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Mondragon v. Capital One Auto Finance

United States Court of Appeals, Ninth Circuit

November 27, 2013

Jose MONDRAGON, individually and on behalf of all others similarly situated, Plaintiff-Appellee,
v.
CAPITAL ONE AUTO FINANCE, a Division of Capital One, N.A., Defendant-Appellant, and Ron Baker Chevrolet, a California Corporation, Defendant.

Argued and Submitted Nov. 5, 2013.

Page 881

Hunter R. Eley (argued), William H. Edmonson, and Johari N. Townes, Doll Amir & Eley LLP, Los Angeles, CA; David N. Anthony, Alan D. Wingfield, and Nicholas R. Klaiber, Troutman Sanders LLP, Richmond, VA, for Defendant-Appellant.

Christopher P. Barry (argued) and Lacee B. Smith, Rosner, Barry & Babbitt, LLP, San Diego, CA, for Plaintiff-Appellee.

Appeal from the United States District Court for the Southern District of California, Marilyn L. Huff, District Judge, Presiding. D.C. No. 3:13-cv-00363-H-RBB.

Before: GOODWIN, FISHER, and CLIFTON, Circuit Judges.

OPINION

CLIFTON, Circuit Judge:

This case presents another issue under the Class Action Fairness Act of 2005 (" CAFA" ), Pub.L. No. 109-2, 119 Stat. 4. Defendant-Appellant Capital One Auto Finance appeals the district court's order remanding a putative class action lawsuit to California state court under CAFA's " local controversy" exception to federal jurisdiction, 28 U.S.C. § 1332(d)(4)(A). Plaintiff Jose Mondragon, as the party seeking remand to state court, bears the burden of proving that the exception applies. Plaintiff submitted no evidence regarding the disputed issue, the citizenship of prospective class members. Nevertheless, the district court held that Plaintiff had satisfied his burden based solely on an inference from the class definition that the requirements for the local controversy exception were satisfied. We disagree, vacate the remand order and remand for further proceedings.

We conclude that there must ordinarily be facts in evidence to support a finding that two-thirds of putative class members are local state citizens, which is one of the local controversy exception's requirements, if that question is disputed before the district court. A pure inference regarding the citizenship of prospective class members may be sufficient if the class is defined

Page 882

as limited to citizens of the state in question, but otherwise such a finding should not be based on guesswork. In reaching this conclusion, we join the other circuits that have considered the issue.

I. BACKGROUND

Plaintiff Jose Mondragon filed this putative class action against defendants Capital One Auto Finance and Ron Baker Chevrolet in the San Diego County Superior Court, alleging violations of various provisions of California state law [1] related to automobile finance contract disclosures. Capital One removed the case to the U.S. District Court for the Southern District of California based on CAFA, 28 U.S.C. §§ 1332(d), 1453(b).

Through CAFA, Congress broadened federal diversity jurisdiction over class actions by, among other things, replacing the typical requirement of complete diversity with one of only minimal diversity, see id. § 1332(d)(2), and allowing aggregation of class members' claims to satisfy a minimum amount in controversy of $5 million, see id. § 1332(d)(6). However, Congress also provided exceptions allowing certain class actions that would otherwise satisfy CAFA's jurisdictional requirements to be remanded to state court. Among these is the exception commonly referred to as the local controversy exception, set forth in 28 U.S.C. § 1332(d)(4)(A).[2] One of the requirements of the local controversy exception is that " ...


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