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UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

NOT FOR PUBLICATION

LATRICIA SMITH, MATTIE 

HALLEY, and BARRY WEIN, et 

al.,

 

Plaintiff(s),

v.

HONEYWELL INTERNATIONAL, 

INC. and PPG INDUSTRIES, 

INC.,

 

Defendants.

Civil Action No. 

10-CV-03345-ES-SCM

[D.E. 182 & 187]

REPORT AND RECOMMENDATION

STEVEN C. MANNION, United States Magistrate Judge.

I. INTRODUCTION

“A United States district court is a court of limited 

jurisdiction and possesses only those powers which are conferred 

on it by statute under Article III of the Constitution.... It 

cannot assume jurisdiction.” United States v. Drossner, 179 F.2d 

509, 510 (3d Cir. 1950). Original jurisdiction cannot be 

conferred by waiver or consent of the parties. Wisconsin Dept. 

of Corrections v. Schacht, 524 U.S. 381, 389, 118 S.Ct. 2047, 

2052 (1998). Likewise, no court can ignore a jurisdictional 

defect; “rather a court, noticing the defect, must raise the 

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matter on its own.” Id. at 389, 118 S.Ct. at 2052. Accordingly, 

Federal Rule of Civil Procedure 12(h)(3) requires that “[i]f the 

court determines at any time it lacks subject-matter 

jurisdiction, the court must dismiss the action.” Fed.R.Civ.P. 

12(h)(3)(emphasis added). When “subject matter jurisdiction is 

called into question, `jurisdictional discovery should be 

allowed unless the plaintiff’s claim is clearly frivolous.” 

Massachusetts School of Law at Andover, Inc. v. American Bar 

Assoc., 107 F.3d 1026, 1042 (3d Cir. 1997).

The question at issue is whether this Court has subject 

matter jurisdiction over this case, and allotted the parties an 

opportunity to present their respective positions on the issue. 

For the reasons set forth herein, it is respectfully recommended 

that this Court not decline subject matter jurisdiction over 

this case at this time.

II. BACKGROUND

Plaintiffs’ original class action Complaint, as filed on 

May 17, 2010 in the Superior Court of New Jersey, Hudson County, 

sought class certification of two classes: A medical monitoring 

class and a property value diminution class. (D.E. 1-1, 

Complaint ¶ 66). As stated in the Complaint, “[m]ore than twothirds of the members of the proposed classes are citizens of 

the State of New Jersey.” (D.E. 1-1, Complaint, at ¶ 13).

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Defendant PPG is a Pennsylvania corporation with its 

principal place of business in Pennsylvania. (D.E. 1-1, 

Complaint, at ¶ 16). It is alleged to be the successor to an 

entity that owned and operated a chromate production facility in 

Jersey City from 1924 to 1963. (D.E. 1-1, Complaint, at ¶ 17). 

Defendant Honeywell International (“Honeywell”) is a 

Delaware corporation but has its principal place of business 

located in New Jersey. (D.E. 1-1, Complaint, at ¶ 14). It is 

alleged to be the successor to an entity that owned and operated 

a chromate production facility in Jersey City from 1895 to 1954. 

(D.E. 1-1, Complaint, at ¶ 15).

Plaintiffs allege that defendants were the only generators 

of chromium ore processing residue (“COPR”) in Jersey City.

(D.E. 1-1, Complaint, at ¶¶ 1, 15). It is further alleged that 

the COPR was used as fill in residential and commercial areas in 

Jersey City. (D.E. 1-1, Complaint, at ¶¶ 22-23). The COPR 

purportedly exposed the class members to hazardous materials and 

contaminated them and the surrounding properties. (D.E. 1-1, 

Complaint, at ¶ 28). For the purposes of this analysis, these 

facts will be accepted as true. Steel Valley Auth. v. Union 

Switch & Signal Div., 809 F.2d 1006, 1010 (3d Cir. 1987).

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III. PROCEDURAL HISTORY

On June 29, 2010, Defendant PPG Industries, Inc. removed 

this action to the United States District Court pursuant to the 

Class Action Fairness Act (“CAFA”). (D.E. 1, Defendant PPG 

Industries, Inc.’s Notice of Removal to the United States 

District for the District of New Jersey). Its Notice of Removal 

alleged “damages aggregating in excess of five million dollars.”

(D.E. 1). Plaintiff did not file a motion to remand.

On March 14, 2011, Defendant Honeywell filed its Answer, in 

which it admitted that its principal place of business is in New 

Jersey. (D.E. 40, Defendant Honeywell’s Answer and Affirmative 

Defenses, ¶ 14; see also D.E. 125, Defendant Honeywell’s Answer 

and Affirmative Defenses, ¶ 14 (answering amended complaint)). 

On March 4, 2013, this Court expressed concern that the 

District Court may not have jurisdiction under 28 U.S.C. § 

1332(d)(4)(A)(i)(II). A briefing schedule was then prescribed to 

examine the question of jurisdiction.

IV. ANALYSIS

CAFA provides federal district courts with original 

jurisdiction over class actions that meet required criteria. See 

28 U.S.C. § 1332(d). Prior to CAFA many class actions were 

excluded from Federal courts because of the complete-diversity 

rule and prohibition against aggregating claims. Kaufman v. 

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Allstate N.J. Ins. Co., 561 F.3d 144, 148 (3d Cir. 2009). 

Federal courts now have jurisdiction where (1) there are at 

least 100 members of the putative class; (2) the matter in 

controversy exceeds five million dollars, 28 U.S.C. § 1332(d)(2) 

and (6); and (3) any class member is a citizen of a State 

different from any defendant. 28 U.S.C. § 1332(d)(2)(A). Id. at 

149. 

