Preston v. Tenet Healthsystem Memorial Med. Center

• Decision Date: 25 April 2007
• Docket Number: No. 07-30160.,Summary Calendar.,No. 07-30132.,07-30132.,07-30160.
• Citation: 485 F.3d 793
• Parties: Elmira PRESTON; Howard Preston; Rose Lefrance Preston; Sheryl Preston; Deborah Mazie; et al., Plaintiffs-Appellees, v. TENET HEALTHSYSTEM MEMORIAL MEDICAL CENTER, INC., doing business as Memorial Medical Center, Defendant-Appellee, v. LifeCare Hospital of New Orleans LLC, doing business as LifeCare Hospital; LifeCare Management Services, L.L.C., Defendants-Appellants. Cheryl Weems, Individually and on behalf of her deceased mother, Veola Mosby, and on behalf of all others similarly situated, Plaintiff-Appellee, v. Touro Infirmary, Defendant-Appellee, SHONO, Inc., doing business as Specialty Hospital of New Orleans, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

485 F.3d 793

Elmira PRESTON; Howard Preston; Rose Lefrance Preston; Sheryl Preston; Deborah Mazie; et al., Plaintiffs-Appellees, v. TENET HEALTHSYSTEM MEMORIAL MEDICAL CENTER, INC., doing business as Memorial Medical Center, Defendant-Appellee, v. LifeCare Hospital of New Orleans LLC, doing business as LifeCare Hospital; LifeCare Management Services, L.L.C., Defendants-Appellants.

Cheryl Weems, Individually and on behalf of her deceased mother, Veola Mosby, and on behalf of all others similarly situated, Plaintiff-Appellee, v. Touro Infirmary, Defendant-Appellee, SHONO, Inc., doing business as Specialty Hospital of New Orleans, Defendant-Appellant.

No. 07-30132.

No. 07-30160.

Summary Calendar.

United States Court of Appeals, Fifth Circuit.

April 25, 2007.

Val Patrick Exnicios, Tammie E. Holley, Roderick Alvendia, New Orleans, LA, Lisa M. Africk, Law Office of Salvador Anzelmo, Mark Philip Glago, Glago Law Firm, Anthony D. Irpinio, Irpino Law Firm, New Orleans, LA, Rebecca Maria Urrutia, Metairie, LA, for Cheryl Weems.

Franklin D. Beahm, Jacob Kenneth Best, Beahm & Green, New Orleans, LA, for Touro Infirmary.

Nicole M. Duarte, Charles W. Bradley, Jr., Michael Stephen Sepcich, Lemle & Kelleher, New Orleans, LA, for SHONO, Inc.

On Petition for Permission to Appeal from the United States District Court for the Eastern District of Louisiana.

Before DeMOSS, STEWART and PRADO, Circuit Judges.

CARL E. STEWART, Circuit Judge:

Cheryl Weems and Touro Infirmary ("Touro") moved to remand this class action lawsuit to state court under the "local controversy" exception of the Class Action Fairness Act of 2005 ("CAFA"), 28 U.S.C. § 1332(d). The district court granted their motion to remand, and SHONO, Inc. d/b/a Specialty Hospital of New Orleans ("SHONO") timely appealed the order. We reverse the district court's judgment.

I. FACTUAL AND PROCEDURAL BACKGROUND

On August 4, 2006, Cheryl Weems, individually and on behalf of her deceased mother and all others similarly situated, filed a class action petition against Touro and SHONO in the Civil District Court for the Parish of Orleans, Louisiana. Weems's claims involve injuries and/or deaths allegedly caused by defects and unreasonably dangerous conditions at the medical facilities of Touro and SHONO on August 29, 2005, the date of Hurricane Katrina. Weems further contends that Touro and SHONO failed to provide adequate transportation away from the premises after Hurricane Katrina made landfall. In the petition, Weems proposes to certify the following class of persons:

All persons, except Defendants' employees, who sustained injury and/or damage, including but not limited to, personal injury or wrongful death, as a result of unreasonable dangerous conditions and/or defects in and/or on the premises of TOURO and SHONO on or about August 29, 2005, and/or as a result of the failure of TOURO and SHONO to attain, maintain, and/or provide an adequate means of transportation to timely and/or safely move persons off its premises in the wake of Hurricane Katrina.

On August 29, 2006, SHONO removed the action to federal court pursuant to CAFA. 28 U.S.C. §§ 1332(d)(2) & 1453(b). Neither Weems nor Touro contests that SHONO satisfied the threshold requirements for removal. § 1332(d)(2). Instead, Weems and Touro moved to remand the case under the local controversy exception. On December 14, 2006, the district court granted their motion to remand. The district court's opinion reads in pertinent part that:

The court concludes that the controversy in this case is truly local inasmuch as it affects the New Orleans area to the exclusion of all others. The alleged injuries occurred in Louisiana, and the two defendants are Louisiana corporations. Further, the best evidence that is available at this time indicates that more than two-thirds of the proposed plaintiff class are citizens of Louisiana. . . . As to the citizenship of those who may be filing wrongful death or survival actions, SHONO does not challenge Touro's contention that seven patients died. Assuming that all of their representatives are not citizens of Louisiana, the number of Louisiana class members would still exceed two-thirds of the class.

