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In re Text Messaging Antitrust Litigation

August 13, 2009

IN RE TEXT MESSAGING ANTITRUST LITIGATION
THIS DOCUMENT RELATES TO:
QUIN JACKSON & DAVID WHITWORTH, ON BEHALF OF THEMSELVES AND A CLASS OF OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
SPRINT NEXTEL CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Matthew F. Kennelly United States District Judge

MDL No. 1997

MEMORANDUM OPINION AND ORDER

MATTHEW F. KENNELLY, District Judge

This case is one of over a dozen transferred to this Court by the Judicial Panel on Multidistrict Litigation (JMPL) pursuant to 28 U.S.C § 1407. As in the others, the plaintiffs this case allege wrongdoing with respect to the amounts charged for sending text messages by cellular telephone service providers. Plaintiffs originally filed this case in Kansas state court, and Sprint Nextel Corporation (Sprint) removed it to federal court. Plaintiffs have moved to remand the case to the District Court of Douglas County, Kansas. For the reasons set forth below, the Court grants plaintiffs' motion.

Background

Plaintiffs sued Sprint in Kansas state court for alleged violations of the section of the Kansas Unfair Trade and Consumer Protection Act dealing with antitrust violations, Kan. Stat. § 50-112. In their complaint, plaintiffs allege that Sprint violated Kansas law by engaging in a conspiracy with other cellular telephone service providers to artificially increase the price for text messages. Plaintiffs defined a putative plaintiff class:

All individuals who purchased texting from Sprint or a Co-Conspirator from January 1, 2005 to the present and who had (i) a Kansas mailing address for billing purposes from Sprint or a Co-Conspirator; (ii) Kansas phone numbers provided by Sprint or a Co-Conspirator; and, (c) [sic] paid a Kansas USF Fee.

First Am. Class Action Pet. ¶ 24.

Discussion

Plaintiffs make two arguments in support of their request for remand. First, plaintiffs contend that this Court lacks subject matter jurisdiction, because Sprint failed to establish the existence of diversity jurisdiction in its notice of removal. Second, plaintiffs contend that even if jurisdiction exists, this Court is required to remand this case under the "home state controversy" exception set forth in 28 U.S.C. § 1332(d)(4)(B).

Before turning to these contentions, it is necessary to address a preliminary issue: whether this Court is bound by Seventh or Tenth Circuit precedent for purposes of the current motion. Sprint originally removed the case to the United States District Court for the District of Kansas, which is located within the Tenth Circuit, and the JMPL subsequently transferred it to the Northern District of Illinois. Even though the law of the transferor court ordinarily applies when a case in federal court on diversity jurisdiction is transferred from one district to another, that rule does not apply to "federal issues." See McMasters v. United States, 260 F.3d 814, 819 (7th Cir. 2001); see also In re Starlink Corn Prods. Liab. Litig, 211 F. Supp. 2d 1060, 1063-64 (N.D. Ill. 2002) (concluding it was proper to apply transferee circuit's law regarding diversity statute following transfer of case by the JMPL). Accordingly, this Court is bound by Seventh Circuit precedent for purposes of the current motion.

1. Minimal Diversity

Plaintiffs first contend that this Court lacks subject matter jurisdiction, because Sprint failed to properly invoke diversity jurisdiction in its notice of removal. Ordinarily, complete diversity of citizenship between all plaintiffs and all defendants is required.

E.g., Smart v. Local 702 Int'l Bhd. of Elec. Workers, 562 F.3d 798, 802 (7th Cir. 2009). The Class Action Fairness Act of 2005 (CAFA), however, created an exception to the general rule requiring complete diversity. 28 U.S.C. ยง 1332(d)(2). Under CAFA, federal courts have subject matter jurisdiction over "any civil action in which the matter in controversy exceeds the sum or value of $5,000,000 [and] . . . any member of a class of plaintiffs is a citizen of a State different ...


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