DIXON v. HORTON INC GULF COAST (2023)

REMAND ORDER

Before the Court is Plaintiffs’ Motion to Remand (Doc. 17), challenging the Court's subject matter jurisdiction over this putative class action. Defendant D.R. Horton, Inc. – Gulf Coast (“Horton”) opposes remand. (Doc. 24). For reasons set forth below, the Court finds that Horton has established subject matter jurisdiction at the time of removal under the Class Action Fairness Act, 28 U.S.C. § 1332(d)(2) (“CAFA”), but that removal was untimely, and that the Local Controversy Exception applies to Plaintiffs’ case. As such, the Court will remand Plaintiffs’ action to the Nineteenth Judicial District Court for the Parish of East Baton Rouge, Louisiana (“19th JDC”).

I. BACKGROUND

In 2014, Plaintiffs and putative class representatives Alicia and West Dixon purchased a new home in the Sugar Ridge subdivision of Lafayette Parish. (Doc. 3-1 ¶ 10; Doc. 9-3 pp. 1-2). Horton, “America's largest new home builder,” allegedly constructed the home; Defendant Bell Mechanical ¹ allegedly designed and installed the heating, ventilation, and air conditioning (“HVAC”) system. (Id. ¶¶ 10-13).

Plaintiffs allege that after moving in to their new home, they experienced numerous problems, including excess moisture and humidity levels, water intrusion, damaged drywall, rampant mold and mildew, and an “inability for their home to cool down during the hot summer months.” (Doc. 3-1 ¶¶ 22, 41). Additionally, Plaintiffs allege that their home suffered structural damage as a result of the constant moisture intrusion, and that the cause of the excess moisture was a combination of two things: poor attic ventilation and a defective HVAC system. (Id. ¶ 29).

On March 9, 2022, Plaintiffs initiated this putative class action against Horton and Bell Mechanical in the 19th JDC. (Doc. 3-1). Plaintiffs’ original Petition proposed a class consisting of purchasers of “new” homes “constructed and sold by [Horton] in Louisiana between January 1, 2013 and present day who have experienced problems with mold or mildew growth in their home or excess moisture and humidity, and who have suffered damages to their person or property as a result.” (Id. ¶ 32). On behalf of all class members, Plaintiffs alleged that Horton and Bell Mechanical knew of the homes’ poor ventilation and defective HVAC systems, knew that these defects were causing excess moisture and humidity levels in each home, and conspired to conceal these defects. (See id. ¶¶ 81-116).

On December 6, 2022, Plaintiffs filed an Amended Petition ² in the 19th JDC “for the purpose of supplementing and amending the original allegations pertaining to the potential class members and proposed Class Definition.” (Doc. 3-2 p. 1). The Amended Petition expanded the proposed class temporally, to include purchasers of Horton-built Louisiana homes from 2007 to present. (Compare Doc. 3-1 ¶ 32, with Doc. 3-2 ¶ 32). The Amended Petition also eliminated language limiting class membership to purchasers that bought their homes directly from Horton, opening the class to members whose homes were merely “constructed by” Horton. (Compare Doc. 3-1 ¶ 32, with Doc. 3-2 ¶ 32). In other words, original and subsequent purchasers of Horton-built Louisiana homes suffering water intrusion and related damages now qualify for class treatment. Finally, and oddly, Plaintiffs’ amended class definition set forth at Paragraph 32 removed any reference to mold, mildew, excess moisture and humidity, and resulting damages. (Compare Doc. 3-1 ¶ 32, with Doc. 3-2 ¶ 32). Still, Plaintiffs made up for this omission at amended Paragraph 41, where they alleged that their claims are “typical” of the proposed class,

as they [Plaintiffs’ and the proposed class members] each purchased a home that was constructed by D.R. Horton in Louisiana between January 1, 2007 and present day; each home suffers from the same design and construction defects and has caused mold, moisture, humidity, and HVAC problems in and with the home; each Class Member has suffered similar injuries and damages as a result of the mold, moisture, humidity, and HVAC problems in their home; and each Class Member purchased their D.R. Horton built home believing that said home was designed, intended, fit, and/or built for and to withstand the typical Louisiana weather and humidity.

