Williams v. Homeland Insurance Company of New York

Homeland Insurance Co. appeals the district court's remand of a class action to Louisiana state court. Williams submitted evidence identifying a total class of 1,388 members and showing that 1,055 of the 1,388 (or 76 percent) are business entities incorporated or organized under Louisiana law. Homeland offers two fact-intensive arguments to suggest that the above 76 percent calculation is error, and the correct percentage of Louisiana citizens should either be 45.4 percent or 65.4 percent. First, Homeland argues that many of the 1,055 should no longer count as Louisiana citizens because they are inactive or not in good standing with the state. However, inactive corporations remain citizens of their state of incorporation, which in this case is Louisiana. Second, Homeland argues that the percentage of Louisiana citizens still falls to 65.4 percent by removing only the more problematic cases, such as entities that allegedly no longer exist. Homeland's math is incorrect because it removes the non-existent companies from the numerator of Louisiana citizens without also removing them from the denominator of total plaintiffs. The local controversy exception requires a local defendant from whom significant relief is sought; and whose alleged conduct forms a significant basis for the claims asserted. Williams satisfied this requirement. A class arbitration is not a class action, and consequently, a prior class arbitration does not frustrate the CAFA exception. The district court's judgment is affirmed. 5th U.S. Circuit Court of Appeals, No. 11-30646, 09-19-2011.