In the

United States Court of Appeals

For the Seventh Circuit

No. 09-8038

IN RE:

SPRINT NEXTEL CORPORATION,

Petitioner.

Petition for Permission to Appeal

from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 09 C 2192—Matthew F. Kennelly, Judge.

SUBMITTED OCTOBER 16, 2009—DECIDED JANUARY 28, 2010

Before FLAUM, EVANS, and SYKES, Circuit Judges.

EVANS, Circuit Judge. Sprint Nextel has petitioned

for leave to appeal the district court’s remand to state

court of a class action against it. The complaint alleged

violations of the Kansas Unfair Trade and Consumer

Protection Act. The district court declined to exercise

jurisdiction on the ground that the suit fell within the

home-state exception to the Class Action Fairness Act

(CAFA). See 28 U.S.C. § 1332(d)(4)(B).

The complaint, filed in Kansas state court, alleges that

Sprint Nextel, a Kansas corporation, conspired with
2 No. 09-8038

other cell phone providers to impose artificially high

prices for text-message service. The plaintiffs declared

that they were bringing the suit on behalf of themselves

and “all Kansas residents” who purchased text

messaging from Sprint Nextel or one of its alleged

coconspirators between January 2005 and October 2008,

when the suit was initiated. But they also specified

that their class was limited only to those who (1) had a

Kansas cell phone number, (2) received their cell phone

bill at a Kansas mailing address, and (3) paid a Kansas

“USF fee,” which is applied to all long-distance calls

within Kansas. It’s not clear what the third factor adds

to the first two. Regardless, the plaintiffs asserted that

these three factors showed that all the class members

were Kansas citizens.

Sprint Nextel removed the case to the United States

District Court for the District of Kansas pursuant to

CAFA, 28 U.S.C. § 1332(d)(2), (d)(5), contending, as

required, that over $5 million was in controversy, the

class contained more than 100 members, and at least

one member of the putative class, though meeting the

three criteria outlined above, was not a Kansas citizen.

Sprint Nextel in fact came up with five non-Kansan

putative class members, all of them national corporations that subscribed to Kansas cell phone service as

part of their Kansas presence and received bills at a

Kansas office. The panel on Multi-District Litigation

transferred this case, along with over a dozen other

similar suits against cell phone companies, to the

Northern District of Illinois. The district court agreed

with the plaintiffs that the home-state exception

required it to remand the case.
No. 09-8038 3

The requirements of the home-state exception are

simple: if “two-thirds or more of the members of all

proposed plaintiff classes in the aggregate, and the

primary defendants, are citizens of the State in which

the action was originally filed,” the district court

should decline jurisdiction. 28 U.S.C. § 1332(d)(4)(B). In

resisting remand, Sprint Nextel argued first that the

plaintiffs had presented no evidence that two-thirds of

their proposed class members were in fact Kansas

citizens, as opposed to, say, local offices of national corporations or out-of-state students at Kansas colleges, each

of whom might have Kansas cell phones and Kansas

mailing addresses. Second, Sprint Nextel argued that

even if the plaintiffs had documented the Kansas citizenship of the members of the proposed class, CAFA

required more. Sprint Nextel contended that when the

statutory exception specifies that “two-thirds or more

of the members of all proposed plaintiff classes in the

aggregate” must be from the home state, it means twothirds of the members of the proposed classes in all

lawsuits alleging similar conduct, not just the proposed

class in this suit. And there was no way, Sprint Nextel

continued, that Kansas citizens constituted at least twothirds of the members across the proposed plaintiff

classes in all text-messaging antitrust cases.

The district court rejected both arguments. First, it

ruled that even though the plaintiffs presented no

evidence to counter Sprint Nextel’s attacks on the composition of their class, they “have defined the

putative class in such a way as to leave little doubt that

at least two-thirds of the class members are Kansas citi-
4 No. 09-8038

zens.” The court rejected the second argument on the

ground that while the local-controversy exception

requires district courts to inquire whether there have

been other class actions with similar allegations in the

past three years, 28 U.S.C. § 1332(d)(4)(A)(ii), the homestate exception does not. The district court concluded

from this distinction that the home-state exception

does not, as a rule, require consideration of other lawsuits; consequently, the defendant’s reading of the twothirds provision, which would require the court to look

beyond the four corners of the complaint, was untenable.

In its petition, Sprint Nextel renews its arguments, which

present issues of first impression for this court. Sprint

Nextel also contends, in light of the other related suits

and the fact that it is a nationwide cell phone provider,

that this is a national controversy, and just the sort of

dispute that CAFA was designed to keep in federal court.