(Compare Doc. 3-1 ¶ 32, with Doc. 3-2 ¶ 32). Other than these amendments to Paragraphs 32 and 41, Plaintiffs’ original Petition and Amended Petition are functionally the same for present purposes.

On December 9, 2022, three days after Plaintiffs filed their Amended Petition, Horton removed Plaintiffs’ action to this Court, invoking CAFA jurisdiction. (Doc. 1). Now, Plaintiffs seek remand, arguing that Horton has not satisfied CAFA's amount-in controversy-requirement, that removal was untimely, and that, in any event, CAFA's Local Controversy Exception applies to this case. (Doc. 17). Horton opposes remand. (Doc. 24).

II. LAW AND ANALYSIS

A. Standard

“CAFA greatly expands federal jurisdiction over interstate class action lawsuits.” Hollinger v. Home State Mut. Ins. Co., 654 F.3d 564, 569 (5th Cir. 2011) (footnote omitted). Specifically, CAFA establishes federal jurisdiction where the proposed class is at least 100 members, minimal diversity exists between the parties, the amount in controversy exceeds $5 million, and the primary defendants are not state actors. 28 U.S.C. § 1332(d)(2), (5).

The “language, structure, and history of CAFA all demonstrate that Congress contemplated broad federal court jurisdiction with only narrow exceptions.” Cedar Lodge Plantation, LLC v. CSHV Fairway View I, LLC, 768 F.3d 425, 429 (5th Cir. 2014) (quotation marks omitted). But exceptions do exist. Relevant here, the Local Controversy Exception, 28 U.S.C. § 1332(d)(4)(A), requires the Court to abstain from exercising jurisdiction over a class action “that uniquely affects a particular locality to the exclusion of all others.” Hollinger, 654 F.3d at 570 (quotation marks omitted).

B. Discussion

i. CAFA Jurisdiction

Horton has carried its burden to establish CAFA jurisdiction at the time of removal. First, there is minimal diversity between the parties. Plaintiffs are Louisiana citizens; Bell Mechanical Services and Bell Mechanical Holdings are each also Louisiana citizens; and Horton is a citizen of Delaware and Texas. (See Doc. 1 pp. 4-5; Doc. 3-1 ¶ 2).

Second, there are at least 100 class members. (Doc. 3-2 at 2). Indeed, Horton shows that as many as 13,788 Horton-built Louisiana homes are affected by the alleged defects. (Doc. 24-1 at 2).

Third, the amount-in-controversy exceeds the jurisdictional minimum. Horton has produced evidence showing that the 13,788 Louisiana homes at issue ranged in purchase price from $92,900 to $540,440, with an average purchase price of $228,677. (Doc. 24-1 at 2). Even if each Horton-built Louisiana home suffered just $363 in damages resulting from Horton's alleged faulty construction and Bell Mechanical's faulty HVAC systems—a mere one-tenth of one percent of the average purchase price—class damages would exceed $5 million. Judicial experience and common sense dictate that Plaintiffs’ allegations, if proved, establish damages far exceeding a few hundred dollars to each affected house.

Finally, none of the named Defendants are government entities or state actors.

ii. Removal was untimely

The time limits for removing a putative class action from state court are set forth in 28 U.S.C. § 1446(b). See 28 U.S.C. § 1453(b); Safranek v. USAA Cas. Ins. Co., 525 F.Supp.3d 707, 714-15 (M.D. La. 2021) (Jackson, J.). Here, Horton's removal was timely only if it occurred: (1) within 30 days of Horton's receipt of Plaintiffs’ March 9, 2022 original Petition, 28 U.S.C. § 1446(b)(1); or (2) within 30 days of Horton's receipt of “an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable,” id. § 1446(b)(3). See Safranek, 525 F.Supp.3d at 714-15.

