MCGUIRE v. PACIFICORP (2025)

OPINION AND ORDER DENYING MOTION TO REMAND

Plaintiffs Greg and Katherine McGuire move to remand this putative class action to state court. ECF 12. Plaintiffs originally filed this action in Multnomah County Circuit Court, and Defendants PacifiCorp and Verizon Communications, Inc., removed the case to this Court, invoking this Court's jurisdiction under the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d)(2). Plaintiffs argue that remand is appropriate because both the mandatory “home state” and the “local controversy” exceptions to CAFA jurisdiction apply. See §§ 1332(d)(4). In the alternative, Plaintiff argues that remand is appropriate under the discretionary “home state” exception to CAFA. See § 1332(d)(3).

For the reasons below, this Court denies the motion to remand because none of the CAFA exceptions are applicable. Plaintiffs have not carried their burden to establish that two-thirds of putative class members are citizens of Oregon, a required element of both the mandatory home-state and local controversy exceptions. This Court also finds both the mandatory and discretionary home-state exceptions are inapplicable because Verizon, a foreign corporation, is a “primary defendant.” Finally, this Court finds the local controversy exception is inapplicable because the alleged principal injuries in this case were incurred in both Oregon and California.

BACKGROUND

PacifiCorp owns a fiber-optic wire known as the “Eugene-Delta Fiber Optic Ground wire,” or “FOG wire.” Declaration of Natasha Voloshina (“Voloshina Decl.”), ECF 26, Ex. 2 ¶ 3. This wire, which is attached to the same poles as PacifiCorp's electric transmission lines, runs from Eugene, Oregon, to a PacifiCorp substation located just north of Shasta Lake, roughly paralleling I-5 from Eugene to Redding, California. Id. ¶ 4 & Ex. 1 at 32. PacifiCorp installed the wire in 1991. Declaration of Joseph Leineweber (“Leineweber Decl.”), ECF 24 ¶ 4. Since 1991, PacifiCorp has leased excess fiber-optic capacity on the wire to Verizon. Declaration of Ernest Knudsen, ECF 22 ¶ 4. Verizon makes annual lease payments to PacifiCorp for this capacity. Id. ¶¶ 5, 7.

Plaintiffs own a property in Oregon crossed by the wire. Complaint (“Compl.”), ECF 1-1 ¶ 3. They filed this putative class action complaint on behalf of themselves and other similarly situated landowners in Oregon state court, alleging that PacifiCorp, which has easement agreements allowing the wire to cross the putative class members’ properties, had unlawfully burdened that easement by leasing fiber-optic capacity on the wire to Verizon. Id. ¶¶ 2–11.

The putative class is defined as “[a]ll persons and entities who own or owned real property in Oregon on which PacifiCorp allowed Verizon to use a PacifiCorp fiber optic wire.” Id. ¶ 27. Plaintiffs bring claims for unjust enrichment and trespass against both defendants, as well as claims for breach of contract and breach of the implied covenant of good faith and fair dealing against PacifiCorp. Id. ¶¶ 39–63. Plaintiffs allege damages in excess of $200,000,000 and also seek injunctive relief. Id. ¶¶ 44, 65–66.

Defendants timely removed the action to federal court pursuant to CAFA, 28 U.S.C. § 1332(d). After limited jurisdictional discovery, see ECF 9, Plaintiffs filed their Motion to Remand (“Mot.”), ECF 12.

LEGAL STANDARDS

A defendant may remove to federal court any civil action filed in state court over which the federal court has original jurisdiction. 28 U.S.C. § 1441. CAFA provides that federal district courts shall have original jurisdiction over civil class actions where the matter in controversy exceeds five million dollars, there are one hundred or more putative class members, and “any member of a class of plaintiffs is a citizen of a State different from any defendant.” 28 U.S.C. § 1332(d)(2), (5)(B).

“CAFA was intended to strongly favor federal jurisdiction over interstate class actions.” King v. Great Am. Chicken Corp., Inc., 903 F.3d 875, 878 (9th Cir. 2018). The Supreme Court has explained that, in evaluating whether a case should be remanded, CAFA “should be read broadly, with a strong preference that interstate class actions should be heard in a federal court if properly removed by any defendant.” Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. 81, 89, 135 S.Ct. 547, 190 L.Ed.2d 495 (2014). Thus, while there is typically a strong presumption against removal in general, Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992), the Supreme Court has held that there is no presumption against removal under CAFA, Dart Cherokee, 574 U.S. at 89, 135 S.Ct. 547.

To allow truly intrastate class actions to be heard in state court, CAFA contains several exceptions that allow or require a federal court to decline jurisdiction.¹ 28 U.S.C. A plaintiff invoking one of these exceptions bears the burden of showing by a preponderance of the evidence that the exception applies. Serrano v. 180 Connect, Inc., 478 F.3d 1018, 1021–22 (9th Cir. 2007). “If the applicability of an exception is not shown with reasonable certainty, federal jurisdiction should be retained.” Arbuckle Mountain Ranch v. Chesapeake Energy Corp., 810 F.3d 335, 338 (5th Cir. 2016) (adopting “the general approach from sister circuits”).

DISCUSSION

Plaintiffs acknowledge that this Court has jurisdiction under CAFA based on the statutory requirements. See Mot., ECF 12 at 2. Plaintiffs argue that two CAFA exceptions, commonly known as the mandatory home-state exception and the local controversy exception, require remand. Id. at 8–18. Plaintiffs argue in the alternative that this Court should exercise its discretion to remand under the discretionary home-state exception. Id. at 19–22.

The mandatory home-state exception requires this Court to decline jurisdiction if (1) two-thirds of the putative class are citizens of Oregon, and (2) all “primary defendants” are citizens of Oregon. 28 U.S.C. § 1332(d)(4)(B). The discretionary home-state exception allows this Court to decline jurisdiction if (1) between one-third and two-thirds of the putative class are citizens of Oregon, (2) all “primary defendants” are citizens of Oregon, and (3) a set of six statutory factors weigh in favor of remand. § 1332(d)(3). Finally, the local controversy exception requires this Court decline jurisdiction if (1) two-thirds of the putative class are citizens of Oregon, and (2) the principal injuries were incurred in Oregon. § 1332(d)(4)(A).

