Court Opinion

ID: 4163138
Source: CourtListenerOpinion
Date Created: 2017-04-25 19:04:35.922641+00
Date Added: 2024-06-11T14:11:34.668987
License: Public Domain

RECOMMENDED FOR FULL-TEXT PUBLICATION
                              Pursuant to Sixth Circuit I.O.P. 32.1(b)
                                     File Name: 17a0094p.06

                   UNITED STATES COURT OF APPEALS
                                 FOR THE SIXTH CIRCUIT

 TIFFANY DAVENPORT, et al.,                              ┐
                                 Plaintiffs-Appellees,   │
                                                         │
                                                         │
        v.                                               >      No. 17-1200
                                                         │
                                                         │
 LOCKWOOD, ANDREWS & NEWNAM, INC., et al.,               │
                                    Defendants,          │
                                                         │
 VEOLIA WATER       NORTH     AMERICA     OPERATING      │
 SERVICES, LLC,                                          │
                                                         │
                                Defendant-Appellant.
                                                         ┘

                         Appeal from the United States District Court
                      for the Eastern District of Michigan at Ann Arbor.
                  No. 5:16-cv-12875—John Corbett O’Meara, District Judge.

                              Decided and Filed: April 25, 2017

              Before: NORRIS, BATCHELDER, and GIBBONS, Circuit Judges.
                                     _________________

                                         COUNSEL

ON BRIEF: John A. K. Grunert, CAMPBELL, CAMPBELL, EDWARDS & CONROY, P.C.,
Boston, Massachusetts, Cheryl A. Bush, Michael R. Williams, BUSH SEYFERTH & PAIGE
PLLC, Troy, Michigan, for Appellant. Emmy L. Levens, COHEN MILSTEIN SELLERS
& TOLL PLLC, Washington, D.C., for Appellees.
                                     _________________

                                          OPINION
                                     _________________

       JULIA SMITH GIBBONS, Circuit Judge. This case arises out of defendant Veolia
Water North America Operating Services, LLC’s (“Veolia”) and other defendants’ allegedly
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negligent conduct in connection with the Flint, Michigan water crisis. The sole issue on appeal
is the meaning of “other class actions” under the local controversy exception to the Class Action
Fairness Act of 2005 (“CAFA”), 28 U.S.C. § 1332(d). The district court found that plaintiffs had
met the requirements for the local controversy exception to CAFA and remanded this matter to
the Michigan state courts. For the reasons that follow, we reverse the district court’s order to
remand the case to state court and find that the local controversy exception is inapplicable to this
case.

                                                 I.

        This case is one of numerous actions arising from the water crisis in Flint, Michigan. The
Flint public water system includes lead pipes. Prior to April 2014, Flint purchased treated water
from the City of Detroit. Thereafter, the city began using the Flint River as its water source. The
Flint River water was not treated with corrosion-inhibiting chemicals, and this led to a multitude
of serious problems with the local water supply. Residents complained that the water was
discolored and foul-smelling. There were reports of skin rashes, hair loss, and vomiting after
drinking and bathing in the water. And most disturbingly, many children in Flint were found to
have high levels of lead in their blood stream. See Mason v. Lockwood, Andrews & Newnam,
P.C., 842 F.3d 383, 387 (6th Cir. 2016).

        On July 26, 2016, the plaintiffs filed this putative class action in Genesee County Circuit
Court asserting claims for negligence, intentional and negligent infliction of emotional distress,
and unjust enrichment. They alleged that the individual plaintiffs and the members of the class
have been harmed by exposure to lead from Flint’s public water system. The defendants include
Veolia and Lockwood, Andrews & Newnam, P.C. (“LAN”), as well as several other entities
related to either Veolia or LAN. In 2013, LAN was hired by Flint to advise the city with respect
to using the Flint River as its water source. Flint hired Veolia in February 2015 as a water expert
to evaluate the city’s water-treatment process. The plaintiffs seek damages from Veolia and
LAN for the harm they allegedly suffered as a result of the contaminated Flint water.

        Veolia timely removed the case to district court pursuant to CAFA. Veolia asserted that
the amount in controversy exceeded $5 million, the putative class comprised at least 100
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members, and there was the minimal diversity of citizenship required by CAFA. It also asserted
that the local controversy exception did not apply to defeat federal jurisdiction because at least
five similar class actions had been filed prior to the filing of this action.

        The plaintiffs moved to remand on the ground that the matter was a local controversy as
contemplated by § 1332(d)(4)(A) and thus did not fall within CAFA’s jurisdiction. Under the
local controversy exception, a district court must decline to exercise CAFA jurisdiction:

              (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
                   (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). The parties agree that all requirements of § 1332(d)(4)(A)(i) have
been met in this case. The plaintiffs, however, asserted that pursuant to subsection (ii), the case
fell within the local controversy exception, despite the fact that other similar class actions had
been filed within the preceding three years.