We first address whether the denominator of the twothirds provision is the total number of potential class

members in this suit or in all suits with similar allegations. Sprint Nextel makes much of the language, “proposed plaintiff classes in the aggregate,” suggesting that

the only possible reason for Congress’s reference to

plural “classes in the aggregate” is to require a district

court to search out similar cases. We join the First

Circuit, the only appellate court to confront this issue,

in rejecting that reading. See In re Hannaford Bros. Co.

Customer Data Sec. Breach Litig., 564 F.3d 75, 78-79 (1st Cir.

2009). The First Circuit’s response to this argument was

that there can be more than one class in a single class

action, and the plural language is meant to address that
No. 09-8038 5

scenario. Id. at 79. We agree. For example, in a toxic tort

case there could be both a medical monitoring class and

a property remediation class. Without the requirement

that the district court evaluate the citizenship of “the

proposed classes in the aggregate,” one might think that

so long as at least two-thirds of the members of one of

those classes were from the home state, the exception

would apply. Preventing that misconception seems

purpose enough for CAFA’s reference to “classes in

the aggregate.”

Moreover, identical language is used in the local-controversy exception, and in that context it can’t mean

what Sprint Nextel says it does. The local-controversy

exception is more intricate than the home-state

exception, but for our purposes only two elements are

important. First, as with the home-state exception,

“greater than two-thirds of the members of all proposed

plaintiff classes in the aggregate [must be] citizens of

the State in which the action was originally filed.” 28

U.S.C. § 1332(d)(4)(A)(i). Second, the exception applies

only if “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 . . . .” Id. at 1332(d)(4)(A)(ii).

Under Sprint Nextel’s reading, the first provision

would require the district court to evaluate the fraction

of home-state plaintiffs involved in all similar class

actions. But, says the second provision, if there are

similar actions, it’s ipso facto not a local controversy.

Thus, for purposes of the local-controversy exception,

the composition of proposed plaintiff classes in other
6 No. 09-8038

similar suits can never matter. If there aren’t any other

similar suits, the district court would of course

evaluate only those in the current case, and if there

are similar suits, the fact of their existence controls, regardless of the composition of the proposed classes in

those suits. It would be surprising if the same language

meant something different in the home-state exception.

See Atlantic Cleaners & Dyers v. United States, 286 U.S. 427,

433 (1932).

We also reject Sprint Nextel’s insinuation that federal

jurisdiction is proper, regardless of the rules set forth

in CAFA, because, it says, CAFA was enacted to ensure

that national controversies, which it asserts this is, are

decided in federal court. That may have been Congress’s

general goal, but it also provided for exceptions, and

plaintiffs are free to “circumscribe their class definitions”

so that they can fit within one of those exceptions

and avoid federal jurisdiction. Johnson v. Advance Am., 549

F.3d 932, 937 (4th Cir. 2008); see also Palisades Collections

LLC v. Shorts, 552 F.3d 327, 336 n. 5 (4th Cir. 2008) (collecting cases to the effect that any general policy

embodied in CAFA in favor of removal jurisdiction

gives way to canons of strict statutory construction).

Furthermore, because the home-state exception, unlike

the local-controversy exception, is framed entirely in

terms of the parties’ citizenship, the fact that this

suit may be but a slice of a bigger controversy is irrelevant. The First Circuit case, In re Hannaford Bros. Co.

Customer Data Sec. Breach Litig., 564 F.3d 75, provides a

good illustration of this point. That appeal involved one
No. 09-8038 7

of 25 different suits that were filed in various district

courts against a grocery chain based in Florida, another

that operates in the Northeast, and their common

Belgian parent company. Id. at 77. Despite the national,

and even international, flavor of the controversy as a

whole, the First Circuit looked only at the case before

it and applied the citizenship requirements of the homestate exception. Because the primary defendant was a

Florida corporation and at least two-thirds of the plaintiffs were citizens of Florida, the state in which the

action was brought, the First Circuit affirmed the

remand order. Id. at 80-81.

It’s more difficult to say whether the district court’s

ruling on the evidentiary issue was correct. Once Sprint

Nextel established that CAFA jurisdiction exists, the

burden fell on the plaintiffs, who were seeking remand,

to show that the home-state exception applies. See Hart

v. FedEx Ground Package System, Inc., 457 F.3d 675, 680

(7th Cir. 2006). And to do that, the plaintiffs had to establish by a preponderance of the evidence that twothirds of their proposed class members are Kansas

citizens, that is, either individuals domiciled in Kansas

or corporations organized there (or other business

entities meeting the relevant tests). 28 U.S.C. § 1332(a), (c);

Preston v. Tenet Healthsystem Mem’l Med. Ctr., Inc., 485

F.3d 804, 813-14 (5th Cir. 2007). The plaintiffs didn’t

submit any evidence about citizenship, but the district

court thought that the class definition itself, keyed as it

is to Kansas cell phone numbers and mailing addresses,

made it more likely than not that two-thirds of the

putative class members are Kansas citizens.
8 No. 09-8038

This approach has some appeal. People with Kansas cell

phones presumably have them because they lived or

worked in the state at some time, and the current

Kansas mailing addresses suggest that they still do.