This Court first considers the mandatory home-state exception and finds that Plaintiffs have failed to satisfy either element. Plaintiffs have not presented sufficient evidence to show that two-thirds of the putative class are Oregon citizens. This Court also finds that Verizon is a primary defendant; as Verizon is not a citizen of Oregon, the primary defendant element is not satisfied. Verizon's status as a primary defendant also means that remand is unavailable under the discretionary home-state exception, even if Plaintiffs have presented sufficient evidence to establish at least one-third of the putative class are Oregon citizens. Finally, on the local controversy exception, this Court finds that the principal injuries were incurred in both Oregon and California. Because these injuries were not incurred exclusively or uniquely in Oregon, this exception is unavailable. This Court therefore denies the motion to remand, as well as Plaintiffs’ request for fees.

A. Mandatory Home-State Exception

As described above, the mandatory “home state” exception requires a district court to decline to exercise jurisdiction when (1) more than two-thirds of the putative class members are citizens of the state where the action was filed and (2) all “primary defendants” are citizens of the same state. § 1332(d)(4)(B). This Court finds that Verizon, a non-citizen of Oregon, is a primary defendant in this action and that Plaintiffs have not established that two-thirds of the putative class are citizens of Oregon.

1. Citizenship of the Putative Class

This Court finds that Plaintiffs have not carried their burden to show that at least two-thirds of the putative class are citizens of Oregon, for two reasons. First, there is insufficient evidence as to the citizenship of former property owners. Plaintiffs have defined the putative class as including “[a]ll persons and entities who own or owned real property in Oregon on which PacifiCorp allowed Verizon to use a PacifiCorp fiber optic wire.” Compl., ECF 1-1 ¶ 27. Plaintiffs have provided no estimate of the number of former property owners, and only a rough estimate of the percentage of former natural person property owners who are Oregon citizens. Without an estimate of the total size of the class—a denominator—the Court cannot make findings on the percentage of the class that are citizens of Oregon.

Second, even if the class were limited to current property owners, the evidence presented would still be insufficient. An Oregon mailing address and ownership of real property in Oregon, without more, does not establish citizenship or even residency. While this Court does find that the individual class members whose mailing address was listed as their Oregon property are likely domiciled in Oregon, such individuals represent at most 58% of the current individual owners, see Shook Rebuttal Decl., ECF 31 ¶ 11, below the two-thirds threshold for CAFA's jurisdictional exceptions. This Court also finds that Plaintiffs have not provided sufficient evidence to make findings as to the properties owned by trusts or public entities.

a. Plaintiffs’ citizenship evidence

To meet their burden that either the home-state exception or the local controversy exception applies, Plaintiffs must “provide ‘some facts in evidence from which the district court may make findings regarding class members’ citizenship.’ ” Brinkley v. Monterey Fin. Servs., Inc., 873 F.3d 1118, 1121 (9th Cir. 2017) (quoting Mondragon v. Capital One Auto Fin., 736 F.3d 880, 884 (9th Cir. 2013)). Citizenship is an “essentially factual” determination, Lew v. Moss, 797 F.2d 747, 750 (9th Cir. 1986), so at this stage the parties may present “summary judgment-type evidence” to show the citizenship of the class, Vasserman v. Henry Mayo Newhall Mem. Hosp., 65 F. Supp. 3d 932, 980 (C.D. Cal. 2014). The district court's citizenship findings must be based on more than “guesswork,” although the burden of proof on the plaintiff “should not be exceptionally difficult to bear,” and the court is “permitted to make reasonable inferences from facts in evidence” in determining citizenship. Mondragon, 736 F.3d at 882, 886.

Plaintiffs retained a consulting firm to attempt to identify the citizenship of the putative class members. See Declaration of Morgan Shook (“Shook Decl.”), ECF 13. Plaintiffs’ expert relied on parcel and tax lot information maintained by Oregon county assessors’ offices to identify the current owners of all properties crossed by PacifiCorp's fiber-optic wire. Id. ¶ 9 & App'x B. Plaintiffs’ expert identified 639 unique owner name and mailing address combinations. Shook Decl., ECF 13 ¶ 12. Of those addresses, 567, or 88.7%, are located in Oregon. Id.

In a refined analysis, Plaintiffs’ expert identified 60% of the affected parcels as owned by individuals, 19% by trusts, and 15% by corporations. Morgan Shook Rebuttal Declaration (“Shook Rebuttal Decl.”), ECF 31 ¶ 14. For the individual owners, 93% are associated with an Oregon-based mailing address. Id. ¶ 15. The same is true for 94% of the trust-owned parcels and 72% of other business-owned parcels. Id. ¶ 16. Separately, a paralegal for Plaintiffs’ counsel identified the citizenship of each corporate owner; 69 of 91, or 75.8%, have their principal place of business in Oregon. Declaration of Kellyn Green (“Green Decl.”), ECF 32 ¶ 1 & Ex. A.

Plaintiffs’ expert also sought to estimate the locations of past natural person owners of affected properties. Relying on American Community Survey (“ACS”) estimates of migration flows, Plaintiffs’ expert identified that only 11% to 17% of past owners in the four Oregon counties crossed by the wire who recently moved out of their homes left Oregon. Shook Decl., ECF 13 ¶¶ 8, 16. Plaintiffs’ expert also identified ACS data suggesting that homeowners in Census tracts crossed by the fiber-optic wire tended to live in their homes for longer periods of time than the overall rates for their county and state. Id. ¶ 15.