Consistent with Louisiana pleading rules, Plaintiffs’ original Petition did not set forth a specific quantum of damages. See La. C.C.P. art. 893. As such, the parties agree that Plaintiffs’ original Petition, standing alone, did not trigger the 30-day removal window under § 1446(b)(1). See Safranek, 525 F. Supp. 3d at 715 (“If a plaintiff wants the 30-day period to run from the defendant's receipt of the initial pleading, a plaintiff should place in that pleading a specific allegation that damages are in excess of the federal jurisdictional amount.” (quotation marks omitted)).

This leaves § 1446(b)(3), under which Horton was required to remove within 30 days of receiving any “paper” making it “unequivocally clear and certain” that Plaintiffs’ action satisfied CAFA's jurisdictional requirements. See Safranek, 525 F. Supp. 3d at 715 (citing authorities). Plaintiffs contend that they served Horton such a “paper” on May 31, 2022, when, in response to Horton's motion to compel arbitration, they provided a copy of their “Contract of Sale” showing that they paid $254,827 for their Horton-built home in July 2014. (Doc. 17-3 pp. 5-6; Doc. 9-3 pp. 1-2, 5-39, 40-41).

The Court agrees that this “paper” made it “unequivocally clear and certain” that Plaintiffs’ action was removable. Upon receiving Plaintiffs’ Contract of Sale, the information available to Horton established that: (1) minimal diversity existed among the parties, (Doc. 3-1 ¶ 2); (2) Plaintiffs were pursuing claims arising from the combination of Horton's faulty construction and Bell Mechanical's defective HVAC systems, (id. ¶¶ 28-29); (3) Plaintiffs’ demanded damages including “return of the purchase price of their home [$254,827],” (id. ¶ 161); and (4) Plaintiffs demanded the same relief on behalf of “hundreds” of Horton-built Louisiana home purchasers, (id. ¶¶ 32, 36, 161). Simple arithmetic dictates that even if Plaintiffs’ proposed class consisted of just 100 members—CAFA's jurisdictional minimum—the aggregate value of the recission damages alone would exceed $5 million based on an average purchase price of just $50,001, or less than one-fifth of the purchase price set forth in Plaintiffs’ Contract of Sale. See Standard Fire Ins. Co. v. Knowles, 568 U.S. 588, 592 (2013) (explaining that CAFA “tells the District Court to determine whether it has jurisdiction by adding up the value of the claim of each person who falls within the definition of [the plaintiffs]’ proposed class and determine whether the resulting sum exceeds $5 million. If so, there is jurisdiction and the court may proceed with the case.”); see also Robertson v. Exxon Mobil Corp., 814 F.3d 236, 240 (5th Cir. 2015) (“The required demonstration concerns what the plaintiff is claiming (and thus the amount in controversy between the parties), not whether the plaintiff is likely to win or be awarded everything he seeks.”). Horton's own evidence shows that it never sold a Horton-built Louisiana home for less than $92,900. (Doc. 24-1 at 2).

In sum, Plaintiffs’ Contract of Sale, combined with the allegations of Plaintiffs’ original Petition, provided “unequivocally clear and certain” notice that Plaintiffs’ action satisfied CAFA's jurisdictional requirements. Horton's removal occurred more than 30 days after service of Plaintiffs’ Contract of Sale, and was untimely. Cf. Pollock v. Horton Inc. Gulf Coast, No. 21-cv-01006, 2021 WL 4396051, at *4 (W.D. La. Sept. 9, 2021) (Hanna, M.J.) (ruling that removal was untimely under § 1446(b)(3) where Horton waited more than 30 days after plaintiffs amended their complaint to include a claim of recission of the sale contract for their Horton-built home, where plaintiffs showed that they bought their home for $254,900), adopted, 2021 WL 4395904 (W.D. La. Sept. 24, 2021) (Juneau, J.).

Horton strongly disagrees, arguing that even after receiving Plaintiffs’ Contract of Sale, Plaintiffs’ action was “not properly removable due to the mandatory statutory application of the ‘Local Controversy Exception’ to CAFA subject matter jurisdiction,” (Doc. 24 at 3 (emphasis in original)), and that this impediment was insurmountable until Plaintiffs filed their Amended Petition, which “drastically” expanded the proposed class to include (for the first time) members that are not Louisiana citizens, (see id. at 12-13). This argument fails on two levels.

