1

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

______________

No. 13-2812

______________

JEFFRY S. VODENICHAR; DAVID M. KING, JR. and 

LEIGH V. KING, husband and wife; JOSEPH B. DAVIS and 

LAUREN E. DAVIS, husband and wife; GROVE CITY 

COUNTRY CLUB; and RICHARD BROADHEAD, 

individually and on behalf of those similarly situated,

v.

HALCÓN ENERGY PROPERTIES, INC.; MORASCYZK & 

POLOCHAK; and CO-EXPRISE, DBA CX-ENERGY

Halcόn Energy Properties, Inc.,

Appellant

______________

On Appeal from the United State District Court 

for the Western District of Pennsylvania

(D.C. Civ. Action No. 2-13-CV-00360)

District Judge: Honorable Arthur J. Schwab

______________

Submitted Under Third Circuit L.A.R. 34.1(a)

July 16, 2013

______________

Before: RENDELL, SMITH, and SHWARTZ, Circuit 

Judges.

(Filed: August 16, 2013)

Kevin L. Colosimo, Esq.

Burleson LLP

501 Corporate Drive, Suite 105
2

Canonsburg, PA 15317

Counsel for Appellant

David A. Borkovic, Esq.

Jones, Gregg, Creehan & Gerace, LLP

411 Seventh Avenue, Suite 1200

Pittsburgh, PA 15219

Counsel for Appellees 

Richard A. Finberg, Esq.

300 Mt. Lebanon Boulevard, Suite 206-B

Pittsburgh, PA 15234

Counsel for Appellees 

______________

OPINION OF THE COURT

______________

SHWARTZ, Circuit Judge.

Defendant Halcόn Energy Properties, Inc. (“Halcόn”) 

appeals the District Court’s Order remanding this case to state 

court based on the “home state” exception to subject matter 

jurisdiction under the Class Action Fairness Act (“CAFA”). 

For the reasons stated below, we will affirm the District 

Court’s remand order, but do so instead based on CAFA’s

“local controversy” exception.

I. FACTS & PROCEDURAL HISTORY

Plaintiffs Jeffry S. Vodenichar, David M. King, Jr., 

Leigh V. King, Joseph B. Davis, Lauren E. Davis, Grove City 

Country Club, and Richard Broadhead filed suit on behalf of 

themselves and other similarly situated landowners who 

sought to lease the oil and gas rights in their land in Mercer 

County, Pennsylvania. Defendants Morascyzk & Polochak 

(“M&P”) and Co-eXprise, d/b/a “CX-Energy,” (“CXEnergy”) agreed to act as Plaintiffs’ agents to negotiate leases

of their oil and gas interests to energy companies under the 

terms of Landowner MarketPlace Agreements (“LMAs”). In 

exchange for their successful marketing efforts, M&P and 

CX-Energy were to be paid a “transaction fee.” 
3

M&P and CX-Energy entered into a Letter of Intent

with Halcόn (“Halcόn Agreement”), an oil and gas company, 

pursuant to which Halcόn would lease up to 60,000 acres of 

oil and gas rights from landowners who entered into LMAs 

and who had submitted lease documents to Halcόn. Under 

the Halcόn Agreement, each landowner who executed an 

LMA was guaranteed a $3,850 per acre payment plus an 

18.5% royalty on the net amount Halcόn realized from the oil 

and gas recovered from the property.

According to Plaintiffs, Halcόn agreed to accept the

leases absent a title defect, an adverse environmental claim, 

or restrictions on the ability to explore, drill for, or produce 

oil, gas, or hydrocarbons. Plaintiffs assert that Halcόn

rejected many of the leases for reasons other than those 

permitted under the Halcόn Agreement. Halcόn counters that 

the word “geology” was fraudulently omitted from the list of 

grounds upon which it could decline to lease the property, and 

that Halcόn was within its bargained-for rights to reject the

leases. Plaintiffs claim that this explanation was pretextual, 

as Halcόn sought to extricate itself from the lease 

arrangement because it lost a bid to secure oil and gas rights 

in other nearby properties, which made the leases of

Plaintiffs’ land less attractive. Plaintiffs further claim that 

they did not know that any words were omitted from the 

agreements and if a change had been made, it was the fault of 

M&P and CX-Energy. 

