United States District Court, D. Connecticut
PAUL T. EDWARDS, Plaintiff,
NORTH AMERICAN POWER AND GAS, LLC, Defendant.
RULING ADDRESSING THE COURT’S SUBJECT MATTER JURISDICTION
Victor A. Bolden United States District Judge
Plaintiff, Paul T. Edwards, is a Connecticut resident who has brought a putative class action against North American Power and Gas, LLC (“NAPG”), a Connecticut citizen. As the Court summarized in detail in a prior ruling, Ruling on Def.’s Mot. to Dismiss, ECF No. 39, Mr. Edwards alleges that NAPG promised consumers low rates on electricity tied to the wholesale market rate and subsequently charged exorbitant rates that were unrelated to the wholesale market rate.
Mr. Edwards has filed a Motion to Amend the Complaint, ECF Nos. 45, 52, seeking to add additional legal claims and several Plaintiffs who reside in states other than Connecticut. Before ruling on this motion, the Court would like to raise some concerns it has about its subject matter jurisdiction over this case. If Mr. Edwards is able to address these concerns, as explained below, the Court will then rule on his Motion to Amend the Complaint.
I. Procedural History
When Mr. Edwards initiated this lawsuit, he alleged claims of unjust enrichment, breach of the covenant of good faith and fair dealing, and violations of the unfair trade practices laws of Connecticut, Maine, New Hampshire, and Rhode Island. Compl., ECF No. 1. Mr. Edwards, an alleged Connecticut resident, was the sole Plaintiff named in the case. But he sought to represent a class that contained consumers with property in Maine, New Hampshire, and Rhode Island, as well as in Connecticut who enrolled in NAPG’s variable rate electricity plan. Id. ¶36. The Court granted NAPG’s Motion to Dismiss in part, dismissing the claims for unjust enrichment under Connecticut law and all claims under Maine, New Hampshire, and Rhode Island law. Ruling on Def.’s Motion to Dismiss, ECF No. 39.
At this time, Mr. Edwards is the sole named Plaintiff in this lawsuit and seeks to represent a class of consumers who enrolled in NAPG’s “variable rate electric plan in connection with a property located within Connecticut.” Compl. ¶36, ECF No. 1. The only claims that remain in the case are for breach of the covenant of good faith and fair dealing under Connecticut law and a violation of the Connecticut Unfair Trade Practices Act (“CUTPA”), Conn. Gen. Stat. §42-110a et seq.
After ruling on the Motion to Dismiss, the Court provided Mr. Edwards with leave to amend his Complaint to add plaintiffs from other states by October 5, 2015. See Scheduling Order, ECF No. 32 (allowing motions to add parties or amend the pleadings to be filed sixty days after the Court’s ruling on the Motion to Dismiss). Mr. Edwards filed his initial Motion to Amend the Complaint, ECF No. 45, on November 30, 2015. He asks the Court for leave to add named Plaintiffs from Rhode Island and New Hampshire as well as claims under each respective state’s unfair trade practices law and claims under each state’s law for breach of contract and breach of the covenant of good faith and fair dealing. Am. Mot. to Amend Compl., ECF No. 52; see Proposed Am. Compl., ECF No. 52-1. He also seeks to add a breach of contract claim under Connecticut law. See Proposed Am. Compl. at Count IV, ECF No. 52-1. Finally, he asks to add an additional named Plaintiff, Gerry Wendrovsky, who resides in New York but owns property in Connecticut. Id. ¶9. NAPG opposes Mr. Edwards’s motion. Def.’s Opp. Br., ECF No. 53.
As a general matter, federal courts are courts of limited jurisdiction, meaning they are only authorized to resolve cases that either address questions of federal law or satisfy diversity jurisdiction requirements. See 28 U.S.C. §§ 1331, 1332; Durant, Nichols, Houston, Hodgson & Cortese-Costa P.C. v. Dupont, 565 F.3d 56, 62 (2d Cir. 2009). A district court must be assured of its subject matter jurisdiction over matters pending before it at all times. See Dupont, 565 F.3d at 62; see also Arbaugh v. Y&H Corp., 546 U.S. 500, 506 (2006). The party asserting federal jurisdiction also has the burden of showing that a case falls within a district court’s jurisdiction. See Blockbuster, Inc. v. Galeno, 472 F.3d 53, 57 (2d Cir. 2006) (“It is well-settled that the party asserting federal jurisdiction bears the burden of establishing jurisdiction.”). To this end, a complaint must contain “a short plain statement of the grounds for the court’s jurisdiction.” Fed.R.Civ.P. 8(a)(1).
