PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
CARRIE DENNISON, on behalf of
herself and all others similarly
situated,
Plaintiff-Appellee,
v. No. 08-2187
CAROLINA PAYDAY LOANS,
INCORPORATED,
Defendant-Appellant.
Appeal from the United States District Court
for the District of South Carolina, at Charleston.
Patrick Michael Duffy, District Judge.
(2:07-cv-04016-PMD)
Argued: October 29, 2008
Decided: December 12, 2008
Before NIEMEYER, TRAXLER, and AGEE,
Circuit Judges.
Affirmed by published opinion. Judge Niemeyer wrote the
opinion, in which Judge Traxler joined. Judge Agee wrote a
separate opinion concurring in part, dissenting in part, and
concurring in the judgment.
2 DENNISON v. CAROLINA PAYDAY LOANS
COUNSEL
ARGUED: Henrietta U. Golding, MCNAIR LAW FIRM,
P.A., Myrtle Beach, South Carolina, for Appellant. Joe R.
Whatley, Jr., WHATLEY, DRAKE & KALLAS, LLC, New
York, New York, for Appellee. ON BRIEF: Alan S. Kaplin-
sky, Mark J. Levin, BALLARD SPAHR ANDREWS &
INGERSOLL, L.L.P., Philadelphia, Pennsylvania; Rita M.
McKinney, MCNAIR LAW FIRM, P.A., Greenville, South
Carolina, for Appellant. J. Preston Strom, Jr., Mario A.
Pacella, STROM LAW FIRM, Columbia, South Carolina, for
Appellee.
OPINION
NIEMEYER, Circuit Judge:
Carrie Dennison, a citizen of South Carolina, filed an
action on behalf of herself and all other "citizens of South
Carolina," who were similarly situated, against Carolina Pay-
day Loans, Inc., alleging that Carolina Payday, in making
"payday loans" to Dennison, violated South Carolina Code
§ 37-5-108 (prohibiting unconscionable loans) and South Car-
olina common law duties of good faith and fair dealing.
Alleging minimal diversity under the Class Action Fairness
Act of 2005 ("CAFA"), 28 U.S.C. § 1332(d)(2)(A), Carolina
Payday removed the action to federal court under 28 U.S.C.
§ 1453(b). It claimed that it satisfied the requirements for
minimal diversity, as defined in § 1332(d)(2)(A), either (1)
because it is a citizen of Georgia, where it claims it has its
principal place of business, even though it is also a citizen of
South Carolina, where it is incorporated, or (2) because some
of the class members had moved from South Carolina and
were citizens of other States.
On Dennison’s motion to remand, the district court found
that Carolina Payday failed to establish minimal diversity
DENNISON v. CAROLINA PAYDAY LOANS 3
under § 1332(d)(2)(A) because even though Carolina Payday
might be a citizen of Georgia, it is also a citizen of South Car-
olina, and the plaintiff and class members are citizens of
South Carolina. The court further found that the class action
fell within the "home-state exception" to CAFA jurisdiction
set forth in 28 U.S.C. § 1332(d)(4) because in a class limited
by definition to "citizens of South Carolina," at least two-
thirds of the class members necessarily are citizens of South
Carolina. Accordingly, the district court remanded the case to
state court. We granted Carolina Payday’s petition for permis-
sion to appeal the remand order under 28 U.S.C. § 1453(c).
The facts and issues raised in this case are substantively
identical to those raised in Johnson v. Advance America, Cash
Advance Centers of South Carolina, Inc., No. 08-2186, ___
F.3d ___ (4th Cir. Dec. 12, 2008). Carolina Payday is a citi-
zen of South Carolina, albeit also a claimed-to-be citizen of
another State, and the class is defined to include only citizens
of South Carolina, thus excluding persons who may have
moved from South Carolina and established citizenship else-
where at the time the action was commenced. For the reasons
given in Advance America, therefore, we conclude that Caro-
lina Payday cannot carry its burden of demonstrating that any
member of the plaintiff’s class is a citizen of a State "different
from" Carolina Payday, as required by 28 U.S.C.
