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Date: 08-24-2015

Case Style: Ebony Bridewll-Sledge v. Blue Cross of California

Case Number: 15-56038

Judge: Barry Silverman

Court: United States Court of Appeals for the Ninth Circuit on appeal from the Central District of California (Los Angeles County)

Plaintiff's Attorney: André E. Jardini (argued) and K.L. Myles, Knapp, Peterson
& Clark, Glendale, California, for Plaintiffs-Appellants
Jermaine Crowder, Stacey Kellam, and Tanya Varner and
Plaintiffs-Appellees Ebony Bridewell-Sledge and Bettie
Perry.

Defendant's Attorney: Jeffrey A. Wortman, James M. Harris, Jill A. Porcaro, and
Kiran A. Seldon (argued), Seyfarth Shaw LLP, Los Angeles,
California, for Defendants-Appellants/Appellees Blue Cross
of California, Anthem Blue Cross Life and Health Insurance
Company, The WellPoint Companies, Inc., and The
WellPoint Companies of California, Inc.

Description: The present appeal involves two similar class actions that
were filed against the same defendants, in the same California
superior court, on the same day thirteen minutes apart, and
that were consolidated by the state court “for all purposes.”
Despite the fact that the two actions had been consolidated
into a single action, Defendants filed two separate notices of
removal, citing the Class Action Fairness Act of 2005,
28 U.S.C. § 1332(d). The district court, in evaluating
whether it had CAFA jurisdiction over the removed action,
analyzed the consolidated case as though it remained two
separate class actions, and concluded that CAFA’s local
controversy exception applied to the first-filed class action,
Bridewell-Sledge v. Blue Cross of California, but that the
exception did not apply to the second-filed class action,
BRIDEWELL-SLEDGE V. BLUE CROSS OF CAL. 5
Crowder v. Blue Cross of California. The district court
remanded Bridewell-Sledge to state court while retaining
jurisdiction over Crowder, the anomalous result of which is
that, despite the state court’s consolidation of Bridewell-
Sledge and Crowder into a single class action “for all
purposes,” Bridewell-Sledge is now proceeding in state court,
while Crowder is proceeding in federal court.
We hold that it was improper for the district court to view
Bridewell-Sledge and Crowder as two separate class actions
after they had been consolidated by the state court. Under
California law, when two actions are consolidated “for all
purposes,” the two actions are merged into a single
proceeding with only one verdict or set of findings and one
judgment, and the actions are treated as if only one complaint
had originally been filed. See Hamilton v. Asbestos Corp.,
998 P.2d 403, 415 (Cal. 2000); McClure v. Donovan,
205 P.2d 17, 20 (Cal. 1949). Therefore, the Bridewell-
Sledge/Crowder consolidated class action should have been
viewed by the district court as a single class action when
evaluating jurisdiction under CAFA. Once it is recognized
that the two cases became one, it is clear that CAFA’s local
controversy exception applies to the consolidated class action,
and, therefore, the district court was required to remand the
entire Bridewell-Sledge/Crowder consolidated class action to
state court. See 28 U.S.C. § 1332(d)(4)(A). We affirm in
part, reverse in part, and remand with directions to the district
court to treat the class actions a single consolidated case and
remand it in its entirety to state court.
I. BACKGROUND
On October 20, 2011 at 1:27 p.m., Plaintiffs Ebony
Bridewell-Sledge and Bettie Perry filed a putative class action
BRIDEWELL-SLEDGE V. 6 BLUE CROSS OF CAL.
in San Francisco Superior Court against Defendants Blue
Cross of California and Anthem Blue Cross Life and Health
Insurance Company, alleging that Defendants failed to
properly pay African-American and female employees at a
wage rate equal to white or male employees working in the
same establishment and performing equal work. The
complaint alleged the following state law causes of action:
(1) employment discrimination – denial of equal pay based on
race – in violation of California’s Fair Employment and
Housing Act; (2) employment discrimination – denial of
equal pay based on gender – in violation of California’s
FEHA; (3) violation of the California’s Equal Pay Act,
California Labor Code § 1197.5; and (4) violation of
California’s Unfair Competition Law, California Business
and Professions Code § 17200 et seq. The Bridewell-Sledge
plaintiffs sought to bring these claims on behalf of themselves
