Court Opinion

ID: 2900078
Source: CourtListenerOpinion
Date Created: 2015-09-09 15:01:24.506668+00
Date Added: 2024-06-11T12:09:34.855083
License: Public Domain

UNITED STATES DISTRICT COURT
                           FOR THE DISTRICT OF COLUMBIA

 VALERIE MCMULLEN, individually and
 on behalf of others similarly situated,

         Plaintiff,
                 v.                                         Civil Action No. 14-1983 (JDB)
 SYNCHRONY BANK, et al.,

         Defendants.

                           MEMORANDUM OPINION & ORDER

       After a period of Court-ordered jurisdictional discovery, plaintiff Valerie McMullen’s

renewed motion for remand hinges upon the answer to one question: were more than two-thirds of

her proposed class citizens of the District of Columbia at the time this case became removable to

federal court? If the answer is yes, then her action is a local controversy that must be litigated in

the District of Columbia Superior Court, where it was originally filed. McMullen urges the Court

to find this standard met and remand her case or, in the alternative, prolong the period for

jurisdictional discovery. But the Court will do neither. McMullen has failed to show that more

than two-thirds of the proposed class were citizens of the District of Columbia at the relevant time

and, in the Court’s view, additional discovery would likely be unhelpful. McMullen’s renewed

motion for remand will therefore be denied.

                                        BACKGROUND

       McMullen brought this action in Superior Court against two individuals (Wayne Bullen

and Karim Steward), three of their companies (Bullen Wellness, Washington Chiropractic, and

One World Fitness), and two banks (Synchrony Bank and JP Morgan Chase) for their alleged

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participation in a fraudulent scheme involving lines of healthcare-related credit. See Compl. [ECF

No. 1-1] at 2–3. After McMullen amended her initial complaint to add class allegations, see Am.

Compl. [ECF No. 1-2] at 14–15, Chase removed the case to this Court, see Notice of Removal

[ECF No. 1]. McMullen responded with a motion to remand, arguing that the Court lacked

jurisdiction and that, even if it had jurisdiction, it would be barred from exercising jurisdiction by

the local controversy exception to the Class Action Fairness Act. See Pl.’s Mot. for Remand [ECF

No. 12-1]. In a prior Memorandum Opinion, the Court concluded that CAFA affords it jurisdiction

over this case and that all but one of the local controversy elements is satisfied. See McMullen v.

Synchrony Bank, 2015 WL 632212 (D.D.C. Feb. 13, 2015). But because the Court was unable to

discern whether two-thirds of the putative class members were District of Columbia citizens, it

reserved final judgment on whether the local controversy exception applies and ordered limited

jurisdictional discovery focused on that issue. See id. at *7.

       The Court’s discovery Order instructed Synchrony and Chase to submit declarations to

McMullen indicating the total number of accounts opened through Bullen, Steward, and their

affiliated companies; the date each account was opened; and the name and last known address

associated with each. See Mar. 18, 2015 Order [ECF No. 35] at 2. They were also ordered to

produce a copy of each named individual’s driver’s license “to the extent such documents [were]

already in their possession.” Id. The Order required the rest of the defendants to produce a copy

of the driver’s license for each customer who had received healthcare financing from the banks,

and “[a]ny other document” relating to those customers’ last known addresses. See id. at 1–2. In

the intervening months, Synchrony and Chase have provided declarations identifying the last

known addresses for 892 putative class members. See Pl.’s Renewed Mot. for Remand [ECF No.

52-1] (Pl.’s Renewed Mot.) at 6. Wayne Bullen, Bullen Wellness, and Washington Chiropractic

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(the Bullen defendants) have produced the “patient records for ninety-three . . . putative class

members,” all of whom were included in the banks’ declarations. Id. at 5–6. But Karim Steward

and One World Fitness (the Steward defendants) have “failed to produce a single document.” Id.

at 7. None of the defendants have produced driver’s licenses.

        In her renewed motion, McMullen argues that the evidence produced so far weighs in favor

of remand to Superior Court under the local controversy exception. See Pl.’s Renewed Mot. at 5.

But in the event the Court disagrees, McMullen asks it to reserve judgment on her motion until

additional discovery has been obtained from the Steward defendants. See id.

                                            DISCUSSION

        The Class Action Fairness Act requires federal courts to decline jurisdiction over proposed

class actions that fall within the local controversy exception. See McMullen, 2015 WL 632212,

at *3. That exception applies only to actions in which “greater than two-thirds of the members of

all proposed plaintiff classes . . . are citizens of the State in which the action was originally filed.”

28 U.S.C. § 1332(d)(4)(A)(i)(I). As the party seeking to invoke the local controversy exception,

McMullen bears the burden of proving by a preponderance of the evidence that the exception

applies. See McMullen, 2015 WL 632212, at *3. The Court “may consider pleadings as well as

evidence” when deciding whether McMullen has met her burden. Vodenichar v. Halcon Energy

Props., Inc., 733 F.3d 497, 503 n.1 (3d Cir. 2013).

