Ninth Circuit Clarifies "Local Controversy" Exception in CAFA

Under the Class Action Farness Act, commonly referred to as CAFA, most class actions are subject to federal court jurisdiction.  One important exception is for so-called "local controversies."  In Mondragon v. Capital One Auto Finance (, the Ninth Circuit clarified the standard of proof required to invoke that exception.  The exception is generally invoked if two-thirds of the class members are citizens of the state in which the action is filed and the primary defendants are as well (there is another more complicated version of the exception where some defendants are and others are not citizens of the state where the action was filed).  Accordingly, establishing that two-thirds or more of the class members are citizens of the forum state is a critical component of invoking the exception.  The class plaintiffs bear the burden of proof. In Mondragon, class plaintiff presented no evidence as to the citizenship of the class members; rather, he argued that the exception self-evidently applied because the class was limited to persons who purchased automobiles in California for use and registration in the state.  The Ninth Circuit held that such an inference is improper.  Actual proof of the citizenship of the class is required, unless the class definition is specifically limited to citizens.

While the Court rejected Mondragon's attempt to establish the citizenship of two-thirds of the class with no evidence, the Court indicated that a would-be plaintiff might be able to rely on reasonable inferences and presumptions drawn from evidence submitted, for example that residence of a sufficient number of plaintiffs or proof of citizenship at an earlier point in time might suffice in some circumstances to meet the evidentiary burden.