Mass Action Remanded to Montana State Court Based Upon Local Controversy Exception

MONTANA — Nearly two hundred plaintiffs filed a lawsuit in Montana state court against BNSF Railway Company (BNSF) and its managing agent, John Swing. BNSF removed the cases as a mass action, as they all arose out of exposure from W.R. Grace’s operations in Libby, Montana. The plaintiffs were all Montana residents and argued the case was improperly removed because Mr. Swing was also a resident of the state. Magistrate Judge John Johnston entered Findings and Recommendations in the matter on January 23, 2018. Both sides lodged objections to the Findings and Recommendation.

The district court reviewed the matter de novo. A “mass action” was a class action removable to federal court if the following elements were met: 1) numerosity: the action must involve the monetary claims of 100 plaintiffs or more; 2) the amount in controversy: $5,000,000 or more in the aggregate; 3) diversity: minimal diversity must be met; and 4) commonality: plaintiffs’ claims involve common questions of law and fact. The plaintiffs argued that their complaint was a placeholder to preserve the statute of limitations and not to assert a joint claim. The defendants countered that nothing in the pre-removal pleadings indicated that the plaintiffs intended to try their claims separately. Judge Johnston sided with the defendants and determined the case was a mass action, and removal was therefore proper.

However, the plaintiffs also argued that the local controversy exception applied. This rule stated that if two-thirds of the plaintiffs were citizens of the state in which the action was filed, the district court shall decline jurisdiction if: 1) at least one defendant from whom relief is sought was a citizen of the state in which the action was originally filed and the alleged conduct of that one defendant also occurred in the state; or 2) the primary defendants were citizens of the state in which the action was originally filed. Judge Johnston found that the plaintiffs had met the two-thirds requirement, and further, that they sought significant relief from Mr. Swing, an uncontested resident of Montana. Finally, the plaintiffs cleared the final hurdle for remand and demonstrated that no other similar class actions had been filed against any of the defendants in the last three years.

Based on these facts, the court found that the local controversy exception applied. On October 15, 2018, the district court adopted the Findings and Recommendations in full, and remanded the case to state court.

Read the full case decision here.