§ 1332(d)(2)(A). Accordingly, we affirm the district court’s
remand order.
At oral argument, which took place on the same day that
Advance America was argued, Carolina Payday emphasized
facts that might distinguish this case from Advance America
in several respects. First, Carolina Payday argues that the
class definition in this case can be read to include persons
who were citizens of South Carolina at the time of transac-
tions with Carolina Payday but who have since become citi-
zens of other States. It points to the class definition here,
which includes "all citizens of South Carolina" and is unlike
the definition of the class for injunctive relief in Advance
4 DENNISON v. CAROLINA PAYDAY LOANS
America, which purportedly limited the class to include only
"citizens of South Carolina who are domiciled in South Caro-
lina." Advance America, slip op. at 4 (emphasis added).1 This
distinction in language, however, is immaterial because an
individual must be domiciled in a State in order to be a citizen
of that State. See Newman-Green, Inc. v. Alfonzo-Larrain,
490 U.S. 826, 828 (1989). Thus, the domicile requirement
injected in the injunctive-relief class definition in Advance
America was surplusage. The definitions of the classes in
Advance America and here are substantively identical, each
limiting the class to citizens of South Carolina at the time the
action was commenced.
Like in Advance America, if one of Carolina Payday’s cus-
tomers had in fact established a domicile outside of South
Carolina before the action was commenced, the customer
would not be a "citizen of South Carolina" and therefore not
a member of the proposed class. Likewise, if the customer
moved from South Carolina after the action was commenced,
that fact would not alter federal jurisdiction, which is fixed at
the time the complaint or notice of removal is filed. See Mol-
lan v. Torrance, 22 U.S. (9 Wheat.) 537, 539 (1824); see also
Grupo Dataflux v. Atlas Global Group, L.P., 541 U.S. 567,
570-71 (2004); 28 U.S.C. § 1332(d)(7).
Carolina Payday also argues that unlike the affidavits in
Advance America, its proffered affidavit stated that "one or
more customers of Carolina Payday entered into loan agree-
ments with Carolina Payday while citizens of South Carolina
but are now citizens of other States." Its affidavit, however,
does not support the argument that a class member can be
someone other than a citizen of South Carolina at the time the
complaint was filed. See 28 U.S.C. § 1332(d)(7). If a South
Carolina citizen entered into a loan agreement with Carolina
1
In all other respects, the class definitions for the subclasses in this case
are identical to the definitions for the subclasses in Advance America. See
Advance America, slip op. at 4.
DENNISON v. CAROLINA PAYDAY LOANS 5
Payday and then moved from the State before the action was
commenced, the fact that the person was not a citizen of
South Carolina at the time the action was commenced simply
means that the person does not qualify as a member of the
class. Dennison defined the class to constitute only citizens of
South Carolina, and Carolina Payday cannot redefine the class
to include non-citizens.
Finally, Carolina Payday argues in its brief that this case is
distinguishable from Advance America because in Advance
America, the class members, as citizens of South Carolina,
were not diverse from the defendant that had its principal
place of business in South Carolina. Carolina Payday points
out that in this case, the class members, also citizens of South
Carolina, are in fact diverse from Carolina Payday because it
has its principal place of business, as it claims, in Georgia.2
It argues that even though Carolina Payday is incorporated in
South Carolina, the minimal diversity analysis under
§ 1332(d)(2)(A) should differ when the defendant’s principal
place of business is in a State different from the State of the
class members’ citizenship. Carolina Payday reasons that
focusing on a corporation’s principal place of business for
purposes of citizenship would reduce forum shopping because
a corporation would not be inclined to choose its principal
place of business to establish CAFA jurisdiction. But Carolina
Payday cites no authority to support its argument. Section
2
There is a dispute over whether Carolina Payday’s principal place of
business is in Georgia. Dennison contends that Carolina Payday’s princi-
pal place of business is in South Carolina. The district court refrained from
deciding the issue, noting that "[s]ince the court rules that dual citizenship
does not on its own establish minimal diversity, Plaintiff’s contention that
South Carolina is also Defendant’s principal place of business is irrele-
vant, and the court need not and does not decide the issue." Dennison v.
