Adams v. West Marine Products, Inc., No. 20-15444 (9th Cir. 2020)
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The Ninth Circuit affirmed the district court's order remanding a putative class action to state court after it was removed to federal court under the Class Action Fairness Act (CAFA). Plaintiff, a former West Marine employee, originally filed the wage and hour action on behalf of herself and other similarly situated current and former West Marine employees in state court.
Invoking the discretionary home state controversy exception to CAFA jurisdiction, the panel remanded to state court. The panel held that the district court reasonably inferred from the facts in evidence that it was more likely than not that more than one-third of class members were California citizens; a district court may raise sua sponte an exception to CAFA jurisdiction; and the district court provided the parties with an adequate opportunity to address whether the exception applied. The district court considered the six factors to determine whether the home state exception to CAFA jurisdiction applied and the district court did not abuse its discretion in concluding that remand was appropriate.
Court Description: Class Action. The panel affirmed the district court’s order remanding a putative class action to state court after it was removed to federal court under the Class Action Fairness Act (“CAFA”), pursuant to 28 U.S.C. § 1332(d). A former West Marine Products, Inc. employee filed the putative class action on behalf of herself and other similarly situated current and former employees, alleging violations of California wage and hour laws. The local controversy exception, and the home state exception (sometimes called the “home state controversy exception”), provide exceptions to CAFA jurisdiction. Under the discretionary base of the home state exception, the district court may decline to exercise jurisdiction where more than one-third of the putative class, and the primary defendants, are citizens of the state where the action was originally filed. Invoking the discretionary home state controversy exception, the district court declined to exercise jurisdiction and ordered the case remanded to state court. The panel held that the district court reasonably inferred from the facts in evidence that it was more likely than not that more than one-third of class members were California citizens. The panel held further that the district court did not err in raising sua sponte an exception to CAFA jurisdiction. ADAMS V. WEST MARINE PRODUCTS 3 Although the local controversy and home state exceptions are not jurisdictional, the exceptions are treated as a form of abstention that a court may raise sua sponte. The panel held that the district court provided the parties with an adequate opportunity to address whether the home state exception to CAFA jurisdiction applied when the district court invited briefing on the home state exception to CAFA jurisdiction, which encompasses both the mandatory and discretionary bases for remand. The district court considered the six factors to determine whether it should exercise its discretion to remand to state court. 28 U.S.C. § 1332(d)(3). The panel concluded that the district court did not abuse its discretion in concluding that remand was appropriate.
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