Mesa v. Enloe Medical Center ( 2021 )

1 2 3 4 5 UNITED STATES DISTRICT COURT 6 EASTERN DISTRICT OF CALIFORNIA 7 8 LINDA MESA and ROBERT CALDWELL, No. 2:20-cv-02483-JAM-KJN individually and on behalf of 9 all others similarly situated, 10 Plaintiffs, ORDER DENYING MOTION TO REMAND 11 v. 12 ENLOE MEDICAL CENTER, and DOES 1 through 100, inclusive, 13 Defendants. 14 15 Before the Court is Linda Mesa and Robert Caldwell’s 16 (“Plaintiffs”) Motion to Remand. Mot. to Remand (“Mot.”), ECF 17 No. 13. Enloe Medical Center (“Defendant”) filed an opposition, 18 Opp’n, ECF No. 14, to which Plaintiff replied, Reply, ECF No. 17. 19 For the reasons set forth below, the Court DENIES Plaintiff’s 20 Motion to Remand.1 21 I. BACKGROUND 22 Defendant Enloe Medical Center (“Enloe”) is a hospital 23 serving patients in Sacramento and Chico, California. See Compl. 24 ¶ 13, Ex. A to Not. of Removal, ECF No. 1-1. Plaintiffs, two 25 California citizens, were patients at Enloe. Compl. ¶¶ 10-11. 26 27 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was 28 scheduled for March 23, 2021. 1 In May 2020, Enloe received notice from its cloud-based 2 service provider, Blackbaud, that Blackbaud had suffered a 3 ransomware attack that resulted in the potential exposure of 4 Enloe’s data. Id. ¶ 20. On September 10, 2020, Enloe sent a 5 letter to Plaintiffs giving them notice of the ransomware attack. 6 Id. 7 In response, Plaintiffs filed this putative class action 8 against both Enloe and Blackbaud in Sacramento County Superior 9 Court. See Compl. Plaintiffs bring three state law claims 10 against Defendants alleging they unlawfully disclosed Plaintiffs’ 11 confidential medical information in violation of: (1) the 12 Confidentiality of Medical Information Act, Cal. Civ. Code § 56 13 et seq., (2) California’s Unfair Competition Law, Cal. Bus. & 14 Prof. Code § 17200 et seq., and for (3) negligence. Id. ¶¶ 14- 15 44. 16 On December 15, 2020, Blackbaud, a citizen of Delaware and 17 South Carolina, filed a Notice of Removal, invoking this Court’s 18 jurisdiction pursuant to the Class Action Fairness Act of 2005 19 (“CAFA”). Not. of Removal ¶ 10, ECF No. 1. Two days later, 20 Plaintiffs voluntarily dismissed Blackbaud, leaving Enloe as the 21 only Defendant. Not. of Voluntary Dismissal, ECF No. 3. On 22 February 4, 2021, Plaintiffs filed the present Motion to Remand. 23 See Mot. 24 II. OPINION 25 A. Legal Standard 26 A civil action brought in state court may be removed by the 27 defendant to a federal district court if the action could have 28 been brought there originally. 28 U.S.C. § 1441(a); see also 1 City of Chicago v. Int’l Coll. of Surgeons, 522 U.S. 156, 163 2 (1997). Under CAFA, federal courts have original jurisdiction 3 over a class action if (1) the parties are minimally diverse, 4 (2) the proposed class has more than 100 members, and (3) the 5 aggregated amount in controversy exceeds $5 million. 28 U.S.C. 6 § 1332(d)(2); see also Kuxhausen v. BMW Fin. Servs. NA LLC, 707 7 F.3d 1136, 1139 (9th Cir. 2013). 8 An exception to federal jurisdiction under CAFA is the 9 “local controversy” exception; and if the requirements of the 10 local controversy exception are met, the district court must 11 decline to exercise jurisdiction. 28 U.S.C. § 1332(d)(4). The 12 local controversy exception applies to: “(i) a class action in 13 which (I) greater than two-thirds of the members of all proposed 14 plaintiff classes in the aggregate are citizens of the State in 15 which the action was originally filed; (II) at least 1 defendant 16 is a defendant— (aa) from whom significant relief is sought by 17 members of the plaintiff class; (bb) whose alleged conduct forms 18 a significant basis for the claims asserted by the proposed 19 plaintiff class; and (cc) who is a citizen of the State in which 20 the action was originally