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Francis v. Make It Right-New Orleans, LLC

United States District Court, E.D. Louisiana

May 15, 2019

FRANCIS ET AL.
v.
MAKE IT RIGHT-NEW ORLEANS, LLC ET AL.

         SECTION "L" (4)

          ORDER AND REASONS

          ELDON E. FALLON UNITED STATES DISTRICT JUDGE.

         Before the Court is Plaintiffs' Motion to Remand (R. Doc. 15). Having considered the briefs, the applicable law, and having heard the parties on oral argument, the Court now issues this Order and Reasons.

         I. BACKGROUND

         The Make It Right Foundation (“MIR Foundation”) was formed in the aftermath of Hurricane Katrina with the initial goal of building affordable and sustainable houses in the Lower 9th Ward neighborhood of New Orleans. Plaintiffs Lloyd Francis and Jennifer Decuir, purporting to represent a class of all original and subsequent purchasers of the Lower 9th Ward MIR Foundation homes, contend the houses are defective. They sued the MIR Foundation, two of its single-member subsidiaries, and several of its current and former officers, directors, and employees in the Civil District Court for the Parish of Orleans.

         Defendants Samuel W. Whitt, S.H. “Jim” Fogelman, and LaToya King (the “Removing Defendants”), former officers and directors of the MIR Foundation, removed this action under the Class Action Fairness Act (“CAFA”). Plaintiffs now move to remand, arguing that (1) the Removing Defendants have not established that CAFA's amount in controversy is met, or (2) this action should be remanded under one of CAFA's “exceptions.”

         II. LAW AND ANALYSIS

         CAFA was enacted to expand federal jurisdiction over interstate class actions of national interest. It provides federal courts with subject matter jurisdiction over class actions in which the parties are minimally diverse (i.e, at least one member of a plaintiff class is a citizen of a state different from at least one defendant) and the amount in controversy exceeds $5 million, exclusive of interest and costs. 28 U.S.C. § 1332(d). A district court may decline to exercise jurisdiction, however, under three narrow exceptions: (1) the local controversy exception; (2) the home state exception; and (3) discretionary jurisdiction.

         I.

         Plaintiffs first argue that the Removing Defendants have not made a sufficient showing that the amount in controversy is met.

         The Removing Defendants must prove by a preponderance of the evidence that the amount in controversy exceeds $5 million. Robertson v. Exxon Mobil Corp., 814 F.3d 236, 240 (5th Cir. 2015). They can meet this burden by (1) showing that the amount is “facially apparent” from the pleadings, or (2) submitting summary-judgment-type evidence. Id. “[T]hat the removing party bears the burden of proving the amount in controversy does not mean that the removing party cannot ask the court to make common-sense inferences about the amount put at stake by the injuries the plaintiffs claim.” Id.

         It is facially apparent from Plaintiffs' Complaint that this case meets the $5 million threshold. Plaintiffs bring causes of action for violations of the Louisiana Unfair Trade Practices Act, breach of contract, continuing tort, fraud, and negligent and intentional infliction of emotional distress. They seek damages on behalf of the putative class of all original and subsequent purchasers of the Lower 9th Ward homes for the cost of “massive repairs”[1] and the “significant mental distress” the purchasers have experienced. Finally, the Complaint cites a 2013 MIR Foundation tax filing that allegedly recognized a warranty liability in excess of $4 million associated with the homes, [2] and indicates that little of the repairs included in this estimate have been completed.[3]

         II.

         Plaintiffs next argue that this action should be remanded under one of CAFA's three exceptions. “[T]he language, structure, and history of CAFA all demonstrate that Congress contemplated broad federal court jurisdiction with only narrow exceptions, ” Cedar Lodge Plantation, L.L.C. v. CSHV Fairway View I, L.L.C., 768 F.3d 425, 429 (5th Cir. 2014), that “provide a statutory vehicle for the district courts to ferret out the controversy that uniquely affects a particular locality to the exclusion of all others.” Hollinger v. Home State Mut. Ins. Co., 654 F.3d 546, 570 (5th Cir. 2011). Plaintiffs bear the burden of proving to a reasonable certainty that the exceptions apply. Arbuckle Mt. Ranch of Tex., Inc. v. Chesapeake Energy Corp., 810 F.3d 335, 338 (5th Cir. 2016).

         Under the local controversy exception, the district court “shall decline to exercise jurisdiction” over an 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 ...

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