        It is undisputed that, prior to the filing of this case by the plaintiffs, Flint residents filed
other class actions against Veolia, LAN, and various other persons and entities seeking damages
for injuries allegedly caused by the lead contamination in Flint’s water system. McIntosh v.
State of Michigan, No. 16-10571 (E.D. Mich. filed Feb. 16, 2015)1; McMillian v. Snyder,

        1
            This action was voluntarily dismissed on May 25, 2016.
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No. 16-10796 (E.D. Mich. filed Mar. 2, 2016); Gilcreast v. Lockwood, Andrews & Newnam,
P.C., No. 16-11173 (E.D. Mich. filed Mar. 31, 2016); Washington v. Snyder, No. 16-11247 (E.D.
Mich. filed April 5, 2016). One of the first such cases was the Mason action, which was initially
filed in state court on January 25, 2016, and then removed to district court, only to be remanded
back to state court under the local controversy exception. The court in Mason did not address
whether other class actions had been previously filed or the meaning of the “other class actions”
provision in § 1332(d). See Mason, 842 F.3d at 389.

       The district court acknowledged that other class actions had been filed in the previous
three years but agreed with the plaintiffs that this case was a “truly local controversy” and
remanded the case to state court. In doing so, the district court noted that CAFA was enacted to
prevent “copycat class actions” in “state courts of different jurisdictions” when there is no way to
consolidate cases. It noted that, here, all of the state class actions were in Michigan and cited
two district cases where the state court class actions were confined to one state as well. Veolia
now appeals.

                                                II.

       We review questions of subject matter jurisdiction de novo, “including a district court’s
order remanding a case to the state court from which it was removed” under CAFA. Graiser v.
Visionworks of Am., Inc., 819 F.3d 277, 282 (6th Cir. 2016) (internal citation and quotations
omitted).

       We have, in the past, interpreted the local controversy exception to CAFA. See Mason,
842 F.3d at 389. However, the statutory interpretation question before us today is an issue of
first impression for our court. Mason dealt with whether the first-filed class action in the Flint
water crisis met the requirements of § 1332(d)(4)(A)(i). Although we spoke with broad language
about the local controversy exception, we confined our holding to the two individual provisions
at issue—the two-thirds citizenship and “significant basis” requirements. Id. at 389.

       Here, the parties agree that all the requirements of § 1332(d)(4)(A)(i) have been met.
They dispute whether subsection (ii) has also been met. As we did in Mason, we confine our
inquiry to the issue before us: whether “during the 3-year period preceding the filing of the class
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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)(ii). There is no dispute that there have been other class actions filed and that
they involve similar factual allegations against many of the same defendants as those present
here. The sole question is whether these “other class actions” are such for CAFA purposes.

                                                 A.

       For questions of statutory interpretation, we look to the statutory language as “the starting
point for interpretation, and . . . the ending point if the plain meaning of that language is clear.”
United States v. Henry, 819 F.3d 856, 870 (6th Cir. 2016). The plain language of CAFA offers a
simple answer to our inquiry. The local controversy exception will apply only if no other similar
class action was brought against any of the defendants in the instant action during the three years
preceding the filing of this case. § 1332(d)(4)(A)(ii).

       It is undisputed that five class actions were brought, each advancing very similar factual
allegations of negligence, intentional and negligent infliction of emotional distress, and unjust
enrichment. And each action sued at least one of the defendants currently in this suit. Applying
the language of the exception to the facts before us, the local controversy exception cannot
apply. The statutory language is clear and unambiguous. The federal court retains jurisdiction
pursuant to CAFA.

       Plaintiffs have a rebuttal. They assert that, when considered within the design and
Congressional intent of CAFA, “other class action” should not refer to class actions filed within
a single state. As applied to this case, plaintiffs certainly have a point. They argue that the Flint
water crisis “exemplifies the quintessential local controversy.” Mason, 842 F.3d at 397. They
emphasize language from the Mason decision that says that “it defies common sense to say a suit
by Flint residents against those purportedly responsible for injuring them through their municipal
water service is not a ‘local controversy.’” Id. And plaintiffs contend that this is not an
interstate class action at all but an entirely local one, because “[t]he heart of this case concerns
injuries suffered by the residents of Flint, Michigan in Flint, Michigan.” The district court, too,
seemed to adopt this argument when it cited to unreported district court cases for the proposition
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that, “where multiple cases are filed in the courts of the same state, federal jurisdiction under
CAFA may not be proper.” Logan v. CLUB Metro USA, LLC, Civil Action No. 15-6773 (JLL),
2015 WL 7253935, at *3–4 (D. N.J. Nov. 17, 2015); see also Bridewell-Sledge v. Blue Cross of
Calif., 798 F.3d 923, 930 (9th Cir. 2015) (two class actions filed in state court and consolidated
did not preclude application of the local controversy exception).

