1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 JULIE JONES, individually and on behalf Case No.: 3:23-cv-1267-JES-BGS of all others similarly situated, 12 ORDER DENYING PLAINTIFF’S Plaintiffs, 13 MOTION TO REMAND AND v. REQUEST FOR JURISDICTIONAL 14 DISCOVERY TONAL SYSTEMS, INC., and DOES 1- 15 100, inclusive, 16 Defendants. 17 18 19
20 I. BACKGROUND 21 Before the Court is Plaintiff Julie Jones’ motion to remand to state court her class 22 action against Defendants Tonal Systems, Inc. (“Tonal”) and John Does 1-100 pursuant 23 to the mandatory home-state controversy exception of the Class Action Fairness Act 24 (“CAFA”). 28 U.S.C. § 1332(d)(4)(B). Tonal is a California-headquartered manufacturer 25 of internet-enabled home fitness equipment. Complaint, ECF No. 1-2 ¶ 4. Jones’ 26 Complaint, filed originally in the Superior Court of California, accuses Tonal of 27 “allow[ing] Third Parties to “wiretap and eavesdrop on the chat conversations of all its 28 1 website visitors” in violation of the California Invasion of Privacy Act (“CIPA”), Cal. 2 Penal Code §§ 630-638; California’s Unfair Competition Law (“UCL”), Cal. Bus. & 3 Prof. Code § 17200, et seq.; and the California Constitution’s right to privacy provision, 4 Cal. Const. art. I, § 1. Compl. ¶ 13. Defendants removed the action to this Court, and 5 Plaintiffs timely filed the instant motion to remand it. For the foregoing reasons, the 6 motion is DENIED. 7 II. PLAINTIFF’S BURDEN UNDER THE MANDATORY HOME STATE 8 CONTROVERSY EXCEPTION TO CAFA 9 CAFA vests federal district courts with original jurisdiction over class actions of 10 100 or more members with minimal diversity and an aggregate amount in controversy 11 exceeding $5,000,000. 28 U.S.C. § 1332(d)(2), (d)(5). CAFA contains two mandatory 12 exceptions under which district courts “shall decline to exercise jurisdiction”—the “local 13 controversy” exception and the “home-state controversy” exception. 28 U.S.C. § 14 1332(d)(4). The parties agree that only the latter is in dispute. ECF No. 19 at 1, fn. 1; 15 ECF No. 20 at 2, fn. 1. Under the home-state controversy exception, federal district 16 courts must decline jurisdiction over actions with 100 or more members and more than 17 $5,000,000 in controversy when “two-thirds or more of the members of all proposed 18 plaintiff classes in the aggregate, and the primary defendants, are citizens of the State in 19 which the action was originally filed.” 28 U.S.C. § 1332(d)(4)(B). It is not contested that 20 Tonal is a citizen of California, where Plaintiff filed her case, and the Plaintiff does not 21 dispute that the prospective damage amount underlying defendant’s removal notice 22 surpasses $5,000,000. The questions on this motion, then, are (1) whether Plaintiff has 23 cleared her evidentiary burden to show that two thirds of the plaintiff class are California 24 citizens and (2) whether jurisdictional discovery should be permitted to establish the 25 same. 26 In this Circuit, the party seeking remand (nearly always the plaintiff) bears the 27 burden of establishing that the home-state controversy applies and requires remand. 28 Serrano v. 180 Connect, Inc., 478 F.3d 1018, 1022 (9th Cir. 2007). Plaintiffs must 1 demonstrate by a preponderance of the evidence that the Defendants and at least two 2 thirds of proposed class members in aggregate are California citizens. The burden on the 3 Plaintiff “should not be exceptionally difficult to bear.” Mondragon v. Capital One Auto 4 Finance, 736 F.3d 880, 886. However, “there must ordinarily be facts in evidence to 5 support” findings related to class citizenship. Id., 881-882. 6 A natural person’s state citizenship is determined by her state of domicile. “A 7 person's domicile is her permanent home, where she resides with the intention to remain 8 or to which she intends to return.” Kanter v. Warner-Lambert Co., 265 F.3d 853, 857 (9th 9 Cir. 2001). Residency and citizenship are thus not the same thing. “[A] residential 10 address in California does not guarantee that the person's legal domicile was in 11 California.” King v. Great American Chicken Corp., Inc., 903 F. 3d 875, 879 (9th Cir. 12 2018). Further, Mondragon declined to address or adopt a presumption that residential 13 information constitutes prima facie evidence of domicile. Mondragon at 885-886. It said 14 only that district courts are to “consider ‘the entire record’ to determine whether evidence 15 of residency can properly establish citizenship.” Id. at 879. 