Betty M. Smith v. Michael Bokor ( 2021 )

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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 18-14797
________________________
D.C. Docket No. 8:18-cv-00381-WFJ-AAS
BETTY M. SMITH,
as personal representative of the estate of Shirley T. Cox,
JUDITH A. BALLEW,
Attorney-in-Fact of John E. Ballew,
MARK F. LAPP,
as personal representative of the estate of Roger J. Lapp,
Plaintiffs-Appellees,
versus
MARCUS & MILLICHAP, INCORPORATED,
Defendant,
MICHAEL BOKOR,
Defendant-Appellant.
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________________________
Appeal from the United States District Court
for the Middle District of Florida
________________________
(March 12, 2021)
Before BRANCH, MARCUS, Circuit Judges, and HUCK,∗ District Judge.
BRANCH, Circuit Judge:
Three named plaintiffs, seeking to represent a putative class of 3,000 nursing
facility residents, filed a class action complaint against Marcus & Millichap, Inc.
(“MMI”), a real estate brokerage firm that marketed the relevant nursing facilities,
and Michael Bokor, the president of the company responsible for managing the
nursing facilities’ operations, in Florida state court. Bokor and MMI removed the
case to the United States District Court for the Middle District of Florida pursuant
to the Class Action Fairness Act (“CAFA”), which gives federal courts original
jurisdiction over class actions where the amount in controversy exceeds
$5,000,000 and there is minimal diversity between the parties (meaning at least
one plaintiff and one defendant are from different states). 28 U.S.C. § 1332(d)(2).
But every statute has its exceptions. Here, the named plaintiffs sought
remand to state court by invoking CAFA’s local controversy and discretionary
exceptions. Those exceptions permit remand where a certain percentage of the
∗ Honorable Paul C. Huck, United States District Judge for the Southern District of
Florida, sitting by designation.
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putative class are citizens of the same state. See id. § 1332(d)(3), (4). To show
that the proposed class met the exceptions’ citizenship requirements, plaintiffs
provided the district court with twelve documents, including economic studies,
statistics, and United States Census Bureau reports. They did not produce any
evidence relating directly to the putative class, such as declarations of class
members’ intent to remain in Florida, property records, or tax records. In this
appeal, we consider whether these studies, surveys, and census data—which do not
directly involve the plaintiffs in this case—are sufficient to establish that a certain
percentage of the plaintiff class are citizens of a particular state for the purposes of
CAFA’s local controversy and discretionary exceptions. We hold that they are not.
I. CAFA Jurisdiction
Before turning to the facts of this case, we begin with an overview of federal
jurisdiction pursuant to CAFA. Through diversity jurisdiction, federal district
courts have original jurisdiction over “all civil actions where the matter in
controversy exceeds the sum or value of $75,000 . . . and is between . . . citizens of
different states.” 28 U.S.C. § 1332(a)(1). In 2005, Congress enacted CAFA, which
amended the federal diversity jurisdiction statute, 28 U.S.C. § 1332, to provide
special rules for class action lawsuits. Class Action Fairness Act of 2005, Pub. L.
No. 109–2 § 2(b), 119 Stat. 4. Pursuant to CAFA, federal courts have original
jurisdiction over class actions where two conditions are met: the aggregate amount
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in controversy exceeds $5 million, and the parties have minimal diversity—
meaning at least one plaintiff is diverse from at least one defendant. 28 U.S.C.
§ 1332(d)(2), (6); see also Mississippi ex rel. Hood v. AU Optronics Corp., 571
U.S. 161, 165 (2014). To determine whether minimal diversity exists, courts
consider the citizenship of all the class members (including putative), both named
and unnamed. 28 U.S.C. § 1332(d)(1)(D). CAFA also includes specific provisions
for the point in time when courts determine the plaintiff class members’
citizenship: (1) citizenship is first considered as of the filing date of the complaint
or amended complaint; or (2) if the initial pleading does not state facts supporting
federal jurisdiction, then citizenship is considered as of the date plaintiffs serve “an
amended pleading, motion or other paper, indicating the existence of federal
jurisdiction.” Id. § 1332(d)(7).
Several rules guide courts in determining parties’ citizenship. First and
foremost, a natural person is a citizen of the state in which he is “domiciled.”
McCormick v. Aderholt, 293 F.3d 1254, 1257 (11th Cir. 2002). “A person’s
domicile is the place of ‘his true, fixed, and permanent home and principal
establishment, and to which he has the intention of returning whenever he is absent
therefrom[.]’” Id. at 1257–58 (quoting Mas v. Perry, 489 F.2d 1396, 1399 (5th
Cir. 1974)). To put it another way, domicile (or citizenship) consists of two
elements: residency in a state and intent to remain in that state. See Miss. Band of
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Choctaw Indians v. Holyfield, 490 U.S. 30, 48 (1989). Residency is necessary, but
insufficient, to establish citizenship in a state. Travaglio v. Am. Exp. Co., 735 F.3d
1266, 1269 (11th Cir. 2013). Courts look to various factors in determining a
person’s intent to remain in a state, including: the location of real and personal
property, business ownership, employment records, the location of bank accounts,
payment of taxes, voter registration, vehicle registration, driver’s license,
membership in local organizations, and sworn statements of intent. See, e.g.,
Sunseri v. Macro Cellular Partners, Ltd., 412 F.3d 1247, 1249 (11th Cir. 2005);
McCormick, 293 F.3d at 1258; 13E Charles Alan Wright & Arthur R. Miller,
Federal Practice and Procedure § 3612 (3d ed. 2019).
CAFA provides several exceptions to federal jurisdiction, pursuant to which
a party can seek to remand the class action to state court. See 28 U.S.C. § 1332(d).
Two of these exceptions—the local controversy exception, § 1332(d)(4)(A), and
the discretionary exception, § 1332(d)(3)—are relevant to this appeal.