First, elsewhere in its opposition to remand, Horton concedes that “[t]he Local Controversy Exception is ‘non-jurisdictional’ – an ‘abstention obligation.’ ” (Doc. 50 at 4); see Watson v. City of Allen, Tx., 821 F.3d 634, 639 (5th Cir. 2016) (“We have already recognized that the ‘local controversy’ and ‘home state’ exceptions require abstention from the exercise of jurisdiction and are not truly jurisdictional in nature.”). In other words, the Local Controversy Exception “does not deprive federal courts of subject matter jurisdiction.” Watson, 821 F.3d at 639; accord Railey v. Sunset Food Mart, Inc., 16 F.4th 234, 240 (7th Cir. 2021) (“the home-state controversy exception is not jurisdictional”). Thus, Horton's apprehension that the Local Controversy Exception might apply to Plaintiffs’ action did not relieve Horton of its obligation to attempt removal within 30 days of receiving “unequivocally clear and certain” notice that Plaintiffs’ action satisfied CAFA's jurisdictional requirements.

Second, Horton's position that the Local Controversy Exception applied to the proposed class set forth in Plaintiffs’ original Petition—but not to the proposed class set forth in Plaintiffs’ Amended Petition (discussed below)—is not convincing. This contention assumes that Plaintiffs’ original proposed class was limited to Louisiana citizens only. But this assumption cannot be squared with the class definition set forth in Plaintiffs’ original Petition, or that set forth in the Amended Petition, neither of which limits class membership to Louisiana “citizens,” or even “owners” of Horton-built Louisiana homes. (See Doc. 3-1 ¶ 32; Doc. 3-2 ¶¶ 32, 41). Each, instead, limits membership to “persons who purchased” Horton-built Louisiana homes plagued by excess water intrusion and related damages. (See Doc. 3-1 ¶ 32; Doc. 3-2 ¶¶ 32, 41). Whether and to what extent such “purchasers” are also Louisiana citizens (or not) is a question of fact addressed in more detail below.

iii. Local Controversy Exception

Equally important for present purposes, Horton's original assessment was ultimately correct: the Local Controversy Exception does apply to Plaintiffs’ action.

Even if CAFA jurisdiction is otherwise satisfied, the Local Controversy Exception states that a district court “shall decline to exercise jurisdiction ․ over a class action” in which: (1) over two-thirds of the proposed class members are citizens of the state where the action was filed; (2) there is at least one “significant” defendant from the same state; (3) the “principal injuries” were incurred in that state; and (4) a similar class action has not been filed within the preceding three years. 28 U.S.C. § 1332(d)(4)(A). Plaintiffs bear the burden of proving the Local Controversy Exception by a preponderance of the evidence. State of Louisiana. v. I3 Verticals Inc., ––– F.4th ––––, 2023 WL 5664189, at *4 (5th Cir. 2023). Again, the Local Controversy Exception is an abstention doctrine, not a jurisdictional rule. Watson, 821 F.3d at 639.

a. More than two-thirds of the proposed class are Louisiana citizens

“To determine whether two-thirds of a proposed class are citizens of the state in which a class action was originally filed, we must first define the class. To do so, we review the allegations set out in Plaintiffs’ petition at the time of removal.” Stewart v. Entergy Corp., 35 F.4th 930, 932 (5th Cir. 2022).

Again, Paragraph 32 of the Amended Petition proposes a class of “[a]ll persons who purchased a home that was constructed by D.R. Horton, Inc. — Gulf Coast in Louisiana between January 1, 2007 and present day.” (Doc. 3-2 ¶ 32). Thereafter, at Paragraph 41, the Amended Petition limits the class to include only those purchasers whose Horton-built Louisiana homes “suffer[ed] from the same design and construction defects [causing] mold, moisture, humidity, and HVAC problems.” (Id. ¶ 41). Given the overwhelming thrust of Plaintiffs’ allegations and demands (which remain unchanged between the original Petition and the Amended Petition), the Court concludes that Paragraphs 32 and 41 of the Amended Petition must be read in pari materia, yielding the following proposed class:

All persons who purchased a home that was constructed by Horton in Louisiana between January 1, 2007 and present day, whose home includes a Bell Mechanical HVAC system and suffers from design and construction defects causing excessive mold, moisture, and humidity, and related damages.

