Duane Morris Class Action Review - 2023 - Report - Page 88
such legal determination in its order denying class certification, and held that subjectmatter jurisdiction under the CAFA was present at the time of filing of the complaint
because this court never made a determination from the outset that a class could never
be potentially certified. Id. Finally, the court held that denial of class action certification
did not divest it of subject-matter jurisdiction because the “CAFA does not specifically
address whether a . . . court may retain jurisdiction following the denial of class
certification.” Id. (citing Metz, et al. v. Unizan Bank, 649 F.3d 492, 500 (6th Cir. 2011)).
Accordingly, the court denied the defendant’s motion to dismiss for lack of jurisdiction.
Id. at *1-2.
B.
Second Circuit
In Zona, et al. v. Arnot Health, Inc., 2022 U.S. Dist. LEXIS 69982 (W.D.N.Y. Apr. 15,
2022), the plaintiffs filed a class action arising from the defendants’ compensation
practices for non-exempt nurses. In relevant part, the defendants sought dismissal for
lack of subject-matter jurisdiction. Id. at *5. The court declined to exercise jurisdiction
over this matter under the “local controversy” exception of the CAFA, and dismissed the
matter without prejudice. Id. at *9. The defendants argued that the local controversy
exception to the CAFA applied to this case and that the court must therefore decline to
exercise jurisdiction. The court opined that to demonstrate that the local controversy
exception is applicable, a party must show: (1) more than two-thirds of the class
members are New York citizens; (2) at least one key defendant is a New York citizen;
(3) the alleged conduct causing injury occurred in New York; and (4) no other class
action has been filed asserting similar factual allegations against any of the defendants
on behalf of the same or other persons during the three-year period preceding the filing
of this case. Id. at *6. Here, the court held that more than two-thirds of the class
members were New York citizens; at least one key defendant was a New York resident,
since all the defendants were incorporated in New York, and each had their respective
principal place of business in New York; the alleged conduct causing injury occurred in
New York; and “no other class action has been filed asserting similar factual allegations
against any of the defendants on behalf of the same or other persons during the threeyear period preceding the filing of this case. Accordingly, with all elements met by a
preponderance of the evidence, the court held that the local controversy exception to
the CAFA applied, and therefore the court was mandated to decline to exercise
jurisdiction. Id. at *9.
C.
Third Circuit
In McLaren, et al. v. UPS Store Inc., 32 F.4th 232, 241 (3d Cir. 2022), the Third Circuit
issued a key decision under the CAFA upholding a late-stage removal of a putative
class action, which normally requires the defendants to file a notice of removal within 30
days from “receipt” of the “initial pleading setting forth the claim for relief.” 28 U.S.C.
§ 1446(b)(1). The CAFA also provides that “if the case stated by the initial pleading is
not removable,” then the defendant’s removal is timely if filed within 30 days “after
receipt by the defendant, through service or otherwise, of a copy of an amended
pleading, motion, order or other paper from which it may first be ascertained that the
case is one which is or has become removable.” Id. § 1446(b)(3). The Third Circuit held
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Duane Morris Class Action Review – 2023
