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Court Rejects Post-Removal Complaint Amendment as Effort to Defeat Diversity

Illustrating a court’s ability to limit forum shopping in a class action, a federal judge in New York denied a motion to remand in a suit brought against Northrop Grumman Corporation over alleged hazardous waste pollution. See Romano v. Northrop Grumman Corp, No. 16-cv-5760 (E.D.N.Y. Dec. 15, 2017). Current and former Nassau County residents filed their putative class action in 2016 in Nassau County Supreme Court alleging injury from the release of hazardous substances. Northrop Grumman removed the suit to federal court asserting, among other things federal jurisdictional hooks, Class Action Fairness Act (“CAFA”) jurisdiction. Subsequent to removal, Plaintiffs amended the complaint to add the Town of Oyster Bay as a Defendant, which would have destroyed the diversity necessary for CAFA jurisdiction.

Defendant operated a 600+ acre site in Bethpage, New York, where it manufactured weapons, aircraft, and satellites for almost six decades. Plaintiffs allege the company used the site to dispose of wastes containing chromium, polychlorinated biphenyls (“PCBs”), and volatile organic compounds (“VOCs”). The proposed class includes thousands of nearby residents and property owners allegedly injured by these contaminants.

Although Defendant asserted three bases for federal jurisdiction, the Eastern District of New York limited its analysis to CAFA jurisdiction. CAFA provides for federal jurisdiction in cases involving 100 or more class members, where the aggregate claim exceeds $5 million, and diversity exists. Complete diversity is not required, but CAFA has a “local controversy” exception for cases in which at least two-thirds of the class members are residents of the forum state, at least one significant defendant is a resident of the state the case was filed in, the principal injuries occurred in that state, and no other similar class action was brought in the previous three years. 28 U.S.C. § 1332(d)(4)(A). Plaintiffs asserted that because of the addition of the Town of Oyster Bay, their suit should be remanded to state court under the local controversy exception, as there was now a defendant with New York citizenship. The court rejected this argument and found that after Defendant removed the suit to federal court plaintiffs could not amend the complaint to defeat federal jurisdiction. The court noted that Plaintiffs’ actions “[g]ave rise to a strong suggestion of forum shopping.”