Opinion ID: 3047391
Heading Depth: 2
Heading Rank: 1

Heading: original jurisdiction under cafa

Text: [1] As a threshold matter, 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); see § 1332(d)(1)(B) (defining “class action” as “any civil action filed under rule 23 of the Federal Rules of Civil Procedure or similar State statute or rule of judicial procedure authorizing an action to be brought by 1 or more representative persons as a class action”). Once the prerequisites of § 1132(d)(5) are satisfied,3 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). 3 The Fifth Circuit characterized § 1332(d)(5) as an “exception” to CAFA jurisdiction conferred under § 1332(d)(2). See Frazier, 455 F.3d at 546. We view § 1332(d)(5) somewhat differently. Although subsection (5) appears later in the statute, it plainly provides that “paragraphs (2) through (4) shall not apply to any class action in which (A) the primary defendants are States, State officials, or other governmental entities against whom the district court may be foreclosed from ordering relief; or (B) the number of members of all proposed plaintiff classes in the aggregate is less than 100.” § 1332(d)(5) (emphasis added). Thus, satisfaction of § 1332(d)(5) serves as a prerequisite, rather than as an exception, to jurisdiction under § 1332(d)(2). This distinction is important because, as we address later, there are “exceptions” to the statute in which jurisdiction otherwise exists under § 1332(d)(2) but the federal courts either may or must decline to exercise that jurisdiction. See, e.g., § 1332(d)(3)-(4). Our approach is consistent with the view adopted by the Seventh Circuit in Hart, 457 F.3d at 679 (holding that the provisions of § 1332(d)(5) must be satisfied before CAFA applies to a class action). 2250 SERRANO v. 180 CONNECT, INC. Thus, under CAFA, complete diversity is not required; “minimal diversity” suffices. Bush v. Cheaptickets, Inc., 425 F.3d 683, 684 (9th Cir. 2005); see Abrego, 443 F.3d at 680-82 (discussing changes to federal diversity jurisdiction with the adoption of CAFA).4 [2] The district court concluded that the Employers satisfied their burden to establish the elements of § 1332(d)(2) and (d)(5). Neither party disputes this conclusion on appeal. However, we have an independent obligation to determine that subject matter jurisdiction exists both in this court and in the district court, even where the parties do not raise the issue. Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 95 (1998); Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1116 (9th Cir. 2004). Based on our review of the record and the district court’s detailed findings, we are satisfied that the Employers met their preliminary burden under § 1332(d)(5) to establish that the putative plaintiff class includes 100 or more persons, and that neither the state, its officers nor government agencies are primary defendants. In addition, the record reveals that the amount in controversy exceeds $5,000,000 and minimal diversity exists among the parties.5 Thus, the district court properly concluded that original subject matter jurisdiction exists under § 1332(d)(2). 4 Although we construe § 1332(b)(5) as a prerequisite to application of CAFA’s “minimal diversity” jurisdiction, this is a specific requirement under CAFA. Federal diversity jurisdiction still exists for other class actions that satisfy the general diversity jurisdiction provision of § 1332(a). See, e.g., Snyder v. Harris, 394 U.S. 332, 340 (1969) (noting that in class actions under § 1332(a), only the citizenship of the named parties counts for purposes of determining “complete diversity”). 5 A fourth defendant named in the complaint, Mountain Satellite, had not been served with the complaint when the district court decided Serrano’s motion to remand. The Employers allege that Mountain Satellite is a “sham” defendant. The district court did not consider this defendant’s effect on jurisdiction, nor do we, because under CAFA only “minimal diversity” must be shown and the Employers satisfied this requirement. SERRANO v. 180 CONNECT, INC. 2251