The Third Circuit evaluates the allegations in the notice 

of removal and the complaint in removal cases. Kaufman, 561 F.3d 

at 151. There is minimal diversity between the parties in this 

case because members of the proposed class are citizens of New 

Jersey, (D.E. 1-1, Complaint, at ¶¶ 10, 13) and Defendant PPG is 

a citizen of Pennsylvania. See 28 U.S.C. § 1332(c)(1) (“[A] 

corporation shall be deemed to be a citizen of any State by 

which it has been incorporated and of the State where it has its

principal place of business.”). Also, with respect to the 

amount in controversy, the Notice of Removal alleged “damages 

aggregating in excess of five million dollars.” (D.E. 1). Thus, 

the threshold requirements of CAFA jurisdiction apply here.

Defendants’ brief suggests that the time of filing rule 

should end the jurisdictional inquiry in this case. That rule 

is based upon a long standing policy that federal diversity 

jurisdiction is determined based upon the facts alleged at the 

time the suit was filed. Kaufman v. Allstate N.J. Ins. Co., 561 

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F.3d at 152. As discussed below, however, a review of the facts 

alleged at the time of the filing actually support remand.

Our jurisdictional discussion requires examination of 

CAFA’s two mandatory exceptions. Kaufman, 561 F.3d at 149. 

Subsection (A) is the “local controversy” exception. Id. 

Subsection (B) has been termed the “home state” exception. Id. 

a. Local Controversy Exception

CAFA’s local controversy exception restricts a district 

court’s ability to exercise jurisdiction in limited

circumstances. Kaufman v. Allstate N.J. Ins. Co., 561 F.3d 144, 

148 (3d Cir. 2009). The relevant inquiry here, therefore, is 

whether the Court has been presented with one of the limited 

circumstances which would restrict this Court’s ability to 

exercise its jurisdiction.

The local controversy exception requires a district court 

to decline to exercise its jurisdiction under paragraph (2) 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

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

originally filed; and

(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 persons....

28 U.S.C. § 1332(d)(4)(A). According to the Fifth Circuit, the 

absence “of any one of the above elements would render remand 

improper....” Williams v. Homeland Ins. Co. of NY, 657 F.3d 287, 

291 (5th Cir. 2011).

On the face of the Complaint, the elements of the local 

controversy exception are satisfied. First, it is alleged that 

“[m]ore than two-thirds of the members of the proposed classes 

are citizens of the State of New Jersey.” (D.E. 1-1, Complaint 

at ¶13). Second, Defendant Honeywell is a defendant from whom 

significant relief is sought and it is also a citizen of New 

Jersey. See (D.E. 1-1, Complaint at ¶¶ 14, 15). Third, the 

principle injuries were incurred in the state in which the 

action was originally filed. Finally, the pleadings do not 

contain any reference to another class action asserting the same 

or similar allegations involving these parties.

Because the requirements are conjunctive, defendants focus 

upon the Subsection (A)(i)(I) requirement that “over two-thirds 

of both of the proposed medical monitoring and property damage 

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classes in their original Complaint “in the aggregate” be New 

Jersey citizens.” (D.Br. at 4)(emphasis in original)(citing 28 

U.S.C. § 1332(d)(4)(A)(i)(I)). The district court may make “a 

reasonable assumption” of CAFA’s citizenship requirements from 

evidence that indicates the “probable citizenship of the 

proposed class”. Williams, 657 F.3d at 291. However, naked 

“allegations of residence are not sufficient for purposes of 

establishing citizenship.” Anthony v. Small Tube Mfg., Corp., 

535 F.Supp.2d 506, 515 (E.D.Pa. 2007)(quotation omitted).

Plaintiffs letter brief has not defended their allegation 

that “[m]ore than two-thirds of the members of the proposed 

classes are citizens of the State of New Jersey”, (D.E. 1-1, 

Complaint, at ¶ 13). See (D.E. 191). Defendants argue that 

Plaintiffs could not credibly argue “that two-thirds of the tens 

of thousands of persons who have ever lived, worked, or gone to

school for six months within the range of the many COPR sites in 

Jersey City over a 115-year period, or who currently own any 

property in the class, are New Jersey citizens.” (D.E. 190, 

D.Br. at 4).

Without facts to support the two-thirds allegations in the 

pleadings, we are forced to conclude that the first element of 

the local controversy exception is inapplicable. Therefore, it 

is not necessary to address the other elements of the local 

controversy exception.

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b. Home State Exception

Under the home state exception, a district court must 

decline to exercise jurisdiction where 

(B) 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.

28 U.S.C. § 1332(d)(4)(B). If an action meets these 

requirements, a district court must remand the case back to the 

state court where it was originally filed.

The two-thirds requirement for the home state exception is 

similar to that under the local controversy exception. As 

discussed above, Plaintiff does not currently have facts to 

support the two-thirds requirement. Therefore, it is not 

necessary to address the other elements of the home state 

exception.

V. CONCLUSION

For the reasons articulated herein, the undersigned 

recommends that CAFA jurisdiction exists and that jurisdiction 

not be declined at this time. It is further recommended that if 

the parties to this action change or the size of the proposed 

class changes, the Court revisit the issue of jurisdiction. 28 

U.S.C. § 1332(d)(7)(citizenship of members of proposed class 

determined upon filing or complaint or amended complaint).

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Pursuant to Local Civil Rule 72.1, the parties have fourteen 

days from receipt of this Report and Recommendation to file and 

serve any objections.

 

4/17/2013 6:49:10 PM

Date: April 17, 2013

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