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: CAFA Law Blog - Information, cases and insights regarding the Class Action Fairness Act of 2005

CAFA's Diversity Jurisdiction Requires Proper Allegations, Says Illinois District Court.

Willis v. Greenpoint Mortg. Funding, Inc., , No. CIV 09-593-GPM, Slip Copy, 2009 WL 4730957 (S.D. Ill. Dec 08, 2009).

Because the complaint did not allege that the amount in controversy exceeded $5 million, the District Court in California sua sponte ordered the plaintiffs to file a second amended complaint properly alleging the amount in controversy for purposes of federal subject matter jurisdiction in diversity under CAFA, failing which it would dismiss the complaint for lack of federal subject matter jurisdiction.

Maintaining that it was the courts' first duty in every suit to determine the existence of subject-matter jurisdiction, the District Court reviewed sua sponte the allegations of federal subject matter jurisdiction contained in the class action complaint brought by the plaintiffs, Joseph and Deborah Willis.  Although the operative complaint did not specify the basis asserted for the Court's subject matter jurisdiction, the Court deduced that it was diversity of citizenship pursuant to CAFA.

The Court noted that the allegations of the operative complaint showed that the proposed class contained at least one hundred persons.  Also, there was minimal diversity of citizenship because the plaintiffs were Illinois citizens while the defendant, Greenpoint Mortgage Funding, Inc., was a corporation incorporated under New York law with its principal place of business in California. Thus, it was a citizen of New York and California for diversity purposes.

The Court, however, stated that the operative complaint did not allege that an aggregate amount in excess of $5 million was in controversy in this case.  Accordingly, the Court directed the plaintiffs to amend their complaint to allege that the jurisdictional minimum amount for purposes of federal diversity jurisdiction under the CAFA was satisfied.  

The Court noted that this was the second time it had been obliged to order the plaintiffs to amend their complaint to allege properly the Court's subject matter jurisdiction in diversity under CAFA.  Thus, the Court stated that if in their second amended complaint the plaintiffs failed correctly to plead the Court's subject matter jurisdiction in diversity under the CAFA, the Court would dismiss the complaint pursuant to Fed. R. Civ. P. 12(h)(3) for lack of federal subject matter jurisdiction.

Full post as published by CAFA Law Blog - Information, cases and insights regarding the Class Action Fairness Act of 2005 on August 20, 2010 (boomark / email).