as individuals and on behalf of the following two classes:
“Class A: All African-Americans employed by Defendants
within the State of California from September 2007 through
the present”; “Class B: All female employees employed by
Defendants within the State of California from September
2007 through the present.”
A few minutes later that same day, on October 20, 2011
at 1:41 p.m., Plaintiffs Jermaine Crowder and Stacey Kellam,
represented by the same counsel as the plaintiffs in the
Bridewell-Sledge action, filed a putative class action in San
Francisco Superior Court against the same set of defendants
– Blue Cross of California and Anthem Blue Cross Life and
Health Insurance Company – alleging that Defendants have
denied them promotions on account of their race and gender.
The complaint alleged the following state law causes of
action: (1) employment discrimination – race-based
employment discrimination in job promotions – in violation
BRIDEWELL-SLEDGE V. BLUE CROSS OF CAL. 7
of California’s FEHA; (2) employment discrimination –
gender-based employment discrimination in job promotions
– in violation of California’s FEHA; and (3) violation of
California’s UCL. Like the Bridewell-Sledge plaintiffs, the
Crowder plaintiffs sought to bring these claims on behalf of
themselves as individuals and on behalf of the following two
classes: “Class A: All African-Americans employed by
Defendants within the State of California from September
2007 through the present”; “Class B: All female employees
employed by Defendants within the State of California from
September 2007 through the present.”
Both actions were subsequently transferred to the Los
Angeles Superior Court. On September 19, 2013, the
Crowder plaintiffs moved pursuant to California Code of
Civil Procedure §§ 404, 404.1, and 1048(a) to consolidate the
Crowder action with the Bridewell-Sledge action. Defendants
opposed consolidation. On November 19, 2013, the state
court granted the motion for consolidation and ordered that
the Crowder action and the Bridewell-Sledge action be
“consolidated this date for all purposes.” The state court
further ordered that Crowder would be designated the lead
case, and that all future filings should be made in only that
lead case.
On May 12, 2014, Plaintiffs amended the complaints to
add as additional defendants The WellPoint Companies, Inc.
and The WellPoint Companies of California, Inc. The new
defendants were served with the summons and the amended
complaints on May 21, 2014.
After the addition of The Wellpoint Companies, Inc. – a
non-California citizen – as a defendant, on June 19, 2014,
Defendants removed the Bridewell-Sledge/Crowder
BRIDEWELL-SLEDGE V. 8 BLUE CROSS OF CAL.
consolidated class action to the United States District Court
for the Central District of California pursuant to the Class
Action Fairness Act of 2005, 28 U.S.C. § 1332(d). Despite
the fact that Bridewell-Sledge and Crowder had been
consolidated for all purposes by the state court, Defendants
filed two separate notices of removal – one for the Bridewell-
Sledge complaint and one for the Crowder complaint. As had
the state court, the federal district court subsequently
consolidated the two cases for all purposes and for trial.
The district court then entered an Order to Show Cause in
Bridewell-Sledge as to why the case should not be remanded
to state court for lack of subject matter jurisdiction. The OSC
directed Defendants to address, among other things, whether
the district court was required to decline jurisdiction under
CAFA’s local controversy exception, 28 U.S.C.
§ 1332(d)(4)(A). Defendants filed a response to the OSC,
and Plaintiffs filed a reply. In addition, Plaintiffs filed a
motion to remand the two actions to state court.
On August 28, 2014, the district court discharged the
OSC in the Bridewell-Sledge action, concluding that it had
jurisdiction over the action under CAFA and that Plaintiffs
had failed to show that CAFA’s local controversy exception
applied. In particular, the district court noted that for
CAFA’s local controversy exception to apply, Plaintiffs were
required to show that “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.”
The district court explained that Plaintiffs had failed to make
this showing because the record was unclear as to which class
BRIDEWELL-SLEDGE V. BLUE CROSS OF CAL. 9
action, Bridewell-Sledge or Crowder, was filed first.1 On that
same day, the district court issued an amended OSC in the
Crowder action.
Plaintiffs provided the district court with evidence