See Stewart, 35 F.4th at 932-33 (construing plaintiffs putative class action petition “as a whole” to arrive at the proper definition of the class for purposes of the Local Controversy Exception analysis). Even at this early stage, the Court finds that the share of Louisiana citizens comprising this proposed class more than likely exceeds two-thirds.

“Citizenship for purposes of the local controversy exception mirrors citizenship for purposes of diversity—it is a party's ‘domicile.’ ” Dozier v. GoAuto Ins. Co., No.19-cv-01223, 2022 WL 1226918, at *4 (W.D. La. Apr. 26, 2022) (Summerhays, J.) (citing Coury v. Prot, 85 F.3d 244, 250 (5th Cir. 1996)). Plaintiffs themselves are Louisiana domiciliaries, (Doc. 3-1 ¶ 1), and seek to represent a discrete class consisting of purchasers of homes constructed by Horton in Louisiana since 2007, whose homes are now overrun with moisture-related damages resulting from poor attic ventilation and defective HVAC systems. (Doc. 3-2 ¶¶ 32, 41). “[O]wning a home is an indicium of a person's domicile,” and the fact that the proposed class members purchased 13,788 Horton-built Louisiana homes creates a “reliable,” “common sense presumption” that the class is comprised of Louisiana citizens. See Hollinger, 654 F.3d at 573-74 (“[T]he courts have acknowledged that where a proposed class is discrete in nature, a common sense presumption should be utilized in determining whether citizenship requirements have been met.” (citing cases)).

Additionally, Plaintiffs present evidence showing that in Lafayette Parish (where Plaintiffs reside) only 387 of 2,065 Horton-built homes—or 18.7 percent—do not claim a Louisiana homestead exemption. (Doc. 17-1 at 2). In other words, 81.3 percent of Horton-built homes in Lafayette Parish do claim the exemption. Under Louisiana law, a homestead exemption is only available to “natural persons,” La. Const. art. VII, § 20(5), and “a homeowner may receive a homestead exemption only for his principal residence.” Hignell-Stark v. City of New Orleans, 46 F.4th 317, 321 (5th Cir. 2022). This evidence, albeit limited to Lafayette Parish, is probative, see Stewart, 35 F.4th at 934 & n.3 (endorsing “informal survey” of subset of proposed class members to determine that more than two-thirds were Louisiana citizens), and reinforces the common sense conclusion that more than two-thirds of Louisiana's Horton-built home purchasers are also Louisiana citizens. See, e.g., Francis v. Make It Right-New Orleans, LLC, No. 18-cv-9906, 2019 WL 2136084, at *3 (E.D. La. May 15, 2019) (Fallon, J.) (finding that two-thirds of the proposed class of current and former homeowners were citizens of Louisiana based on “common sense” and homestead exemption records showing that 91 of the 113 homeowners claimed homestead exemptions).

Finally, even for those proposed class members who have already sold or otherwise divested their Horton-built homes, “[t]here is a presumption in favor of ․ continuing domicile which requires the party seeking to show a change in domicile to come forward with enough evidence to that effect.” Preston v. Tenet Healthsystem Mem'l Med. Ctr., Inc., 485 F.3d 804, 819 (5th Cir. 2007) (quotation marks omitted). This presumption is applied with regularity to determine whether the Local Controversy Exception is met. E.g., Dozier, 2022 WL 1226918, at *4-*6. Horton offers no evidence to rebut this presumption, and, thus, Plaintiffs are entitled to rely on it. E.g., id. at *8 (“Plaintiff is entitled to rely on the continuing domicile presumption because GoAuto has not come forward with evidence that rebuts that presumption.”)