Granted, being a resident isn’t the same thing as being

a citizen, that is to say, a domiciliary, Mississippi Band of

Choctaw Indians v. Holyfield, 490 U.S. 30, 48 (1989); Meyerson

v. Harrah’s East Chicago Casino, 299 F.3d 616, 617 (7th Cir.

2002), and people who work in Kansas but don’t live

there—such as commuters from Kansas City, Missouri—aren’t Kansas citizens. Yet, one would think that

the vast majority of individual Kansas cell phone users

do in fact live in that state and that the vast majority

of them view it as their true home. True, some of those

residents are college students from other states or

others, such as soldiers, who come to Kansas without

the intent to remain indefinitely. But it’s hard to

believe that those nondomiciliaries are collectively

more than a drop in the bucket when it comes to class

composition. The population of Kansas is approximately 2.8 million people, http://quickfacts.census.gov/

qfd/states/20000.html, but the state’s biggest military

base, Fort Leavenworth, is home to only 10,000 soldiers

and family members, http://usmilitary.about.com/od/

armybaseprofiles/ss/leavenworth_3.htm, and the out-ofstate population of the University of Kansas, the

state’s biggest school, is under 10,000, http://colleges.

collegetoolkit.com/colleges/studentprofile/university_of_

kansas/155317.aspx.

The same view seems equally applicable to cell phones

belonging to businesses. On the one hand, any out-of-
No. 09-8038 9

state companies that purchase text messaging for

Kansas cell phones used by their local employees and

receive bills at a Kansas mailing address would be part

of the class, but not Kansas citizens. On the other hand,

we imagine that only a fraction of businesses that use

Kansas cell phone service are not Kansas citizens. All in

all, we’re inclined to think that at least two-thirds of

those who have Kansas cell phone numbers and use

Kansas mailing addresses for their cell phone bills

are probably Kansas citizens. Cf. Kitson v. Bank of

Edwardsville, No. 06-528-GPM, 2006 WL 3392752, at *6 (S.D.

Ill. Nov. 22, 2006) (holding court “entitled to assume” that

class members were Illinois citizens on basis of Illinois

mailing addresses because, in its view, mailing addresses

are evidence of residence, which is evidence of domicile);

Caruso v. Allstate Ins. Co., 469 F. Supp. 2d 364, 367-68 (E.D.

La. 2007) (“Although there well may be proposed classes

where detailed proof of the two-thirds citizenship requirement is required, the Court finds that common

sense should prevail in this closed-end class involving

people who, as noted, hold an asset that is a measure

of domicile, their home.”); Bennett v. Bd. of Comm’rs for E.

Jefferson Levee Dist., Nos. 07-3130, 07-3131, 2007 WL

2571942, at *5 (E.D. La. Aug. 31, 2007) (holding it was

“reasonable to infer” that two-thirds of all class

members were Louisiana citizens, where class was

open to all “residents, domiciliaries, business entities,

property owners, and other persons and entities residing

or present” in a certain parish in August 2005); see also

Joseph v. Unitrin, Inc., No. 1:08-CV-077, 2008 WL 3822938,

at *6 (E.D. Tex. Aug. 12, 2008).
10 No. 09-8038

But that’s all guesswork. Sensible guesswork, based on

a sense of how the world works, but guesswork nonetheless. There are any number of ways in which our

assumptions about the citizenship of this vast class

might differ from reality. For example, we may have

grossly underestimated the presence of out-of-state

businesses or the number of Kansas residents who

don’t intend to stay indefinitely. Or perhaps a far

greater percentage of nondomiciliary residents use text

messaging than their domiciled neighbors. Ultimately,

we agree with the majority of district courts that a

court may not draw conclusions about the citizenship

of class members based on things like their phone

numbers and mailing addresses.

In Gerstenecker v. Terminix Int’l, Inc., No. 07-CV-0164-MJR,

2007 WL 2746847 (S.D. Ill. Sept. 19, 2007), the district

court refused to remand a case where the class was

defined as all individuals and entities that own property

in Illinois and purchased extermination contracts from

the defendant. The court was troubled both by the fact

that the class could include absentee landlords from

other states and also by the lack of proof that any Illinoisresident owners were indeed Illinois citizens. “In

essence, plaintiffs ask this Court to conclude that

because the real property at issue is located in Illinois, twothirds of the members of the proposed class in the aggregate are citizens of Illinois. That may or may not be

true but either conclusion requires a leap of faith this

Court cannot make.” Id. at *2. The plaintiff in Phillips v.

