Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_13-cv-08031/USCOURTS-azd-3_13-cv-08031-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1441 Petition for Removal- Breach of Contract

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Robert Angelo, Trent Cosse, Don Davis, 

Hans Epprecht, Lucien Riley, and Does 1–

238, on their own behalf and on behalf of 

all others similarly situated, 

Plaintiffs, 

v. 

Stewart Title & Trust of Phoenix, Inc., 

Defendant. 

No. CV13-8031 PCT DGC

ORDER 

 On January 16, 2013, Plaintiffs filed a class action lawsuit in Yavapai County 

Superior Court against Defendant Stewart Title & Trust of Phoenix, Inc. Doc. 1-2. On 

February 6, 2013, Defendant timely removed the case to this Court. Doc. 1. Defendant 

invoked the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d), as the basis for 

the Court’s subject-matter jurisdiction. Id. Defendant has now filed a motion to dismiss 

for failure to state a claim. Doc. 6. Plaintiffs have responded, and do not mention or 

contest the Court’s subject-matter jurisdiction. See Doc. 10. The Court nonetheless, 

acting sua sponte, orders the parties to show cause why the Court should not remand this 

case pursuant to either the discretionary or mandatory exceptions to CAFA subject-matter 

jurisdiction. See Fed. R. Civ. P. 12(h)(3) (“If the court determines at any time that it 

lacks subject-matter jurisdiction, the court must dismiss the action.”). 

I. Class Action Fairness Act 

 Congress enacted CAFA, in part, to “‘restore the intent of the framers of the 

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United States Constitution by providing for Federal court consideration of interstate cases 

of national importance under diversity jurisdiction.’” Luther v. Countrywide Home 

Loans Servicing LP, 533 F.3d 1031, 1033–34 (9th Cir. 2008) (quoting Pub. L. No. 109–2, 

§ 2(b)(2), 119 Stat. 4, 5). As explained by the Ninth Circuit, 

CAFA applies to “class action” lawsuits where the aggregate number of 

members of all proposed plaintiff classes is 100 or more persons and where 

the primary defendants are not “States, State officials, or other 

governmental entities against whom the district court may be foreclosed 

from ordering relief.” § 1332(d)(5) . . . . Once the prerequisites of 

§ 1332(d)(5) are satisfied, CAFA vests federal courts with “original” 

diversity jurisdiction over class actions if: (1) the aggregate amount in 

controversy exceeds $5,000,000, and (2) any class member is a citizen of a 

state different from any defendant. § 1332(d)(2). Thus, under CAFA, 

complete diversity is not required; “minimal diversity” suffices. 

Serrano v. 180 Connect, Inc., 478 F.3d 1018, 1020–21 (9th Cir. 2007) (footnote omitted). 

 In this case, the prerequisites for subject-matter jurisdiction under CAFA are 

clearly satisfied. Plaintiffs bring their case on behalf of 238 putative class members. 

Doc. 1-2, ¶ 1. Defendant is not a State or State official. See Doc. 1-1. The case involves 

a dispute over membership deposits of $26,804,350. Doc. 1-2, ¶ 1. Finally, minimal 

diversity exists, as one of the named Plaintiffs is a resident of Texas (Id., ¶ 7), unnamed 

Plaintiffs may include citizens of other states and countries (Id., ¶ 19), and Defendant is a 

Delaware corporation with its principal place of business in Arizona (Doc. 1-1). 

Although these prerequisites are satisfied, CAFA also has provisions under which 

this Court either “may” or “shall” decline to exercise jurisdiction. 28 U.S.C. 

§ 1332(d)(3)–(4). As explained by the Ninth Circuit, 

[§ 1332(d)(2)] sets out the contours of original jurisdiction. In contrast, 

§ 1332(d)(3) describes situations where district courts may “decline to 

exercise jurisdiction” “in the interests of justice and looking at the totality 

of the circumstances”; and § 1332(d)(4) sets out two circumstances that 

require district courts to decline jurisdiction, the so-called “local 

controversy” and “home-state controversy” exceptions. Implicit in both 

subsections (d)(3) and (d)(4) is that the court has jurisdiction, but the court 

either may or must decline to exercise such jurisdiction. 

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Serrano, 478 F.3d at 1022 (footnote omitted) (emphasis in original). Both the 

discretionary and mandatory exceptions to CAFA jurisdiction depend on the citizenship 

of the members of the Plaintiff class. For the discretionary exception to apply, “greater 

than one-third but less than two-thirds of the members of all proposed plaintiffs classes 

and the primary defendants [must be] citizens of the State in which the action was 

originally filed.” § 1332(d)(3). For the mandatory exceptions to apply, greater than twothirds of the members of all proposed plaintiff classes must be citizens of the State in 

which the action was originally filed. § 1332(d)(4). 

 Having read the pleadings, the Court believes that at least one-third, and perhaps 

more than two-thirds, of the class may be citizens of Arizona. Four of the five named 

Plaintiffs are Arizona residents. Doc. 1-2, ¶ 7. The case involves a golf resort located in 

Arizona. Id., ¶ 1. Finally, Defendant has its principal place of business in Arizona. Doc. 

1-1. From these facts, it is a reasonable, although not certain, inference that at least onethird and perhaps more than two-thirds of the class are citizens of Arizona. Therefore, 

the Court may have discretion or be required to decline jurisdiction over this case. 

III. Further Briefing 

The Court concludes that briefing on this issue is required. The parties shall 

address the six factors this Court must consider under CAFA’s discretionary exception to 

jurisdiction, as listed in § 1332(d)(3)(A)–(F). The parties shall also address both the 

“local controversy” exception under § 1332(d)(4)(A), and the “home-state controversy” 

exception under § 1332(d)(4)(B). The parties shall file memoranda and supporting 

material addressing these questions, specifically focusing on the citizenship of the 

members of the Plaintiff class. In addressing these questions, the parties are reminded 

that a person’s residence can be prima facie evidence of his or her place of domicile for 

purposes of subject-matter jurisdiction. See Hollinger v. Home State Mut. Ins. Co., 654 

F.3d 564, 571 (5th Cir. 2011); State Farm Mut. Auto. Ins. Co. v. Dyer, 19 F.3d 514, 520 

(10th Cir. 1994). Plaintiffs shall file a memorandum, not to exceed 12 pages of 

argument, by April 12, 2013. Defendant shall file a response, not to exceed 12 pages, by 

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April 19, 2013. No reply will be filed. 

 IT IS ORDERED THAT: 

1. Plaintiffs shall respond to this Order to Show Cause by April 12, 2013. 

2. Defendant shall respond by April 19, 2013. 

Dated this 29th day of March, 2013. 

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