The local controversy exception provides that a “district court shall decline
to exercise jurisdiction” over a class action that meets certain statutory criteria, two
of which are relevant here. See id. § 1332(d)(4). The first addresses plaintiff
citizenship: “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.” Id. § 1332(d)(4)(A)(i)(I). The second, referred to as the “significant
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defendant test,” see Evans v. Walter Indus., Inc., 449 F.3d 1159, 1166 (11th Cir.
2006), requires the plaintiffs to prove that:
(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.
28 U.S.C. § 1332(d)(4)(A)(i)(II).
The discretionary exception provides that federal district courts may, “in the
interests of justice and looking at the totality of the circumstances, decline to
exercise jurisdiction” over a class action where: (1) “greater than one-third but less
than two-thirds of the members of all proposed plaintiff classes in the aggregate”
are citizens of the state in which the class action was originally filed; and (2) “the
primary defendants are citizens of the State in which the [class] action was
originally filed.” Id. § 1332(d)(3). If those threshold requirements are met, CAFA
instructs courts to consider the following six factors:
(A) whether the claims asserted involve matters of national or
interstate interest;
(B) whether the claims asserted will be governed by laws of the State
in which the action was originally filed or by the laws of other States;
(C) whether the class action has been pleaded in a manner that seeks
to avoid Federal jurisdiction;
(D) whether the action was brought in a forum with a distinct nexus to
the class members, the alleged harm, or the defendants;
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(E) whether the number of citizens of the State in which the action
was originally filed in all proposed plaintiff classes in the aggregate is
substantially larger than the number of citizens from any other State,
and the citizenship of the other members of the proposed class is
dispersed among a substantial number of States; and
(F) whether, during the 3-year period preceding the filing of that class
action, 1 or more other class actions asserting the same or similar
claims on behalf of the same or other persons have been filed.
Id.
This case concerns the application of both exceptions.
II. Background
On January 5, 2018, Shirley Cox, John Ballew, and Mark Lapp (through
their estates and personal representatives), individually and on behalf of all others
similarly situated, filed a class action complaint against Bokor and MMI in Florida
state court. Bokor is an individual Florida citizen and MMI is a Delaware
corporation with its principal place of business in California. The complaint
defined the class as “persons . . . who resided in any of the Facilities at any time
during the period January 5, 2014 through [January 5, 2018].” In turn, the
complaint defined the “Facilities” to include the 22 “skilled nursing facilities
located throughout [Florida],” which MMI marketed and sold. To be eligible for
admission to a skilled nursing facility in Florida, an individual must either
(1) require long-term care because he cannot safely live alone in the home setting;
or (2) require intensive rehabilitation before he can be safely discharged from the
hospital.
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Plaintiffs alleged that the facilities, including those where plaintiffs received
care, improperly obtained licenses from the State of Florida by withholding critical
information required by state regulations regarding their common ownership and
management. Plaintiffs did not name the facility owners as defendants but
contended that Bokor, who was the president of the company that operated the
facilities and who personally submitted the facilities’ license applications, “used
fraud and deception” to obtain the state licenses. They further alleged that,
although MMI knew the licenses were invalid, the company endeavored to market
and sell the facilities. As to harm that these alleged acts caused, the complaint
alleged that “all of the residents at the Facilities during the relevant times were
injured by being deceived into suffering substandard levels of care on a daily basis,
which placed their health and well-being in jeopardy,” and that “each of the
licensees of all the Facilities . . . shield[ed] the [operators of the facilities] from
liability to future creditors, including Plaintiffs and the Class members.”
Plaintiffs brought five claims against Bokor and MMI: aiding and abetting
breach of fiduciary duties (Counts I & II), civil conspiracy (Count III), and claims
for civil remedies for criminal practices (Counts IV & V). They also sought actual
damages for the class in the amount of $900,000,000, as well as treble damages,
expenses, attorneys’ fees, and costs. The complaint estimated that the proposed
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class of individuals “who resided in any of the Facilities at any time during the
period January 5, 2014 through the date of this Complaint” exceeded 3,000 people.
On February 14, 2018, Bokor removed the action to the United States
District Court for the Middle District of Florida pursuant to CAFA. See 28 U.S.C.
§§ 1332(d)(2), 1453(b). Two days later, MMI joined Bokor’s notice of removal.1
Once in federal court, Bokor and MMI filed separate motions to dismiss plaintiffs’
complaint for lack of subject matter jurisdiction and failure to state a claim upon
which relief can be granted. Plaintiffs did not respond to either motion. Instead,
plaintiffs moved to remand to Florida state court pursuant to CAFA’s local
controversy and discretionary exceptions. As discussed above, for either exception
to apply, a certain percentage of the plaintiff class must be citizens of the state to
which the case will be remanded. Accordingly, plaintiffs attached twelve items to
their remand motion as proof that more than two-thirds (or, in the alternative, at
least one-third) of the class were Florida citizens. These documents fell into three
categories: (1) data generated by federal agencies, (2) economic studies concerning
nursing facility markets, and (3) population migration surveys and reports.
1. Data Generated by Federal Agencies
1
The district court clarified in its remand order that “[t]he allegations of the complaint
and notice of removal establish the prerequisites for removal under CAFA. Plaintiffs do not
dispute Defendants have carried their burden to establish federal jurisdiction.”
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The first document in this category is the Center for Medicare and Medicaid
Studies “Nursing Home Data Compendium 2015 Edition.” Weighing in at 252
pages, the compendium includes population data not just from Florida, but also
from forty-nine other states and the District of Columbia. While 96 pages explore
nursing home resident characteristics, nothing in the document bears on where the
nursing home residents lived prior to admittance or their citizenship. Further, the
data concerning each state’s nursing home population is drawn from the 2010
census—which sampled the United States population as it was four years before
the relevant time period in this case. In their motion to remand, Plaintiffs relied on
this compendium for only two data points: (1) approximately 85 percent of nursing
home residents nationwide are 65 or older; and (2) in 2013 and 2014,
approximately 18 percent of all the nursing home residents in Florida had zero
activities of daily living impairments. Notably, neither of those data points bears
on of the citizenship of the putative class members in this case.
