FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
BRADFORD COLEMAN, individually,
and on behalf of other members of
the general public similarly
situated, and as aggrieved
employee pursuant to the Private No. 10-80152
Attorneys General Act (“PAGA”),
Plaintiff-Respondent, D.C. No.
v. 2:10-cv-02242-
ABC-AJW
ESTES EXPRESS LINES, INC., a
Virginia Corporation; ESTES WEST, OPINION
a business entity form unknown;
G.I. TRUCKING COMPANY, FKA DOE
1, DBA Estes West,
Defendants-Petitioners.
Submitted October 13, 2010*
San Francisco, California
Filed November 30, 2010
Before: Diarmuid F. O’Scannlain, Stephen S. Trott, and
William A. Fletcher, Circuit Judges
Per Curiam Opinion
*October Motions Panel
19019
COLEMAN v. ESTES EXPRESS LINES 19021
COUNSEL
Robert Ebert Byrnes, Park Paul Estrella, Sue Jin Kim, Miriam
Leigh Schimmel, and Glenn Danas, INITIATIVE LEGAL
GROUP APC, Los Angeles, California, Payam Shahian,
STRATEGIC LEGAL PRACTICES, APC, Los Angeles, Cal-
ifornia, for the plaintiff-respondent.
Timothy M. Freudenberger and Sarah Drechsler, CARLTON
DISANTE & FREUDENBERGER LLP, Irvine, California,
David Lee Terry and David L. Woodard, POYNER &
SPRUILL LLP, Raleigh, North Carolina, for the defendants-
petitioners.
19022 COLEMAN v. ESTES EXPRESS LINES
OPINION
PER CURIAM:
Bradford Coleman sued Estes Express Lines, Inc. and Estes
West, individually and on behalf of a proposed class, in Cali-
fornia state court. Estes Express removed to federal district
court under the Class Action Fairness Act of 2005 (“CAFA”),
Pub. L. No. 109-2, 119 Stat. 4 (2005). The district court
remanded to state court because the case involved a local con-
troversy under 28 U.S.C. § 1332(d)(4). Pursuant to 28 U.S.C.
§ 1453(c)(1), Estes Express has applied for leave to appeal
that order.
This Circuit has not yet articulated criteria to determine
when it is appropriate to hear discretionary appeals under
CAFA. Here, we set forth criteria to guide a reviewing court.
Applying those criteria to the facts of this case, we grant Estes
Express’ application for leave to appeal.
I. Background
Estes Express is a Virginia-based corporation that acquired
California-based G.I. Trucking in 2005. After the acquisition,
G.I. Trucking became Estes West (d/b/a G.I. Trucking). Estes
West operates as an “internal regional division” of Estes
Express, much like Estes Express’ Southeast, Southwest,
Northeast, and Upper Midwest regional divisions.
Estes Express owns 100% of Estes West and exercises sig-
nificant control over its operations. Estes Express sets corpo-
rate policies, directs all payroll functions, determines benefit
plans, writes the employee handbook, establishes procedures
relating to rest breaks and meal breaks, creates employee job
descriptions, and lays off employees. There is only one Estes
West payroll employee in California, who carries out policies
set by the Estes Express office in Virginia. Estes West
employs one regional human resources manager, who reports
COLEMAN v. ESTES EXPRESS LINES 19023
to Estes Express headquarters. Local managers of Estes West
give day-to-day instructions to employees, but such instruc-
tions are given strictly within the guidelines established by
Estes Express. Estes West has no revenue, but it maintains a
payroll account in California as mandated by California law.
It has a Board of Directors consisting of Estes Express
employees, but the Board holds no independent meetings and
has no responsibility for formulating a business plan.
Bradford Coleman, who was employed by G.I. Trucking
and then Estes West from 2004 to 2009, sued Estes West and
Estes Express based on multiple alleged violations of Califor-
nia wage and hour statutes. Coleman brought his suit in state
court, styled as a class action with two proposed sub-classes.
Estes Express removed under CAFA. 28 U.S.C. §§ 1332(d),
1453(b).
Coleman moved to remand to state court, arguing that the
case was a local controversy, which is an exception to
CAFA’s removal jurisdiction. Under that exception, a federal
district court “shall decline to exercise [removal] jurisdiction
. . . over a class action in which — “
(I) greater than two-thirds of the members of all pro-
posed 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 signifi-
cant 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
19024 COLEMAN v. ESTES EXPRESS LINES
(III) principal injuries resulting from the alleged con-
duct or any related conduct of each defendant were
incurred in the State in which the action was origi-
nally filed . . .
28 U.S.C. § 1332(d)(4)(A)(i). Estes Express argues that the
criteria of 28 U.S.C. § 1332(d)(4)(A)(i)(II)(aa) and (II)(bb)
are not satisfied. Although Coleman pled claims against both
Estes Express and Estes West, Estes Express argues that its
employees would have been responsible for the alleged viola-
tions, and only it has the ability to satisfy any judgment. Estes
Express further argues that it is the only defendant “whose
alleged conduct forms a significant basis for the claims assert-
ed” and “from whom significant relief is sought.” It contends
that in deciding this jurisdictional question, the district court
should look beyond the pleadings to determine which party
actually caused the alleged harm and from which party any
relief would actually come. See Roberts v. Corrothers, 812
F.2d 1173, 1177 (9th Cir. 1987). Since Estes Express is not
a citizen of California, it argues that the local controversy
exception should not apply. See § 1332(d)(4)(A)(i)(II)(cc).
[1] In a thorough opinion, the district court explained that
courts have split on whether to look beyond the complaint in
determining whether the local controversy exception applies.