Carolina Payday Loans, Inc., No. 2:07-cv-04016-PMD, slip op. at 6 n.2
(D.S.C. May 21, 2008). We too refrain from deciding the State of Carolina
Payday’s principal place of business because the decision is not necessary
to reach our holding that Carolina Payday has not demonstrated minimal
diversity.
6 DENNISON v. CAROLINA PAYDAY LOANS
1332(c)(1) provides that "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." 28
U.S.C. § 1332(c)(1) (emphasis added). The statute does not
give greater weight to a corporation’s principal place of busi-
ness than to its place of incorporation. For purposes of diver-
sity jurisdiction, Carolina Payday is a citizen of both South
Carolina, its State of incorporation, and Georgia, assuming it
is able to demonstrate that its principal place of business is in
Georgia. Whether it is a citizen of Georgia, however, is
immaterial as it is indisputably a citizen of South Carolina and
therefore cannot show that it is not a citizen of South Caro-
lina.
Like the defendant in Advance America, Carolina Payday
cannot sustain its burden of establishing, as required by
§ 1332(d)(2)(A), that "any member of [the] class of plaintiffs
is a citizen of a State different from any defendant." As we
pointed out in Advance America, "[t]he language of the statute
imposes a requirement on [Carolina Payday] to prove the
negative—i.e. that it is not a citizen of South Carolina—and
that it cannot do." Advance America, slip op. at 7. It was
incorporated in South Carolina and therefore is a citizen there.
Because Carolina Payday Loans has not established the
existence of minimal diversity, we do not reach whether the
home-state exception of 28 U.S.C. § 1332(d)(4) applies to
defeat federal jurisdiction in this case.
On the reasoning of Advance America, we affirm the order
of the district court in this case, remanding the case to state
court for lack of diversity jurisdiction under CAFA.
AFFIRMED
AGEE, Circuit Judge, concurring in part, dissenting in part,
and concurring in the judgment:
I agree with the majority opinion that Carolina Payday fails
to satisfy the requirements of 28 U.S.C. § 1332(d)(2)(A) on
DENNISON v. CAROLINA PAYDAY LOANS 7
the basis of its dual citizenship. As in the companion case
decided today, Johnson v. Advance America, Cash Advance
Centers of South Carolina, Inc., No. 08-2186, ___ F.3d ___
(4th Cir. Dec. 12, 2008), I write separately because I respect-
fully disagree with the conclusion in the majority opinion that
the language of the Complaint has limited the classes of plain-
tiffs to only citizens of South Carolina as of the time the Com-
plaint was filed. Nonetheless, I concur in the judgment of the
majority because Carolina Payday failed to meet its burden of
proof to establish the citizenship of any plaintiff in a state
other than South Carolina.
The Complaint sets out three classes of plaintiffs as fol-
lows:
Injunctive Relief Class: All citizens of South Caro-
lina who borrowed money from Defendant in the
three years preceding the filing of the complaint or
who will borrow money from Defendant in the
future.
Damages Subclass One: All citizens of South Caro-
lina who borrowed money from Defendant in the
three years preceding the filing of this complaint
whose monthly obligations exceeded 55% of their
gross monthly income.
Damages Subclass Two: All citizens of South Caro-
lina who renewed a loan with Defendant by repaying
only the interest and received a new loan.
(J.A. 12-13).
Carolina Payday contends that these class definitions "may
reasonably be read as including, in addition to current South
Carolina residents, any individual who was a South Carolina
citizen at the time he or she borrowed money . . . but who at
the time of removal was a citizen of a different state." (Br.