showing that the Bridewell-Sledge complaint had been filed
a few minutes prior to the Crowder complaint. On January
14, 2015, the district court entered an order remanding the
Bridewell-Sledge action to state court, concluding that
CAFA’s local controversy exception applied to that action.
In that order, the district court concluded that the fact that the
two cases had been consolidated had no effect on its removal
jurisdiction analysis, citing Sherman v. Mantle Oil & Gas,
LLC, No. CIV.A. 10-2774, 2011 WL 130240 (E.D. La. Jan.
14, 2011). Shortly thereafter, on January 29, 2015, the
district court discharged the OSC in the Crowder action,
concluding that it had jurisdiction over that action under
CAFA and that CAFA’s local controversy exception did not
apply. Still treating the two actions separately, the district
court reasoned that because the Bridewell-Sledge complaint
had been filed a few minutes prior to the Crowder complaint,
the Crowder action could not satisfy the local controversy
exception’s requirement that “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.”
1 The district court also found that the Bridewell-Sledge plaintiffs had
failed to show that CAFA’s home-state controversy exception applied to
the action. In addition, the district court later denied Plaintiffs’ motion to
remand, concluding that Defendants’ notices of removal were timely and
that Plaintiffs had failed to show that CAFA’s home-state controversy
exception applied to the two actions. These rulings are not at issue in this
appeal.
BRIDEWELL-SLEDGE V. 10 BLUE CROSS OF CAL.
In sum, although consolidated for all purposes into a
single class action by the state court prior to removal, the
district court’s rulings created the incongruous result of
ordering the Bridewell-Sledge action to proceed in state court
and the Crowder action to proceed in federal court.
II. STANDARD OF REVIEW
The defendants in Bridewell-Sledge and the plaintiffs in
Crowder both filed petitions pursuant to 28 U.S.C.
§ 1453(c)(1) for leave to appeal the district court’s respective
remand orders, which we granted. We review the district
court’s remand orders de novo. Corber v. Xanodyne Pharm.,
Inc., 771 F.3d 1218, 1222 (9th Cir. 2014) (en banc). “‘We
review the construction, interpretation, or applicability of
CAFA de novo.’” Visendi v. Bank of Am., N.A., 733 F.3d
863, 867 (9th Cir. 2013) (emphasis added) (quoting Nevada
v. Bank of Am. Corp., 672 F.3d 661, 667 (9th Cir. 2012)).
III. DISCUSSION
A. Removal Jurisdiction Under CAFA
“A defendant generally may remove a civil action if a
federal district court would have original jurisdiction over the
action.” Allen v. Boeing Co., 784 F.3d 625, 628 (9th Cir.
2015) (citing 28 U.S.C. § 1441(a)). In the present appeal,
Defendants removed the Bridewell-Sledge action and the
Crowder action pursuant to CAFA.
“Congress enacted CAFA in 2005 to ‘curb perceived
abuses of the class action device which, in the view of
CAFA’s proponents, had often been used to litigate multistate
or even national class actions in state courts.’” Corber,
BRIDEWELL-SLEDGE V. BLUE CROSS OF CAL. 11
771 F.3d at 1222 (quoting Tanoh v. Dow Chem. Co., 561 F.3d
945, 952 (9th Cir. 2009)). “As a threshold matter, CAFA
applies to ‘class action’ lawsuits where the aggregate number
of members of all proposed plaintiff classes is 100 or more
persons and where the primary defendants are not ‘States,
State officials, or other governmental entities against whom
the district court may be foreclosed from ordering relief.’”
Serrano v. 180 Connect, Inc., 478 F.3d 1018, 1020 (9th Cir.
2007) (quoting 28 U.S.C. § 1332(d)(5)). If these
prerequisites are met, CAFA vests federal courts with original
diversity jurisdiction over a class action “if: (1) the aggregate
amount in controversy exceeds $5,000,000, and (2) any class
member is a citizen of a state different from any defendant.”
Id. at 1020–21 (citing 28 U.S.C. § 1332 (d)(2)). “[U]nder
CAFA, complete diversity is not required; ‘minimal
diversity’ suffices.” Id. at 1021.
The parties do not dispute that the above conditions for
CAFA jurisdiction are met in both Bridewell-Sledge and
Crowder. Rather, the parties’ dispute in this appeal concerns
the applicability of CAFA’s local controversy exception.
B. CAFA’s Local Controversy Exception
CAFA contains several exceptions to its grant of removal
jurisdiction, one of which is the local controversy exception.
See Serrano, 478 F.3d at 1022–23. The purpose of the local
controversy exception is “to respond to concerns that class