Severn Trent Envtl. Serv., Inc., No. 07-3889, 2007 WL 2757131

(E.D. La. Sept. 19, 2007), sought remand under the local-
No. 09-8038 11

controversy exception for a putative class that was

defined as all persons who were living in a particular

Louisiana county during a one-week period in 2007 and

used contaminated water. Id. at *1-*2. The district court

acknowledged that “there is some intuitive appeal to the

claim” that two-thirds of the people who lived in the

county during that week were citizens of Louisiana at

the time the complaint was filed only two months later,

but held such intuition did not establish by a preponderance of the evidence that the citizenship requirement

was satisfied. Id. at *3.

A similar struggle played out in Anthony v. Small Tube

Mfg. Corp., 535 F. Supp. 2d 506 (E.D. Pa. 2007), where the

district court rejected the argument that two-thirds of

the class members were bound to be Pennsylvania

citizens, given a class defined as everyone who

worked at a particular Pennsylvania factory over a 35-

year period. The court said that even though satisfaction

of the citizenship requirement “may be a reasonable

inference, it does not satisfy the plaintiff’s burden of

proof,” because some of the employees may have moved

when they left their jobs, or may not have been citizens

even when they were working at the factory. Id. at 517.

And in Schwartz v. Comcast Corp., No. Civ.A. 05-2340, 2006

WL 487915 (E.D. Pa. Feb. 28, 2006), the court ruled that

the plaintiffs had not established the Pennsylvania citizenship of two-thirds of a class they defined as “[a]ll

persons and entities residing or doing business in the

Commonwealth of Pennsylvania who subscribed

to Comcast’s high-speed internet service” during a

given one-year period. Id. at *3; see also Evans v. Walter
12 No. 09-8038

Indus., Inc., 449 F.3d 1159, 1165-66 (11th Cir. 2006) (rejecting

assertion that two-thirds of plaintiff class were Alabama

citizens, where class was defined as “[a]ll property

owners, lessees, [and] licensees of properties” on which

the defendants released toxins 85 years earlier, as well as

“all individuals who have come into contact” with those

toxins; court found no evidence that two-thirds of those

harmed during lengthy period were still, or indeed ever,

Alabama citizens).

This would have been a much simpler case if the plaintiffs had followed either of two approaches. For starters,

rather than relying on the fact that per the class definition

each class member has a Kansas cell phone number and

billing address (and paid the Kansas USF fee, whatever

that is), they might have submitted evidence that twothirds of the class members were indeed Kansas

domiciliaries or businesses. Given that there are probably

hundreds of thousands of putative class members, if

not more, it would be infeasible to document each

class member’s citizenship individually, but the district

court could have relied on evidence going to the citizenship of a representative sample. This evidence might

have included affidavits or survey responses in which

putative class members reveal whether they intend to

remain in Kansas indefinitely, see Preston v. Tenet

Healthsystem Mem’l Med. Ctr., Inc., 485 F.3d 804, 817 (5th

Cir. 2007); Martin v. Lafon Nursing Facility of the Holy

Family, Inc., 548 F. Supp. 2d 268, 273-74 (E.D. La. 2008), or,

if they are businesses, their citizenship under the

relevant test. Given those results and the size of the
No. 09-8038 13

sample and the estimated size of the proposed class, the

district court could then have used statistical principles

to reach a conclusion as to the likelihood that two-thirds

or more of the proposed class members are citizens of

Kansas. Statisticians and scientists usually want at least

95 percent certainty, see Michael O. Finkelstein & Bruce

Levin, Statistics for Lawyers 120, (2d ed. 2001), but any

number greater than 50 percent would have allowed

the district court to conclude that the plaintiffs had established the citizenship requirement by a preponderance

of the evidence. See Ethyl Corp. v. EPA, 541 F.2d 1, 28 n. 58

(D.C. Cir. 1976) (en banc).

Alternatively, the plaintiffs might have defined their

class as all Kansas citizens who purchased text

messaging from Sprint Nextel or an alleged

coconspirator. By using that definition, the plaintiffs

could have guaranteed that the suit would remain in

state court. There would have been no concern that out-ofstate businesses, college students, soldiers, and the like

comprised greater than one-third of the class, and it

doesn’t take any evidence to establish that Kansas

citizens make up at least two-thirds of the members of

a class that is open only to Kansas citizens. See Johnson

v. Advance Am., 549 F.3d 932, 937-38 (4th Cir. 2008). The

tradeoff is that this definition would have limited the

pool of potential class members, something that plaintiffs and their lawyers are apparently unwilling to do.

Accordingly, we GRANT the petition for leave to appeal

and VACATE the order remanding the case to state court.

On remand, the district court should give the plaintiffs
14 No. 09-8038

another opportunity to prove that the proposed class

satisfies the requirements of the home-state exception.

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