Court Opinion

ID: 4423946
Source: CourtListenerOpinion
Date Created: 2019-08-08 17:00:35.474526+00
Date Added: 2024-06-11T14:50:42.261640
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

DAVID EHRMAN, individually and on          No. 19-55658
behalf of all others similarly situated,
                    Plaintiff-Appellee,       D.C. No.
                                           8:18-cv-01125-
                  v.                         JVS-DFM

COX COMMUNICATIONS, INC.;
COXCOM, LLC; COX                             OPINION
COMMUNICATIONS CALIFORNIA,
LLC, and DOES, 1 through 25,
inclusive,
           Defendants-Appellants.

      Appeal from the United States District Court
         for the Central District of California
       James V. Selna, District Judge, Presiding

           Argued and Submitted July 11, 2019
                  Pasadena, California

                   Filed August 8, 2019
2             EHRMAN V. COX COMMUNICATIONS

  Before: MILAN D. SMITH, JR. and MICHELLE T.
FRIEDLAND, Circuit Judges, and MICHAEL H. SIMON, *
                   District Judge.

             Opinion by Judge Milan D. Smith, Jr.

                          SUMMARY **

            Removal / Class Action Fairness Act

    The panel reversed the district court’s order remanding
to state court an action that was removed to federal court by
the defendants pursuant to the Class Action Fairness Act
(“CAFA”).

    In seeking to remand, plaintiff argued that the defendants
had failed to adequately plead the existence of minimal
diversity in their removal motion.

    The panel held that defendants’ jurisdictional
allegations, which provided a short and plain statement of
the parties’ citizenship based on information and belief,
satisfied the defendants’ burden of pleading minimal
diversity. The panel further held that the district court
misconstrued CAFA’s pleading requirements by holding
that defendants’ jurisdictional allegations fell short, and by
requiring defendants to support those allegations with

    *
      The Honorable Michael H. Simon, United States District Judge for
the District of Oregon, sitting by designation.
    **
       This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
            EHRMAN V. COX COMMUNICATIONS                    3

evidence in response to only a facial – not a factual or as-
applied – challenge.

                        COUNSEL

Katherine Tracy Van Dusen (argued), Richard R. Patch,
Scott C. Hall, and Philip D.W. Miller, Coblentz Patch Duffy
& Bass LLP, San Francisco, California, for Defendants-
Appellants.

Jamin S. Soderstrom (argued), Soderstrom Law PC, Irvine,
California, for Plaintiff-Appellee.

                         OPINION

M. SMITH, Circuit Judge:

     When a defendant removes a case to federal court
pursuant to the Class Action Fairness Act of 2005 (CAFA),
28 U.S.C. § 1332(d), how much evidence of the parties’
citizenships must it provide? If the defendant’s citizenship
allegations are unchallenged factually, the answer is none.
In such cases, all a removing party must do is provide a short
and plain statement of the grounds for removal. Because
Defendants Cox Communications’ (and related entities’)
notice of removal did just that, and because Plaintiff David
Ehrman did not factually attack Cox’s jurisdictional
allegations, we reverse the district court’s grant of Ehrman’s
motion to remand.
4           EHRMAN V. COX COMMUNICATIONS

    FACTUAL AND PROCEDURAL BACKGROUND

    Ehrman filed a class action complaint against Cox in
Orange County Superior Court, alleging that Cox had
engaged in unlawful business practices related to the
advertisement and sale of residential internet services.
Ehrman brought the case on behalf of himself and “all
consumers in California who paid for [Cox’s] residential
Internet services within four years from the date this action
was filed.”

    Cox removed the case to the district court pursuant to
CAFA. Cox alleged in its notice of removal that Ehrman’s
suit met CAFA’s removal requirements because it was a
putative class action with more than 100 class members, that
there was minimal diversity between the parties, and that the
amount in controversy exceeded $5,000,000, exclusive of
interest and costs. Cox, a purported citizen of Delaware and
Georgia, asserted based on information and belief that
Ehrman and all class members are citizens of California.

    Ehrman then moved to remand the case to state court.
Asserting a facial challenge to Cox’s notice of removal,
Ehrman argued that Cox had failed to adequately plead the
existence of minimal diversity. He claimed that Cox’s
allegations of citizenship were insufficient because they
relied “purely on an allegation of residency and [on]
‘information and belief.’”

     The district court granted Ehrman’s motion to remand.
It reasoned:

       In the absence of instruction from the Ninth
       Circuit . . . this Court declines to find that the
       complaint alone created a rebuttable
       residency-domicile          presumption         of
            EHRMAN V. COX COMMUNICATIONS                     5

       removability. . . . [T]he Court finds that
       Cox’s reliance on the residency allegation in
       the complaint [] amounted to mere sensible
       guesswork such that it is insufficient for
       establishing minimal diversity.