The next document in this category is the United States Census Bureau
“Characteristics of the Group Quarters Population in the United States: 2016
American Community Survey: 1-Year Estimates.” This document shows that 85.4
percent of people in the United States currently live at the same address as they did
one year prior and, of the 14.6 percent of people who moved in general, only 3.1
percent moved to a different state or abroad. And the survey data reflects the
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national population—it does not address the state of Florida specifically or mention
nursing facilities.
The final document in this group is the United States Census Bureau’s
“2012-2016 American Community Survey 5-Year Estimates.” It presents Florida
population data in a variety of fields, including household size, spoken languages,
and income levels, but only devotes a few lines to “geographic mobility,”
observing: (1)“[i]n 2012-2016, 84 percent of the people at least one year old living
in Florida were living in the same residence one year earlier”; and (2) of the 16
percent that moved during that period, only 3.8 percent moved out of state. But it
does not specifically address the geographic mobility of those 65 and older who
lived in Florida during this period. And it does not mention nursing homes in
Florida. Plaintiffs argued in their motion for remand that the two Census Bureau
documents show that the plaintiff class members intend to remain in Florida.
2. Economic Papers from 2002 through 2015 Concerning Nursing
Facility Markets
The second category consists of five economics-based academic studies and
papers which address the geographic markets of nursing facilities.
The first is a 2015 working paper by Xin Zhao out of the University of
Colorado, Boulder entitled “Competition, Information, and Quality: Evidence from
Nursing Homes.” The author seeks to “estimate the effect of competition on
nursing home quality and explore how the effect varies when consumers have
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better access to quality information,” by extrapolating nationwide data. The paper
includes data regarding the number of nursing homes in Florida from 2006 to 2011
but does not mention Florida anywhere else in its 47 pages. In their motion for
remand, Plaintiffs rely on this document to support their argument that “an
overwhelming majority of the proposed class members resided in Florida.” They
pointed to only one line from this paper, which notes that “[t]he average distance
between a nursing home and its potential consumer is 19.2 miles.”
The next document is a 2008 paper by David C. Grabowski, an associate
professor of health economics in Harvard Medical School’s Department of Health
Care Policy, entitled “The Market for Long-Term Care Services.” It aims to
“highlight the measurement, data, and methodological issues underlying the study
of long-term care markets and to suggest data that would improve our
understanding of such markets.” The paper does not mention Florida or make any
conclusions as to residency or citizenship. Plaintiffs rely on this document (along
with the next three documents in this category) to support the proposition that
“numerous peer reviewed studies have concluded to a statistically significant
degree of certainty that eighty percent (80%) of the residents in any skilled nursing
facility in any state were residing in the same county as the facility immediately
prior to admission.” The paper does not quite support this conclusion. Instead, it
reports merely that a 1994 study “found that 80% of residents in Wisconsin
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facilities chose a nursing home located in the county where they resided before
entering the home.”
Plaintiffs also included a 2002 study entitled “Use of Resident-Origin Data
to Define Nursing Home Market Boundaries,” authored by Jack Zwanziger, Dana
B. Mukamel, and Indridi Indridason from the University of Rochester School of
Medicine and Dentistry. This study’s declared purpose is to test the assumption
that “a nursing home’s market is coincident with the boundaries of the county in
which it is located.” It relies on 1990 census data to examine Medicare
beneficiaries admitted into a nursing home in New York state during the periods of
1992 to 1993 and 1996 to 1997 and finds that, for most New York nursing homes,
more than 80 percent “of their market” resides within the county in which they are
located.
Next up is a 2011 paper authored by John R. Bowblis, an assistant professor
of Economics at Miami University and Phillip North, a portfolio analyst at Duke
Energy, which is entitled “Geographic Market Definition: The Case of Medicare-
Reimbursed Skilled Nursing Facility Care.” It evaluates “the different empirical
techniques to define relevant geographic markets for nursing home care,” in order
to “inform researchers and policymakers which method would be more appropriate
given their research objectives and the constraints of their data.” This paper
examines nursing facility markets in eight states, including Florida. It does not
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provide any discussion or examination of Florida nursing facility residents, but
includes a data point that 98.4 percent of Florida nursing home residents lived in
Florida prior to entering the nursing home.
The final document in this category is a 2006 paper entitled “Spatial
Competition and Market Definition in the Nursing Home Industry,” by Aditi
Mehta—the paper does not say whether Mehta is a student or professor—in the
Department of Economics of Boston University. The abstract for this paper
illustrates the technical nature of the documents in this category:
The degree of competition in the nursing home industry has profound
implications for regulations, quality and pricing decisions. This paper
presents a model of spatial competition in the nursing home industry
to investigate how consumer preferences over location can affect the
substitutability and the degree of competition between geographically
differentiated nursing homes. A random coefficients logit demand
model for nursing home care is estimated using census tract
demographic information. . . . The model is used to examine the
impact of changes in the market structure of nursing homes in one
hypothetical county.
The paper does not mention Florida or address citizenship of those in nursing
facilities. Instead, it relies on 2002 CMS data concerning Wisconsin nursing
homes to conclude that “the distance between the consumer’s previous residence
and the nursing home is an important characteristic when choosing which nursing
home to enter.”
3. Population Migration Surveys and Reports
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Four surveys and reports make up this last category of documents. One
document is a PowerPoint presentation, apparently created in 2011 by the North
Carolina Division of Health Service Regulation, entitled “North Carolina
Certificate of Need Law.” It examines health care facility services in North
Carolina and does not mention Florida. As Plaintiffs emphasize in their remand
motion, the presentation reflects that, in North Carolina at least, 74 percent of all
hospital patients travel less than 25 miles to receive care.