actions with a truly local focus should not be moved to
federal court under [CAFA] because state courts have a
strong interest in adjudicating such disputes. At the same
time, this is a narrow exception that was carefully drafted to
ensure that it does not become a jurisdictional loophole.”
S. Rep. No. 109-14, at 39 (2005), reprinted in 2005
BRIDEWELL-SLEDGE V. 12 BLUE CROSS OF CAL.
U.S.C.C.A.N. 3; see also Benko v. Quality Loan Serv. Corp.,
789 F.3d 1111, 1116 (9th Cir. 2015) (“We recognize that the
‘local controversy exception’ is a narrow one.”); Coleman v.
Estes Express Lines, Inc., 627 F.3d 1096, 1100 (9th Cir.
2010) (per curiam) (“[CAFA’s local controversy exception]
is intended to ‘identify . . . a controversy that uniquely affects
a particular locality’ and to ensure that it is decided by a state
rather than a federal court.” (quoting Evans v. Walter Indus.,
449 F.3d 1159, 1163–64 (11th Cir. 2006))).
CAFA’s local controversy exception, 28 U.S.C.
§ 1332(d)(4), is as follows:
A district court shall decline to exercise
jurisdiction under [CAFA] . . .
(A)(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
BRIDEWELL-SLEDGE V. BLUE CROSS OF CAL. 13
(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[.]
If the above conditions are met, a district court is required to
remand the class action back to the originating state court.
See Benko, 789 F.3d at 1116; Serrano, 478 F.3d at 1022.
“[T]he burden of proof for establishing the applicability
of an exception to CAFA jurisdiction rests on the party
seeking remand, which in this case, as in most cases, is the
plaintiff.” Mondragon v. Capital One Auto Fin., 736 F.3d
880, 883 (9th Cir. 2013). Moreover, “no antiremoval
presumption attends cases invoking CAFA, which Congress
enacted to facilitate adjudication of certain class actions in
federal court.” Dart Cherokee Basin Operating Co. v.
Owens, 135 S. Ct. 547, 554 (2014). To the contrary, “CAFA
should be read ‘with a strong preference that interstate class
actions should be heard in a federal court if properly removed
by any defendant.’” Allen, 784 F.3d at 633 (quoting Dart
Cherokee, 135 S. Ct. at 554).
BRIDEWELL-SLEDGE V. 14 BLUE CROSS OF CAL.
The district court erred in its remand orders by applying
a “strong presumption against removal jurisdiction.” Because
we review the district court’s remand orders de novo, see
Corber, 771 F.3d at 1222, we do not apply this presumption
in our analysis below.
C. Applicability of the Local Controversy Exception
Defendants conceded below and do not challenge on
appeal that both Bridewell-Sledge and Crowder satisfy the
first three requirements of CAFA’s local controversy
exception: (1) that more than two-thirds of the plaintiffs are
citizens of California; (2) that at least one defendant from
whom significant relief is sought and whose alleged conduct
forms a significant basis for the claims is a California citizen;
and (3) that the principal injuries about which Plaintiffs
complain were suffered in California. Therefore, only the
fourth prong of CAFA’s local controversy exception – that no
similar class action has been filed against any of the
defendants in the preceding three years – is at issue in this
appeal.
Defendants argue that the local controversy exception
should not apply to either Bridewell-Sledge or Crowder, and,
therefore, both should remain in federal court. For their part,
Plaintiffs argue that both Bridewell-Sledge and Crowder
should be remanded to state court pursuant to the local
controversy exception. Specifically, Plaintiffs argue that the
state court’s consolidation of Bridewell-Sledge and Crowder
prior to removal resulted in a single consolidated class action,
and, as such, no “other class action” had been filed during the
three-year period preceding the filing of the consolidated
class action. We agree with Plaintiffs.
BRIDEWELL-SLEDGE V. BLUE CROSS OF CAL. 15
Although there does not appear to be any circuit court
case on this issue, several district courts have held that “under
certain circumstances, where two actions are consolidated
into a single action, state-ordered consolidation may affect
jurisdiction and removability.” In re MTBE Prods. Liab.
Litig., 399 F. Supp. 2d 340, 353 (S.D.N.Y. 2005); accord City
of Oakland v. Abend, No. C-07-2142 EMC, 2007 WL
2023506, at *3 (N.D. Cal. July 12, 2007); Lakewood Prairie,
LLC v. Ibarra Concrete Co., No. CIV.A. 08 C 1200, 2008
WL 3982510, at *3 (N.D. Ill. May 27, 2008); see also, e.g.,
Cottman Transmission Sys., LLC v. Bence, No. CIV.A.
