Patricia Hood v. Gilster-Mary Lee Corporation

United States Court of Appeals
For the Eighth Circuit
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No. 15-1458
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Patricia Hood; Susan Meyer; Nora de la Rosa

lllllllllllllllllllll Plaintiffs - Appellees

v.

Gilster-Mary Lee Corporation

lllllllllllllllllllll Defendant - Appellant
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Appeal from United States District Court
for the Western District of Missouri - Joplin
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Submitted: April 14, 2015
Filed: May 1, 2015
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Before LOKEN, COLLOTON, and BENTON, Circuit Judges.
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BENTON, Circuit Judge.

On December 23, 2013, former and current employees filed a class action
lawsuit in state court against Gilster-Mary Lee Corporation and six other defendants.
The employees allege lung impairment (or potential lung impairment) from exposure
to butter-flavoring products, including diacetyl, used in Gilster’s microwave popcorn
packaging plant in Jasper, Missouri. Defendants removed the case to federal court
under the Class Action Fairness Act. See 28 U.S.C. §§ 1332, 1441(a)-(b), 1453. The
parties do not dispute CAFA jurisdiction. Six weeks later, the employees dismissed
all defendants except Gilster. The district court ordered a remand to state court based
on CAFA’s local-controversy exception. See Hood v. Gilster-Mary Lee Corp., 2015
WL 328409, at *3, *5 (W.D. Mo. Jan. 26, 2015), citing 28 U.S.C. § 1332(d)(4).
Having jurisdiction under 28 U.S.C. § 1453(c), this court reverses and remands.

The proposed class includes those who worked for over one year at Gilster’s
plant before January 1, 2008—when Gilster stopped using diacetyl. They allege
claims for premises liability, negligence, fraudulent concealment, prima facie tort, and
medical monitoring. The employees seek, among other remedies, a funded medical-
monitoring program.

Under the local-controversy exception, a district court is required to decline
jurisdiction when, as relevant here, “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.” 28 U.S.C. § 1332(d)(4)(A)(i)(I).

The two-thirds is determined as of the date of the filing of the complaint (or
amended complaint). See id. § 1332(d)(7). The district court permitted discovery on
state citizenship. For all of the potential class members, except the current employees,
the employees initially provided only last-known addresses, some 27 years old, and
did not identify state citizenship. The employees wrote the potential class members
seeking affidavits of citizenship; most did not respond.

The employees identified two groups of Gilster employees who worked at the
plant over one year before 2008: 40 current employees (three of whom are not U.S.
citizens), and 246 former employees. The employees received 95 affidavits from
former employees still residing in Missouri, and 7 from former employees no longer
in Missouri. Of the former employees, 126 had last-known addresses in Missouri but

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did not return an affidavit. They also obtained lists of former employees from two
temporary staffing companies. One temporary staffing list shows 58 of 61 individuals
have last-known Missouri addresses, 13 of which confirmed Missouri citizenship.
Potential class members were also identified from prior litigation against Gilster. Of
25 potential members, 9 were confirmed as Missouri citizens. The rest did not
respond. The district court found that about 150 of 372, or 41 percent, of the
potential class members are clearly Missouri citizens. The district court’s findings
can be summarized as:

List Potential Class Members Clearly Missouri Citizens
Gilster - current 40 37
Gilster - former 246 95
Temporary staff 61 13
Prior litigants 25 9
Total 372 154

The party seeking remand bears the burden of proof for a CAFA exception.
Westerfeld v. Indep. Processing, LLC, 621 F.3d 819, 822 (8th Cir. 2010). Any doubt
about the applicability of the local-controversy exception is resolved against the party
seeking remand. Id. at 823.