Plaintiffs also relied on two surveys to show that the plaintiff class members
intend to remain in Florida. One survey is the 45-page Pew Research Center report
from 2008: “American Mobility: Who Moves? Who Stays Put? Where’s Home?”
It surveys 2,260 people nationwide in 2008 regarding general moving trends across
the United States, and indicates that 19 percent of individuals 65 or older
“responded that [they were] very likely or somewhat likely [to] move in the next
five years.” However, it provides no data specific to individuals in nursing
facilities in Florida. Similarly, a 2012 survey titled “The United States of Aging,”
which the National Council on Aging, USA Today, WPBT2, and United
Healthcare sponsored, reported that “[c]lose to nine in 10 older Americans intend
to continue living in their current homes for the next five to 10 years.” However,
of the 2,250 people surveyed, only 250 were from Florida, and the survey says
nothing about residents of nursing homes in Florida.
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Finally, plaintiffs provided the district court with a 2014 article from a
website belonging to what appears to be a business group named “Renaissance
Planning” and written by Jeremy Goldstein, which they asserted helps establish the
putative class members’ intent to remain in Florida. The Renaissance Planning
article, entitled “Where Seniors Are Moving?” relies on the American Community
Survey, discussed above, to point out that only approximately 10 percent of
Americans 55 and older move. While it notes that Florida is one of several states
that “had the most in-migration,” meaning individuals that moved to a new county
or new state, “among people 55 and over” between 2010 and 2012, the article does
not mention individuals in nursing facilities.
Bokor and MMI opposed the plaintiffs’ motion for remand on numerous
grounds, arguing, in part, that the documents on which the plaintiffs relied were
unauthenticated and they did not prove by a preponderance of the evidence that
either CAFA exception applied.
While their motion for remand was pending, plaintiffs moved for leave to
conduct discovery regarding the applicability of CAFA’s local controversy and
discretionary exceptions to federal jurisdiction. Bokor and MMI opposed that
discovery motion on the grounds that plaintiffs were merely seeking to bolster their
argument for remand even though that motion remained unresolved.
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On October 16, 2018, the district court granted plaintiffs’ motion to remand
and denied plaintiffs’ discovery motion. The district court began its analysis with
the local controversy exception. It divided the plaintiffs’ supporting documents
into those purportedly showing each of the two separate requirements of
citizenship for CAFA jurisdiction purposes: residency and intent to remain. As to
residency, the court relied on the economic studies to show that “individuals who
choose or land in a nursing facility hale from the proximate area,” and therefore
“their residences were much more likely than not to be located in Florida.” The
district court next examined the putative class’s “intent to remain” in Florida. In
finding that two-thirds of the class intended to remain in Florida, the district court
depended on federal census data, economic studies, and population surveys, which
showed that United States citizens—particularly senior citizens—do not often
move out of state. The district court concluded that:
Although . . . some of the studies may not focus specifically on
Florida, the Court finds the data concerning nursing homes
nationwide, together with the specific Florida studies, is sufficient to
attribute citizenship to the putative class in Florida. Faced with the
persuasive submissions of Plaintiffs, who carry the burden of proof of
the exception to the CAFA, the Court finds that Plaintiffs have shown
by a preponderance of the evidence that two-thirds of the class
members are citizens of Florida.
And, after finding the other aspect of the exception satisfied—namely that Bokor
was a significant defendant—the district court concluded that “[r]emand is
warranted under the local controversy exception.”
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Regarding CAFA’s discretionary exception, the district court further
explained that,
To consider the discretionary exception . . . the class membership
must be composed of greater than one-third but less than two-thirds of
the class citizens of Florida. If the Court had not determined that two-
thirds of the class were Florida citizens, the Court would consider the
six factors listed in the statute. To that end, the Court finds that this
matter is purely local and not one of national importance. The claims
will be governed by the laws of Florida and were not pled to avoid
federal jurisdiction. There is a distinct nexus between this Florida
action involving only Florida facilities, and the alleged torts
committed and injuries sustained here. No other class actions asserting
these claims have been brought in the preceding three years.
Bokor immediately filed a motion to stay the remand order pending appeal,
which the court granted. Bokor then filed a notice of appeal of the district court’s
remand order on November 15, 2018.
III. Standards of Review
We review the district court’s decision to remand de novo. Evans, 449 F.3d
at 1161. We review the district court’s evidentiary rulings for clear abuse of
discretion. Aycock v. R.J. Reynolds Tobacco Co., 769 F.3d 1063, 1068 (11th Cir.
2014).
“When a party seeks to avail itself of an express statutory exception to
federal jurisdiction granted under CAFA . . . the party seeking remand bears the
burden of proof with regard to that exception.” Evans, 449 F.3d at 1164; see also
Preston v. Tenet Healthsystem Mem’l Med. Ctr., Inc., 485 F.3d 804, 814 (5th Cir.
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2007) (“Preston II”) (“[W]e employ the time-honored standard routinely applied to
the fundamental question of citizenship” in determining whether plaintiffs meet a
CAFA exception: “proof by a preponderance of the evidence.”). We review the
district court’s jurisdictional factual findings concerning the parties’ citizenship for
clear error. Travaglio, 735 F.3d at 1269. “A finding is clearly erroneous if the
record lacks substantial evidence to support it.” Id.
IV. Discussion
A. The Local Controversy Exception
We now determine whether the plaintiffs met the citizenship requirement
under CAFA’s local controversy exception. That exception requires a district
court to decline to exercise jurisdiction when three requirements are met:
(1) greater than two-thirds of the proposed plaintiff class are citizens of the state of
filing; (2) at least one “significant defendant” is a citizen of the state of filing; and
(3) the principal injuries were incurred in the state of filing. 28 U.S.C.