As a result of these events, Plaintiffs filed a putative 

class action against Halcόn based upon diversity jurisdiction, 

28 U.S.C. § 1332(a), in the United States District Court for 

the Western District of Pennsylvania (“first filed action”). In 

their complaint, Plaintiffs alleged that Halcόn breached their 

agreement and the duty of fair dealing. Halcόn filed an 

answer and the District Court convened a case management 

conference. During the conference, Halcόn informed the 

District Court that it anticipated joining M&P and CXEnergy, claiming that they were “necessary parties.” Case 

Mgmt. Conf. Tr. 13-14, No. 12-1624 (W.D. Pa. Jan. 16, 

2013), ECF No. 31.

Plaintiffs decided to file direct claims against M&P 

and CX-Energy. Knowing that adding these parties to the 
4

complaint would destroy diversity jurisdiction, Plaintiffs filed 

a motion to dismiss the first filed action without prejudice and 

with the intent of pursuing their claims against all defendants 

in state court. In response to the motion, Halcόn stated that it 

did not oppose joining M&P and CX-Energy, agreed that the 

claims against all three defendants would benefit from being 

heard in a single proceeding, but asserted that the case should 

proceed in the District Court under CAFA, particularly given 

the discovery already produced and the ongoing alternative 

dispute resolution (“ADR”) activities. 

The District Court granted the motion to voluntarily 

dismiss the first filed action without prejudice, reasoning that 

the parties agreed that the claims should proceed in one

forum, federal diversity would be destroyed by the addition of 

M&P and CX-Energy, and CAFA had not been pled as a 

basis for jurisdiction. The District Court also ordered the 

parties to complete the ADR process and directed the parties 

to retain the discovery produced to both facilitate the ADR 

process and assist in the state court case. 

On the day Plaintiffs filed their motion to dismiss the 

first filed action, they, through their same counsel, filed a

state court class action complaint in the Court of Common 

Pleas of Mercer County, Pennsylvania, alleging that Halcόn, 

M&P, and CX-Energy breached their agreements with, and 

duties to, the putative class (“second filed action”). The 

second filed complaint is identical to the first filed complaint, 

except with respect to the addition of two named plaintiffs, 

two defendants, the causes of action against the additional 

defendants, seven paragraphs setting forth the facts 

supporting those additional claims, and several exhibits

relating thereto. 

Halcόn then removed the second filed action to the 

District Court, which was assigned to the same District Judge 

as the first filed action. On the cover sheet that accompanied 

the removal petition, Halcόn indicated that the second filed 

action was related to the first filed action. In a text-entry 

order filed in the second filed action shortly after removal, the 

District Court made specific reference to the first filed action, 

including a directive that the parties inform the District Court 
5

of the status of the ADR process that the Court had ordered in 

the first filed action.

Plaintiffs filed a motion to remand the second filed 

action based upon CAFA’s local controversy exception to

federal subject matter jurisdiction. The District Court found 

that the local controversy exception did not apply, but held 

that CAFA’s home state exception required remanding the 

case to the Court of Common Pleas. Halcόn petitioned for 

review of the remand order pursuant to 28 U.S.C. § 

1453(c)(1), which we granted. 

II. JURISDICTION & STANDARD OF REVIEW

We have jurisdiction over this appeal pursuant to 28 

U.S.C. § 1453(c) and review issues of subject matter 

jurisdiction and statutory interpretation de novo. Kaufman v. 

Allstate New Jersey Insurance Co., 561 F.3d 144, 151 (3d 

Cir. 2009).

III. DISCUSSION

CAFA provides federal courts with jurisdiction over 

civil class actions if the “matter in controversy exceeds the 

sum or value of $5,000,000,” the aggregate number of 

proposed class members is 100 or more, and any class 

member is a citizen of a state different from any defendant. 

