Preston v. Tenet Healthsystems Mem'l Med. Ctr., Inc. - 485 F.3d 804 (5th Cir. 2007

Rule:

Each Class Action Fairness Act of 2005 exception requires the court to make an objective factual finding regarding the percentage of class members that were citizens of the forum state at the time of filing the class petition. The local controversy and home state exceptions to federal jurisdiction are separate and distinct statutory provisions with a common requirement -- greater than two-thirds of the members of all proposed plaintiff classes in the aggregate must be citizens of the state in which the action was originally filed. 28 U.S.C.S. § 1332(d).

Facts:

Plaintiffs Elmira Preston, Howard Preston, Rose Lefrance Preston, Sheryl Preston, Deborah Mazie, et al. represented a class of patients and the relatives of deceased and allegedly injured patients hospitalized at the defendant-hospital, Tenet Healthsystems Memorial Medical Center, Inc., when Hurricane Katrina made a landfall. Defendant owned and operated the hospital, and the defendant care center, LifeCare, leased the seventh floor of the facility for an acute care center. Plaintiffs brought suit against the defendant asserting claims for negligence and intentional misconduct, reverse patient dumping under the Emergency Medical Treatment and Active Labor Act, 42 U.S.C. § 1395dd, and involuntary euthanization. Plaintiffs alleged that defendant failed to develop and implement an evacuation plan for the patients. According to the petition, the defendant’s and care center’s failure to maintain the premises and timely evacuate the facility resulted in the deaths and injuries of hospitalized patients. While plaintiffs withdrew their remand motion, the defendant care center continued to seek remand. Thus, it had to show by a preponderance of the evidence that at least one-third of the plai8ntiffs were Louisiana citizens when the complaint was filed. Plaintiffs then named the care center in the amended petition for damages. Defendant care center moved to remand this class action lawsuit under the local controversy exception of the Class Action Fairness Act of 2005, 28 U.S.C. § 1332(d). 

Issue:

Was the district court’s judgment in granting the defendant’s motion to remand under the local controversy exception of the Class Action Fairness Act of 2005, 28 U.S.C. § 1332 (d) correct?

Answer:

Yes. The court affirmed the district court's judgment.

Conclusion:

The court recognized that Congress crafted the Class Action Fairness Act of 2005 to exclude only a narrow category of truly localized controversies. The exceptions provide a statutory vehicle for the district courts to ferret out the controversy that uniquely affects a particular locality at the exclusion of all others. This particular Hurricane Katrina case symbolizes a quintessential example of Congress' intent to carve-out exceptions to CAFA's expansive grant of federal jurisdiction when our courts confront a truly localized controversy. The court then determined that based on the medical records, affidavits, and attending factual circumstances, the district court did not err in finding that one-third of the class members were citizens of Louisiana at the time of filing suit. Accordingly, the court affirmed the district court's judgment.