8 DENNISON v. CAROLINA PAYDAY LOANS
Appellant 20.) As in Advance America, the majority finds this
argument unpersuasive based on its reading of the classes as
defined in the Complaint. The majority opinion reasons that
"if one of Carolina Payday’s customers had in fact established
a domicile outside of South Carolina before the action was
commenced, the customer would not be a ‘citizen of South
Carolina’ and therefore not a member of the proposed class."
Supra at 4. For the reasons stated in my separate opinion in
Advance America, I disagree.
As with the definitions of Damages Subclass One and
Damages Subclass Two in Advance America, membership in
the proposed classes of plaintiffs in this case is not defined in
the present tense but in the past tense. The definitions of the
proposed classes in the Complaint do not limit their members
to those persons who are citizens of South Carolina at the
time the complaint was filed. Instead, members of the respec-
tive classes are those persons who either "borrowed money
from the Defendant" or "renewed" a loan while South Caro-
lina citizens. Thus, to be a member of the classes, a person
need only have borrowed from Carolina Payday over the last
three years, or renewed a loan, while a South Carolina citizen.
The failure of the Complaint to place a certain temporal
requirement on class membership leaves open the potential
membership to persons who were not South Carolina citizens
when the Complaint was filed, even though they were South
Carolina citizens when their transactions with Carolina Pay-
day took place. If such persons with other than South Carolina
citizenship do exist in fact, then the minimal diversity require-
ments enunciated in CAFA would be met and jurisdiction in
the district court would be established. 28 U.S.C. § 1332(d)(2)
(2006).
Nevertheless, I concur with the judgment in this case
because Carolina Payday has failed in its burden of proof. See
Strawn v. AT&T Mobility LLC, 530 F.3d 293, 298 (4th Cir.
2008) ("[T]he party seeking to invoke federal jurisdiction
must . . . demonstrate the basis for federal jurisdiction."). Car-
DENNISON v. CAROLINA PAYDAY LOANS 9
olina Payday’s "evidence" to meet its burden of proof for
removal is simply the naked statement in an affidavit that
"One or more customers of Carolina Payday entered into loan
agreements with Carolina Payday while citizens of South Car-
olina but are now citizens of other states."3 (J.A. 34) (empha-
sis added). Such an allegation proves nothing as Carolina
Payday failed to show any of its customers who are potential
class members under the Complaint did anything other than
change residence. "[S]tate citizenship for purposes of diver-
sity jurisdiction depends not on residence, but on national citi-
zenship and domicile, and the existence of such citizenship
cannot be inferred from allegations of mere residence, stand-
ing alone." Axel Johnson, Inc. v. Carroll Carolina Oil Co.,
145 F.3d 660, 663 (4th Cir. 1998) (internal citations omitted).
Thus, Carolina Payday fails as a matter of law to meet its
burden of proof to show any potential plaintiff was a citizen
of any state other than South Carolina. Accordingly, even
though I disagree with the majority’s conclusion that the
Complaint’s definition of the classes limits their membership
to citizens of South Carolina at the time the Complaint was
filed, Carolina Payday has failed to show any non South Car-
olina citizen actually exists. I thus concur in the judgment of
the majority because Carolina Payday has failed to demon-
strate the existence of federal jurisdiction under 28 U.S.C.
§ 1332(d)(2).
3
Carolina Payday’s affidavits in this case are no more persuasive than
those submitted in Advance America. There, Advance America proffered
exhibits to its affidavit identifying the customers whose residence had
changed. Here, Carolina Payday does not identify a single customer it
alleges changed citizenship. Moreover, in a second affidavit, Carolina
Payday’s affiant merely alleges that "[n]umerous customers . . . now
reside in states outside of South Carolina." (J.A. 39) (emphasis added). In
short, Carolina Payday’s affidavits are conclusory and fail to provide any
basis for the assertion that any of its customers changed citizenship. Such
conclusory assertions need not be accorded any evidentiary weight. See
McHone v. Polk, 392 F.3d 691, 703-04 (4th Cir. 2004).