28 U.S.C. § 1332(d)(2), (d)(2)(A), (d)(5)(B). Thus, the 

statute authorizes federal jurisdiction over class actions even 

in the absence of complete diversity between the parties, 

except where the “controversy is uniquely” connected to the 

state in which the action was originally filed. Kaufman, 561 

F.3d at 149 & n.4. To this end, the statute includes two 

mandatory exceptions to federal subject matter jurisdiction, 

known as the “local controversy” and “home state” 

exceptions. 28 U.S.C. § 1332(d)(4)(A)-(B). The party 

seeking to invoke an exception bears the burden of proving 

by a preponderance of the evidence that the exception 

applies.1 Kaufman, 561 F.3d at 153-54.

 

1 Because these exceptions are examined to determine 

whether a federal court has subject matter jurisdiction, “our 

inquiry is limited to examining the case ‘as of the time it was 
6

Upon determining that the local controversy exception 

was inapplicable, the District Court concluded that the home 

state exception applied to this case. For the reasons explained 

herein, we part company with the District Court and conclude 

that CAFA’s home state exception is inapplicable to this case, 

but that remand is warranted under the local controversy

exception.

A. Home State Exception

The home state exception requires a federal court to 

decline to exercise subject matter jurisdiction in CAFA class 

actions where “two-thirds or more of the members of all 

 

filed in state court[.]’” Std. Fire Ins. Co. v. Knowles, 133 S. 

Ct. 1345, 1349 (2013) (quoting Wisc. Dep’t of Corrs. v. 

Schacht, 524 U.S. 381, 390 (1998)) (concluding that, 

although District Court appropriately considered stipulation 

in the complaint by the class action plaintiff to an amount in 

controversy below CAFA’s jurisdictional threshold, the 

District Court wrongly concluded that the precertification 

stipulation was binding on the absent class members). As we 

noted in Erie Ins. Exch. v. Erie Indem. Co., No. 13-1415, __ 

F.3d __, 2013 WL 3481493, at *3 (3d Cir. June 28, 2013), in 

evaluating whether removal was proper, “we generally focus 

on the allegations in the Complaint and the notice of 

removal.” Id. (emphasis added). Courts may consider 

pleadings as well as evidence that the parties submit to 

determine whether subject matter jurisdiction exists or an 

exception thereto applies. See Coleman v. Estes Express

Lines, Inc., 631 F.3d 1010, 1015-17 (9th Cir. 2011) (relying 

solely on the pleadings to evaluate the “significant relief” and 

“significant basis of the claims” factors under the local 

controversy exception, but considering external evidence to 

determine the “citizenship” factor); Coffey v. Freeport 

McMoran Copper & Gold, 581 F.3d 1240, 1246 (10th Cir. 

2009) (looking to the total activity of a company to determine 

the “citizenship” factor ); Moua v. Jani-King of Minn., Inc., 

613 F. Supp. 2d 1103, 1108-09 (D. Minn. 2009) (considering 

the allegations and plaintiff’s arguments in other 

submissions); Anthony v. Small Tube Mfg. Corp., 535 F. 

Supp. 2d 506, 517 (E.D. Pa. 2007) (considering defendant’s 

answer and averments).
7

proposed plaintiff classes in the aggregate, and the primary 

defendants, are citizens of the State in which the action was 

originally filed.” 28 U.S.C. § 1332(d)(4)(B). A party seeking 

to invoke this exception must therefore: (1) establish that the 

citizenship of the members of two-thirds or more of the 

putative class is the state in which the action was originally 

filed; (2) establish the citizenship of the defendants; (3) 

identify the primary defendants; and (4) demonstrate that 

two-thirds or more of the members of the putative class are 

citizens of the same state as the primary defendants. See

Anthony, 535 F. Supp. 2d at 514-15. 

There is no dispute that the named plaintiffs, more 

than two-thirds of the class members,

2 CX-Energy, and M&P 

are all citizens of Pennsylvania, the state where the action was 

originally filed.

3

 Halcόn is a Delaware Corporation with its 

principal place of business and headquarters in Texas, and 

thus it is not a citizen of Pennsylvania. 

