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Civil Procedure – Jurisdiction – ‘Minimal’ Diversity – Class Action

This suit by borrowers against a “payday loan” lender in South Carolina is remanded from federal to state court because the lender, a citizen of Georgia and South Carolina, has not shown “minimal diversity” under the relaxed standard of the Class Action Fairness Act of 2005, the 4th Circuit holds.

The facts and issues raised in this case are substantively identical to those raised in Johnson v. Advance America, [VLW 008-2-162]. Carolina Payday is a citizen of South Carolina, albeit a claimed-to-be citizen of another state, and the class is defined to include only citizens of South Carolina, thus excluding persons who may have moved from South Carolina and established citizenship elsewhere at the time the action was commenced. For the reasons given in Advance America, therefore, we conclude that Carolina Payday cannot carry its burden of demonstrating that any member of plaintiff’s class is citizen of a state “different from” Carolina Payday, as required by 28 U.S.C. § 1332(d)(2)(A).

We affirm the district court’s remand order.

Because Carolina Payday has not established the existence of minimal diversity, we do not reach whether the home-state exception of 28 U.S.C. § 1332(d)(4) applies to defeat federal jurisdiction in this case.

Concurrence & dissent

Agee, J.: I agree with the majority opinion that Carolina Payday fails to satisfy the requirements of 28 U.S.C. § 1332(d)(2)(A) on the basis of its dual citizenship. As in the companion case decided today, Johnson v. Advance America, [VLW 008-2-162], I write separately because I respectfully disagree with the conclusion in the majority opinion that the language of the complaint has limited the classes of plaintiffs to only citizens of South Carolina as of the time the complaint was filed. Nonetheless, I concur in the judgment of the majority because Carolina Payday failed to meet its burden of proof to establish the citizenship of any plaintiff in a state other than South Carolina.

Dennison v. Carolina Payday Loans Inc. (Niemeyer, J.) No. 08-2187, Dec. 12, 2008; USDC at Charleston, S.C. (Duffy) Nerietta U. Golding for appellant; Joe R. Whatley Jr. for appellee. VLW 008-2-161, 13 pp.

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