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Green v. Skyline Highland Holdings LLC

United States District Court, E.D. Arkansas, Western Division

December 4, 2017

JAMES GREEN, as Special Administrator of the Estate of Felix Williams, deceased; et al. PLAINTIFFS


         Plaintiffs' motion to remand [Doc. No. 17] is denied.

         I. BACKGROUND

         Plaintiffs bring this class action lawsuit on behalf of all residents or estates of residents who stayed at four defendant nursing homes between April 1, 2016, to the present. Plaintiffs allege that defendants breached contractual and statutory duties owed to the plaintiffs by failing to adequately staff the nursing homes.

         The corporate structure and relationships among the various defendants are as follows: Defendant nursing homes are separate limited liability companies that share a common corporate parent, defendant JS Highland Holdings, LLC (“JS”). In addition to acting as the holding company of its four nursing home subsidiaries, JS also provides the nursing homes with various administrative and management services. Defendant Skyline Holdings LLC (“Skyline”) is another subsidiary of JS and also provides administrative and management services for the defendant nursing homes. JS's sole member is defendant Joseph Schwartz, a citizen of New York. Schwartz is therefore the sole member and effective owner of all LLC defendants. Moreover, all of the LLC defendants are registered in and have their primary place of business in Arkansas. Each defendant nursing home separately employs its respective administrative and nursing directors, who are all citizens of Arkansas.

         Defendants removed this case from the Pulaski County Circuit Court, alleging that jurisdiction was proper under the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. sections 1332(d), et seq.; diversity jurisdiction; and federal question jurisdiction. See Doc. No. 1. Plaintiffs move to remand, arguing that while CAFA's threshold requirements are satisfied, CAFA's “local controversy, ” “home state, ” and discretionary remand exceptions apply. Defendants respond by arguing that none of CAFA's exceptions apply, and diversity and federal question jurisdiction independently confer subject matter jurisdiction.

         The motion to remand is denied because none of the CAFA exceptions apply and therefore subject matter jurisdiction properly lies herein. Whether diversity-of-citizenship or federal question jurisdiction independently confer jurisdiction need not be addressed.


         CAFA eases the diversity requirements in certain class action lawsuits. Under CAFA, a federal district court has original subject matter jurisdiction where at least $5, 000, 000 is in controversy, the proposed class consists of over 100 members, and minimal diversity is satisfied. 28 U.S.C. § 1332(d)(2).

         CAFA has several exceptions, but only three are relevant in this case. First, the “local controversy” exception provides that when the following criteria are met, the federal district court must “decline to exercise jurisdiction”:

1) more than two-thirds of the proposed class members are citizens of the state where the action was originally filed,
2) the class seeks significant relief from at least one defendant who is a citizen of the same state in which the action was originally filed and whose conduct forms a significant basis for the claims asserted,
3) principal injuries resulting from the conduct of each defendant were incurred in the state in which the suit was originally filed, and
4) No other class actions have been filed asserting the same or similar allegations against any of the defendants on behalf of the same or other persons during the three-year period preceding the filing of the current class action.

28 U.S.C. § 1332(d)(4)(A). Second, the “home state” exception provides that a “district court shall decline to exercise jurisdiction . . . over a class action in which . . . two-thirds or more of the members of all proposed plaintiff classes in the aggregate, and the primary defendants, are citizens of the State in which the action was originally filed.” Id. at § 1332(d)(4)(B). Third, the discretionary remand exception allows a district court to decline to exercise jurisdiction in certain cases where more than one-third but less than two-thirds of the members of the proposed class and all “primary defendants” are citizens of the state in which the class action was originally filed. Id. at ยง 1332(d)(3). A number of factors are then considered in deciding whether discretionary remand is appropriate, including whether the claims involve issues of national importance, whether the forum's law principally governs issues in the ...

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