Having established the citizenships of the parties and 

two-thirds or more of the putative class, the Court must next 

identify the “primary defendants” under Section 

 

2 Members of the putative class who are natural 

persons are deemed citizens of the state in which they are

domiciled, which is typically the state where the person lives. 

See Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 

828 (1989); District of Columbia v. Murphy, 314 U.S. 441, 

455 (1941). Under CAFA, suits brought “by unincorporated 

associations [are] treated like suits by corporations in that the 

citizenship of the association for diversity purposes is 

determined by the entities’ principal place of business and not 

by the citizenship of its members.” Erie Ins., 2013 WL 

3481493, at *6 n.7; 28 U.S.C. § 1332(d)(10). 

3 CX-Energy is deemed a citizen of Pennsylvania, 

which is both its state of incorporation, 28 U.S.C. § 

1332(c)(1), and the place “where the corporation’s high level 

officers direct, control, and coordinate the corporation’s 

activities.” Hertz Corp. v. Friend, 559 U.S. 77, 80 (2010). 

As an unincorporated association, CAFA deems M&P “to be 

a citizen of the State where it has its principal place of 

business and the State under whose laws it is organized,” 28 

U.S.C. § 1332(d)(10), which in this case is Pennsylvania. 
8

1332(d)(4)(B). Here, the District Court concluded that the 

home state exception applied based upon its determination 

that M&P and CX-Energy were the only primary defendants 

and both were citizens of Pennsylvania, where the second 

filed action was originally filed. Because Halcόn had denied 

liability in its answer, the District Court reasoned that Halcόn

was not a primary defendant. We conclude, however, that 

Halcόn—which is not a citizen of Pennsylvania—is a primary 

defendant, thereby rendering CAFA’s home state exception 

inapplicable to this case.

CAFA itself does not define the phrase “primary 

defendants.” The word “primary” has several meanings, 

including: “first in order of time or development,” 

“primitive,” “of first rank, importance, or value,” “principal,” 

“basic,” “fundamental,” “direct,” “firsthand,” and “belonging 

to the first group or order in successive divisions, 

combinations or ramifications.” Merriam-Webster’s 

Collegiate Dictionary 923 (10th ed. 2002). Looking at the 

surrounding statutory language, we can rule out certain of 

these definitions (such as those that focus on sequence), and 

construe the word primary to mean “principal,” 

“fundamental,” or “direct.” 

Some courts have embraced the definition of primary 

to mean direct and construed the words “primary defendants” 

to capture those defendants who are directly liable to the 

proposed class, as opposed to being vicariously or secondarily 

liable based upon theories of contribution or indemnification. 

See, e.g., Copper Sands Homeowners Ass’n, Inc. v. Copper

Sands Realty, LLC, No. 2:10-cv-00510, 2011 WL 941079, at 

*6 (D. Nev. Mar. 16, 2011); Anthony, 535 F. Supp. 2d at 517; 

Kitson v. Bank of Edwardsville, No. 06-528, 2006 WL 

3392752, at *13-17 (S.D. Ill. Nov. 22, 2006). This 

construction finds support in the statements of CAFA’s 

Sponsors, which describe the primary defendants as those 

who are the “real targets” of the lawsuit. 151 Cong. Rec.

H723-01, 2005 WL 387992 (daily ed. Feb. 17, 2005)

(statement of Rep. Goodlatte); see also H.R. Rep. No. 108-

144, 2003 WL 21321526, at 38 (2003) (stating that “[t]he 

sponsors intend that primary defendants be intended to reach 

those defendants who are the real targets of the lawsuit, i.e., 

the defendants who would be expected to incur most of the 
9

loss if liability is found.”) This language shows that the 

Sponsors were focused on the defendants who plaintiffs 

alleged are the real wrongdoers as opposed to those 

defendants who may have to pay because of the actions of 

others.4 Therefore, the direct versus secondary liability 

distinction some courts use is consistent with the legislative 

intent. 

