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Media Alerts - Hargett v. St. Bernard's Hospital, Inc. - Eighth Circuit
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April 28, 2017
  Hargett v. St. Bernard's Hospital, Inc. - Eighth Circuit
Headline Eighth Circuit holds that district court improperly remanded class action lawsuit to state court based on class members' Arkansas residency rather than citizenship

Area of Law Class Action; Federal Jurisdiction

Issue(s) Presented Whether the district court properly remanded a class action lawsuit that had been removed to federal court based on the local controversy exception to the Class Action Fairness Act.

Brief Summary Plaintiff Tammy Hargett filed a class action lawsuit in Arkansas state court on behalf of a class comprising "all persons who were Arkansas Medicaid-eligible beneficiaries" who were treated at one of the defendant hospitals and had liens placed on their third-party claims by RevClaims, LLC. The defendant hospitals removed the suit to federal court under the Class Action Fairness Act (CAFA), 28 U.S.C. § 1332(d), which broadened federal jurisdiction over class actions. Hargett moved to remand, arguing that the district court should decline to exercise jurisdiction under CAFA's local-controversy exception, which applies when more than two-thirds of the class members are "citizens of the State in which the original action was filed." Id. at § 1332(d)(4)(A)(i)(I) (emphasis added). The district court granted the motion to remand, finding that the proposed class was defined as "all persons who were Arkansas residents at the time the medical services . . . were provided to them."

RevClaim and the hospitals appealed. The Eighth Circuit focused its analysis on how the "resident" versus "citizen" distinction made in other parts of CAFA applied specifically to the local-controversy exception. The Court noted that elsewhere in the statute, the term "citizen" has long meant something different from "resident." "Citizen" requires permanence, whereas residency is a more fluid concept. One person can be a resident of multiple states, but can only be a citizen of one. Where Congress uses a term, such as "citizen," that has a well-established meaning, it must be assumed that Congress meant to incorporate the established meaning. Thus, by using the term "citizen" in the local-controversy exception, Congress meant to require something more than simply residency in a state. The Seventh Circuit has also explicitly recognized the distinction between residency and citizenship for purposes of the local-controversy exception. Ultimately, the Eighth Circuit agreed with the Seventh Circuit, and concluded that "citizen" is not synonymous with "resident" in determining whether the local-controversy applies. As such, the district court erred in holding that merely alleging a proposed class of Arkansas residents was sufficient to satisfy § 1334(d)(4), and should not have remanded the case to state court.

The full text of the opinion may be found at

Panel Circuit Judges Bowman, Shepherd, and Smith

Date of Issued Opinion April 14, 2017

Decided Reversed and remanded

Docket Number 17-1339

Counsel Kenneth P. Castleberry, Robert L. Henry III, James D. Robertson, A.F. Thompson, III, Paul Waddell, and Sam Waddell for Appellants and Brandon W. Lacy for Appellee

Author Circuit Judge Smith

Case Alert Circuit Supervisor Joelle Larson, University of Minnesota Law School

    Posted By: Joelle Larson @ 04/28/2017 02:57 PM     8th Circuit  

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