16 Absent a factual stipulation that the two-thirds requirement has been met, such a 17 finding can at least in theory be made from the class definition alone. “A pure inference 18 regarding the citizenship of prospective class members may be sufficient if the class is 19 defined as limited to citizens of the state in question, but otherwise such a finding should 20 not be based on guesswork.” Mondragon at 881-882 (9th Cir. 2013). The Ninth Circuit 21 has construed “guesswork” broadly in this context, and acknowledged that Plaintiff’s 22 burden may “require evidentiary proof of propositions that appear likely on their face.” 23 Id. at 884. In Mondragon, the Court explicitly found it “likely that most of the 24 prospective class members—we would guess more than two-thirds of them—were 25 California citizens at the time the lawsuit was filed,” and then vacated the district court’s 26 remand order. Id. Five years later in King, the Ninth Circuit again vacated a remand order 27 where the defendant had already stipulated that “at least 67%” of the employees making 28 up the putative class had last known residential addresses in California. 903 F. 3d 875, 1 876. The Court reasoned that the defendant’s stipulation left too narrow of a “cushion” 2 between the § 1332(d)(4) exception’s two-thirds requirement and the possibility that 3 putative class members’ residential addresses would not indicate California citizenship— 4 whether because class members had moved, were not U.S. citizens, or held California 5 addresses on a temporary basis. Id. at 879. 6 In support of her remand motion, the Plaintiff points to the class definition and 7 “common sense,” as well as the Court’s ability to make “reasonable inferences from facts 8 in evidence.” ECF No. 20 at 2, citing Mondragon. Plaintiffs have defined the class as: 9 All persons within the state of California who within the statute of limitations period: (1) communicated with Defendant via the chat feature on 10 the Website, and (2) whose communications were recorded and/or 11 eavesdropped upon in real time by Drift or any other third party without prior consent. Compl. ¶ 32 (ECF No. 1-2). 12
13 The class definition is thus not limited to California citizens. Instead, Plaintiff infers that 14 because Tonal makes “home fitness” equipment (emphasis original), more than two 15 thirds of people accessing the Defendant’s customer service chat feature while in 16 California also reside and are domiciled there.
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 JULIE JONES, individually and on behalf Case No.: 3:23-cv-1267-JES-BGS of all others similarly situated, 12 ORDER DENYING PLAINTIFF’S Plaintiffs, 13 MOTION TO REMAND AND v. REQUEST FOR JURISDICTIONAL 14 DISCOVERY TONAL SYSTEMS, INC., and DOES 1- 15 100, inclusive, 16 Defendants. 17 18 19
20 I. BACKGROUND 21 Before the Court is Plaintiff Julie Jones’ motion to remand to state court her class 22 action against Defendants Tonal Systems, Inc. (“Tonal”) and John Does 1-100 pursuant 23 to the mandatory home-state controversy exception of the Class Action Fairness Act 24 (“CAFA”). 28 U.S.C. § 1332(d)(4)(B). Tonal is a California-headquartered manufacturer 25 of internet-enabled home fitness equipment. Complaint, ECF No. 1-2 ¶ 4. Jones’ 26 Complaint, filed originally in the Superior Court of California, accuses Tonal of 27 “allow[ing] Third Parties to “wiretap and eavesdrop on the chat conversations of all its 28 1 website visitors” in violation of the California Invasion of Privacy Act (“CIPA”), Cal. 2 Penal Code §§ 630-638; California’s Unfair Competition Law (“UCL”), Cal. Bus. & 3 Prof. Code § 17200, et seq.; and the California Constitution’s right to privacy provision, 4 Cal. Const. art. I, § 1. Compl. ¶ 13. Defendants removed the action to this Court, and 5 Plaintiffs timely filed the instant motion to remand it. For the foregoing reasons, the 6 motion is DENIED. 