Citing other district-court orders, the district court relied on last-known
addresses to conclude that over two-thirds of the potential class members were
Missouri citizens.1 More persuasive is the Seventh Circuit’s general rule: “[A] court

1
Compare, e.g., Elsea v. Jackson, Cnty., Mo., 2010 WL 4386538, at *4 (W.D.
Mo. Oct. 28, 1010) (“[R]esidence is prima facie proof of citizenship.”), Randall v.
Evamor, Inc., 2010 WL 1727977, at *2 (E.D. Mo. Apr. 29, 2010) (finding last-
known address creates rebuttable presumption of citizenship), Tonnies v. Southland

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may not draw conclusions about the citizenship of class members based on things like
their phone numbers and mailing addresses.” In re Sprint Nextel Corp., 593 F.3d
669, 674 (7th Cir. 2010). See also Mondragon v. Capital One Auto Fin., 736 F.3d
880, 884 (9th Cir. 2013) (“That a [class member] may have a residential address in
California does not mean that person is a citizen of California. In addition, the
proposed class reaches back to cover purchases made as long as four years before the
filing of the complaint . . . and we imagine that at least some [class members] who
were California citizens at the time of purchase subsequently moved to other states
. . . .” (internal citation omitted)). The Seventh Circuit notes two ways plaintiffs can
meet their burden: (1) affidavit evidence or statistically significant surveys showing
two-thirds of the class members are local citizens, or (2) redefine the class as only
local citizens. In re Sprint, 593 F.3d at 675-76. See Myrick v. WellPoint, Inc., 764
F.3d 662, 665 (7th Cir. 2014) (Plaintiffs may “take a random sample of [potential
class members], ascertain the citizenship of each . . . on the date the case was
removed, and extrapolate to the class as a whole. If the sample yields a lopsided
result . . . the outcome is clear without the need for more evidence. . . . If the result
is close to the statutory two-thirds line, then do more sampling and hire a statistician
to ensure that the larger sample produces a reliable result.”).

Imports, Inc., 2009 WL 3172565, at *3-4 (E.D. Mo. Sept. 29, 2009) (same), Clover
v. Sunset Auto Co., 2009 WL 2757050, at *3 (E.D. Mo. Aug. 26, 2009) (same), and
Redd v. Suntrup Hyundai, Inc., 2009 WL 2568054, at *2-3 (E.D. Mo. Aug. 18,
2009) (same), with Hart v. Rick’s NY Cabaret Int’l, Inc., 967 F. Supp. 2d 955, 964-
66 (S.D.N.Y. 2014) (rejecting that last-known addresses demonstrated citizenship),
Albury v. Daymar Colleges Grp., 2012 WL 884902, at *3, *7 (W.D. Ky. Mar. 14,
2012) (noting no circuit court analyzing CAFA exceptions has applied rebuttable
presumption equating residence with citizenship, and refusing to apply the
presumption), Lancaster v. Daymar Colleges Grp., 2012 WL 524459, at *4 (W.D.
Ky. Feb. 15, 2012) (finding residency insufficient to establish citizenship), Wiggins
v. Daymar Colleges Grp., 2012 WL 525449, at *7-8 (W.D. Ky. Feb. 15, 2012)
(same), and McMorris v. TJX Cos., 493 F. Supp. 2d 158, 162-63 (D. Mass 2007)
(same).

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 The district court does use the terms “sampling” and “representative sample.”
The record does not include any sample, sampling methodology, or other indication
of a disciplined approach. The district court extrapolates the citizenship of the
Missouri citizens who responded, to the citizenship for those potential class members
who did not respond. The fallacy is apparent. Those still at the last-known address
were more likely to respond, and those not at the last-known address were less likely
to respond (and more likely not to be Missouri citizens, or even have a valid address).
Thus, the last-known-address evidence in this case does not bridge the gap between
41 percent and 67 percent.

Because the employees did not meet their burden of proof that a CAFA
exception under 28 U.S.C. § 1332(d)(4) applies, the district court erred by resolving
doubt in favor of the party seeking the remand.

The judgment is reversed, and case remanded for further proceedings consistent
with this opinion.
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