       But the district court relied on, and the plaintiffs urge us on appeal to look to, the “local”
nature of the controversy in such a way that contradicts CAFA’s plain language. It is true that
the injuries were suffered by Flint residents in Flint, Michigan. In the colloquial sense, then, the
controversy is “local.” However, it is not local in the way Congress contemplated in CAFA.
It was the alleged conduct of primarily out-of-state defendants that caused plaintiffs’ injuries.
And the class actions filed surrounding the Flint water crisis will have long-lasting implications
for interstate commerce and will be felt far beyond the Flint, Michigan region. The language of
CAFA defines by its own terms what qualifies as a local controversy, and those requirements are
not met in this case. Even the plaintiffs concede that the local controversy exception could be
plausibly read to conform to, rather than contradict, its plain meaning. Furthermore, courts agree
that “[a]ny doubt about the applicability of the local-controversy exception [should be] resolved
against the party seeking remand.” Hood v. Gilster-Mary Lee Corp., 785 F.3d 263, 265 (8th Cir.
2015); Dutcher v. Matheson, 840 F.3d 1183, 1190 (10th Cir. 2016); Reece v. AES Corp., 638 F.
App’x 755, 767–68 (10th Cir. 2016).

                                                B.

       To the extent that the district court and the plaintiffs rely on policy considerations in lieu
of a plain-meaning reading of the text, we note that the policy implications behind CAFA do not
require that we remand this case to state court. Plaintiffs argue that Congress’s intent when
enacting CAFA was to eliminate “copycat, or near copycat, suits in multiple forums.” They are
not wrong. Congress did intend to prevent copycat suits in multiple forums, enabling class
actions to be consolidated to promote judicial efficiency. See S. Rep. 109-14, 7, as reprinted in
2005 U.S.C.C.A.N. 3, 27. But there are also policy goals behind CAFA that support the plain-
language reading of the statute here. The statute was enacted to broaden the availability of
diversity-jurisdiction for class-action suits. See Dart Cherokee Basin Operating Co. v. Owens,
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135 S. Ct. 547, 554 (2014) (quoting S. Rep. 109-14, at 35, that “the overall intent of [CAFA] is
to strongly favor the exercise of federal diversity jurisdiction over [interstate] class actions”).
Congress was concerned about what “appear[ed] to be state court provincialism against out-of-
state defendants” and the need “to shore up confidence in the judicial system by preventing even
the appearance of discrimination in favor of local residents.” S. Rep. No. 109-15, at 6, 8.
Congress valued a federal forum for all cases “with significant interstate and economic impacts,”
id. at 8, in order “to allow defendants to defend large interstate class actions in federal court.”
Freeman v. Blue Ridge Paper Prods., Inc., 551 F.3d 405, 407 (6th Cir. 2008).

       CAFA was not to be read narrowly, but as a broad grant of jurisdiction in interstate class
actions.   S. Rep. 109-14, at 43 (The “provisions [of 28 U.S.C. S 1332(d)] should be read
broadly. . .”). And the exception, specifically, was not to be read to create a jurisdictional
loophole by which a plaintiff could defeat federal jurisdiction. See id. at 39. To read the statute
narrowly but give broad sweep to the local controversy exception, in direct contradiction of its
plain language, would be to contort Congress’s intent as embodied in the statutory language.

                                                 C.

       Finally, it is worth noting the unique procedural posture of this case and contrasting it
with cases cited by both the district court and the plaintiffs to support a finding that the local
controversy exception must apply here. In Vodenichar, the Third Circuit addressed whether a
case met the requirements of § 1332(d)(4)(A)(ii), but remanded the case to state court because it
was a continuation of the first class action filed in the dispute. Vodenichar v. Halcon Energy
Props., Inc., 733 F.3d 497, 509 (3d Cir. 2013). The case was the same suit in a second iteration,
not a separate, second-filed suit with similar factual allegations against some of the same
defendants. Id. at 509–10. Therefore, because no other suit with similar factual allegations had
been filed preceding that one, the case met the requirements for the local controversy exception
and the district court was required to remand.          Id.   Unlike Vodenichar, this case is an
independent action and is not a continuation of the first-filed case.

       Mason, on the other hand, did not address the requirements of § 1332(d)(4)(A)(ii) at all.
See Mason, 842 F.3d at 389. It was the first class action filed in the Flint water crisis. By the
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plain language of the local controversy exception, “no other class action had been filed asserting
the same or similar factual allegations against any of the defendants” in the three years prior to
Mason being filed. 28 U.S.C. § 1332(d)(4)(A)(ii). Mason, by the language of the exception,
belonged in state court. This case, by the same language, does not. It is undisputed that multiple
class actions have been filed in the three years preceding the July 26, 2016 filing of this suit, and
thus the local controversy exception cannot apply here.

                                                III.

       For the reasons stated above, we reverse the judgment of the district court and remand for
further proceedings not inconsistent with this opinion.