7 II. PLAINTIFF’S BURDEN UNDER THE MANDATORY HOME STATE 8 CONTROVERSY EXCEPTION TO CAFA 9 CAFA vests federal district courts with original jurisdiction over class actions of 10 100 or more members with minimal diversity and an aggregate amount in controversy 11 exceeding $5,000,000. 28 U.S.C. § 1332(d)(2), (d)(5). CAFA contains two mandatory 12 exceptions under which district courts “shall decline to exercise jurisdiction”—the “local 13 controversy” exception and the “home-state controversy” exception. 28 U.S.C. § 14 1332(d)(4). The parties agree that only the latter is in dispute. ECF No. 19 at 1, fn. 1; 15 ECF No. 20 at 2, fn. 1. Under the home-state controversy exception, federal district 16 courts must decline jurisdiction over actions with 100 or more members and more than 17 $5,000,000 in controversy when “two-thirds or more of the members of all proposed 18 plaintiff classes in the aggregate, and the primary defendants, are citizens of the State in 19 which the action was originally filed.” 28 U.S.C. § 1332(d)(4)(B). It is not contested that 20 Tonal is a citizen of California, where Plaintiff filed her case, and the Plaintiff does not 21 dispute that the prospective damage amount underlying defendant’s removal notice 22 surpasses $5,000,000. The questions on this motion, then, are (1) whether Plaintiff has 23 cleared her evidentiary burden to show that two thirds of the plaintiff class are California 24 citizens and (2) whether jurisdictional discovery should be permitted to establish the 25 same. 26 In this Circuit, the party seeking remand (nearly always the plaintiff) bears the 27 burden of establishing that the home-state controversy applies and requires remand. 28 Serrano v. 180 Connect, Inc., 478 F.3d 1018, 1022 (9th Cir. 2007). Plaintiffs must 1 demonstrate by a preponderance of the evidence that the Defendants and at least two 2 thirds of proposed class members in aggregate are California citizens. The burden on the 3 Plaintiff “should not be exceptionally difficult to bear.” Mondragon v. Capital One Auto 4 Finance, 736 F.3d 880, 886. However, “there must ordinarily be facts in evidence to 5 support” findings related to class citizenship. Id., 881-882. 6 A natural person’s state citizenship is determined by her state of domicile. “A 7 person's domicile is her permanent home, where she resides with the intention to remain 8 or to which she intends to return.” Kanter v. Warner-Lambert Co., 265 F.3d 853, 857 (9th 9 Cir. 2001). Residency and citizenship are thus not the same thing. “[A] residential 10 address in California does not guarantee that the person's legal domicile was in 11 California.” King v. Great American Chicken Corp., Inc., 903 F. 3d 875, 879 (9th Cir. 12 2018). Further, Mondragon declined to address or adopt a presumption that residential 13 information constitutes prima facie evidence of domicile. Mondragon at 885-886. It said 14 only that district courts are to “consider ‘the entire record’ to determine whether evidence 15 of residency can properly establish citizenship.” Id. at 879. 16 Absent a factual stipulation that the two-thirds requirement has been met, such a 17 finding can at least in theory be made from the class definition alone. “A pure inference 18 regarding the citizenship of prospective class members may be sufficient if the class is 19 defined as limited to citizens of the state in question, but otherwise such a finding should 20 not be based on guesswork.” Mondragon at 881-882 (9th Cir. 2013). The Ninth Circuit 21 has construed “guesswork” broadly in this context, and acknowledged that Plaintiff’s 22 burden may “require evidentiary proof of propositions that appear likely on their face.” 23 Id. at 884. In Mondragon, the Court explicitly found it “likely that most of the 24 prospective class members—we would guess more than two-thirds of them—were 25 California citizens at the time the lawsuit was filed,” and then vacated the district court’s 26 remand order. Id. Five years later in King, the Ninth Circuit again vacated a remand order 27 where the defendant had already stipulated that “at least 67%” of the employees making 28 up the putative class had last known residential addresses in California. 