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Robert A. Waller, Jr., On Behalf of Himself and All Others Similarly Situated v. Hewlett-Packard Company

May 10, 2011

ROBERT A. WALLER, JR., ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
HEWLETT-PACKARD COMPANY, ETC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Honorablelarryalanburns United States District Judge

ORDER DENYING MOTION TO REMAND

This case involves a putative class action against Hewlett Packard, Costco, Western Digital Corporation, and Staples. Plaintiff's grievance is that a Hewlett Packard "SimpleSave" hard drive he purchased from Costco did not operate as advertised; he asserts claims under California's Unfair Competition Law, Consumer Legal Remedies Act, and False Advertising Act.

There are three motions now pending: a motion to dismiss Plaintiff's claims and a motion to strike Plaintiff's class action allegations, both filed by HP, and a motion to remand filed by the Plaintiff. The Court previously stayed HP's motions. (Doc. No. 16.) The motion to remand is now fully briefed and ready for a ruling.

I. Legal Standard

Under the Class Action Fairness Act, "district courts shall have original jurisdiction of any civil action in which the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs, and is a class action in which . . . any member of a class of plaintiffs is a citizen of a State different from any defendant." 28 U.S.C. § 1332(d)(2). But there are exceptions to CAFA, one of which is the so-called "local controversy" exception. Even when a district court has jurisdiction under § 1332(d)(2), it "shall decline to exercise jurisdiction"

(i) over a class action in which--

(I) 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;

(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 significant 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

(III) principal injuries resulting from the alleged conduct or any related conduct of each defendant were incurred in the State in which the action was originally filed; and

(ii) during the 3-year period preceding the filing of that class action, no other class action has been filed asserting the same or similar factual allegations against any of the defendants on behalf of the same or other persons . . . .

28 U.S.C. § 1332(d)(4)(A). A district court should also decline to exercise jurisdiction under § 1332(d)(2) when "two-thirds or more of the members of all proposed plaintiff classes in the aggregate, and the primary defendants, are citizens of the State in which the action was originally filed." 28 U.S.C. § 1332(d)(4)(B). This is called the "home state" exception, but because Costco and Staples aren't California residents, Plaintiff does not rely on it.*fn1

There appears to be some confusion in the briefing over the legal basis of Plaintiff's motion to remand, because he quotes § 1332(d)(4)(A) - the local controversy exception - and cites § 1332(d)(2) - the original jurisdiction provision. He also makes no mention in the motion, although he does in his reply brief, of the local controversy exception. Moreover, in a joint motion to stay the motions to dismiss and strike while the motion to remand is pending, filed (and presumably drafted) by the Plaintiff, the parties indicate that "[t]he motion for remand challenges the court's jurisdiction over the action on the ground there is not the requisite diversity amongst the parties under the Class Action Fairness Act (28 U.S.C. §1332(d)(2))." (Doc. No. 15 at 2:3--5.) The motion apparently left HP with the impression that Plaintiff's argument for remand is simply that the Court lacks original jurisdiction under § 1332(d)(2) - not that even if it does havejurisdiction under § 1332(d)(2) the local controversy exception of § 1332(d)(4)(A) applies anyway.

But that's not exactly reasonable on HP's part. Plaintiff's remand motion, front and center in a section titled "Legal Argument," quotes § 1332(d)(4)(A) and (B) in their entirety and proceeds to make arguments that are only meaningful in reference to the local controversy exception. The Court doesn't understand why HP focuses almost exclusively on § 1332(d)(2) in its opposition, and even goes so far as to assert that "Plaintiff has not raised any argument based on the 'local controversy' or 'home state' exceptions to CAFA jurisdiction" and that "Plaintiff's Motion contains a vague reference to at least one CAFA exception." (Opp'n Br. at 9 n.13.) Plaintiff could have provided more accurate citations to the actual legal basis for its motion, to be sure, but it's obvious, nonetheless, that he believes the local controversy exception of § 1332(d)(4)(A) applies here. And that doesn't foreclose him from arguing, also, that the Court lacks original jurisdiction under § 1332(d)(2) in the first place.

So the Court confronts two questions here. The first is whether it has original jurisdiction over this action pursuant to § 1332(d)(2). Assuming it does, the second question is whether the local controversy exception of § ...


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