        Here, the most comprehensive evidence comes from Synchrony and Chase.                      Their

declarations provide the last known addresses for 892 putative class members, see Pl.’s Renewed

Mot. at 5, all of whom had accounts opened through either Bullen Wellness or Washington

Chiropractic, see Henry Decl. [ECF No. 53-1] at 1–2; Smith Decl. [ECF No. 53-2] at 2. And

McMullen concedes that—even after resolving eight inconsistencies between the declarations and

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patient records in favor of finding D.C. citizenship—only sixty percent of these individuals were

last linked to a District of Columbia address. See Pl.’s Renewed Mot. at 6. This evidence thus

tends to show that the local controversy exception does not apply.

        Unsurprisingly, however, McMullen points to a different source in support of her motion

for remand: the Bullen defendants’ patient records. These records include addresses for ninety-

three of the individuals named in the declarations; eighty percent are located in the District of

Columbia. See id. at 5. In McMullen’s view, the patient records represent the only “verifiable

documentation of the citizenship of putative class members” and therefore “establish a sufficient

basis for the Court to remand this case under the local controversy exception.” Id. By making this

argument, of course, McMullen also implies that the evidence provided by Synchrony and Chase

cannot be relied upon. She touches on that theme again when she notes that the banks have not

provided driver’s licenses for the putative class members—“[d]espite the explicit order from the

Court,” and despite Chase’s representation that driver’s licenses were sometimes used to verify

credit applicants’ identities. Id. at 2–3.

        The Court rejects McMullen’s implication that it must choose between the declarations and

the patient records; indeed, the two sources of evidence are broadly consistent. But all else being

equal, because the declarations include almost ten times as many putative class members, they are

likely to provide a more accurate assessment of the class’s composition. See Schmid v. Frosch,

680 F.2d 248, 249 n.4 (D.C. Cir. 1982) (“Small samples tend to be less reliable than large samples

because of instability and variability caused by unrepresentative samples, measurement error,

random selection, and [other factors].”). And McMullen’s insinuations are ultimately insufficient

to cast doubt on the declarations’ reliability.   In the first place, McMullen has not adequately

explained her conclusory statement that the patient records are more “verifiable” than the

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declarations.   Nor has she spelled out why the declarations’ evidentiary value should be

undermined by the fact that Synchrony and Chase have not produced any driver’s licenses. In any

event, there is a perfectly reasonable explanation for that omission. The Order that McMullen

invokes instructed the banks to produce driver’s licenses only “to the extent such documents [were]

already in their possession.” Mar. 18, 2015 Order at 2. Chase, for its part, has explained that it

did not obtain driver’s licenses in its ordinary course of business because it relied on health care

providers—here, the Bullen and Steward defendants—to verify applicants’ identities. See Evans

Decl. [ECF No. 53-3] at 2.       And McMullen has offered no reason to doubt Synchrony’s

representation that it does not possess copies of the class members’ driver’s licenses either. See

Smith Decl. at 2. Hence, McMullen’s first arguments fail.

       McMullen also implies that certain inconsistencies between the patient records and the

declarations weigh against the declarations’ credibility.    By her count, there are ninety-three

individuals included in both productions; for eight of those, the last known addresses included in

the respective productions are contradictory.        See Pl.’s Renewed Mot. at 6.        Yet these

inconsistencies do not automatically undermine the declarations, any more than they undermine

the patient records. In theory, there may be principled reasons to resolve the contradictions

uniformly in favor of the patient records. But not only has McMullen failed to provide any such

reasons, she has elected to resolve the contradictions by an altogether different method: by merely

adopting the District of Columbia address in each case, regardless of its source. See Pl.’s Renewed

Mot. at 6 n.2 (“The D.C. address was considered in determining the citizenship of these eight

individuals.”). Of course, the Court cannot adopt such a results-oriented resolution. In the absence

of a better interpretation by McMullen, the identified inconsistencies at most put the evidence with

respect to the eight individuals in equipoise.    And as the proponent of the local controversy

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exception, McMullen “bears the risk of nonpersuasion on the contested factual assertions that are

pertinent to the [exception’s applicability].” Hart v. FedEx Ground Package Sys. Inc., 457 F.3d
675, 682 (7th Cir. 2006).

       In the end, McMullen has failed to offer evidence showing that more than two-thirds of the

class members were District of Columbia citizens. For the vast majority of the class members, the

record provides a single address that there is no reason to reject. For eight class members, the

record is inconsistent. But even assuming that each of these individuals was a D.C. resident,

McMullen falls significantly short of the two-thirds threshold. Simply excluding them from the

calculation puts her even farther from the mark. Hence, there is no avenue by which McMullen

could meet her burden with the record before the Court.

