98 Litigating CA Wage & Hour and Labor Code Class Actions (22nd Edition) Seyfarth Shaw LLP | www.seyfarth.com D. Exceptions to CAFA Jurisdiction There are narrow exceptions to CAFA jurisdiction.591 The party that is seeking remand back to the state court bears the burden of proof in establishing any exceptions to CAFA jurisdiction.592 1. Local Controversy Exception Under the local controversy exception, a federal court must decline jurisdiction where: (1) greater than 2/3 of the proposed class members are citizens of the forum state,593 (2) at least one “significant” defendant (i.e., from whom significant relief is sought and whose alleged conduct forms a significant basis for the claims asserted by the class) is a citizen of the forum state, (3) the principal injuries caused by the alleged conduct or any related conduct of each defendant were incurred in the forum state, and (4) no other class action was filed within the past three years asserting the same or similar factual allegations against any of the defendants on behalf of the same or other persons.594 Some circuits, including the Eleventh Circuit, have made it clear that the CAFA’s language favors federal jurisdiction over class actions and that its legislative history suggests that Congress intended the local controversy exception to be a narrow one, “with all doubts resolved ‘in favor of exercising jurisdiction over the case.’”595 Consistent with this notion, several circuits agree that the party seeking remand back to the state court bears the burden to demonstrate that the court lacks jurisdiction under the “local controversy” exception.596 The Ninth Circuit addressed this issue in Coleman v. Estes Express Lines, holding that a “district court cannot look beyond the complaint in determining whether the criteria of subsections (aa) [“significant relief”] and (bb) [“significant basis”] have been satisfied.”597 Thus, extrinsic evidence will not be considered in evaluating this exception. Coleman explained that this conclusion was required not only by the plain language of these subparts, but also because any contrary holding would result in an expansive “mini-trial,” contrary to congressional intent that jurisdiction determinations be made quickly under CAFA.598 591 See 28 U.S.C. § 1332(d)(4)(A)-(B). 592 Serrano v. 180 Connect, Inc., 478 F.3d 1018, 1024 (9th Cir. 2007). 593 “A person’s state of citizenship is established by domicile, not simply residence, and a residential address in California does not guarantee that the person’s legal domicile was in California.” King v. Great Am. Chicken Corp, Inc., 903 F.3d 875, 879 (9th Cir. 2018). 594 28 U.S.C. § 1332(d) (4). 595 Evans v. Walter Indus., Inc., 449 F.3d 1159 (11th Cir. 2006). 596 See Serrano, 478 F.3d at 1019 (noting agreement with other circuits that party seeking remand must demonstrate applicability of “local controversy” exception); Frazier v. Pioneer Americas LLC, 455 F.3d 542, 546 (5th Cir. 2006); Hart v. FedEx Ground Package Sys. Inc., 457 F.3d 675, 680-81 (7th Cir. 2006); see also S. Rep. No. 109-14, at 44 (“It is the Committee’s intention with regard to each of these exceptions that the party opposing federal jurisdiction shall have the burden of demonstrating the applicability of an exemption.”). 597 Coleman v. Estes Express Lines, 631 F.3d 1010, 1015 (9th Cir. 2011). 598 Id. at 1017.
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