903 F. 3d 875, 1 876. The Court reasoned that the defendant’s stipulation left too narrow of a “cushion” 2 between the § 1332(d)(4) exception’s two-thirds requirement and the possibility that 3 putative class members’ residential addresses would not indicate California citizenship— 4 whether because class members had moved, were not U.S. citizens, or held California 5 addresses on a temporary basis. Id. at 879. 6 In support of her remand motion, the Plaintiff points to the class definition and 7 “common sense,” as well as the Court’s ability to make “reasonable inferences from facts 8 in evidence.” ECF No. 20 at 2, citing Mondragon. Plaintiffs have defined the class as: 9 All persons within the state of California who within the statute of limitations period: (1) communicated with Defendant via the chat feature on 10 the Website, and (2) whose communications were recorded and/or 11 eavesdropped upon in real time by Drift or any other third party without prior consent. Compl. ¶ 32 (ECF No. 1-2). 12
13 The class definition is thus not limited to California citizens. Instead, Plaintiff infers that 14 because Tonal makes “home fitness” equipment (emphasis original), more than two 15 thirds of people accessing the Defendant’s customer service chat feature while in 16 California also reside and are domiciled there. After all, if the class members (or at least 17 two thirds of them) did not have permanent homes in California, then they would not 18 have purchased expensive home fitness equipment. ECF No. 9 at 5; ECF No. 20 at 2-3. 19 Plaintiff makes a sensible inference, but the factual contents of her Complaint and 20 motion to remand are less extensive than what Ninth Circuit precedents require for her to 21 meet her burden under the home-state controversy exception. Finding that the home state 22 exception’s two thirds requirement has been met in this case would amount to 23 “guesswork” as the case law has defined it. 24 III. REQUEST FOR JURISDICTIONAL DISCOVERY 25 In the event she does not carry her jurisdictional burden, Plaintiff alternately 26 requests 60 days of “limited jurisdictional discovery” for the purpose of establishing 27 citizenship of more than two-thirds of class members. ECF No. 9-1 at 6-8. The Ninth 28 Circuit has previously said that “any decision regarding jurisdictional discovery is a 1 discretionary one, and is governed by existing principles regarding post-removal 2 jurisdictional discovery, including the disinclination to entertain ‘substantial, burdensome 3 discovery on jurisdictional issues.’” Abrego Abrego v. The Dow Chemical Co., 443 F.3d 4 676, 692 (9th Cir. 2006) (citing S. Rep. No. 109-14 at 44). “In granting discovery, the 5 trial court is vested with broad discretion and will not be reversed except upon the 6 clearest showing that denial of discovery results in actual and substantial prejudice to the 7 complaining litigant.” Data Disc, Inc. v. Systems Technology Associates, Inc., 557 F.2d 8 1280, 1285 n.1 (9th Cir. 1977). The Court’s discretion is further guided by a 9 contemporaneous report of the Senate Judiciary Committee on the interpretation of 10 CAFA: 11 [T]he Committee cautions that these jurisdictional determinations should be made 12 largely on the basis of readily available information. Allowing substantial, 13 burdensome discovery on jurisdictional issues would be contrary to the intent of these provisions to encourage the exercise of federal jurisdiction over class actions. 14 S. Rep. No. 109-14 at 44.1 15 Plaintiff’s motion to remand and subsequent briefing is somewhat vague as to what 16 jurisdictional discovery she seeks. Her motion and Complaint allege that Defendant 17 “possesses ‘Drift Intel’ about each visitor of the Website who used the chat feature.” ECF 18 No. 9-1 at 7; c.f. Compl. ¶ 19. Plaintiff alleges that the Drift Intel “includes the visitor’s 19 IP address and Salesforce record details.” Id. These Salesforce record details, Plaintiff 20 21 1 The Defendants cite the same Senate Report’s admonishment that: 22 in assessing the citizenship of the various members of a proposed class, it would in most cases be 23 improper for the named plaintiffs to request that the defendant produce a list of all class members (or detailed information that would allow the construction of such a list), in many instances a massive, 24 burdensome undertaking that will not be necessary unless a proposed class is certified.