Based on these data, Plaintiffs’ expert concluded that a “substantial majority” of current property owners “are likely residents of Oregon.” Id. ¶ 14. While acknowledging that identifying the current residence of past property owners was less exact, Plaintiffs’ expert also concluded that “most past owners ․ are still more likely to be Oregon residents.” Id. ¶ 16.

b. Number and citizenship of former property owners

Plaintiffs have not provided adequate evidence of the size of the class. In order to determine whether two-thirds of class members are Oregon citizens, “we must first determine the size of the class as a whole.” Brinkley, 873 F.3d at 1121. Here, the putative class consists of “[a]ll persons and entities who own or owned real property in Oregon on which PacifiCorp allowed Verizon to use a PacifiCorp fiber optic wire.” Compl., ECF 1-1 ¶ 27 (emphasis added). PacifiCorp installed the wire at issue in 1991 and has leased capacity on the wire to Verizon since the same year, Leineweber Decl., ECF 24 ¶¶ 4, 7, so the number of former owners over the 34-year operation of the wire is potentially substantial.

Plaintiffs’ expert identifies 812 individuals, corporations, or trusts that currently own parcels. Shook Rebuttal Decl., ECF 31 ¶ 17. But Plaintiffs offer no estimate as to the number of former owners. As the Ninth Circuit held in Brinkley, this omission makes it impossible to determine the total size of the class. See Brinkley, 873 F.3d at 1122; cf., e.g., Adams v. W. Marine Prods., Inc., 958 F.3d 1216, 1223 (9th Cir. 2020) (concluding plaintiff met her burden by, among other evidence, identifying a fixed class size). “[A]bsent ‘some facts in evidence’ regarding the size of the entire class, the district court cannot determine whether two-thirds of all class members are [Oregon] citizens.” Brinkley, 873 F.3d at 1122 (quoting Mondragon, 736 F.3d at 884).

Assume, for example, that Plaintiffs’ estimates are accurate: 90% of all current property owners and 60% of former property owners are Oregon residents.² Reply, ECF 30-1 at 14. If there are more current property owners than former property owners, the class would comfortably clear the two-thirds threshold. But if there are many more former property owners than current owners, the class could fall below the two-thirds requirement. Without knowing the underlying numbers, the Court cannot make factual findings based on these percentages alone. Plaintiffs simply have not presented any evidence at all from which this Court can determine the number of former owners, and thus the size of the total class.

c. Citizenship of current property owners

The evidence Plaintiffs present about the current property owners is also not sufficient to find that over two-thirds of those property owners are citizens of Oregon. The proposed class includes both “persons and entities.” Compl., ECF 1-1 ¶ 27. As to the natural persons included in the class, Plaintiffs present evidence only that they (1) own property in Oregon and (2) have an Oregon mailing address. While Plaintiffs do present evidence from which this Court may infer that 58% of these property owners are residents of Oregon, this number falls below the two-thirds threshold for CAFA's mandatory exceptions. As for the entities in the putative class, Plaintiffs present sufficient evidence to establish that more than two-thirds of the corporations and unincorporated associations are Oregon citizens, but do not carry their burden as to trusts or public entities.

i. Natural persons

The evidence Plaintiffs present about the current property owners is insufficient to find that two-thirds of the class are citizens of Oregon. “To be a citizen of a state, a natural person must first be a citizen of the United States.” Kanter v. Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001). Citizenship is then determined by the person's state of “domicile,” or where he or she resides and intends to remain. See Miss. Band of Choctaw Indians v. Holyfield, 490 U.S. 30, 48, 109 S.Ct. 1597, 104 L.Ed.2d 29 (1989). Many factors, including the location of real property, are relevant to determining domicile, but none are controlling. See Kyung Park v. Holder, 572 F.3d 619, 624–25 (9th Cir. 2009) (citing Lew v. Moss, 797 F.2d 747, 750 (9th Cir. 1986)).

This Court finds that at least 58% of the current natural-person property owners are likely Oregon residents. This number reflects the percentage of property owners whose listed mailing address is the same as the property they own. Shook Rebuttal Decl., ECF 31 ¶ 11. That these owners own and receive mail at the same address strongly supports an inference that they reside at that address. This Court cannot, however, find that more than two-thirds of property owners are Oregon residents based on the declarations submitted by Plaintiff. The pivotal fraction of putative class members—approximately 35% of the individual owners in the putative class—are property owners with an Oregon mailing address different from the address of the property. See id. ¶¶ 11, 15.

Plaintiffs ask this Court to find that every property owner with an Oregon mailing address is an Oregon resident. Reply, ECF 34-1 at 19. This Court cannot do so because “mailing addresses are not a direct proxy for residence.” Adams, 958 F.3d at 1223. While an Oregon residential address may support an inference that a class member is domiciled in Oregon,³ the Court cannot draw the same inference from an Oregon mailing address. See In re Sprint Nextel Corp., 593 F.3d 669, 674 (7th Cir. 2010) (explaining that courts “may not draw conclusions about the citizenship of class members based on things like their ․ mailing addresses”); cf., e.g., Cox v. Holcomb Fam. Ltd. P'ship, No. 3:13-cv-01688-ST, 2014 WL 5462022, at *11 (D. Or. Oct. 26, 2014) (identifying either an Oregon residential address or Oregon voter registration as sufficient to establish residency).

Plaintiffs are correct that, in all likelihood, a significant fraction of these records reflect Oregon citizens. Two-thirds of the putative class members may well be Oregon citizens, and the burden of proof in these cases “should not be exceptionally difficult to bear.” Mondragon, 736 F.3d at 886. But this Court's findings may not be “based on guesswork,” even sensible guesswork. Id. at 884. The Ninth Circuit has acknowledged that this requirement “may result in some degree of inefficiency by requiring evidentiary proof of propositions that appear likely on their face.” Id. But that is the burden that the case law imposes on Plaintiffs, and they have failed to meet it in this case.