§ 1332(d)(4)(A)(i).
Bokor claims that plaintiffs did not meet their burden as to the first two
prongs of the local controversy exception and so the district court should not have
remanded the case to state court. First, he claims that plaintiffs did not prove that
at least two-thirds of the putative class were Florida citizens at the time they filed
the claim in state court. Second, Bokor argues that the district court could not have
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found that he is a significant defendant because plaintiffs did not present any
evidence that Bokor could pay the judgment if he were to lose this case. We
address each argument in turn.
1. Citizenship of Two-Thirds of the Plaintiff Class
Bokor objects that the plaintiffs did not prove the first prong of establishing
citizenship because even assuming that more than two-thirds of the putative class
reside in Florida, plaintiffs did not submit any evidence that even one of the
proposed class members intends to remain in Florida. Instead, according to Bokor,
the U.S. Census data, unauthenticated private surveys, and studies cannot establish
citizenship because they provide no evidentiary nexus to the putative class. 2 We
2
In determining whether the district court has jurisdiction over a removed case pursuant
to 28 U.S.C. §§ 1332 and 1441, a federal court may consider “summary-judgment-type-
evidence”—meaning relevant evidence that would be admissible at trial. Williams v. Best Buy
Co., 269 F.3d 1316, 1319 (11th Cir. 2001) (adopting the Fifth Circuit’s approach in Allen v. R &
H Oil & Gas Co., 63 F.3d 1326, 1335–36 (5th Cir. 1995), and the Ninth Circuit’s approach in
Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 337 (9th Cir. 1997)); Fed. R. Evid. 56(c).
Nevertheless, evidence does not have to be authenticated or otherwise presented in an admissible
form to be considered at the summary judgment stage, “as long as the evidence could ultimately
be presented in an admissible form.” See Lossia v. Flagstar Bancorp, Inc., 895 F.3d 423, 429
(6th Cir. 2018); Maurer v. Indep. Town, 870 F.3d 380, 384 (5th Cir. 2017) (“At the summary
judgment stage, evidence need not be authenticated or otherwise presented in an admissible
form. . . . [Rather, the materials presented] need only be capable of being presented in a form
that would be admissible in evidence.” (quotation omitted)).
Bokor makes much of the fact that the district court did not authenticate the plaintiffs’
documents when addressing the motion for remand, but as set forth above, at this preliminary
stage, the evidence need not be authenticated to be considered—instead, it need only be capable
of authentication. See Lossia, 895 F.3d at 429; Maurer, 870 F.3d at 384. Given the types of
evidence presented—studies, census data, surveys, and reports—there is no indication that these
materials would not have been capable of authentication later. See Fed. R. Evid. 901 & 902
(rules governing authentication of evidence). Accordingly, the district court did not abuse its
discretion in considering this proffered data. See United States v. Siddiqui, 235 F.3d 1318, 1322
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agree that the district court erred in finding this evidence sufficient to establish that
two-thirds of the putative class were Florida citizens.
Class action plaintiffs can prove that two-thirds of the putative class are
citizens of a certain state in two ways. The first way, as our sister circuits have
recognized, is to limit the class definition to citizens of a certain state. See In re
Hannaford Bros. Customer Data Sec. Breach Litig., 564 F.3d 75, 77, 81 (1st Cir.
2009) (recognizing that defining class to exclude “any persons and entities who are
not citizens of the State of Florida” defeated federal jurisdiction under CAFA
pursuant to the local controversy exception); Johnson v. Advance Am., 549 F.3d
932, 937–38 (4th Cir. 2008) (recognizing plaintiffs had “taken care” to avoid
federal jurisdiction under CAFA by limiting the class to South Carolina citizens);
see also In re Sprint Nextel Corp., 593 F.3d 669, 676 (7th Cir. 2010) (observing
that if the plaintiffs had “defined their class as all Kansas citizens who purchased
text messaging from Sprint Nextel or an alleged coconspirator” instead of Kansas
residents, “the plaintiffs could have guaranteed that the suit would remain in state
court”) (first emphasis in original).
Here, the class definition does not establish the citizenship of the class
members for purposes of the first requirement of CAFA’s local controversy
(11th Cir. 2000) (“A district court has discretion to determine authenticity, and that
determination should not be disturbed on appeal absent a showing that there is no competent
evidence in the record to support it.”).
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exception. Plaintiffs defined the class as individuals as “persons . . . who resided
in any of the Facilities at any time during the period January 5, 2014 through
[January 5, 2018.].” Again, residency does not equate to citizenship. Travaglio,
735 F.3d at 1269. Therefore, this class definition does not establish that the class
is made up only of Florida citizens—meaning individuals who currently reside in
Florida and have an intent to remain. Plaintiffs argue that this class definition
helps establish the residency prong of citizenship, because it limits the class to
Florida residents. But the definition does not limit the class to current Florida
residents. Rather, it defines the class as persons who “resided” in the Florida
facilities at some point during a four-year period. Thus, the class definition on its
face encompasses class members who currently reside in the Florida facilities and
those who resided in the facilities during the relevant four-year period, but have
since moved to another state. Because citizenship for purposes of CAFA
jurisdiction is based on current residency and an intent to remain, the class
definition does not aid the class in establishing either prong of the citizenship
requirement.
In cases where plaintiffs do not base citizenship on the class definition, they
must provide evidence of the class members’ state of residence as well as evidence
showing their intent to remain in that state. See Evans, 449 F.3d at 1165; see also
Miss. Band of Choctaw Indians, 490 U.S. at 48 (“[D]omicile is established by
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physical presence in a place in connection with a certain state of mind concerning
one's intent to remain there.”). In determining someone’s intent to remain in a
state, “[m]ere mental fixing of citizenship is not sufficient. What is in another
man’s mind must be determined by what he does as well as by what he says.”