25 ECF 19 at 5-6, 16. The Court notes that producing such a list is a less “massive, burdensome undertaking” today 26 than when the Senate Report was issued in 2005, or when the Abrego Abrego decision was issued in 2006. The Court’s holding today is not based on an aversion to producing lists, but on the indications that the indexes in the 27 Defendant’s possession are unlikely to yield jurisdictionally relevant information. See, e.g., Boschetto v. Hansing, 539 F.3d 1011, 1020 (9th Cir. 2008) (“The denial of [plaintiff-appellant's] request for discovery, which was based 28 on little more than a hunch that it might yield jurisdictionally relevant facts, was not an abuse of discretion.”) 1 states, “will often include physical addresses associated with the visitor.” Id. Her reply 2 brief states that determining residency and location information of Drift chat users “may 3 be accomplished by an aggregated list of residential addresses and IP addresses in 4 Tonal’s records with respect to website visitors who used the chat feature on the [Drift] 5 website during the class period.” ECF No. 20 at 4. At oral argument on this motion, 6 Plaintiff’s counsel further elaborated that jurisdictional discovery would include up to ten 7 interrogatories to Tonal, likely followed by third party subpoenas to Drift. The latter 8 would invite further motions. 9 Tonal, for its part, has provided a Declaration from its Director of Care, Sales, and 10 Marketing Systems stating essentially that mailing address information of its customers 11 and IP address information of Drift chat users are kept in separate places, and that the 12 latter is not in the custody of Tonal. ECF No. 19-3, Ex. D at 1. (“As used by Tonal, there 13 is no input field in the Drift software platform for values associated with chat users’ 14 mailing or residential addresses.”) Tonal further adds that “As a matter of course, Tonal 15 does not collect mailing or residential addresses in Drift or Tonal’s consumer databases 16 based on chat interactions.” Id. 17 Plaintiff’s argument, impliedly, is a problem of aggregation and set logic. It is a bet 18 that the intersection of three lists—a list of all Tonal customers receiving deliveries of 19 their Tonal equipment in California, a second list of all Tonal customers using the Drift 20 chat feature, and a third list of all IP addresses used by customers while accessing the 21 Drift chat feature—would yield a set of potential class members about whom this Court 22 could apply a preponderance of evidence standard to establish whether two thirds are 23 California citizens. This hypothetical set of Tonal customers who (1) have California 24 mailing addresses and (2) used the Drift chat feature and (3) did so with an IP address 25 suggesting that they accessed the site while in California does not amount to the required 26 jurisdictional showing. Instead, it would still invite the Court to speculate (or “guess”) 27 both on the reliability of IP addresses to establish the physical location of a Tonal/Drift 28 1 user? and on the domiciliary status of Tonal customers with California addresses. If the 2 || best version of jurisdictional discovery would not advance Plaintiff's required showing 3 under § 1332(d)(4), and simultaneously would at least begin to resemble the sort of 4 burdensome undertaking disfavored by the CAFA statute and accompanying Senate 5 || Report, then the Court can safely in its discretion deny the request. 6 IV. CONCLUSION 7 Accordingly, the Court DENIES the Plaintiff's motion to remand and request for 8 || jurisdictional discovery (ECF No. 9). 9 IT IS SO ORDERED. 10 1 Dated: January 31, 2024 4a— □□ ae 4, 12 Honorable James E. Sunmons Jr. B United States District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ? The Court does not adopt Defendant’s framing that IP addresses are a per se unreliable indicator of an internet user’s physical location.