Mr. Edwards’s Complaint indicates that this Court has subject matter jurisdiction under 28 U.S.C. §1332(d), which addresses diversity jurisdiction requirements for class actions. See Compl. ¶10, ECF No. 1; Proposed Am. Compl. ¶14, ECF No. 52-1. Section 1332(d)(2) provides that federal district courts have “original jurisdiction” over class actions involving an amount in controversy of more than $5, 000, 000, where “any member” of the class of plaintiffs “is a citizen of a State different from any defendant.” 28 U.S.C. §1332(d)(2)(A); see also Estate of Pew v. Cardarelli, 527 F.3d 25, 30 (2d Cir. 2008). It also requires that the putative class contain at least 100 members. 28 U.S.C. §1332(d)(5)(B); see also Blockbuster, 472 F.3d at 56.
As the text of subsection (d)(2) reveals, a plaintiff need not show complete diversity (i.e., that all plaintiffs are citizens of a different state than the defendant) to sustain federal subject matter jurisdiction over a class action. Instead, he need only indicate the existence of minimal diversity, or that one plaintiff class member is a citizen of a different state from the defendant. See Blockbuster, 472 F.3d at 56; see also BlackRock Fin. Mgmt. Inc. v. Segregated Account of Ambac Assurance Corp., 673 F.3d 169, 175 (2d Cir. 2012) (observing that the Class Action Fairness Act of 2005, Pub. L. No. 109-2, 119 Stat. 4, “expanded federal jurisdiction to permit a defendant to remove to federal court a class action… notwithstanding the absence of complete diversity or federal question otherwise required for removal.”).
In opposing Mr. Edwards’s Motion to Amend the Complaint, NAPG argues that Mr. Edwards has failed to allege the existence of minimal diversity, as the lawsuit currently stands, because the initial Complaint indicates that he, the putative class members, and NAPG are all Connecticut citizens. See NAPG’s Opp. Br. 2, ECF No. 53. It reasons that without minimal diversity, the Court lacks subject matter jurisdiction. Id. In other words, NAPG argues that the case lacks minimal diversity unless Mr. Edwards’s Motion to Amend the Complaint is granted. The Court agrees with this conclusion, but has also identified an ambiguity in Mr. Edwards’s allegations of citizenship that it would like him to address first.
Mr. Edwards has successfully alleged that NAPG is a Connecticut and Delaware citizen. For the purpose of analyzing diversity jurisdiction, corporations are citizens of both the place they are incorporated and their principal place of business. See 28 U.S.C. §1332(c)(1) (“[A] corporation shall be deemed to be a citizen of every State [ ] by which it has been incorporated and of the State [ ] where it has its principal place of business….”); see also Ventimiglia v. Tishman Speyer Archstone-Smith Westbury, L.P., 588 F.Supp.2d 329, 336 (E.D.N.Y. 2008) (observing that an organization may be a citizen of two states where it’s principal place of business is in one state and it is organized under the laws of another). Mr. Edwards alleges that NAPG is incorporated in Delaware, with its principal place of business in Connecticut. Compl. ¶9, ECF No. 1; Proposed Am. Compl. ¶13, ECF No. 52-1. Thus, NAPG is a Connecticut and Delaware citizen. For minimal diversity to exist, Mr. Edwards must show that one member of the Plaintiffs’ class is a citizen of another state.
Individuals are citizens of the place they are domiciled, or where they are physically located with intent to stay. See Universal Reins. Co. v. St. Paul Fire & Marine Ins. Co., 224 F.3d 139, 141(2d Cir. 2000) (“[E]stablishing one’s domicile in a state generally requires both physical presence there and intent to stay.”). The Second Circuit has indicated that alleging that an individual is a “resident” of a certain state is insufficient to indicate that individual’s citizenship. Canedy v. Liberty Mut. Ins. Co.¸ 126 F.3d 100, 103 (2d Cir. 1997) (“it is well-established that allegations of residency alone cannot establish citizenship…”). In the class action context, the Second Circuit also has found that an allegation that a class consisted of “New York customers” was sufficient to allege the citizenship of those class members for the purposes of diversity analysis. See e.g., Blockbuster, 472 F.3d at 59 (holding that the allegation that a putative class ...