    We granted Cox’s motion for leave to appeal to provide
guidance on what a defendant must allege, and what
evidence it must provide, when removing a case pursuant to
CAFA.

   JURISDICTION AND STANDARD OF REVIEW

    We have jurisdiction pursuant to 28 U.S.C. § 1453(c)(1),
which allows us to “accept [a timely] appeal from an order
of a district court granting or denying a motion to remand a
class action to the State court.”

    “We review de novo a district court’s decision to remand
a removed case and its determination that it lacks subject
matter jurisdiction.” Lively v. Wild Oats Mkts., Inc.,
456 F.3d 933, 938 (9th Cir. 2006).

                        ANALYSIS

    Congress enacted CAFA with the “intent . . . to strongly
favor the exercise of federal diversity jurisdiction over class
actions with interstate ramifications.” S. Rep. No. 109-14,
at 35 (2005), as reprinted in 2005 U.S.C.C.A.N. 3, 34.
Because “a party bringing suit in its own State’s courts might
(seem to) enjoy . . . a home court advantage against
outsiders,” Home Depot U.S.A., Inc. v. Jackson, 139 S. Ct.
1743, 1751 (2019) (Alito, J., dissenting), federal diversity
jurisdiction provides “‘a neutral forum’ for parties from
different States,” id. at 1746 (quoting Exxon Mobil Corp. v.
Allapattah Servs., Inc., 545 U.S. 546, 552 (2005)). To this
6           EHRMAN V. COX COMMUNICATIONS

end, CAFA confers jurisdiction on federal district courts
over class actions when, among other things, “any member
of a class of plaintiffs is a citizen of a State different from
any defendant.” 28 U.S.C. § 1332(d)(2)(A). Unlike the
complete diversity of citizenship generally required by
§ 1332(a), therefore, CAFA requires only “minimal
diversity.” Bush v. Cheaptickets, Inc., 425 F.3d 683, 684
(9th Cir. 2005).

    Simply because a class action satisfies the requirements
of CAFA, however, does not mean that it must be filed in
federal court. Such cases may also be filed in state courts,
which enjoy concurrent jurisdiction over such actions. See
Tafflin v. Levitt, 493 U.S. 455, 458 (1990). A defendant in
state court who wishes to litigate in federal court may
therefore remove a class action that satisfies CAFA’s
requirements. See Home Depot, 139 S. Ct. at 1746. At issue
here is what that removing defendant must plead in its notice
of removal.

    As the removing party, Cox had the burden of pleading
minimal diversity. See Abrego Abrego v. Dow Chem. Co.,
443 F.3d 676, 685 (9th Cir. 2006). Accordingly, Cox had to
file in the district court a notice of removal “containing a
short and plain statement of the grounds for removal.”
28 U.S.C. § 1446(a). “Congress, by borrowing the familiar
‘short and plain statement’ standard from Rule 8(a), intended
to ‘simplify the “pleading” requirements for removal’ and to
clarify that courts should ‘apply the same liberal rules [to
removal allegations] that are applied to other matters of
pleading.’” Dart Cherokee Basin Operating Co. v. Owens,
135 S. Ct. 547, 553 (2014) (alteration in original) (quoting
H.R. Rep. No. 100-889, at 71 (1988), as reprinted in 1988
U.S.C.C.A.N. 5982, 6031–32). A party’s allegation of
minimal diversity may be based on “information and belief.”
            EHRMAN V. COX COMMUNICATIONS                     7

Carolina Cas. Ins. Co. v. Team Equip., Inc., 741 F.3d 1082,
1087 (9th Cir. 2014). The pleading “need not contain
evidentiary submissions.” Dart Cherokee, 135 S. Ct. at 551.

    In its notice of removal, Cox alleged that it was a citizen
of Delaware and Georgia. It also alleged:

       As admitted in the Complaint, [Ehrman] is a
       resident of California. [Cox] is informed and
       believes, and on that basis alleges, that
       [Ehrman] is a citizen of the state in which he
       resides, as alleged in the Complaint.

       [Cox] is informed and believes, and on that
       basis alleges, that all purported class
       members are citizens of California, as alleged
       in the Complaint.

    Ehrman argues, and the district court agreed, that Cox’s
allegations of citizenship were insufficient because they
relied on allegations that Ehrman or other class members
reside in California.

    We agree that residency is not equivalent to citizenship.
A “natural person’s state citizenship is [] determined by her
state of domicile, not her state of residence.” Kanter v.
Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001). “A
person’s domicile is her permanent home, where she resides
with the intention to remain or to which she intends to return.
A person residing in a given state is not necessarily
domiciled there, and thus is not necessarily a citizen of that
state.” Id. (citations omitted).