Property owners with mailing addresses in Oregon may well be Oregon citizens with “rental properties, secondary homes, or investment properties.” Shook Rebuttal Decl., ECF 31 ¶ 11. But they may also represent individuals who maintain an Oregon mailing address but are not citizens of Oregon, whether because they are not citizens of the United States, because they are legally domiciled elsewhere, or some other reason. See Mondragon, 736 F.3d at 884; King, 903 F.3d at 879–80. Without some additional evidence, such as records of employment, voter registration, driver's licenses, or vehicle registration, this Court cannot find that two-thirds of these individuals are citizens of Oregon. Cf., e.g., Saunders v. DoorDash, Inc., No. 20-cv-5825, 2021 WL 528767, at *5 (N.D. Cal. Feb. 12, 2021) (finding plaintiff established California citizenship when more than two-thirds of class members (1) listed a California address, (2) were employed in California, and (3) had a California driver's license). Plaintiffs simply do not present adequate evidence to carry their burden to show that at least two-thirds of current, natural-person property owners are citizens of Oregon.

ii. Legal entities

Plaintiffs estimate that 19% of the parcels at issue are owned by trusts, 15% are owned by companies, and 5% by public or government entities. Shook Rebuttal Decl., ECF 31 ¶ 14; see also Corrected Declaration of Matthew Hoelle (“Hoelle Decl.”), ECF 39 ¶ 28 (estimating that 35.4% of affected parcels are owned by entities). Each is discussed in turn below.

First, this Court finds that more than two-thirds of corporations and unincorporated associations in the putative class are citizens of Oregon. The citizenship of a corporation, partnership, or LLC is that of the state or states in which it is chartered and has its principal place of business.⁴ See 28 U.S.C. §§ 1332(c)(1), (d)(10). Plaintiffs provide evidence showing that 75.8% of these types of entities in the putative class have their principal place of business in Oregon. Green Decl., ECF 32, Ex. A. This suffices to establish their citizenship.

Plaintiffs do not, however, establish the same as to properties owned by trusts. The citizenship of a trust is determined by the citizenship of its trustees or members, depending on the type of trust. See Demarest v. HSBC Bank USA, N.A., 920 F.3d 1223, 1229 (9th Cir. 2019). Plaintiffs only show that 94% of the trusts are linked to an Oregon mailing address. Shook Rebuttal Decl., ECF 31 ¶ 16. For the reasons discussed above, an Oregon mailing address alone is not sufficient proof of citizenship. A trust may own property or have a mailing address outside the states of citizenship of its trustees or members; a trust may also have multiple trustees or members. There is simply no evidence of the citizenship of any trustees or members in the record. While Plaintiffs suggest it stands to reason that a trust's mailing address is “close to home,” Reply, ECF 30-1 at 20, they present no authority allowing this Court to infer that these trusts are Oregon citizens from an associated mailing address alone.

Finally, Plaintiffs have not carried their burden as to the public and government entities. Plaintiffs’ count of class members repeatedly includes the United States, which is not a citizen of any state,⁵ Hancock Fin. Corp. v. Fed. Sav. & Loan Ins. Corp., 492 F.2d 1325, 1329 (9th Cir. 1974), and the State of Oregon, which is not a citizen of itself, Moor v. Cnty. of Alameda, 411 U.S. 693, 717, 93 S.Ct. 1785, 36 L.Ed.2d 596 (1973). While these public entities do not appear to make up a substantial share of the putative class, Plaintiffs’ estimates of the citizenship of the total class must account for these entities, which have Oregon mailing addresses but are not citizens. See King, 903 F.3d at 876 (noting that stipulation that 67% of class members had California addresses left “very little cushion, if any,” for class members who did not otherwise qualify as California citizens). As discussed above, Plaintiffs do not show that the putative class meets the two-thirds threshold in the first instance with respect to natural persons or trusts.

Because this Court cannot find that two-thirds of natural persons, trusts, or public entities included in the putative class are citizens of Oregon, it ultimately cannot find that two-thirds of the overall class are citizens, even though Plaintiffs have carried their burden as to corporate entities. The mandatory home-state exception therefore cannot apply.

2. Primary Defendants

The home-state exception also applies only when “the primary defendants are citizens of the State in which the action was originally filed.” 28 U.S.C. § 1332(d)(3). This Court finds that CAFA's home-state exception does not apply here because both PacifiCorp and Verizon are primary defendants. Because Verizon is not a citizen of Oregon, this exception is not applicable. See Singh v. Am. Honda Fin. Corp., 925 F.3d 1053, 1068 (9th Cir. 2019) (noting that this exception applies “ ‘only if all primary defendants are citizens of’ the alleged home state” (quoting Vodenichar v. Halcón Energy Props., Inc., 733 F.3d 497, 506 (3d Cir. 2013))).

The term “primary defendant” is not defined in CAFA and “is not an established term of art.” Kearns, 2005 WL 3967998, at *7. Absent other sources of meaning, “the Court turns to CAFA's legislative history.” Beasley v. Lucky Stores, Inc., 379 F. Supp. 3d 1039, 1043 (N.D. Cal. 2019). The report published by the Senate Judiciary Committee accompanying CAFA states that the term refers to to “any person who has substantial exposure to significant portions of the proposed class in the action, particularly any defendant that is allegedly liable to the vast majority of the members of the proposed classes.” S. Rep. 109-14, at 43 (2005), as reprinted in 2005 U.S.C.C.A.N. 3, 41.⁶ District courts in this Circuit have historically cited this language to define the term. See, e.g., Chalian v. CVS Pharmacy, Inc., No. CV 16-08979, 2017 WL 1377589, at *3 (C.D. Cal. Apr. 11, 2017) (quoting Harrington v. Mattel, Inc., No. C07-05110, 2007 WL 4556920, at *5 (N.D. Cal. Dec. 20, 2007)).