Courts also look at the allegations to identify the 

defendants expected to sustain the greatest loss if liability 

were found, Bennett v. Bd. of Comm’rs for East Jefferson 

Levee Dist., Nos. 07-3130, 07-3131, 2007 WL 2571942, at *6 

(E.D. La. Aug. 31, 2007) (comparing the maximum exposure 

of liability for each defendant to determine primacy), and 

whether such defendants have “substantial exposure to 

significant portions of the proposed class.”5 Robinson v. 

Cheetah Transp., No. 06-0005, 2006 WL 468820, at *2 n.7 

(W.D. La. Nov. 14, 2006).6 These considerations, therefore, 

 

4

For this reason, courts examining whether a 

defendant is a “primary defendant” should not consider

whether the defendant may be able to recover from others or 

whether it is able to satisfy the judgment. 

5

This is also consistent with the legislative history. 

The Sponsors explicitly stated that “[t]he term “primary 

defendant” should include any person who has substantial 

exposure to significant portions of the proposed class in the 

action, particularly any defendant that is allegedly liable to 

the vast majority of the members of the proposed classes, as 

opposed to simply a few individual class members.” 151 

Cong. Rec. H723-01, 2005 WL 387992 (daily ed. Feb. 17, 

2005) (statement of Rep. Goodlatte); see also H.R. Rep. No.

108-144, 2003 WL 21321526, at 38 (2003). Thus, the 

Sponsors intended the identity of the “primary defendants” to 

be determined based upon the allegations concerning the 

defendants expected to be liable to the greatest number of 

class members and to suffer the greatest loss if liability is 

found.

6

See also Hollinger v. Home State Mut. Ins. Co., 654 

F.3d 564, 572 (5th Cir. 2011) (finding that defendants were 

primary defendants after considering the fact that all punitive 

class members had claims against them and that they had 

issued the insurance policies at the center of the dispute). 
10

focus on the number of class members purportedly impacted 

by the defendant’s alleged actions and the amount the 

defendant may lose if found liable. To determine the number 

of class members to whom a defendant may be liable and to 

identify the defendants who would sustain the greatest loss if 

found liable, courts must assume liability will be established.

7

 

As a result, courts should not consider whether a defendant 

has denied liability, and the District Court’s reliance on 

Halcόn’s denial of liability was misplaced. 

In short, courts tasked with determining whether a 

defendant is a “primary defendant” under CAFA should

assume liability will be found and determine whether the 

defendant is the “real target” of the plaintiffs’ accusations. In 

doing so, they should also determine if the plaintiffs seek to 

hold the defendant responsible for its own actions, as opposed 

to seeking to have it pay for the actions of others. Also, 

courts should ask whether, given the claims asserted against 

the defendant, it has potential exposure to a significant 

portion of the class and would sustain a substantial loss as 

compared to other defendants if found liable. 

Applying these principles, we conclude that Plaintiffs 

allege that each defendant is directly liable, appear to 

apportion liability equally among the defendants, and seek 

similar relief from all defendants. While more claims are 

asserted against M&P and CX-Energy than against Halcόn, 

the claims against Halcόn are as, if not more, significant in 

that Plaintiffs allege Halcόn breached its lease agreement 

with more than 1,000 landowners and owes damages 

exceeding $50,000 to each class member. Thus, Halcόn is a 

“primary defendant.” 

Finally, by using the word “the” before the words 

“primary defendants” rather than the word “a,” the statute 

requires remand under the home state exception only if all 

primary defendants are citizens of Pennsylvania. Anthony, 

535 F. Supp. 2d at 515. Because Halcόn is a primary 

defendant and is not from the same state as the Pennsylvania 

 

7

This is in keeping with the contingent nature of the 

Sponsors’ language (i.e., “if liability is found”). H.R. Rep. 

No. 108-144, 2003 WL 21321526, at 38 (2003).
11

class members, remand based upon this exception is not 

warranted. 

For these reasons, we conclude that the home state 

exception does not apply and remand should not have been 

ordered on this basis. 

B. Local Controversy Exception

Finding the District Court’s rationale for remand 

lacking, we turn to the other exception to CAFA’s subject 

matter jurisdiction: the local controversy exception. The 

District Court ruled that the local controversy exception did 

not apply to this case because another class action had been 

filed arising from the same facts and asserting similar claims. 