filed; and (III) principal injuries 21 resulting from the alleged conduct or any related conduct of 22 each defendant were incurred in the State in which the action 23 was originally filed; and (ii) during the 3-year period 24 preceding the filing of that class action, no other class action 25 has been filed asserting the same or similar factual allegations 26 against any of the defendants on behalf of the same or other 27 persons.” Id. “The local controversy exception to CAFA 28 jurisdiction is a narrow exception, and Plaintiffs bear the 1 burden of establishing that it applies.” Allen v. Boeing Co., 2 821 F.3d 1111, 1116 (9th Cir. 2016). If the exception applies, 3 the district court must remand the case to state court. Id. 4 B. Analysis 5 As an initial matter, Plaintiffs argue in their Motion that 6 the Court does not have federal question jurisdiction. Mot. at 7 5-7. In opposition, Defendant concedes this point, stating 8 federal question was not the basis for removal. Opp’n at 4, 9 n.1. Because the parties agree the Court does not have federal 10 question jurisdiction, the Court discusses below only what is 11 disputed: whether the Court retains jurisdiction under CAFA. 12 1. Minimal Diversity 13 Plaintiffs argue that the Court lacks jurisdiction under 14 CAFA because following Plaintiffs’ voluntary dismissal of 15 Defendant Blackbaud, minimal diversity – a required element of 16 CAFA jurisdiction under 28 U.S.C. § 1332(d)(2) – no longer 17 exists. Mot. at 4-5; Reply at 2-3. Defendant counters that the 18 relevant inquiry is not whether minimal diversity exists now, 19 but whether minimal diversity existed at the time of removal; 20 and it is undisputed that minimal diversity existed when 21 Blackbaud removed the case. Opp’n at 3-6 (emphasis added). 22 First, the Court agrees with Defendant’s characterization 23 of the well-settled law that minimal diversity is assessed at 24 the time of removal. Opp’n at 4-6 (collecting authority holding 25 that minimal diversity for CAFA jurisdiction is determined at 26 the time of removal). As another Eastern District Court has 27 explained: “CAFA, a statute favoring federal jurisdiction, was 28 drafted with the understanding that if minimal diversity exists 1 at the time of removal, jurisdiction could not be divested, even 2 if the situation changed as a result of a later event.” Clark 3 v. WorldMark, The Club, No. 1:18-cv-01661-LJO, 2019 WL 1023887, 4 at *6 (E.D. Cal. Mar. 4, 2019) (internal quotations and 5 citations omitted). In reply, Plaintiffs do not address Clark 6 or the many other cases Defendant cites to for the proposition 7 that diversity is assessed at the time of removal. See Reply. 8 Instead, Plaintiffs only discuss and attempt, but fail, to 9 distinguish one case at length: Waller v. Hewlett-Packard Co., 10 No. 11-cv-04540-LAB, 2012 WL 1987397 (S.D. Cal. June 4, 2012). 11 Mot. at 4-5; Reply at 3. 12 Second, applying this rule, the Court finds that at the 13 time of removal, minimal diversity clearly existed. Under CAFA, 14 minimal diversity exists where “any member of a class of 15 plaintiffs is a citizen of a State different from any 16 defendant.” Ehrman v. Cox Commc’ns Inc., 932 F.3d 1223, 1226 17 (9th Cir. 2019). Here, when Blackbaud removed the case on 18 December 15, 2020, minimal diversity existed because named 19 Plaintiffs, Linda Mesa and Robert Caldwell, are California 20 citizens, and Blackbaud is a citizen of Delaware and South 21 Carolina. See Not. of Removal ¶¶ 11-12 (citing to Compl. ¶¶ 10- 22 11, 14). Thus, at the time of removal, at least two members of 23 the class were “citizens of a State different from [a] 24 Defendant.” Ehrman, 932 F.3d at 1226. That Plaintiffs 25 voluntarily dismissed Blackbaud two days after Blackbaud removed 26 the case - thereby leaving only parties with California 27 citizenship - does not change the fact that at the time of 28 removal, minimal diversity existed. 