Stewart v. Entergy Corporation

Case: 22-30177 Document: 00516336407 Page: 1 Date Filed: 05/27/2022

United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit

FILED
May 27, 2022
No. 22-30177
Lyle W. Cayce
Clerk

Anthony J. Stewart; Diane Raley; Tomika Jordan;
Sheena Altine; Tyelga J. Kearney; et al.,

Plaintiffs—Appellees,

versus

Entergy Corporation; Entergy New Orleans, L.L.C.;
Entergy Louisiana, L.L.C.,

Defendants—Appellants.

Appeal from the United States District Court
for the Eastern District of Louisiana
USDC No. 2:21-CV-1834

Before Stewart, Haynes, and Ho, Circuit Judges.
Per Curiam:
Plaintiffs-Appellees, individuals who were adversely affected by
power outages following Hurricane Ida, filed a class action lawsuit in state
court against Defendants-Appellants Entergy Corporation, Entergy New
Orleans, L.L.C., and Entergy Louisiana, L.L.C. (collectively, “Entergy”).
Plaintiffs allege that Entergy negligently designed, operated, and maintained
the electricity transmission system, which led to power outages in the wake
of the hurricane. Entergy removed this case to federal court under 28 U.S.C.
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No. 22-30177

§ 1441, asserting three bases for original jurisdiction: federal question
jurisdiction, 28 U.S.C. § 1331; jurisdiction under the Class Action Fairness
Act (“CAFA”), 28 U.S.C. § 1453(b); and federal bankruptcy jurisdiction, 28
U.S.C. § 1452. Plaintiffs moved to remand, and the district court granted the
remand motion.
Typically, a case’s foray into federal court ends there—an order
remanding a case to state court is generally not appealable. 28 U.S.C.
§ 1447(d). But, for actions removed under CAFA, appellate courts “may
accept an appeal from an order of a district court granting or denying a motion
to remand a class action to the State court from which it was removed if
application is made to the court of appeals” within ten days after entry of the
remand order. Id. § 1453(c)(1). Entergy timely petitioned for such an appeal,
and we granted that request.
For the reasons set forth below, we hold that CAFA’s local
controversy and home state exceptions bar federal jurisdiction. We also hold
that, under governing precedent, our appellate jurisdiction extends only to
the CAFA-related claim. We, therefore, AFFIRM in part and DISMISS
in part.
I. CAFA Jurisdiction
“CAFA provides the federal district courts with ‘original jurisdiction’
to hear a ‘class action’ if the class has more than 100 members, the parties
are minimally diverse, and the ‘matter in controversy exceeds the sum or
value of $5,000,000.’” Standard Fire Ins. Co. v. Knowles, 568 U.S. 588, 592
(2013) (quoting 28 U.S.C. § 1332(d)(2), (d)(5)(B)). However, under the
local controversy and home state exceptions to CAFA, a “district court shall
decline to exercise jurisdiction” over a class action in which “greater than
two-thirds” of proposed class members are citizens of the state in which the
action was originally filed, and certain other procedural requirements are

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met. 28 U.S.C. § 1332(d)(4).1 The party seeking remand bears the burden
of establishing, by a preponderance of the evidence, that the local controversy
and home state citizenship requirements are met. Preston v. Tenet
Healthsystem Mem’l Med. Ctr., Inc. (Preston I), 485 F.3d 804, 814 (5th Cir.
2007).
Plaintiffs concede that CAFA’s statutory requirements are met but
assert that the local controversy and home state exceptions preclude federal
jurisdiction. Concluding, among other things, that more than two-thirds of
the proposed class members are Louisiana citizens, the district court agreed
and granted Plaintiffs’ remand motion. We review that jurisdictional
determination de novo but review factual findings regarding the citizenship
of parties for clear error. See Williams v. Homeland Ins. Co., 657 F.3d 287,
290 (5th Cir. 2011); Preston I, 485 F.3d at 809.
To determine whether two-thirds of a proposed class are citizens of
the state in which a class action was originally filed, we must first define the
class. To do so, we review the allegations set out in Plaintiffs’ petition at the
time of removal. See Arbuckle Mountain Ranch, Inc. v. Chesapeake Energy
Corp., 810 F.3d 335, 341 (5th Cir. 2016). Here, the petition asserts that the
class action is brought “on behalf of all residents of the East Bank of Jefferson
Parish and all residents of Orleans Parish.” The petition then states: “Until

1
The local controversy exception requires remand if Plaintiffs establish that
(1) greater than two-thirds of the class members are citizens of Louisiana; (2) at least one
defendant “from whom significant relief is sought” and “whose alleged conduct forms a
significant basis for the claims” is a citizen of Louisiana; (3) the principal injuries
complained of occurred in Louisiana; and (4) “during the 3-year period preceding the filing
of the class action, no other class action has been filed asserting the same or similar factual
allegations” against any of the defendants. See 28 U.S.C. § 1332(d)(4)(A). The home state
exception requires remand when “two-thirds or more of the members of all proposed
plaintiff classes in the aggregate, and the primary defendants” are citizens of Louisiana.
See id. § 1332(d)(4)(B). Because only the two-thirds citizenship requirement is in dispute
on this appeal, our analysis is limited to that issue.