The Ninth Circuit's opinion in Singh sets out factors a district court must consider in determining whether a defendant qualifies as a “primary defendant.” 925 F.3d at 1068. These factors include: (1) “whether the defendant is sued directly or alleged to be directly responsible for the harm to the proposed class,” as opposed to defendants who are only secondarily or vicariously liable, such as by indemnification or contribution; (2) “the defendant's potential exposure to the class relative to the exposure of other defendants,” assuming all defendants will be found liable; and (3) any other relevant considerations. See id. (listing the first two factors and noting that courts “should not treat these considerations as exhaustive”). Other relevant considerations, under appropriate circumstances, may include whether the defendant is “able to satisfy a potential judgment,” “is the subject of a significant portion of the claims,” or “is the only defendant in one particular cause of action.” Kendrick v. Xerox State & Local Sols., Inc., No. 18-cv-00213, 2018 WL 1605104, at *4 (N.D. Cal. Apr. 3, 2018) (quoting Sorrentino v. ASN Roosevelt Ctr., LLC, 588 F. Supp. 2d 350, 359 (E.D.N.Y. 2008)); see also Marino, 26 F. Supp. 3d at 953 (reciting the same factors). The overall purpose of this inquiry, which the Ninth Circuit has cautioned should not proceed “mechanistically,” is to determine whether a particular defendant is a “principal, fundamental, or direct” defendant. Singh, 925 F.3d at 1068 (quoting Vodenichar, 733 F.3d at 504).

The first Singh factor, direct responsibility, is satisfied here because the Complaint alleges that Verizon is directly responsible for harm to the class members. The Complaint alleges that Verizon leased space on the fiber-optic wire from PacifiCorp and “concealed from Plaintiffs and the class that it was using the wires.” ECF 1-1 ¶¶ 2, 4. The Complaint further alleges that Verizon entered the class members’ properties, installed equipment on the properties, did construction and maintenance work, and “caus[ed] other burdens on the land,” despite lacking an easement or other right to enter the class members’ properties. Id. ¶¶ 6–7. These are allegations of direct harm to the class members from Verizon's actions. This direct harm, and Verizon's resulting direct liability, make Verizon a primary defendant.

Plaintiffs argue that Verizon is not a primary defendant because its liability is downstream of PacifiCorp's. Mot., ECF 12 at 13–14. Plaintiffs contend that any liability on Verizon's part “depends on a threshold finding that PacifiCorp's conduct was wrongful.” Id. at 13. Plaintiff also argues that Verizon's profits are “at least one step removed” from PacifiCorp's alleged wrongful conduct, and “could not have been obtained without PacifiCorp's predicate misconduct.” Id. But Verizon and PacifiCorp's liability cannot be so easily separated. Unlike in Singh, where one defendant's liability required a “threshold finding” that another defendant acted unlawfully, 925 F.3d at 1069, the liability of PacifiCorp and Verizon is intertwined. Plaintiffs are correct that, without some finding that PacifiCorp exceeded the scope of the easement by leasing access to Verizon, Verizon is unlikely to be liable. But the Complaint also alleges that Verizon entered the class members’ properties, installed equipment on the properties, and in various other ways burdened the land. ECF 1-1 ¶ 7. Absent that direct action by Verizon, it is not clear how PacifiCorp's actions would have concretely injured the putative class—at a minimum, PacifiCorp's liability would be far more limited than the $200,000,000 in damages that Plaintiffs seek in this action.

The second factor, potential exposure to the class, also weighs against remand here. Plaintiffs do assert additional claims for breach of contract against PacifiCorp alone. Compl., ECF 1-1 ¶¶ 51–63. But Plaintiffs seek to recover the same amount—$200,000,000—on each of their claims, id. ¶¶ 44, 50, 57, 63, and seek to hold both PacifiCorp and Verizon jointly and severally liable, id. ¶ 14. Verizon is, in other words, potentially directly liable to every class member for the entire award,⁷ which suggests that Verizon is a primary defendant. See Naki v. Hawai‘i, Nos. 23-00452, 23-00459, 2024 WL 4456803, at *14 (D. Haw. Apr. 5, 2024) (noting that alleging joint and several liability suggested a defendant was a primary defendant).

Plaintiffs sue Verizon directly on their unjust enrichment and trespass theories. Compl., ECF 1-1 ¶¶ 39–50. Plaintiffs’ Complaint, by and large, makes the same allegations against both Defendants. See id. ¶ 31 (alleging “PacifiCorp and Verizon engaged in a common course of conduct”). And Plaintiffs’ Complaint seeks the same relief from both Defendants, without distinction. Verizon is a real target of this lawsuit, and therefore a primary defendant. See, e.g., Morand-Doxzon v. Delaware N. Cos. Sportservice, Inc., No. 20-cv-1258, 2020 WL 6391194, at *5 (S.D. Cal. Nov. 2, 2020) (finding companies were both primary defendants where the complaint made “the same allegations” and sought “the same relief” from both defendants).

Verizon is incorporated in Delaware and has its principal place of business in New York.⁸ Because Verizon is not a citizen of Oregon, the home-state exception cannot apply.

B. Discretionary Home-State Exception

The discretionary “home state” exception allows a district court to decline to exercise jurisdiction when (1) greater than one-third but less than than two-thirds of the putative class members are citizens of the state where the action was filed, (2) all “primary defendants” are citizens of the same state, and (3) a set of six factors favor remand. § 1332(d)(3). For the reasons detailed above, this Court finds that Verizon is a primary defendant, making this exception unavailable. As discussed below, this Court also finds that at least one-third of the putative class are citizens of Oregon, but that the statutory factors do not favor remand.

1. Citizenship of the Putative Class

Although this Court found that the evidence was insufficient to establish that at least two-thirds of the class are Oregon citizens, this Court finds that at least one-third of the putative class members are likely Oregon citizens. As discussed above, this Court found that at least 58% of parcels owned by natural persons and 75.8% of parcels owned by corporations are likely Oregon citizens. Because 60% of parcels are owned by natural persons and 15% are owned by corporations, Shook Rebuttal Decl., ECF 31 ¶ 14, these percentages are more than sufficient to establish that more than one-third of current property owners are Oregon citizens. As for the former owners, both Plaintiffs’ and Defendants’ experts found that more than two-thirds of the former natural person owners are likely Oregon residents. See Shook Decl., ECF 13 ¶ 16 (suggesting that approximately 60% of former property owners are Oregon residents); Hoelle Decl., ECF 39 ¶ 14 (estimating that 56.2% of former property owners are still residents of Oregon). While the absence of evidence about former legal entity property owners is problematic, the Court finds that at least one-third of the putative class members are likely Oregon citizens.