03-5467, 2004 WL 98594, at *2 (E.D. Pa. Jan. 15, 2004)
(collecting cases). In particular, these courts have found that
state court consolidation will affect the district court’s
analysis of removal jurisdiction where the state court’s
consolidation order “destroys the identity of each suit and
merges them into one.” Abend, 2007 WL 2023506, at *3; see
also Bence, 2004 WL 98594, at *2 (determining that state
court consolidation affected the district court’s removal
jurisdiction analysis where the consolidation order “makes
clear that the combined actions are to be treated as if they had
been originally commenced as a single action” (internal
quotation marks and citation omitted)). Defendants argue
that these cases are distinguishable from the present appeal
because in each of these cases, the effect of the state court’s
consolidation was to create federal jurisdiction, not to destroy
it. We do not find Defendants’ distinction meaningful. State
court consolidation should not be treated as a one-way street
where it only affects federal jurisdiction if it creates federal
jurisdiction as opposed to nullifying federal jurisdiction.
Prior to removal, the state trial court consolidated
Bridewell-Sledge and Crowder “for all purposes.” Under
California law, when two actions are consolidated “for all
BRIDEWELL-SLEDGE V. 16 BLUE CROSS OF CAL.
purposes,” “the two actions are merged into a single
proceeding under one case number and result in only one
verdict or set of findings and one judgment.” Hamilton,
998 P.2d at 415; accord Sanchez v. Superior Court, 250 Cal.
Rptr. 787, 789 (Cal. Ct. App. 1988) (“[T]he pleadings are
regarded as merged, one set of findings is made, and one
judgment is rendered.”). And “the cases are to be treated as
if the causes had been united originally.” McClure, 205 P.2d
at 20 (internal quotation marks and citation omitted). This
California law controls because “we look to state law to
determine when an action has been commenced under
CAFA.” McAtee v. Capital One, F.S.B., 479 F.3d 1143, 1145
(9th Cir. 2007). Accordingly, we conclude that under these
circumstances, when examining whether we have federal
jurisdiction over Bridewell-Sledge and Crowder under
CAFA, it is necessary to view Bridewell-Sledge and Crowder
as a single consolidated class action that was united
originally, rather than as two separate class actions filed at
different times.
Once it is recognized that we’re dealing with one
consolidated case, the applicability of CAFA’s local
controversy exception becomes clear. When viewed as a
single consolidated class action that was filed on October 20,
2011, it is undisputed that no other similar class action was
filed against any of the defendants during the preceding threeyear
period.2 Accordingly, CAFA’s local controversy
2 In their briefing, Defendants refer to Strong v. Blue Cross of California
– a similar class action involving the same named plaintiffs, defendants,
and lawyers that was pending in state court at the time the complaints in
Bridewell-Sledge and Crowder were filed. Defendants conceded below
that the Strong action was filed on December 28, 2007, which is more than
three years prior to October 20, 2011 – the date that the Bridewell-Sledge
and Crowder complaints were filed. Therefore, the Strong action does not
BRIDEWELL-SLEDGE V. BLUE CROSS OF CAL. 17
exception applies to the Bridewell-Sledge/Crowder
consolidated class action, and the district court was required
to remand the entire consolidated class action to state court.
See 28 U.S.C. § 1332(d)(4)(A); Benko, 789 F.3d at 1116;
Serrano, 478 F.3d at 1022.
Defendants argue that the state court’s consolidation of
Bridewell-Sledge and Crowder for all purposes does not
affect the court’s CAFA analysis because, they contend, the
relevant inquiry under the fourth prong of the local
controversy exception looks to the filing dates of the original
complaints, and at that time the complaints were two separate
actions. We agree with Defendants that the relevant date
under the fourth prong is the date when the actions were
originally filed, and not some later date, such as the date
when the two actions were consolidated. See McAtee,
479 F.3d at 1146 (“[F]or the purpose of determining CAFA’s
effective date, an action is commenced under California law
when the original complaint in the action is filed . . . .”).
However, Defendants’ argument fails to consider that when
two actions are consolidated “for all purposes” under
California law, “the cases are to be treated as if the causes