For the reasons set forth herein, we conclude that “no other 

class action” had been filed as contemplated under CAFA, 

and therefore remand of this case pursuant to the local 

controversy exception is appropriate.

Under the local controversy exception:

A district court shall decline to exercise 

jurisdiction under paragraph (2)—

(A)(i) over a class action in which—

(I) greater than two-thirds of the members of 

all proposed plaintiff classes in the 

aggregate are citizens of the State in which 

the action was originally filed;

(II) at least 1 defendant is a defendant—

(aa) from whom significant relief is 

sought by members of the plaintiff class;

(bb) whose alleged conduct forms a 

significant basis for the claims asserted 

by the proposed plaintiff class; and

(cc) who is a citizen of the State in which 

the action was originally filed; and
12

(III) principal injuries resulting from the 

alleged conduct or any related conduct of 

each defendant were incurred in the State in 

which the action was originally filed; and

(ii) during the 3–year period preceding the 

filing of that class action, no other class action 

has been filed asserting the same or similar 

factual allegations against any of the defendants 

on behalf of the same or other persons[.]

28 U.S.C. § 1332(d)(4)(A). A party seeking to invoke this 

exception must therefore show that: (1) greater than twothirds of the putative class are citizens of the state in which 

the action was originally filed; (2) at least one defendant is a 

citizen of the state in which the action was originally filed

(the “local defendant”); (3) the local defendant’s conduct 

forms a significant basis for the claims asserted; (4) plaintiffs 

are seeking significant relief from the local defendant; (5) the 

principal injuries occurred in the state in which the action was 

originally filed; and (6) no other class action asserting the 

same or similar allegations against any of the defendants had 

been filed in the preceding three years. These elements

ensure that the exception is invoked when the class is 

primarily local, the lawsuit is against “at least one real in-state 

defendant whose alleged conduct is central to the class claims 

and from whom the class seeks significant relief,” the injuries 

the defendant allegedly caused occurred within the forum,

and no other similar class actions have been filed against any 

of the defendants. 151 Cong. Rec. S999-02, 2005 WL 

283380 (daily ed. Feb. 7, 2005) (statement of Sen. Specter).

Each element of the local controversy exception is met 

and remand pursuant to this exception is warranted. 

First, as stated previously, there is no dispute that more 

than two-thirds of the class members are citizens of 

Pennsylvania.

Second, there is no dispute that at least one defendant 

named in the case is local—that is, from the state in which the 

case was originally filed. As discussed above, both M&P and 

CX-Energy are citizens of Pennsylvania, the state in which 
13

the case was originally filed, and hence are local defendants 

under CAFA.

Third, each local defendant’s “alleged conduct forms a 

significant basis for the claims asserted by the proposed 

plaintiff class.” 28 U.S.C. § 1332(d)(4)(A)(i)(II)(bb).

8 As

agents for the putative class members, the local defendants 

entered an agreement with Halcόn pursuant to which Halcόn 

would lease up to 60,000 acres of Plaintiffs’ oil and gas 

rights. Plaintiffs allege that the local defendants breached 

their contractual and fiduciary obligations to the class by 

failing to ensure that the lease agreements conformed to 

Halcόn’s requirements and made negligent misrepresentations 

to the class concerning the basis upon which Halcόn could 

refuse to enter the leases.9 Put differently, Plaintiffs 

essentially assert that M&P and CX-Energy made 

misrepresentations to induce them to relinquish their oil and 

gas rights and caused Halcόn to decline to enter the lease 

agreement by changing the terms of the agreement and that 

these actions damaged Plaintiffs. Because Plaintiffs’ claims 

are based upon Halcόn’s rejection of the leases and because 

Halcόn allegedly rejected the leases based on language that 

the local defendants purportedly omitted, the local 

defendants’ conduct forms a “significant basis” of Plaintiffs’ 

claims. 

Fourth, Plaintiffs are seeking “significant relief” from 

both local defendants. Plaintiffs seek from the local 

defendants damages totaling more than $50,000 for each of 

 

8

This factor does not require that each class member 

assert a claim against that local defendant nor must the local 

defendant’s alleged conduct form the basis of every claim 

asserted. Kaufman, 561 F.3d at 155. The focus is on the 

conduct in which the local defendant allegedly engaged and 

the alleged number of people impacted by it.