2. Discretionary Home-State Factors

Even though the citizenship requirement is satisfied, this Court declines to exercise its discretion to remand this action. CAFA provides that a district court may decline to exercise jurisdiction “in the interests of justice and looking at the totality of the circumstances,” after considering six enumerated factors. 28 U.S.C. § 1332(d)(3). None of these factors are dispositive. Adams, 958 F.3d at 1224. As with the other jurisdictional exception, the burden of proof rests on the party seeking remand. Mondragon, 736 F.3d at 883.

This Court finds that two of these factors—that the claims asserted involve matters of “interstate interest,” § 1332(d)(3)(A), and that Plaintiffs appear to have pled this action “in a manner that seeks to avoid Federal jurisdiction,” § 1332(d)(3)(C)—weigh heavily against remand under the circumstances of this case.

The claims in this action implicate significant matters of interstate interest given the clear federal interest in interstate communications. The wire runs from Eugene to near Redding and provides communications services for California as well as Oregon. Defendants point out that Plaintiffs seek injunctive relief, which could “impact Verizon's ability to deliver telecommunications traffic from (and within) California and Oregon to locations throughout the entire nation,” Declaration of Mark Julian Wingate, ECF 27 ¶ 2. Although Plaintiffs argue that Defendants have failed to explain how or why injunctive relief would be disruptive, that is a problem of their own making; the Complaint only asks that “Defendants should be enjoined from engaging in the unlawful practices described in this Complaint,” ECF 1-1 ¶ 65, leaving Defendants and this Court to wonder what injunctive relief Plaintiffs actually seek. At this stage, it seems obvious to the Court that an injunction ordering Verizon to stop entering, installing equipment along, or maintaining the wire, see id. ¶ 7, would likely have some adverse consequences for interstate communications.

The third factor also weighs against remand because Plaintiffs appear to have defined the prospective class to avoid federal jurisdiction. This factor examines whether the proposed class “encompasses all of the people and claims that one would expect to include in a class action, as opposed to proposing a class that appears to be gerrymandered solely to avoid federal jurisdiction by leaving out certain potential class members or claims.” S. Rep. No. 109-14, at 37. The wire at issue in this case extends into California, but the Complaint makes no mention of this fact, instead stating only that the wire runs “from the California border through the Willamette Valley.” Compl., ECF 1-1 ¶ 3. The class is limited to property owners “in Oregon,” id. ¶ 27, despite the identical alleged injuries inflicted on identically situated California property owners. Plaintiffs suggest that their reason for this limitation was to avoid differences in state law that “may complicate class certification.” Reply, ECF 34-1 at 22. It is certainly Plaintiffs’ prerogative to pursue only state law claims, but this Court finds it difficult to describe the resulting class as a “natural class.” The exclusion of California property owners from the class, despite an otherwise amorphous class definition sweeping in unknown numbers of former owners, was presumably to avoid this Court's jurisdiction.

The other factors, which include whether the claims are governed by the law of the state in which the action was originally filed, the forum's nexus with the class members, harm, or defendants, the relative citizenship of the putative class members, and the history of other similar class actions, § 1332(d)(3)(B), (D)–(F), are either neutral or provide modest support for applying the home state exception. Considered collectively, however, the six factors in § 1332(d)(3) weigh against applying the discretionary home state exception.

C. Local Controversy Exception

The “local controversy” exception to CAFA jurisdiction requires a district court to decline to exercise jurisdiction when, among other requirements, (1) more than two-thirds of the putative class members are citizens of the state where the action was filed, and (2) the “principal injuries resulting from the alleged conduct or any related conduct of each defendant were incurred in” the forum state. 28 U.S.C. § 1332(d)(4)(A); see Bridewell-Sledge v. Blue Cross of Cal., 798 F.3d 923, 928 (9th Cir. 2015). The purpose of this exception is to ensure that class actions with a local focus remain in state court, reflecting the strong state interest in resolving local disputes. Bridewell-Sledge, 798 F.3d at 928. The Ninth Circuit has cautioned that this exception is “narrow” and not intended to provide a “jurisdictional loophole.” Id. (citation omitted).

As discussed above, this Court finds that Plaintiffs have not established the requisite class citizenship. This Court also finds that the local controversy exception to CAFA jurisdiction is unavailable here because the principal injuries were not exclusively or uniquely incurred in Oregon. The fiber-optic wire at issue runs from Oregon to California, and the alleged harm it inflicts on California property owners is identical to the alleged harm inflicted on the putative class members. Given the potential “interstate ramifications” of this class action, Brinkley, 873 F.3d at 1121 (citation omitted), the local controversy exception is not available.

CAFA itself does not provide a definition of “principal injuries,” and the Ninth Circuit has not directly addressed the meaning of the term. See Beasley, 379 F. Supp. 3d at 1043. The Senate Report that accompanied CAFA explained that this language was intended to require that “all or almost all of the damage caused by defendants’ alleged conduct occurred in the state where the suit was brought,” such that the “impact of the misconduct ․ is localized.” S. Rep. No. 109-14, at 40. Courts interpreting this exception are therefore required to assess whether the conduct alleged in the complaint could have plausibly caused substantial harm beyond the state in which the suit was brought, even if the putative class is limited to citizens of one state. See R.A. ex rel. Altes v. Amazon.com, Inc., 406 F. Supp. 3d 827, 834 (C.D. Cal. 2019) (analyzing whether the “underlying conduct at issue” was “limited to or unique to California”); Aarstad v. BNSF Ry. Co., No. CV-17-72, 2020 WL 1673100, at *2 (D. Mont. Apr. 6, 2020) (noting most Ninth Circuit district courts have adopted a similar approach).