Stine v. Moore, 213 F.2d 446, 448 (5th Cir. 1954). Thus, as we pointed out
previously, courts look to various factors in determining a person’s intent to remain
in a state, including property or business ownership, where the plaintiffs pay taxes
and are registered to vote, and sworn statements of intent to remain. All of these
forms of evidence relate directly to the parties asserting citizenship.
None of the evidence the plaintiffs provided is sufficient to establish either
prong of citizenship. Instead, as we recounted above, the plaintiffs submitted only
generalized studies and surveys—many of which date back to years before the
relevant time period—and census data. While we do not hold that a district court
may never consider evidence of a general nature in determining citizenship of the
class, such generalized evidence cannot be the sole basis of the citizenship
determination. Rather, in addition to any generalized evidence presented, “there
must ordinarily be at least some [specific] facts in evidence from which the district
court may make findings regarding class members’ citizenship for purposes of
CAFA’s local controversy exception.” Mondragon v. Capital One Auto Fin., 736
F.3d 880, 884 (9th Cir. 2013); see also Myrick v. WellPoint, Inc., 764 F.3d 662,
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665 (7th Cir. 2014) (rejecting plaintiffs’ reliance on a series of inferences based on
the policy language to show citizenship for a class action policyholder suit against
a health insurer, because the “plaintiffs did not offer any evidence to support” their
propositions).
Turning to the case at hand, plaintiffs urge us to use “common sense” and
make the following series of logical inferences from the generalized evidence they
presented:
(1) Most people who go to nursing facilities resided in the state of the
facility before admittance, so it is more likely than not that two-thirds of
the putative class lived in Florida before going to the facility. 3
(2) Most people in nursing facilities in Florida are over 65, so it is more
likely than not that two-thirds of the putative class is over 65.4
(3) Most people over 65 do not move out of state, so it is more likely than not
that two-thirds of the putative class will not move out of Florida. 5
Plaintiffs assert that based on these inferences, it is more likely than not that
two-thirds of the putative class are Florida citizens. 6 We cannot reach that
conclusion here for several reasons.
3 The economic studies purportedly support this proposition.
4
The CMS Compendium purportedly supports this proposition.
5
The Census Bureau data, Pew Research Center report, and United States of Aging
survey purportedly support this proposition.
6
We know that the named plaintiffs are citizens of Florida based on the exhibits attached
to their complaint and the defendants’ concession below that each of the named plaintiffs were
domiciled in Florida—i.e., resided in Florida and had the intention to remain there indefinitely.
But the named plaintiffs’ citizenship does not establish the citizenship of the putative class.
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First, none of the cited documents specifically addresses the citizenship
(residency and intent to remain) of people admitted to Florida nursing facilities. In
fact, only two documents specifically examine both Florida and nursing facilities.
Furthermore, no document examines any resident of the 22 nursing facilities
involved in this case. Second, the plaintiffs failed to define the type of skilled
nursing homes at issue, meaning we do not know whether the facilities in question
are long-term care facilities, short-term care facilities, or both—an important
distinction that could affect the residency and intent to remain prongs of the
citizenship inquiry. Third, while the evidence submitted tends to show that at least
two-thirds of admissions to nursing facilities—for either long term or short-term
care—generally are from the surrounding geographic area, the fact that a person
lives in a certain geographic area does not establish necessarily that the person is a
citizen of that state. That point is particularly true for a state like Florida where
citizens of other states may live part of the year in Florida (and perhaps have to
enter into a short-term care nursing facility while in Florida), but maintain a
permanent residence elsewhere. In other words, without any specific evidence
related to the putative class members, we cannot reasonably infer from the
generalized evidence presented that the approximately 3,000 residents of the 22
nursing facilities at issue were Florida citizens. We cannot rely only on a series of
purportedly reasonable inferences to determine citizenship; we cannot base our
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determination of citizenship on “sensible guesswork.” Sprint, 593 F.3d at 674; see
id. (“All in all, we’re inclined to think that at least two-thirds of those who have
Kansas cell phone numbers and use Kansas mailing addresses for their cell phone
bills are probably Kansas citizens. . . . But that’s all guesswork. Sensible
guesswork, based on how the world works, but guesswork nonetheless.”); Brown v.
Keene, 33 U.S. 112, 115 (1834) (“It is not sufficient that jurisdiction may be
inferred argumentatively from its averments.”); King v. Great Am. Chicken Corp.,
Inc., 903 F.3d 875, 880 (9th Cir. 2018) (“The impression that this case would
qualify for the local or home-state controversy exception is easy to understand. . . .
The problem is that this impression rests on guesswork.”); Evans, 449 F.3d at 1166(rejecting reliance on inferences to determine citizenship of putative class).
Moreover, even assuming that the plaintiffs had put forth sufficient evidence
to show that two-thirds of the class members were Florida residents, none of the
generalized data submitted was sufficient to establish the class members’ intent to
remain in the state. At best, the submitted data speak only to population moving
patterns and current residency, not to people’s intentions of moving. 7 If we
7
Plaintiffs claim that circumstantial evidence, like data and studies, is enough to show
intent to remain. They point to discrimination lawsuits as an example of an area of law where
courts use circumstantial evidence to show intent, like McDonnell Douglas Corp. v. Green, 411
U.S. 792, 805 (1973) (allowing evidence of “statistics as to petitioner’s employment policy and
practice” to determine “whether petitioner’s refusal to rehire respondent . . . conformed to a
general pattern of discrimination against blacks”) and Walker v. NationsBank of Fla. N.A., 53
F.3d 1548, 1555 (11th Cir. 1995) (recognizing the plaintiff could present statistical evidence to
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accepted that current residency and statistics showing that less than 3 percent of
people moved out of state between 2012 through 2016 proves that two-thirds of
this class intends to remain in Florida, then we would be holding that proof of
residency alone is enough to prove citizenship. Cf. Miss. Band of Choctaw
Indians, 490 U.S. at 48; Travaglio, 735 F.3d at 1269; see also Hargett, 854 F.3d at
965 (“A complaint or notice of removal resting on residency, then, will not
establish citizenship for diversity jurisdiction.”). Our precedent demands more.
