Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_13-cv-08031/USCOURTS-azd-3_13-cv-08031-1/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 

 Defendant Stewart Title & Trust of Phoenix, Inc., has filed a motion to dismiss. 

Doc. 6. Before ruling on the motion, the Court ordered the parties to show cause why the 

Court should not remand this case pursuant to either the discretionary or mandatory 

exceptions to subject-matter jurisdiction under the Class Action Fairness Act (“CAFA”). 

Doc. 16. The parties have submitted responsive memoranda. Docs. 19, 20. 

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

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 

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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 

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 class 

members 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. 

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 class members. For the discretionary exception to apply, “greater than one-third 

but less than two-thirds of the members of all proposed plaintiff 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 two-thirds of the 

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members of all proposed plaintiff classes must be citizens of the State in which the action 

was originally filed. § 1332(d)(4). 

 The parties agree that the mandatory exceptions do not apply. Doc. 19 at 2; 

Doc. 20 at 2. With respect to the discretionary exception, Plaintiffs submit that 53.4% of 

the class members are Arizona residents. Doc. 19 at 2. Defendants do not dispute that 

more than one-third of the proposed class members are citizens of Arizona. And as noted 

above, Defendant has its principal place of business in Arizona. 

 The Court must consider six factors in deciding whether to exercise its discretion 

to remand the case to state court. 28 U.S.C. § 1332(d)(3)(A)-(F). The parties agree that 

the second, third, and fourth factors favor remand (Doc. 19 at 2-4; Doc. 20 at 3-4), and 

the Court finds that all six factors clearly favor remand. This case concerns the 

Defendant’s administration of an escrow account, a matter that is not of significant 

national or interstate interest. The complaint asserts claims that will be governed by 

Arizona law, and was not pled to avoid federal jurisdiction. Yavapai County is a forum 

with a distinct nexus to this action because the alleged harm relates to the handling of an 

escrow account dedicated to the construction of a facility in Yavapai County. Doc. 1-1, 

¶ 6. More than one-half of the members of the proposed class are citizens of Arizona, 

and after considering the citizenship of the non-Arizona class members, the Court finds 

that no other state has an interest comparable to Arizona’s. See, e.g., Doc. 20 at 4 

(“[47%] of the putative Plaintiffs are dispersed all across the United States, with at least 

three Plaintiffs living in Switzerland and Canada.” (emphasis added)). Finally, no other 

class action involving similar claims has been filed during the three-year period 

preceding the filing of this action, and the filing of a related bankruptcy action is not a 

consideration identified in the statute. 

 In summary, “this case does not possess the interstate character or bear the 

interstate implications that underpin CAFA’s enlargement of federal jurisdiction.” 

Hirschbach v. NVE Bank, 496 F. Supp. 2d 451, 462 (D.N.J. 2007). The Court therefore 

will decline to exercise subject matter jurisdiction. 

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 IT IS ORDERED that the Clerk shall remand this case to Yavapai County 

Superior Court. 

 Dated this 23rd day of May, 2013. 

Case 3:13-cv-08031-DGC Document 21 Filed 05/23/13 Page 4 of 4