In sum, judicial experience, common sense, the available evidence, and the unrebutted presumptions coalesce, and the Court finds that Plaintiffs have carried their burden to show that greater than two-thirds of the members of the proposed class are Louisiana citizens.

b. Significant Local Defendant

Next, the Local Controversy Exception requires the presence of at least one “significant” defendant who is also a citizen of Louisiana. Nobody disputes that Bell Mechanical is a Louisiana citizen. The only question is whether Bell Mechanical is “significant” to this case.

To meet their burden, Plaintiffs must show (1) that the class seeks “significant relief” from Bell Mechanical, (2) whose conduct is a “significant basis” of their claims. I3 Verticals Inc., 2023 WL 5664189, at *4.

There are at least two factual situations where courts have found that a defendant is not a “significant” defendant. The first is when only a small portion of the class members have claims against that particular defendant. ․ The second situation is when the relief sought (or reasonably expected) from a particular defendant is “just small change” in comparison to what the class is seeking from the other co-defendants.

Phillips v. Severn Trent Env't Servs., Inc., No. 07-cv-3889, 2007 WL 2757131, at *3 (E.D. La. Sept. 19, 2007) (Feldman, J.). Still, “[i]t is rare that a court has found a defendant is not a significant defendant.” Ictech-Bendeck v. Progressive Waste Sols. of LA, Inc., 367 F. Supp. 3d 555, 565 (E.D. La. 2019) (Morgan, J.).

As an initial matter, Plaintiffs’ Amended Petition is replete with allegations establishing that Bell Mechanical's conduct is a “significant basis” of their claims. Allegedly, Bell Mechanical both designed and installed all of the HVAC systems in the Horton-built homes at issue. Plaintiffs contend that Bell Mechanical's HVAC systems created negative air pressure in these homes, (Doc. 3-1 ¶ 29), and, when combined with Horton's poor attic ventilation, resulted in excess moisture and humidity levels, causing significant damage, (see id. ¶¶ 101-116). Plaintiffs further allege that Bell Mechanical knew its HVAC systems were deficient and were the cause of the moisture intrusion in these homes. (Id. ¶ 115). And because their contracts with Horton allegedly required all potential class members to use only Bell Mechanical to service their HVAC systems, this allowed Bell Mechanical to actively mislead homeowners, concealing the source of the moisture problem. (Id. ¶¶ 25-30). What's more, Bell Mechanical allegedly delayed its response to service requests for months, and never truly remedied any of the alleged moisture issues. (Id.). Even when Bell Mechanical responded, Plaintiffs contend that Bell Mechanical did not fix its defective HVAC systems, but instead “repeatedly installed dehumidifiers” to “mask” the excess moisture being drawn into these homes by the HVAC system itself. (Id. ¶ 109).

Of the 26 proposed questions of fact and law common to the class, 17 concern Bell Mechanical's conduct. (Doc. 3-1 ¶ 39). Of the nine causes of action, four are asserted against Bell Mechanical—specifically, Counts 5 (Fraud), 6 (Racketeering), 7 (Conspiracy), and 8 (Negligence). (Id. ¶¶ 101-156). Even the allegations supporting Plaintiffs’ claims solely against Horton are intertwined with Bell Mechanical's conduct. In sum, Bell Mechanical's conduct infects every single cause of action, and will play a significant role in determining the class certification issue, and the ultimate outcome of this case.

Additionally, Plaintiffs easily show that they are seeking “significant relief” from Bell Mechanical. The Fifth Circuit recently explained this prong as follows:

All that matters is what the plaintiffs seek in damages—not whether there's any likelihood that they will obtain what they seek. If plaintiffs seek significant relief from an in-state defendant, then they satisfy the prong․ A plaintiff without realistic hope of getting the defendant to transfer money into his account can still seek significant relief from that defendant.

I3 Verticals Inc., 2023 WL 5664189, at *7-*8.