had been united originally.” McClure, 205 P.2d at 20
(internal quotation marks and citation omitted); accord Kropp
v. Sterling Sav. & Loan Ass’n, 88 Cal. Rptr. 878, 885 (Cal.
Ct. App. 1970) (“[T]he actions are viewed as if the same
plaintiff or plaintiffs had filed a single complaint on joined
causes of action against the same defendant or defendants.”
(internal quotation marks and citation omitted)); see also
McAtee, 479 F.3d at 1145 (“[W]e look to state law to
determine when an action has been commenced under
affect the applicability of the local controversy exception to the Bridewell-
Sledge/Crowder consolidated class action.
BRIDEWELL-SLEDGE V. 18 BLUE CROSS OF CAL.
CAFA.”). Thus, when we examine the relevant filing dates
under the fourth prong of CAFA’s local controversy
exception, we should treat the Bridewell-Sledge and Crowder
complaints as if one single complaint had been filed on
October 20, 2011.
In addition, we do not find persuasive Defendants’
reliance on Marple v. T-Mobile Cent., LLC, No. 10-cv-00954-
NKL, 2011 WL 300162 (W.D. Mo. Jan. 27, 2011) and Gibo
v. U.S. Nat’l Ass’n, No. 12-00514 SOM-RLP, 2013 WL
363140 (D. Haw. Jan. 29, 2013). Neither case involved the
consolidation of multiple class actions into a single action by
a state court prior to removal. Marple merely involved a
consolidation by a federal district court after removal for the
purposes of “‘pretrial proceedings.’” 2011 WL 300162, at
*1. Gibo did not involve any consolidation at all, either by
the state court or the federal court.3 See 2013 WL 363140, at
*6–7; Lima, 2013 WL 1296757, at *1. Further, in
discounting the effect of the state court’s consolidation of
Bridewell-Sledge and Crowder prior to removal, the district
court below relied on Sherman v. Mantle Oil & Gas, LLC,
No. CIV.A. 10-2774, 2011 WL 130240 (E.D. La. Jan. 14,
2011). We also find Sherman inapt because it involved a
different factual scenario – not as here, the consolidation for
all purposes of two state actions prior to removal.
3 In addition, Gibo is a findings and recommendations issued by a
magistrate judge. See 2013 WL 363140 at *12. When the district court
adopted the magistrate judge’s recommendations, it declined to adopt the
magistrate’s recommendations regarding the fourth prong of CAFA’s local
controversy exception. See Lima v. Deutsche Bank Nat. Trust Co., No.
12-00509 SOM RLP, 2013 WL 1296757, at *4 (D. Haw. Mar. 29, 2013).
BRIDEWELL-SLEDGE V. BLUE CROSS OF CAL. 19
D. CAFA’s Legislative History
Defendants argue that we should consult CAFA’s
legislative history in determining whether there is federal
jurisdiction over the Bridewell-Sledge/Crowder consolidated
class action. Even assuming it were necessary to consult the
legislative history, CAFA’s legislative history supports
remanding the consolidated class action pursuant to the local
controversy exception, and not the position taken by
Defendants.
The legislative history shows that the purpose of the local
controversy exception is “to ensure that state courts can
continue to adjudicate truly local controversies in which some
of the defendants are out-of-state corporations.” S. Rep.
109-14, at 28. Defendants concede that Bridewell-Sledge and
Crowder satisfy the first three requirements of the local
controversy exception, meaning that (1) more than two-thirds
of the plaintiffs are citizens of California;4 (2) at least one
defendant from whom significant relief is sought and whose
alleged conduct forms a significant basis for the claims is a
California citizen; and (3) the principal injuries about which
plaintiffs complain were suffered in California. A
consolidated class action involving primarily California
plaintiffs and California defendants, with only one defendant
being an out-of-state corporation, and involving injuries
suffered in California constitutes a controversy local to
California. Therefore, allowing a California state court to
continue to adjudicate that consolidated class action would be
entirely in accordance with the purpose of CAFA’s local
controversy exception.
4 Indeed, Defendants concede that all of the plaintiffs are California
citizens.
BRIDEWELL-SLEDGE V. 20 BLUE CROSS OF CAL.
We recognize that the Senate Report provides: “[I]f a
controversy results in the filing of multiple class actions, it is
a strong signal that those cases may not be of the variety that
th[e local controversy] exception is intended to address.”
S. Rep. 109-14, at 40. But, the Senate Report goes on to