Compare, e.g., Coffey v. Freeport McMoran Copper & Gold,
581 F.3d 1240, 1244-45 (10th Cir. 2009) (per curiam), with
Robinson v. Cheetah Transp., No. 06-0005, 2006 U.S. Dist.
LEXIS 10129, at *12 (W.D. La. Feb. 27, 2006), and Green
v. SuperShuttle Int’l, Inc., No. 09-2129, 2010 U.S. Dist.
LEXIS 7456, at *10 (D. Minn. Jan. 29, 2010). This Circuit
has not yet addressed the issue. The district court held that the
plain language of the statute precluded it from considering
extrinsic evidence on the question of which party will actually
pay a judgment under § 1332(d)(4)(A)(i)(II)(aa). The court
then held that, even considering extrinsic evidence, Estes
West was a defendant “whose alleged conduct form[ed] a sig-
nificant basis for the claims asserted.” Therefore, the court
COLEMAN v. ESTES EXPRESS LINES 19025
found it unnecessary to reach the question whether extrinsic
evidence should be considered as to § 1332(d)
(4)(A)(i)(II)(bb). The court found that the local controversy
exception applied and remanded to state court.
Under CAFA, a party may seek leave to appeal a remand
order to the court of appeals, which has discretion whether to
accept the appeal. 28 U.S.C. § 1453(c)(1). Pursuant to this
provision, Estes Express sought leave to appeal.
II. Analysis
A. Factors Guiding the Court’s Discretion
[2] CAFA does not explain how an appellate court should
decide whether to accept an appeal of a remand order.
Although we have not yet articulated the criteria to consider,
we note that the First Circuit has set out a helpful list of
criteria to use in evaluating applications for leave to appeal
under § 1453(c)(1). Coll. of Dental Surgeons of P.R. v. Conn.
Gen. Life Ins. Co., 585 F.3d 33, 38-39 (1st Cir. 2009). The
First Circuit’s criteria have been adopted by the Tenth Circuit.
See BP Am., Inc. v. Oklahoma, 613 F.3d 1029, 1034-35 (10th
Cir. 2010). We, too, adopt them.
[3] In Dental Surgeons, the First Circuit held that a key
factor in determining whether to accept an appeal is “the pres-
ence of an important CAFA-related question” in the case.
Coll. of Dental Surgeons, 585 F.3d at 38. Because discretion
to hear appeals exists in part to develop a body of appellate
law interpreting CAFA, “[t]he presence of a non-CAFA issue
(even an important one) is generally not thought to be entitled
to the same weight.” Id. If the CAFA-related question is
unsettled, immediate appeal is more likely to be appropriate,
particularly when the question “appears to be either incor-
rectly decided [by the court below] or at least fairly debat-
able.” Id.
19026 COLEMAN v. ESTES EXPRESS LINES
[4] The First Circuit also enumerated several case-specific
factors, including the importance of the CAFA-related ques-
tion to the case at hand and the likelihood that the question
will “evade effective review if left for consideration only after
final judgment.” Id. The appellate court should also consider
whether the record is sufficiently developed and the order suf-
ficiently final to permit “intelligent review.” Id. Finally, the
First Circuit observed that the court should conduct the famil-
iar inquiry into the balance of the harms. Id. at 39.
[5] The First Circuit explained, and we agree, that whether
to permit appeal under 28 U.S.C. § 1453(c)(1) is ultimately
“committed to the informed discretion” of the appellate court.
Id. The foregoing criteria are guides, not a series of bright-line
rules.
B. Application of the Criteria
Applying these criteria, we grant Estes Express’ application
for leave to appeal. Although the local controversy exception
to CAFA jurisdiction is “narrow,” it is nonetheless an enu-
merated exception to a federal court’s CAFA removal juris-
diction. It is intended to “identify . . . a controversy that
uniquely affects a particular locality” and to ensure that it is
decided by a state rather than a federal court. See Evans v.
Walter Indus., Inc., 449 F.3d 1159, 1163-64 (11th Cir. 2006)
(internal quotation marks and citation omitted). The question
whether the district court must rely only on the pleadings or
should look to extrinsic evidence will often determine
whether a case will be remanded under the local controversy
exception. This case thus raises an important issue of CAFA
law. As the district court recognized, this is an unsettled ques-
tion in this Circuit. We do not say that district court’s decision
“appears to be incorrectly decided,” but the array of courts on
both sides of the question indicates that it is at least “fairly
debatable” and that appellate review would be useful.
[6] Whether the district court may look beyond the com-
plaint may be dispositive of whether this case should be
COLEMAN v. ESTES EXPRESS LINES 19027
remanded. As the district court recognized, it may be possible
to decide the applicability of § 1332(d)(4)(A)(i)(II)(bb) in this
case without looking at extrinsic evidence, but the applicabil-
ity of § 1332(d)(4)(A)(i)(II)(aa) depends on Estes West’s abil-
ity to pay a judgment. The probability that a state court or the
Supreme Court will review the federal jurisdictional question
after the merits of the case have been decided is almost non-
existent, so this question is likely to evade review if Estes
Express cannot immediately appeal. The issues were fully
briefed below, resulting in a reasoned remand order, so the
case is well-positioned for review.
[7] Finally, the only harm Coleman and the proposed class
will suffer if the remand order is appealed is delay. There is
no indication that a delay will seriously harm Coleman and
the proposed class. Estes Express, on the other hand, will lose
almost any chance of litigating this case in a federal forum if
it is not allowed to appeal the remand order. Cf. Miller-Davis
Co. v. Ill. State Toll Highway Auth., 567 F.2d 323, 326 (7th
Cir. 1977). The balance of harms thus favors Estes Express.
Conclusion
We therefore GRANT Defendants’ application for leave to
appeal.