Again, four of the nine causes of action are aimed at Bell Mechanical. Plaintiffs seek class-wide relief from Bell Mechanical for damage to the structural elements and interior finishes of their homes, as well as “the loss [or] diminution in value of their home[s], loss of use and enjoyment of their home[s], increased electricity bills, loss of their personal property, health problems, and associated medical expenses.” (Doc. 3-1 ¶ 152). As part of their racketeering claim, Plaintiffs also seek treble damages, litigation costs, and attorneys’ fees. (Doc. 3-1 ¶ 120). Finally, Plaintiffs’ contend that Horton and Bell Mechanical are jointly, severally, and solidarily liable to all potential class members for all damages. (Doc. 3-1 ¶ 163). E.g., Smith v. Marcus & Millichap, Inc., 991 F.3d 1145, 1160 (11th Cir. 2021) (plaintiffs sought significant relief local defendant where “the complaint [sought] joint and several liability against both [defendants] for all damages” and alleged a “scheme that contemplate[d] each defendant as equally culpable”).

Horton's best rejoinder is that Bell Mechanical's significance as a Defendant is diminished by the fact that Plaintiffs’ proposed class now extends back to members whose Louisiana homes were built by Horton in 2007 and 2008, yet Bell Mechanical “first served as an HVAC subcontractor for Horton in Louisiana in 2009.” (Doc. 24-1 at 3). If Horton means to say that Bell Mechanical installed no HVAC systems for Horton-built homes in 2007 and 2008, then it stands to reason that some portion of Plaintiffs’ proposed class is unlikely to recover damages from Bell Mechanical.

Without more, however, this is not enough to overcome Plaintiffs’ showing that Bell Mechanical is a “significant” Defendant. Why? Because Horton's bald statement lacks context. Critically, how many Louisiana homes did Horton build in 2007 and 2008? Without this information, it is impossible to determine whether and to what extent Horton's “significance” is diminished. Even giving Horton the benefit of the doubt, and assuming that Horton built its Louisiana homes at a consistent rate between 2007 and present (16 years), the share of Horton homes built in 2007 and 2008 without Bell Mechanical HVAC systems is just 12.5 percent. Plainly, if 87.5 percent of Horton's Louisiana-built homes include Bell Mechanical HVAC systems, Bell Mechanical remains a “significant” Defendant based on Plaintiffs’ allegations and demands.

Plaintiffs’ extensive allegations against Bell Mechanical, and the extensive relief demanded from Bell Mechanical, establish Bell Mechanical as a “significant” local Defendant.

c. Principal Injuries and Other Class Actions

Horton does not dispute the two remaining elements of the Local Controversy Exception. In any event, each of the Horton-built homes at issue is located in Louisiana, and thus the “principal injuries resulting from the alleged conduct ․ were incurred in the State.” 28 U.S.C. § 1332(d)(4)(A)(i)(III). Finally, neither side has identified any other class action filed in the last three years “asserting the same or similar factual allegations against any of the defendants,” nor has the Court's own research turned up any such action. Id. § 1332(d)(4)(A)(ii).

III. CONCLUSION

Horton has carried its burden to establish CAFA jurisdiction, but its removal was untimely, and CAFA's Local Controversy Exception applies. Accordingly,

IT IS ORDERED that Plaintiffs’ Motion to Remand (Doc. 17) be and is hereby GRANTED IN PART, as set forth herein.

IT IS FURTHER ORDERED that this action be and is hereby immediately REMANDED to the Nineteenth Judicial District Court for the Parish of East Baton Rouge, Louisiana.

FOOTNOTES

1.   Defendants Bell Mechanical Holdings, LLC and Bell Mechanical Services, LLC are related entities, (Doc. 17-2 pp. 7, 14), and the parties have treated them as one throughout their briefing, referring to them simply as “Bell Mechanical.” The Court follows suit.

2.   Plaintiffs’ Amended Petition incorporates by reference “each and every allegation, paragraph, and cause of action set forth in their original Class Action Petition,” and is the operative pleading for the Court's purposes. See Turner v. GoAuto Ins. Co., 33 F.4th 214, 216 (5th Cir. 2022). As such, the Court cites to both the original Petition (Doc. 3-1) and the Amended Petition (Doc. 3-2) throughout this Order.

BRIAN A. JACKSON, UNITED STATES DISTRICT JUDGE