Additionally, we have observed that the local controversy is a narrow
exception, “with all doubts resolved in favor of exercising jurisdiction over the
case.” Evans, 449 F.3d at 1163. With only generalized data and no specific facts
to support the citizenship of any member of the putative class, doubts abound in
this case. As the plaintiffs’ evidence fails to prove citizenship of any member of
the class, it fails to establish more than two-thirds of the class are Florida citizens.
show discriminatory intent). In such cases, the plaintiff relied on statistics about the plaintiff’s
particular employer to show a pattern of discrimination. But proving intentional discrimination
is a different beast from proving intent to remain in a state for citizenship purposes. As
discussed above, courts can look to evidence like voting and vehicle registration and property
ownership to show intent to remain, and the plaintiffs themselves can sign an affidavit to that
effect. In discrimination cases, however, evidence of an employer’s intent to discriminate is
typically elusive. Regardless, even in those circumstantial evidence discrimination cases, the
data must have some nexus to the parties. See, e.g., Pace v. S. Ry. Sys., 701 F.2d 1383, 1388
(11th Cir. 1983).
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We therefore conclude that the district court clearly erred in its determination of
state citizenship necessary for remand under the local controversy exception. 8
We recognize that class action lawsuits may become “totally unworkable” if
the citizenship of each individual class member “had to be considered.” Preston II,
485 F.3d at 816 (quoting 1 Charles Alan Wright, Law of Federal Courts § 72, at
521 (5th ed. 1994)). And the “standard for establishing the domicile of more than
one hundred plaintiffs must be based on practicality and reasonableness.” Id. But
requiring something more than general data sources is not impractical or
unreasonable.
2. Significant Defendant
Bokor also argues that, in determining whether he was a significant
defendant, the district court erred in not considering his ability to pay the potential
judgment—plaintiffs are seeking more than $900 million in damages. He
maintains that CAFA requires the district court to consider his finances in order to
find him significant. We disagree.
As explained previously, in addition to the requirement that two-thirds of the
proposed class be citizens of the same state, CAFA’s local controversy exception
8
But plaintiffs are not without a remedy. They could conduct a survey of the potential
class. See, e.g., In re Sprint Nextel Corp., 593 F.3d at 675–76; Myrick, 764 F.3d at 665. And to
prove their intent to remain, they could submit traditional forms of proof of intent for the court to
consider, like the location of real and personal property, business ownership, employment
records, payment of taxes, voter registration, vehicle registration, driver’s license, sworn
statements of intent, etc. See, e.g., Sunseri, 412 F.3d at 1249.
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requires plaintiffs to show that at least one defendant “from whom significant relief
is sought” and “whose alleged conduct forms a significant basis for the claims” is a
“citizen of the state in which the action was originally filed.” 28 U.S.C.
§ 1332(d)(4)(A)(i)(II). Such an individual is termed the “significant defendant.”
The district court found that Boker is a significant defendant for several
reasons.9 First, the complaint seeks joint and several liability against both Bokor
and MMI for all damages. Second, the district court determined that there was “no
evidence that Bokor is any less or more significant with respect to liability . . .
[n]or [was] there anything that would indicate that Bokor with his various entities
is any less capable of paying a potential judgment than MMI.” Finally, the district
court concluded that whether Bokor’s action forms a “‘significant basis’ . . . rests
on the alleged scheme that contemplates each Defendant as equally culpable.”
Bokor does not dispute these findings. Rather, his only objection is that the
district court failed to consider his ability to pay any potential judgment. In
support of his argument that the district court was required to consider his ability to
pay, Bokor relies on (1) our decision in Evans, (2) an unpublished district court
opinion from the Western District of Louisiana, and (3) legislative history.10 To be
9
Because MMI is not a Florida citizen, the district court could not remand the action to
Florida unless it determined Bokor, a Florida citizen, is a significant defendant.
10
We need not consider the unpublished district court opinion because that court’s
opinions are not binding upon us. And legislative history is anathema to sound statutory
analysis. See Conroy v. Aniskoff, 507 U.S. 511, 519 (1993) (Scalia, J., concurring) (“The
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sure, the dicta in Evans stated: “whether a putative class seeks significant relief
from an in-state defendant includes not only an assessment of how many members
of the class were harmed by the defendant’s actions, but also a comparison of the
relief sought between all defendants and each defendant’s ability to pay a potential
judgment.” 449 F.3d at 1167 (quoting Robinson v. Cheetah Trans., No. Civ.A. 06-
0006, 2006 WL 468820, at *3 (W.D. La. Feb. 27, 2006)). But before we rely on
dicta, we must turn to the statute itself.
We review de novo issues of statutory construction. Scimone v. Carnival
Corp., 720 F.3d 876, 880 (11th Cir. 2013). “As in any case of statutory
construction, our analysis begins with the ‘language of the statute.’ And where the
statutory language provides a clear answer, it ends there as well.” Owens v.
Samkle Auto. Inc., 425 F.3d 1318, 1321 (11th Cir. 2005) (quoting Hughes Aircraft
Co. v. Jacobson, 525 U.S. 432, 438 (1999)).
The significant defendant provision is unambiguous in its requirement that
the defendant be one “from whom significant relief is sought by members of the
plaintiff class.” 28 U.S.C. § 1332(d)(4)(A)(i)(II)(aa) (emphasis added). That
requirement does not equate to a defendant from whom significant relief may be
greatest defect of legislative history is its illegitimacy. We are governed by laws, not by the
intentions of legislators. . . . If one were to search for an interpretive technique that, on the
whole, was more likely to confuse than to clarify, one could hardly find a more promising
candidate than legislative history.”).