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a more precise determination is made of all residents of the East Bank of
Jefferson Parish and all residents of Orleans Parish affected by the failure of
the Transmission System, the Plaintiffs allege that the class consists of all
persons affected by power outages and residing in the Parishes of within the
service area of [sic] Entergy who sustained personal, mental, and economic
damages and/or inconvenience as a result of the failure of the Transmission
System resulting from Hurricane Ida.”
We conclude that, whatever the Plaintiffs may have meant, we must
construe the petition as written and the proper reading of these two
paragraphs, the first one limiting the class to portions of Jefferson and all of
Orleans parish and the second one referencing those parishes and then
referring to “the Parishes,” i.e., those parishes, means that the class
definition is quite limited in scope: it consists of Louisiana residents and
businesses in the East Bank of Jefferson and Orleans Parishes affected by the
relevant power outages. Focusing narrowly on the phrase “all persons” and
the allegation that Entergy “provide[s] services to 3 million customers in 4
states,” Entergy argues that the class definition must include persons
residing outside Louisiana. That interpretation, however, is belied by a plain
reading of the petition.
Even if one could read the petition more broadly than the conclusion
above, of the four states served by Entergy, only Louisiana uses the word
“parish” to describe its geographic subdivisions. This should end the
matter, but even if we set this compelling fact aside (as Entergy urges us to
do) our conclusion remains the same. The petition states that the class action
is brought on behalf of residents of two specific parishes; makes repeated
references to Louisiana generally and southeast Louisiana specifically; 2 and

2
In addition to the petition’s many references to Louisiana, we note its eleven
references to southeast Louisiana specifically. The petition alleges that: (1) Entergy’s

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describes how Entergy’s alleged negligence affected the Ninth Ward, the
French Quarter, and the Central Business District—all neighborhoods
located within New Orleans. Even if, as Entergy suggests, the class might
include residents outside East Bank of Jefferson and Orleans Parishes, it is
still limited to those residents in parishes served by Entergy (i.e., those in
Louisiana). Considering the petition as a whole, we cannot determine that
other states are involved.
With the class defined, we next determine if the district court clearly
erred in concluding that two-thirds of proposed class members are Louisiana
citizens. A person’s domicile, demonstrated by residence and the intent to
remain, “serves a dual function as his state of citizenship.” Preston v. Tenet
Healthsystem Mem’l Med. Ctr., Inc. (Preston II), 485 F.3d 793, 797–98 (5th Cir.
2007). At the preliminary stages of a class action, the evidentiary standard
for establishing the domicile of more than 100 plaintiffs “must be based on
practicality and reasonableness.” Preston I, 485 F.3d at 816. Accordingly, a
district court “may make a reasonable assumption of CAFA’s citizenship

transmission system failure “left southeast Louisiana without power”; (2) Entergy is aware
of climate change affecting southeast Louisiana; (3) Entergy made the decision to service
southeast Louisiana; (4) Entergy chose not to invest in underground electricity
transmission, which “could have assured regular, consistent, and sustained protected
service” in southeast Louisiana; (5) Entergy is the sole provider of electricity to southeast
Louisiana; (6) Entergy’s transmission system provides electricity to southeast Louisiana;
(7) a 2010 Department of Energy study was directed in part to Entergy’s transmission
system in southeast Louisiana; (8) prior to Hurricane Ida, Entergy asserted that its
southeast Louisiana systems could withstand winds of 150 mph; (9) Hurricane Ida passed
through southeast Louisiana; (10) Entergy’s failure to exercise reasonable care resulted in
the widespread outages in southeast Louisiana; and (11) the citizens of southeast Louisiana
are not liable for any contributory negligence for the power outages or corresponding
damages.
Moreover, the petition provides background information on Entergy—specifically
that Entergy has forty electric power plants in twelve states and provides service to
customers in four states—but it does not discuss damages occurring in any other state.