SHONO sought permission to appeal, and on February 14, 2007, the court granted permission under § 1453(c).¹ We address whether Weems and SHONO presented sufficient evidence to establish the two-thirds citizenship requirement under the local controversy exception, § 1332(d)(4)(A).

II. STANDARD OF REVIEW

This court conducts a de novo review of the district court's remand order. Sherrod v. Am. Airlines, Inc., 132 F.3d 1112, 1117 (5th Cir.1998) (citing Allen v. R&H Oil & Gas Co., 63 F.3d 1326, 1336 (5th Cir.1995)). We review the district court's factual findings as to the citizenship of the parties for clear error. Coury v. Prot, 85 F.3d 244, 249 (5th Cir.1996). A finding of fact is clearly erroneous only when "although there may be evidence to support it, the reviewing court on the entire [record] is left with the definite and firm conviction that a mistake has been committed." Campos v. City of Baytown, Tex., 840 F.2d 1240, 1243 (5th Cir.1988) (citing Anderson v. City of Bessemer City, N.C., 470 U.S. 564, 573, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985)).

III. DISCUSSION

A. Statutory Background

Congress enacted CAFA to encourage federal jurisdiction over interstate class action lawsuits of national interest. CAFA contains a basic jurisdictional test, which requires a removing defendant to prove minimal diversity and an aggregated amount in controversy of $5,000,000 or more. 28 U.S.C. § 1332(d). The district court can decline jurisdiction under three provisions: (1) the home state exception, § 1332(d)(4)(B); (2) the local controversy exception, § 1332(d)(4)(A); and (3) discretionary jurisdiction, § 1332(d)(3).

Pursuant to the local controversy exception, the only provision at issue in this appeal, the district court "shall decline to exercise jurisdiction" when the action meets the following criteria:

(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.

§ 1332(4)(A).

B. The Local Controversy Exception

1. Burden of Proof and Evidentiary Standard

In the consolidated case, Preston v. Memorial Medical Center, we held that the parties moving to remand the class action to state court must prove that the CAFA exceptions to federal jurisdiction divest the district court of subject matter jurisdiction. Serrano v. 180 Connect, Inc., 478 F.3d 1018, 1024 (9th Cir.2007); Frazier v. Pioneer Ams. LLC, 455 F.3d 542, 546 (5th Cir.2006). We also held that the party moving for remand must prove the statutory citizenship requirement by a preponderance of the evidence. Welsh v. Am. Surety Co. of N.Y., 186 F.2d 16, 17 (5th Cir.1951). We reasoned that Congress explicitly enumerated any envisioned deviations from the general removal statute, and nothing in CAFA's text suggests that Congress meant to impose a heightened burden of proof on parties attempting to remand a class action lawsuit to state court.

2. Proving Citizenship to Defeat Diversity Jurisdiction

In determining diversity jurisdiction, the state where someone establishes his domicile serves a dual function as his state of citizenship. Stine v. Moore, 213 F.2d 446, 448 (5th Cir.1954). A person's state of domicile presumptively continues unless rebutted with sufficient evidence of change. Acridge, 334 F.3d at 448 (citing Palazzo v. Corio, 232 F.3d 38, 42 (2d Cir. 2000)). Domicile requires the demonstration of two factors: residence and the intention to remain. "When challenged as here, the burden rest[s] on [the plaintiff] to show by a preponderance of the evidence that he was a citizen of that State." Welsh, 186 F.2d at 17 (internal citations omitted); see also Garcia v. Koch Oil Co. of Tex. Inc., 351 F.3d 636, 638-39 (5th Cir.2003). Therefore, Weems and Touro must show that greater than two-thirds of the putative class members were citizens of Louisiana on August 4, 2006, the filing date of the class action petition. 28 U.S.C. § 1332(d)(7) ("Citizenship of the members of the proposed plaintiff classes shall be determined for purposes of paragraphs (2) through (6) as of the date of the filing of the complaint.").

3. Evidence Adduced to Prove the Citizenship Requirement

SHONO argues that the evidence presented by Weems and Touro, the pre-Katrina addresses of the hospitalized patients, does not satisfy the local controversy exception. Specifically, the medical records do not establish that on August 4, 2006, the date Weems filed her class action petition, at least two-thirds of the putative class members were Louisiana citizens. Touro and Weems contend that the presumption of continuing domicile requires SHONO to demonstrate that the relocated class members, who were Louisiana citizens as evinced by the medical records, do not intend to return home.

a. Medical Records

Weems made no effort to provide citizenship data, stating in her motion that "plaintiffs believe that the majority of the members of this class, and certainly more than 2/3 of the members are from Louisiana." (emphasis added). Touro submitted an affidavit...