There are two ways in which this standard may be satisfied. First, and most obviously, this requirement may be met when the conduct alleged is truly limited to a single state. See Cheapside Minerals, Ltd. v. Devon Energy Prod. Co., 94 F.4th 492, 500–01 (5th Cir. 2024) (concluding this exception requires the entire class to have sustained their principal injuries in the forum state). Pointing out that the putative class is defined as including only “real property in Oregon,” Compl., ECF 1-1 ¶ 27, Plaintiffs contend that this requirement is met here because the “properties at issue are only in Oregon.” Mot., ECF 12 at 18. Although the proposed class is comprised only of owners of Oregon properties, in no way is the underlying conduct at issue—Defendants’ alleged conduct of unlawfully burdening easement agreements associated with a wire that runs from Eugene to Redding—limited to Oregon. “The fact that the suit was brought as a single-state class action does not mean that the principal injuries were local.” S. Rep. No. 109-14, at 41. A party may not strategically “defeat federal jurisdiction” over an “essentially ․ regional class action[ ]” by limiting the class to plaintiffs from one state. Phillips v. Kaiser Found. Health Plan, Inc., 953 F. Supp. 2d 1078, 1086 (N.D. Cal. 2011).

Second, the principal injuries requirement may be satisfied if the harm inflicted is unique to Oregon, even if not exclusively incurred within the state. That is not the case here either. California property owners—even if there are fewer of them—were injured in the same manner and by the same conduct as the Oregon property owners. The conduct alleged in the Complaint is not the sort of “truly local” harm that Congress intended to be captured by the local controversy exception. See Coleman v. Estes Express Lines, Inc., 627 F.3d 1096, 1100 (9th Cir. 2010) (per curiam) (explaining that the exception “is intended to ‘identify ․ a controversy that uniquely affects a particular locality’ ”).

Approximately 30% of the fiber-optic wire's route runs through California. Declaration of Marshall Payne (“Payne Decl.”), ECF 25 ¶ 6. Plaintiffs’ Complaint alleges that PacifiCorp has sold or leased access to the wire to Verizon along its entire length. See ECF 1-1 ¶ 4. To the extent that the Defendants have exceeded the scope of the relevant easements, Plaintiffs offer no reason to believe that Defendants have only done so in Oregon. See id. ¶¶ 6–8. The alleged conduct appears to have occurred in the same manner, as part of the same project, in both Oregon and California. Numerous California property owners, identically situated to the members of the putative class, could seek relief under the same legal theories. Plaintiffs only allege common law causes of actions, see id. ¶¶ 39–66, and offer no reason to believe that Defendants would not be vulnerable to suit in a California court under essentially the same theories.⁹

Plaintiffs point out that approximately 70% of the wire's route runs through Oregon, and that the 30% of the wire in California runs through sparsely populated areas. Reply, ECF 30-1 at 10. But the “principal injuries” exception is not simply a plaintiff-counting exercise. There is nothing qualitatively unique to Oregon about the alleged injuries.

An examination of Talen Montana Retirement Plan v. PPL Corp., No. CV-18-174, 2019 WL 4410347 (D. Mont. Sept. 16, 2019), the only case Plaintiffs cite as remanding when “the bulk of the principal injuries are incurred in the forum state,” Reply, ECF 30-1 at 9–10, illustrates this point. In Talen, 68% of the putative class members were citizens of Montana. Talen, 2019 WL 4410347, at *5. But additional facts, not present in this case, justified applying the exception there. Talen involved the closure of two Montana power plants. Id. at *2. The class action was brought on behalf of all of Talen Montana's creditors, id., the single largest by far of which was the State of Montana, which sought to recover $500 million associated with remediation of ash ponds at one of the power plants. Id. at *2, *7. The putative class also included employees and retirees of Talen Montana, most of whom lived and worked near the power plants. See id. at *7.

The CAFA Senate Report makes clear that the “purpose of this exception [i]s to allow cases involving environmental torts” that are “truly local” to a particular community to remain in state court. S. Rep. No. 109-14, at 44. The action in Talen, although not technically an environmental tort, was inextricably intertwined with the closure and cleanup of a coal-fired power plant in a particular community. See Talen, 2019 WL 4410347, at *7. Other cases to apply the exception have likewise involved localized environmental catastrophes. See, e.g., Aarstad, 2020 WL 1673100, at *3–4 (finding this requirement met in a case about the “alleged negligent transportation of asbestos-laced vermiculite from a mine near Libby[, Montana] to the loading facility four and one-half miles away in Libby”). The fiber-optic wire in this case is simply not analogous to the harms in both of those cases, where the harm radiated from a specific location in Montana. In this case, by contrast, the harm stemming from the alleged trespass occurred along the entire length of the wire from Eugene, Oregon, to a substation located north of Redding, California, approximately 80 miles from the Oregon border. Payne Decl., ECF 25 ¶ 6. There is no apparent difference between the California and Oregon sections of the wire; both sections were constructed “as part of a single project,” PacifiCorp “uses the entire length” in the same manner, and Verizon “has leased from PacifiCorp access to the entire length ․ including the portions of the line that are in California.” Leineweber Decl., ECF 24 ¶¶ 5, 7.

This Court acknowledges that this controversy does not carry nationwide implications. Cf., e.g., Marino v. Countrywide Fin. Corp., 26 F. Supp. 3d 949, 954–55 (C.D. Cal. 2014); Winn v. Mondelez Int'l, Inc., No. 17-cv-02524, 2018 WL 3151774, at *5 (N.D. Cal. June 28, 2018) (denying motion to remand products liability class action where products were “sold nationwide”); Kearns v. Ford Motor Co., No. CV 05-5644, 2005 WL 3967998, at *12 (C.D. Cal. Nov. 21, 2005) (finding harms were “not limited to California,” but instead “suffered by consumers throughout the country”). But CAFA was intended to favor federal jurisdiction over class actions “with interstate ramifications,” Brinkley, 873 F.3d at 1121 (citation omitted), not only those with nationwide effects. See Phillips, 953 F. Supp. 2d at 1086 (referring to “regional” class actions as falling within CAFA's scope). That the interstate project at the heart of this dispute occurred in only two states does not transform it into a controversy that uniquely affects Oregon. In light of the Ninth Circuit's suggestion that this exception is to be construed narrowly, Benko v. Quality Loan Serv. Corp., 789 F.3d 1111, 1116 (9th Cir. 2015), this Court will not extend it to the facts of this case.