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requirement from evidence that indicates the probable citizenship of the
proposed class.” Williams, 657 F.3d at 291 (internal quotation marks and
citation omitted). Moreover, “where a proposed class is discrete in nature,
a commonsense presumption should be utilized in determining whether
citizenship requirements have been met.” Hollinger v. Home State Mut. Ins.
Co., 654 F.3d 564, 573 (5th Cir. 2011) (per curiam).
As aforementioned, based on the class definition and facts alleged, it’s
evident that this class will consist overwhelmingly of Louisiana citizens and
corporations. To support that reasonable assumption, Plaintiffs adduced an
informal survey establishing that many of the proposed class members are
indeed Louisiana citizens.3 Entergy takes issue with the survey, asserting that
its informal nature renders it “essentially useless” in assessing the
citizenship of the full proposed class. We understand Entergy’s arguments
regarding the survey’s methodology and reliability, but its conclusions
merely support what a commonsense presumption based on the class
definition and the factual allegations dictates. At the very least, it was not
clearly erroneous for the district court to rely on the survey in reaching its
conclusion that at least two-thirds of the proposed class members are
Louisiana citizens.
Our decision today accords with our prior precedent holding that a
class action stemming from a hurricane hitting southeast Louisiana was a
truly local controversy.4 See Preston I, 485 F.3d at 821–22. Here, we similarly

3
The survey results established that eighty-two proposed class members are
Louisiana citizens: those individuals are physically present in Louisiana; work in Louisiana;
and exercise civil and political rights, pay taxes, own property, maintain bank accounts, and
belong to churches and clubs in Louisiana. These are all factors used to determine domicile.
See Coury v. Prot, 85 F.3d 244, 251 (5th Cir. 1996).
4
Preston II was a companion case to Preston I involving the same class and the same
factual circumstances but asserting claims against a different defendant hospital. 485 F.3d

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conclude that “the crux of this case revolves around a narrowly defined class
and claims stemming from a localized chain of events.” Id. at 821. It’s quite
clear this controversy uniquely affects Louisiana to the exclusion of other
states. Accordingly, the district court did not clearly err in assuming that at
least two-thirds of proposed class members are Louisiana citizens. CAFA’s
local controversy and home state exceptions therefore apply, and this case
was properly remanded to state court.
II. Other Potential Appellate Jurisdiction
We have consistently held that § 1453(c)(1) does not grant us
jurisdiction to consider non-CAFA-related grounds for removal when
reviewing a remand order. See, e.g., City of Walker v. Louisiana ex rel Dep’t of
Transp. & Dev., 877 F.3d 563, 566–67 (5th Cir. 2017); Patterson v. Dean
Morris, L.L.P., 448 F.3d 736, 739 (5th Cir. 2006); Perritt v. Westlake Vinyls
Co., L.P., 562 F. App’x 228, 231 (5th Cir. 2014) (per curiam) (“[W]e do not
have jurisdiction to review the district court’s decision to remand for lack of
diversity jurisdiction, but we may review its decision to remand for lack of
CAFA jurisdiction.” (quotation omitted)).

at 793. Despite the similarities between the cases, we held that the plaintiffs’ evidence in
Preston II—a list of addresses from class members’ prior medical records—was insufficient
to prove citizenship and accordingly held that CAFA’s exceptions did not apply. Id. at
798–801. In reaching that conclusion, we noted that the petition in that case was filed one
year after Hurricane Katrina, and, because of the mass relocation that took place post-
Katrina, the court was unable to presume that class members had maintained their
Louisiana domiciles. Id. at 799–802. Though Plaintiffs’ petition here indicates that many
individuals affected by the power outages “evacuate[d]” to other states, there are no facts
alleged or other evidence in the record indicating that a Katrina-style “mass relocation”
occurred after Hurricane Ida. Katrina caused thousands of deaths and massive destruction,
whereas Ida, while horrible, did not have that same result. In any event, to the contrary, the
survey—though informal—supports an inference that those affected by Hurricane Ida
power outages have maintained Louisiana domiciles, even if they were temporarily residing
elsewhere until their power returned.

