Tiffany Brinkley.
VACATED AND REMANDED.
MILAN D. SMITH, JR.
UNITED STATES CIRCUIT JUDGE