CONCLUSION

Plaintiffs’ Motion to Remand, ECF 12, is DENIED.¹⁰ Defendants’ responsive pleadings are due within twenty-one (21) days of the issuance of this Opinion.

IT IS SO ORDERED.

FOOTNOTES

1.   Although commonly referred to as “jurisdictional exceptions,” the exceptions are not themselves jurisdictional. See Visendi v. Bank of Am., N.A., 733 F.3d 863, 869 (9th Cir. 2013). Instead, they function “more like abstention doctrines,” setting out “how the jurisdiction granted by § 1332(d)(2) should be managed.” Mullen v. GLV, Inc., 37 F.4th 1326, 1328 (7th Cir. 2022).

2.   This number is not accurate; the 60% figure represents only “former residential property owners,” not all former property owners. Reply, ECF 34 at 14. Plaintiffs offer no facts whatsoever to support any findings about the citizenship of former non-residential property owners, much less an estimate of how many there may be. See id. at 21 (acknowledging that Plaintiffs’ analysis does not account for former owners who are not natural persons).

3.   This Court notes that residence alone does not demonstrate citizenship. A “person residing in a given state is not necessarily domiciled there.” Kanter, 265 F.3d at 857. While some courts treat a person's current residence as “prima facie evidence of the person's domicile,” the Ninth Circuit has not adopted that presumption, Mondragon, 736 F.3d at 886, and has held only that a person's residence is “some evidence” of his or her citizenship, Adams, 958 F.3d at 1221; see King, 903 F.3d at 879 (treating residency alone as insufficient to show domicile).

4.   While partnerships and LLCs are, in traditional diversity cases, treated as citizens of every state of which their members are citizens, see Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006), 28 U.S.C. § 1332(d)(10) creates an exception to this rule for CAFA jurisdiction. See Davis v. HSBC Bank Nev., N.A., 557 F.3d 1026, 1032 & n.13 (9th Cir. 2009) (Kleinfeld, J., concurring).

5.   Defendants’ expert identifies eleven entries in which the United States is listed as a putative class member. Hoelle Decl., ECF 39 ¶ 22 & tbl. 1. At least two of these properties are tribal trust lands of the Cow Creek Band of Umpqua Tribe of Indians. Although legally held by the federal government in trust for the Tribe, tribes exercise sovereign functions over their tribal lands, limited only by the “overriding interests of the National Government.” New Mexico v. Mescalero Apache Tribe, 462 U.S. 324, 332, 103 S.Ct. 2378, 76 L.Ed.2d 611 (1983) (citation omitted). Whether the federal government or the Tribe should be considered the “owner” of these lands for these purposes will rarely be important to CAFA jurisdiction, however, because the Tribe, like the United States, is a sovereign nation independent from state control and thus not a citizen of any state. See Am. Vantage Cos., Inc. v. Table Mountain Rancheria, 292 F.3d 1091, 1096 (9th Cir. 2002) (“Rather than belonging to state political communities, [tribes] are distinct, independent political communities. Tribes also owe no allegiance to a state.” (citations omitted)).

6.   The Supreme Court and the Ninth Circuit have repeatedly cited this report in interpreting CAFA. See Dart Cherokee Basin, 574 U.S. at 89, 135 S.Ct. 547; Shady Grove Orthopedic Assocs. v. Allstate Ins. Co., 559 U.S. 393, 458, 130 S.Ct. 1431, 176 L.Ed.2d 311 (2010) (Ginsburg, J., dissenting); Brinkley, 873 F.3d at 1121; Coleman v. Estes Express Lines, Inc., 631 F.3d 1010, 1018 (9th Cir. 2011). This Court notes, however, that the Report was issued “ten days after CAFA was signed into law,” Speed v. JMA Energy Co., LLC, 872 F.3d 1122, 1129 n.2 (10th Cir. 2017), which may limit its value as legislative history.

7.   Plaintiffs also argue that PacifiCorp indemnified Verizon and therefore will not face any liability. Reply, ECF 34-1 at 5–6 (filed under seal). The indemnification arrangements that parties sued directly may have between one another or with a third party do not appear to be relevant to the Singh factors. A party sued only on a theory of indemnification may not be a primary defendant, but Plaintiffs cite no authority to suggest that a defendant faced with the opposite scenario—sued directly, but with the possibility of shifting some liability through indemnification or contribution—should not be considered a primary defendant.

8.   The Court will take judicial notice of Verizon's 2024 10-K filing as probative of its citizenship. The Complaint asserts without explanation that Verizon is a Minnesota corporation, ECF 1-1 ¶ 18, and neither party otherwise addresses Verizon's citizenship in their briefing.

9.   Plaintiffs assert that, absent a declaration from Defendants “stating that they failed to uphold their Agreement with respect to California properties,” this Court cannot find that Defendants caused the same injuries to California property owners. Reply, ECF 34-1 at 12–13 (filed under seal). But Plaintiffs do not identify any material difference in the project that suggests a California property owner could not copy-paste the Complaint in this action and maintain a suit under the same theories. Defendants need not concede liability to argue that a California property owner could bring a similar action.

10.   Plaintiffs also request an award of attorney's fees under 28 U.S.C. § 1447(c). Mot., ECF 12 at 22–24. Because this Court denies the motion to remand, it also finds that an award of fees is unwarranted here.

IMMERGUT, District Judge.