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Nevertheless, Entergy urges us to review its non-CAFA-related
jurisdictional assertions, arguing that the Supreme Court’s recent decision in
BP P.L.C. v. Mayor of Baltimore, 141 S. Ct. 1532 (2021), overrules our prior
precedent. We disagree and, accordingly, must follow our prior precedent.
In BP, the Supreme Court considered whether § 1447(d)—which
authorizes appeal of “an order remanding a case to the State court from
which it was removed pursuant to section 1442 [the federal officer removal
statute] or 1443 [the civil rights removal statute]”—extends appellate review
to the entire remand order or limits it to the portions of the remand order
related to §§ 1442 and 1443. 141 S. Ct. at 1536. The Court concluded that
when a district court’s remand order rejects multiple grounds for removal,
§ 1447(d) “authorizes a court of appeals to review each and every one of
them” because “the statute allows courts of appeals to examine the whole of
a district court’s ‘order,’ not just some of its parts or pieces.” Id. at 1538.
Entergy seizes on this reasoning. Because CAFA also permits appeal from
“an order,” Entergy argues, BP’s holding on § 1447(d) necessarily extends
to § 1453(c)(1) and grants us jurisdiction to review all the issues decided in
the remand order.
Some of our sister circuits read § 1453(c)(1) this way, see, e.g., Brill v.
Countrywide Home Loans, Inc., 427 F.3d 446, 451–52 (7th Cir. 2005), but we
do not think BP—which concerned a statute not at issue here and did not
refer to § 1453(c)(1) even in passing—allows us to depart from our
precedent. Under the well-settled rule of orderliness, “three-judge panels”
must “abide by a prior Fifth Circuit decision until the decision is overruled,
expressly or implicitly, by either the United States Supreme Court or by the
Fifth Circuit sitting en banc.” Cent. Pines Land Co. v. United States, 274 F.3d
881, 893 (5th Cir. 2001) (quotation omitted). “[Our] precedent is implicitly
overruled if a subsequent Supreme Court opinion establishes a rule of law
inconsistent with that precedent.” Gahagan v. U.S. Citizenship & Immigr.

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Servs., 911 F.3d 298, 302 (5th Cir. 2018) (internal quotation marks and
citation omitted). But that decision must be “unequivocal[].” Id. We
conclude that § 1447(d) is sufficiently distinct from § 1453(c)(1) and
therefore that BP has not unequivocally overruled our precedent or
established a law inconsistent with it.
We begin with the text. Though § 1453(c)(1) does not expressly limit
appellate review to issues solely related to CAFA, it is textually distinct from
§ 1447(d). Unlike § 1447(d) as to which the usual appeal timing implicitly
applies, § 1453(c) sets an express and short ten-day time limit on a party
requesting permission to appeal. 28 U.S.C. § 1453(c)(1). If the permission
is granted (which is discretionary in the appeals court), it also requires
appellate courts to accelerate their determination of such appeals. See id.
§ 1453(c)(2) (requiring courts of appeals to render a judgment no later than
sixty days after the appeal is filed); see also Patterson v. Dean Morris, L.L.P.,
444 F.3d 365, 368 (5th Cir. 2006) (appeal is deemed filed once permission is
granted: “[I]t is the order granting leave to appeal that triggers the sixty-day
period for a court of appeals to enter judgment.”). These very short and
narrow time limits have practical implications—to exercise our discretion to
even hear CAFA-related remand appeals, we “must weigh the time taken
from earlier-filed appeals to tend to the CAFA appeal.” Alvarez v. Midland
Credit Mgmt., Inc., 585 F.3d 890, 894 (5th Cir. 2009). Compare these CAFA-
specific efficiency considerations with § 1447(d). In BP, the Court noted that
inefficiency in the context of § 1447(d) was a mere policy concern that could
not “overcome a clear statutory directive.” 141 S. Ct. at 1542 (internal
quotation marks and citation omitted). But in the case of § 1453(c), a swift
and efficient disposition is the statutory directive and, as such, is
memorialized in its text. Taking additional time to review non-CAFA-related
claims under § 1453(c) would undoubtedly undermine that directive.

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Moreover, we note that review under § 1447(d) is mandatory, while,
as explained above, review under § 1453(c)(1) is permissive. Compare 28
U.S.C. § 1447(d) (“An order remanding a case . . . pursuant to section 1442
or 1443 of this title shall be reviewable by appeal or otherwise.” (emphasis
added)), with id. § 1453(c)(1) (“[A] court of appeals may accept an appeal
from an order of a district court granting or denying a motion to remand a
class action . . . .” (emphasis added)). This textual difference likely stems
from the unique purpose of § 1453(c), which was enacted to help generate
appellate law interpreting CAFA, but only if that could be done efficiently.
See S. REP. NO. 109-14, at 49 (2005) (“The purpose of this provision is to
develop a body of appellate law interpreting the legislation without unduly
delaying the litigation of class actions.”). That unique purpose further
supports our conclusion that BP’s holding does not extend to remand orders
under § 1453(c)(1) and has not unequivocally overruled our precedent
interpreting that statute. See Gahagan, 911 F.3d at 302.
For the reasons above, we conclude that BP did not overrule our prior
precedent, so we are required to continue following the rule “that our
jurisdiction to review a CAFA remand order stops at the edge of the CAFA
portion of the order.” City of Walker, 877 F.3d at 567. Thus, we dismiss that
portion of the appeal. As to the CAFA portion of the district court’s remand
order here, we agree that the local controversy and home state exceptions bar
federal jurisdiction, so we affirm that portion.
AFFIRMED in part and DISMISSED in part.

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