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obtained. See Coffey v. Freeport McMoran Copper & Gold, 581 F.3d 1240,
1244−45 (10th Cir. 2009) (“The statutory language is unambiguous, and a
‘defendant from whom significant relief is sought’ does not mean a ‘defendant
from whom significant relief may be obtained.’”) Nothing in the statute indicates
that district courts must conduct a factual inquiry into whether a defendant has the
financial means to pay the damages alleged in the complaint. Thus, CAFA does
not require the district court to examine a defendant’s ability to pay based on the
unambiguous plain meaning of the statute’s text. And Bokor does not dispute that
under this interpretation of the statute, he qualifies as a significant defendant.
Thus, because we agree with the district court’s interpretation of the statute, we
affirm the district court’s conclusion that plaintiffs satisfied the “significant
defendant” requirement in § 1332(d)(4)(A)(i)(II)(aa).
Because we find that plaintiffs failed to meet the local controversy
exception’s state citizenship requirement, however, the district court erred in
remanding this matter to state court.
B. Discretionary Exception
To the extent that the district court also determined that CAFA’s
discretionary exception applied, we now examine this exception.
As its name implies, the discretionary exception, unlike the local
controversy exception, leaves the decision to remand largely up to the discretion of
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the district court. However, in order to exercise that discretion, the district court
must find two preliminary conditions are met: (1) greater than one-third but less
than two-thirds of the aggregate members are citizens of the state in which the
class action was originally filed; and (2) the primary defendants are citizens of the
state in which the class action was originally filed. 28 U.S.C. § 1332(d)(3). Bokor
argues that neither threshold requirement was met in this case. We agree.
1. Percentage of Florida Citizens
The district court implicitly found that the plaintiffs met the first condition
of the discretionary exception—that greater than one-third but less than two-thirds
of the class members are Florida citizens—based on the same evidence it relied on
in its analysis under the local controversy exception. As explained previously, our
review of the evidence, however, determined that the plaintiffs’ evidence failed to
prove the citizenship of any member of the class. Thus, that same evidence failed
to establish that greater than one-third of the class are Florida citizens for purposes
of the discretionary exception. See Preston II, 485 F.3d at 816 (“The same legal
principles apply to the discretionary jurisdiction provision as apply to the local
controversy . . . exception[]. Despite the burden to prove a lesser percentage of
class members were citizens of Louisiana, which party bears the burden of proof
and the sufficiency of evidence necessary to satisfy the citizenship requirements
remains consistent throughout either analysis.”).
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2. Primary Defendant
Finally, Bokor contends that the discretionary exception is unavailable
because MMI is a primary defendant but not a Florida citizen. The district court,
however, did not address the discretionary exception’s requirement that all
“primary defendants” are Florida citizens. 11 We do so now.
We recently grappled with what it means to be a “primary defendant” under
CAFA in Hunter v. City of Montgomery, Alabama, 859 F.3d 1329 (11th Cir. 2017).
We held that in deciding whether a defendant is a “primary defendant,” a court
must ask “whether, given the claims asserted against the defendant, [the defendant]
has potential exposure to a significant portion of the class and would sustain a
substantial loss as compared to other defendants if found liable.” Id. (quoting
Vodenichar v. Halcon Energy Props., Inc., 733 F.3d 497, 505–06 (3d Cir. 2013)).
Based on the allegations in plaintiffs’ complaint, MMI clearly is a primary
defendant. Plaintiffs assert three causes of action against MMI—the same number
11
Instead of addressing this threshold primary defendant requirement, the district court
proceeded straight to the statute’s six discretionary factors. It may have been the case that the
district court assumed that the discretionary exception’s “primary defendant” analysis equates to
the “significant defendant” analysis under the local controversy exception. It does not.
As explained previously, in order for the discretionary exception to apply, the district
court must first find two preliminary conditions are met: (1) greater than one-third but less than
two-thirds of the aggregate members are citizens of the state in which the class action was
originally filed; and (2) the primary defendants are citizens of the state in which the class action
was originally filed. See 28 U.S.C. § 1332(d)(3). Thus, both the percentage of Florida citizens
and the primary defendant requirements must be found before the court can consider the six
discretionary factors.
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as they assert against Bokor. And plaintiffs seek to hold MMI and Bokor jointly
and severally liable for more than $900 million in alleged damages: MMI has
significant exposure and can potentially sustain at least the same loss as Bokor.
But MMI is not a Florida citizen. MMI’s citizenship thus destroys plaintiffs’
ability to invoke the discretionary exception.
Plaintiffs put forth two arguments to lead us away from this conclusion.
First, plaintiffs counter that MMI is a corporation and therefore vicariously liable
for the actions of employees, so it cannot be a primary defendant as compared to
Bokor, who is directly liable for his own actions. Plaintiffs do not provide any
authority for this argument and nothing in the statute or case law interpreting the
statute indicates that courts should view individuals and corporations differently
for purposes of determining primary defendants under CAFA’s discretionary
exception. Second, plaintiffs argue that MMI is not a primary defendant because it
did not steer this litigation; rather, MMI “simply joined” Bokor’s motion to remove
and Bokor’s opposition to plaintiff’s motion to remand and only Bokor filed this
appeal. Again, plaintiffs do not cite any authority to show why these facts should
alter the “primary defendant” analysis above and the statute does not contemplate
such an inquiry. Thus, to the extent that the remand order was based on the
discretionary exception, the district court erred in failing to find that MMI is a
primary defendant and not a Florida citizen.
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REVERSED and REMANDED for further proceedings consistent with
this opinion.
35