9 Halcόn’s cross-claim also alleges that the local 

defendants agreed to include language in certain lease 

documents that did not appear in the documents that plaintiffs 

signed. Halcόn claims that the local defendants made 

statements concerning the basis upon which Halcόn could 

reject the lease, which Halcόn alleges contradicts the written 

agreement. 
14

the 1,362 class members and a declaration that the local

defendants were not entitled to receive fees from Plaintiffs for 

the lease transactions. While monetary and declaratory relief 

is also sought from Halcόn, this does not change the fact that 

significant relief is being sought from the local defendants.

Fifth, there is no dispute that the “principal injuries” 

resulting from the alleged conduct or related conduct of each

defendant were “incurred in the state in which the case was 

originally filed.” 28 U.S.C. § 1332(d)(4)(A)(i)(III).10 Here, 

most class members who sought to lease their oil and gas 

rights allegedly reside in, and all of the land is located in,

Mercer County, Pennsylvania. Thus, Pennsylvania citizens

own the land that is at the heart of this dispute, and they were

allegedly financially injured by the defendants’ alleged 

breach of the agreements to lease the oil and gas rights to 

their Pennsylvania property. 

Finally, contrary to the District Court, we determine 

that no other class action, as contemplated by CAFA, 

asserting the same or similar allegations against any of the 

defendants had been filed in the preceding three years. While 

we recognize that Plaintiffs filed two separate putative class 

action complaints against Halcόn, the act of filing a

subsequent complaint does not necessarily mean that the 

earlier filed action bars invocation of the exception. Indeed, 

close scrutiny of the two cases shows that the first filed action 

does not constitute an “other class action” as contemplated by 

CAFA.

CAFA does not define what constitutes an “other class 

action” other than to limit it to filed cases asserting similar 

factual allegations against a defendant. The goals of the 

statute, however, provide guidance. In enacting CAFA,

Congress recognized the benefits of having one federal forum 

 

10 This provision is written in the disjunctive and 

hence, the provision is “satisfied either 1) when principal 

injuries resulting from the alleged conduct of each defendant 

were incurred in the state in which the action was originally 

filed ‘or’ 2) when principal injuries resulting from any related 

conduct of each defendant were incurred in the state.” 

Kaufman, 561 F.3d at 158. 
15

to adjudicate multiple cases filed in various courts against a

defendant. See Class Action Fairness Act of 2005, Pub. L. 

No. 109-2, § 2(a)(1), 119 Stat. 4. To this end, the statute 

seeks to control the impact of multiple class actions filed by 

different members of the same class against a defendant by 

providing a single forum to resolve similar claims. See S. 

Rep. No. 109-14, at 4-5 (2005), reprinted in 2005 

U.S.C.C.A.N. 3, 5-6; DeHart v. BP America, Inc., No. 09-

626, 2010 WL 231744, at *12 (W.D. La. Jan. 14, 2010). 

Moreover, Congress sought to have all but truly local 

controversies11 proceed in federal court and found that when a 

“controversy results in the filing of multiple class actions, it is 

a strong signal that those cases may not be of the variety that 

[the local controversy] exception is intended to address.” S. 

Rep. No. 109-14, at 40-41, 2005 U.S.C.C.A.N. at 39; see also

Class Action Fairness Act of 2005, Pub. L. No. 109-2, § 

2(b)(2), 119 Stat. 4. 

In short, Congress wanted to ensure that defendants 

did not face copycat, or near copycat, suits in multiple forums 

and hence excluded from the local controversy exception 

cases where a defendant was named in multiple similar cases. 

It follows that the “no other class action” factor must not be 

read too narrowly. The “inquiry is whether similar factual 

allegations have been made against the defendant in multiple 

class actions”—and hence they are facing separate, distinct

lawsuits—without regard to the procedural posture of the 

earlier filed cases or whether the putative classes in the cases 

overlap, their claims arise from an identical event, or involve 

the same causes of action or legal theories.