    Here, however, Cox did not merely allege residency. It
alleged that Ehrman and all putative class members were
citizens of California. That Cox’s notice of removal
8             EHRMAN V. COX COMMUNICATIONS

mentioned Ehrman’s residency is immaterial to our analysis.
Cox did not have to explain why it believed Ehrman or the
putative class members were citizens of California. As we
explained above, a defendant’s allegations of citizenship
may be based solely on information and belief. See Carolina
Cas., 741 F.3d at 1087. Because Cox provided a short and
plain statement alleging that Ehrman and the putative class
members were citizens of California, its jurisdictional
allegations were sufficient—at least in the absence of a
factual or as-applied challenge.

    The district court also erred by placing on Cox a burden
to prove its jurisdictional allegations in response to
Ehrman’s facial challenge. “[A]t the pleading stage,
allegations of jurisdictional fact need not be proven unless
challenged.” NewGen, LLC v. Safe Cig, LLC, 840 F.3d 606,
614 (9th Cir. 2016); see also Dart Cherokee, 135 S. Ct. at
553 (“[T]he defendant’s amount-in-controversy allegation
should be accepted when not contested by the plaintiff or
questioned by the court.”). Because “no antiremoval
presumption attends cases invoking CAFA,” Dart Cherokee,
135 S. Ct. at 554, courts should be especially reluctant to sua
sponte challenge a defendant’s allegations of citizenship.

    Ehrman did not factually challenge Cox’s jurisdictional
allegations. Instead, his motion to remand asserted a facial
challenge to the legal adequacy of Cox’s notice of removal.
Such a challenge “accepts the truth of the [removing party’s]
allegations but asserts that they ‘are insufficient on their face
to invoke federal jurisdiction.’” Leite v. Crane Co., 749 F.3d
1117, 1121 (9th Cir. 2014) (quoting Safe Air for Everyone v.
Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004)). 1 Nor did the

    1
      We note that, had Ehrman challenged the truth of the jurisdictional
allegations in Cox’s notice of removal, the district court should have
               EHRMAN V. COX COMMUNICATIONS                              9

district court independently question Cox’s allegations. 2 For
these reasons, Cox should not have been required to present
evidence in support of its allegation of minimal diversity.
Accepting the truth of Cox’s allegations, Ehrman “is a
citizen of [California],” and “all purported class members
are citizens of California.”

    In short, Cox alleged the parties’ citizenships based on
information and belief in its notice of removal. And, because
Ehrman asserted a facial, rather than a factual or as-applied,
challenge to the notice of removal, those allegations were
sufficient. See NewGen, 840 F.3d at 614. No evidence was
required.

     We conclude by clarifying the scope of our decision.
Although the district court focused much of its analysis on
the question of whether allegations of a party’s residency
constitutes prima facie evidence of that party’s domicile, we
need not address that issue today. Cf. Mondragon v. Capital
One Auto Fin., 736 F.3d 880, 886 (9th Cir. 2013) (noting that
the Ninth Circuit has not yet addressed whether “a person’s
residence [is] prima facie evidence of the person’s
domicile”). Because Ehrman did not factually challenge
Cox’s jurisdictional allegations, Cox did not need to provide
evidence of either Ehrman’s or the purported class members’
citizenship.    We hold only that Cox’s jurisdictional

permitted jurisdictional discovery had Cox requested it. See Laub v. U.S.
Dep’t. of the Interior, 342 F.3d 1080, 1093 (9th Cir. 2003) (“[D]iscovery
should be granted when . . . the jurisdictional facts are contested or more
facts are needed.”).

    2
       Indeed, the district court acknowledged that it would be
“inconceivable” that neither Ehrman nor any of the 832,000 purported
class members, all of whom subscribed to residential internet service in
California, were citizens of California.
10          EHRMAN V. COX COMMUNICATIONS

allegations, which provided a short and plain statement of
the parties’ citizenships based on information and belief,
satisfied Cox’s burden of pleading minimal diversity.

                     CONCLUSION

    Congress enacted CAFA to “facilitate adjudication of
certain class actions in federal court.” Dart Cherokee, 135
S. Ct. at 554 (emphasis added). In keeping with that
purpose, we require removing defendants to provide only a
short and plain statement of the grounds for removal. And
when a defendant’s allegations of citizenship are
unchallenged, nothing more is required.

    By holding that Cox’s jurisdictional allegations fell
short, and by requiring Cox to support those allegations with
evidence in response to only a facial—not a factual or as-
applied—challenge, the district court misconstrued CAFA’s
pleading requirements. We therefore reverse the district
court’s grant of Ehrman’s motion to remand.

     REVERSED AND REMANDED.