explain that the purpose of the fourth prong of the local
controversy exception is “to ensure that overlapping or
competing class actions or class actions making similar
factual allegations against the same defendant that would
benefit from coordination are not excluded from federal court
by the Local Controversy Exception and thus placed beyond
the coordinating authority of the Judicial Panel on
Multidistrict Litigation.” Id. at 41 (emphasis added).
Elsewhere the Senate Report explains:
When . . . similar, overlapping class actions
are filed in State courts of different
jurisdictions, there is no way to consolidate or
coordinate the cases. The “competing” class
actions must be litigated separately in an
uncoordinated, redundant fashion because
there is no state court mechanism for
consolidating state court cases. The result is
enormous waste–multiple judges of different
courts must spend considerable time
adjudicating precisely the same claims
asserted on behalf of precisely the same
people. As a result, state courts and class
counsel may “compete” to control the cases,
often harming all the parties involved. In
contrast, when overlapping cases are pending
in different federal courts, they can be
consolidated under one single judge to
promote judicial efficiency and ensure
BRIDEWELL-SLEDGE V. BLUE CROSS OF CAL. 21
consistent treatment of the legal issues
involved.
Id. at 23 (footnote omitted); see also id. at 3 (“Multiple class
action cases purporting to assert the same claims on behalf of
the same people often proceed simultaneously in different
state courts, causing judicial inefficiencies and promoting
collusive activity.”). The above language shows that the
purpose of the fourth prong of the local controversy exception
and an overall purpose of CAFA is to ensure that similar,
overlapping class actions do not proceed before different state
courts in an uncoordinated, redundant fashion resulting in
inefficiencies. Thus, CAFA sought to create a federal forum
where these cases could be coordinated and consolidated
before one judge to promote judicial efficiency. Bridewell-
Sledge and Crowder are similar, overlapping class actions.
However, prior to removal, they had been consolidated into
a single class action proceeding before one judge that would
result in a single verdict and a single judgment. Allowing
that consolidated class action to proceed in state court is
entirely consistent with CAFA’s goal of ensuring that
overlapping class actions “be consolidated under one single
judge to promote judicial efficiency and ensure consistent
treatment of the legal issues involved.” Id. at 23. Defendants
fail to provide any further judicial efficiency that could be
obtained by removal to federal court.
Finally, Defendants note that the primary purpose of
CAFA is ensuring “‘[f]ederal court consideration of interstate
cases of national importance.’” Standard Fire Ins. Co. v.
Knowles, 133 S. Ct. 1345, 1350 (2013) (quoting Class Action
Fairness Act of 2005, Pub. L. No. 109–2, 119 Stat. 5). This
is true. However, Defendants fail to explain how the present
consolidated class action is a case of national importance. To
BRIDEWELL-SLEDGE V. 22 BLUE CROSS OF CAL.
the contrary, the present consolidated class action appears to
be largely a local California controversy involving routine
employment discrimination claims arising solely under
California law. In sum, CAFA’s legislative history supports
the conclusion that the local controversy exception applies to
the present consolidated class action, and that the Bridewell-
Sledge/Crowder consolidated class action should be
remanded to state court.

Outcome: We hold that in evaluating jurisdiction under CAFA, the
district court should have viewed Bridewell-Sledge and
Crowder as a single consolidated class action that was united
originally, and determined that CAFA’s local controversy
exception applies to the entire Bridewell-Sledge/Crowder
consolidated class action. We affirm the district court’s order
remanding the Bridewell-Sledge action, and we reverse the
district court’s order in the Crowder action and remand with
directions to the district court to treat the cases as a single
consolidated case and remand it in its entirety to the Superior
Court of the County of Los Angeles for further proceedings.

AFFIRMED IN PART, REVERSED IN PART, and
REMANDED WITH INSTRUCTIONS.

The costs should be borne by the Defendants.

Plaintiff's Experts:

Defendant's Experts:

Comments:



 
 
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