12 S. Rep. No.

 

11 The local controversy exception seeks to “identify a 

truly local controversy—a controversy that uniquely affects a 

particular locality to the exclusion of all others” 151 Cong. 

Rec. H723-01, 2005 WL 387992 (daily ed. Feb. 17, 2005)

(statement of Rep. Sensenbrenner), and “enables State courts 

to adjudicate truly local disputes involving principal injuries 

concentrated within the forum State.” 151 Cong. Rec. S999-

02, 2005 WL 283380 (daily ed. Feb. 7, 2005) (statement of 

Sen. Specter).

12 Also, if two class actions arise out of the same facts, 

but are factually and analytically different, such that the proof 

necessary for one class to prevail differs from the proof 
16

109-14, at 41, 2005 U.S.C.C.A.N. at 39; see also Giannini v. 

Nw. Mut. Life Ins. Co., No. 12-77, 2012 WL 1535196, at *5 

(N.D. Cal. Apr. 30, 2012); Rasberry, 609 F. Supp. 2d at 605.

The question here is whether the first and second filed 

actions are the same case or if the first filed action is an 

“other class action,” as contemplated under the local 

controversy exception. The same representative plaintiffs 

filed two complaints on behalf of an identically-defined

putative class arising from the same factual allegations. 

While the first filed action was pending in federal court, the 

parties proceeded with discovery and Halcόn disclosed its 

intention to join the local defendants based on their role in the 

transaction that gave rise to the dispute. Plaintiffs then 

expressed a desire to add them as direct defendants. Instead 

of amending the first filed complaint in a way that would 

destroy complete diversity, Plaintiffs sought to voluntarily 

dismiss the first filed action so that Plaintiffs and Halcόn 

could assert claims against the local defendants in a single 

forum in which subject matter jurisdiction undisputedly 

existed. Apparently recognizing the possibility that, absent a 

settlement, the dispute between the sides would continue, the 

District Court granted the motion to dismiss the first filed 

action without prejudice but ordered the parties to participate 

in ADR and to retain the discovery that they had exchanged 

for use in both the ADR and the case that joined the two local

defendants. Thus, the District Court’s actions showed that it 

considered the second filed action a continuation of the first 

filed action and took practical steps to ensure that the act of 

filing the second complaint did not delay the parties’ ability 

to proceed. Treating the second filed action in this way is 

consistent with the goal of the local controversy exception of 

ensuring that the defendants are not subject to similar claims 

in different forums and allowing all claims against them to 

proceed in a coordinated fashion.

 Furthermore, this is not a copycat situation where the 

defendants face similar class claims brought by different 

 

another class would need to present, the first filed class action 

would not constitute an “other” class action as defined in 

CAFA. Rasberry v. Capitol Cnty. Mut. Fire Ins. Co., 609 F. 

Supp. 2d 594, 605 (E.D. Tex. 2009).
17

named plaintiffs and different counsel in different forums. 

Rather, the named Plaintiffs and their counsel brought class 

claims in November 2012 and, based on Halcόn’s disclosure,

Plaintiffs decided to enlarge the case to add the two local 

defendants together with claims unique to those parties that 

arose from the same transactions. In practical terms, 

Plaintiffs’ actions were no different from a situation where a 

party amends a pleading to join parties to an existing case, 

which is indeed what Halcόn itself stated it intended to do

during the original district court proceeding. Indeed, there is 

nothing in the record that would suggest otherwise.

In short, Halcόn is defending the same case that it had 

been defending since November 2012 with the exception of 

the addition of the other parties Halcόn intended to join. The 

first filed action therefore is not an “other class action” as 

contemplated under CAFA, but rather is the same case, albeit 

enlarged, and thus, the “no other class action” prong of the 

local controversy exception is satisfied.

For these reasons, the local controversy exception to 

CAFA jurisdiction mandates remand of this truly local case

involving Pennsylvania landowners and their land. 

IV. CONCLUSION

For the foregoing reasons, we will affirm the order of 

the District Court granting the motion to remand.