       Moreover, McMullen falls short of her burden in another respect: even if she could show

that more than two-thirds of the proposed class members maintained District of Columbia

addresses at the time the various records were collected, she would struggle to show that this was

true at the time relevant under the statute. When determining whether the local controversy

exception applies, courts must assess class members’ citizenship “as of the date of filing of the

complaint or amended complaint, or, if the case stated by the initial pleading is not subject to

Federal jurisdiction, as of the date of service by plaintiffs of an amended pleading, motion, or other

paper, indicating the existence of Federal jurisdiction.”        28 U.S.C. § 1332(d)(7).        Here,

McMullen’s pleadings first indicated the existence of federal jurisdiction on October 31, 2014,

when she amended her initial complaint to add class allegations. See Am. Compl. at 14–15. But

by that point, much of the evidence underlying the declarations had grown somewhat stale. See

Henry Decl. at 4–11 (reflecting accounts opened at Chase between November 2008 and April

2012); id. at 2 (explaining that, for all but twelve Chase customers, the date associated with their

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last known addresses is August 2013 or earlier); Smith Decl. at 3–14 (reflecting accounts opened

at Synchrony between February 2005 and November 2014). 1 Many of the class members may

have moved between the time when their addresses were recorded and the time when McMullen

initiated her class action. And as the party responsible for proving that the local controversy

exception applies, McMullen has the burden of grappling with this uncertainty. See Hart, 457 F.3d

at 682. She has failed to do so. 2

         McMullen’s final argument is that the Court should not deny her renewed motion until she

has obtained jurisdictional discovery from the Steward defendants, who “were the responsible

parties for issuing the unauthorized lines of credit.” Pl.’s Renewed Mot. at 7. In her view, such

discovery is likely to resolve the inconsistencies between the patient records and declarations. See

id. McMullen proposes that the Court order the Steward defendants to comply with the prior

discovery orders and make a corporate representative available for deposition. Additionally, she

requests that the Court issue a subpoena to the person in possession of One World Fitness’s now-

closed gym, so that she can obtain any files and computers that are still there. See id.

         The Court is sympathetic to McMullen’s request, but will not issue those orders. As a

general matter, jurisdictional discovery “is justified only if the plaintiff reasonably demonstrates

that it can supplement its jurisdictional allegations through discovery.” Kopff v. Battaglia, 425 F.

Supp. 2d 76, 89 (D.D.C. 2006) (internal quotation marks omitted). Here, the Court has difficulty

seeing how additional discovery could help McMullen prove that the local controversy exception

applies. In the first place, it is not at all clear whether any files or computers remain at the gym.

         1
           The record provides no information about when the patient records were compiled and updated.
         2
           Some courts have examined class members’ citizenship at the time of removal when applying CAFA
jurisdictional exceptions to class actions originally filed in state court. See, e.g., Myrick v. WellPoint, Inc., 764 F.3d
662, 665 (7th Cir. 2014) (To prove that an exception to CAFA jurisdiction applied, “plaintiffs needed to produce some
evidence that would allow the court to determine the class members’ citizenships on the date the case was removed.”).
But McMullen fares no better under this rule. Indeed, because McMullen’s action was removed almost a month after
it became removable, her burden under the time-of-removal rule is slightly heavier.

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But even assuming that some do, one would expect their contents to be broadly consistent with the

information in the declarations. After all, the banks’ records were based on the information

supplied by the Bullen and Steward defendants. See Evans Decl. at 2 (“It was a customary practice

for health care providers to submit applications electronically through [Chase’s] online system.”);

see also Am. Compl. at 2–3 (“Defendants Bullen and Steward took out lines of credit on behalf of

Plaintiff . . . .”). Indeed, the address information in the Bullen defendants’ patient records is a

greater than ninety percent match with that in the banks’ declarations. And even assuming limited

inconsistencies between Steward’s files and the banks’ declarations, McMullen would have to

explain why these inconsistencies should be resolved in favor of District of Columbia citizenship.

See supra at 5. To this point, she has offered no persuasive arguments on that subject. Hence, the

Court will close the period of jurisdictional discovery and deny McMullen’s motion for remand. 3

                                                     ORDER

         Upon consideration of [52] plaintiff’s renewed motion for remand, [53] defendants’

opposition, [54] plaintiff’s reply, and the entire record herein, and for the reasons stated in this

Memorandum Opinion & Order, it is hereby

         ORDERED that [52] plaintiff’s renewed motion for remand is DENIED; and it is further

         ORDERED that a status conference shall be set for September 28, 2015, at 9:30 in

Courtroom 30A.

         SO ORDERED.

                                                                                   /s/
                                                                            JOHN D. BATES
                                                                        United States District Judge

Dated: September 8, 2015

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          None of this serves to exonerate the Steward defendants for their apparent disregard of their obligations in
this matter. The Court expects their full engagement moving forward.

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