1 Because the settled caselaw dictates that minimal diversity 2 is assessed at the time of removal and because here minimal 3 diversity did exist at the time of removal, the Court retains 4 jurisdiction under CAFA despite Plaintiffs’ dismissal of 5 Blackbaud. 6 2. Local Controversy Exception 7 Plaintiffs next argue the case should be remanded because 8 the local controversy exception to CAFA jurisdiction applies. 9 Mot. at 4-5; Reply at 3-5. Defendant advances two separate 10 arguments as to why this exception does not apply. Opp’n at 6- 11 10. 12 First, Defendant argues that by failing to raise the local 13 controversy exception within 30 days after the time of removal, 14 Plaintiffs have waived it. Opp’n at 7-8. In their reply brief, 15 Plaintiffs do not address Defendant’s waiver arguments. See 16 Reply. The Court finds Plaintiffs’ failure to address 17 Defendants’ legal arguments itself constitutes waiver. See e.g. 18 Resnick v. Hyundai Motor Am., Inc., 2017 WL 1531192 at *22 (C.D. 19 Cal. Apr. 13, 2017) (“Failure to oppose an argument raised in a 20 motion to dismiss constitutes waiver of that argument.”). 21 Second, Defendant argues that even if the Court were to 22 overlook the waiver issue, Plaintiffs still would not be able to 23 establish all the elements required for the local controversy 24 exception to apply. Opp’n at 8-10. Specifically, Defendant 25 contends Plaintiffs “cannot show that Enloe’s conduct formed a 26 significant basis of their requested relief or that no other 27 class actions asserting the same or similar factual allegations 28 have been filed against Blackbaud related to the data privacy 1 incident.” Id. at 8. Again, in their reply brief, Plaintiffs do 2 not address Defendant’s arguments about whether 1) Enloe’s 3 conduct formed a significant basis of Plaintiffs’ requested 4 belief, and whether 2) any other class actions have been filed 5 asserting the same or similar factual allegations against any of 6 the defendants on behalf the same or other persons. See Reply. 7 Significantly, both of these elements are required for the local 8 controversy exception to apply. 28 U.S.C. § 9 1332(d)(4)(i)(II)(bb) (“significant basis” element); 28 U.S.C. 10 § 1332(d)(4)(ii) (“no other class actions” element). In failing 11 to address Defendant’s arguments about these two necessary 12 elements, Plaintiffs consequently fail to carry their burden of 13 establishing the local controversy exception applies. Allen, 821 14 F.3d at 1116. 15 Finally, Plaintiffs request “the opportunity to seek 16 jurisdictional discovery regarding the citizenship of the 17 putative class members” in the event the Court is unable to 18 determine whether the local controversy exception applies. 19 Reply at 5. However, in their reply, Plaintiffs did not proffer 20 any facts that might lead the Court to believe they could 21 establish Enloe’s conduct formed a significant basis of 22 Plaintiffs’ requested belief as required under § 1332(d)(4)(i) 23 or that no other class actions have been filed asserting the 24 same or similar factual allegations against any of the 25 defendants on behalf the same or other persons as required under 26 § 1332(d)(4)(ii). Because Plaintiffs failed to show they could 27 establish the local controversy exception applies even if they 28 were granted limited discovery regarding citizenship, their em EIEIO IE RII IIE EIEIO IEE REE IE IGE II ES NESS EE 1 request for limited jurisdictional discovery is denied. 2 Til. ORDER 3 For the reasons set forth above, the Court DENIES 4 Plaintiff’s Motion to Remand this case to the Sacramento County 5 Superior Court. 6 IT IS SO ORDERED. 7 Dated: March 29, 2021 kA 9 teiren staves odermacr 7008 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28