Celena King v. GREAT AMERICAN CHICKEN CORP, INC., DBA Kentucky Fried Chicken

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
CELENA KING,
Plaintiff-Appellee,
v.
GREAT AMERICAN CHICKEN
CORP, INC., DBA Kentucky
Fried Chicken,
Defendant-Appellant.
No. 18-55911
D.C. No.
2:17-cv-04510-GW-AS
OPINION
Appeal from the United States District Court
for the Central District of California
George H. Wu, District Judge, Presiding
Argued and Submitted August 10, 2018
Pasadena, California
Filed September 6, 2018
Before: Richard R. Clifton and Morgan Christen, Circuit
Judges, and Cynthia M. Rufe,* District Judge.
Opinion by Judge Clifton
* The Honorable Cynthia M. Rufe, United States District Judge for the
Eastern District of Pennsylvania, sitting by designation.

-- 1 of 16 --

KING V. GREAT AMERICAN CHICKEN CORP. 2
SUMMARY**
Class Action Fairness Act / Jurisdiction
The panel vacated the district court’s order remanding
plaintiff’s putative class action to Los Angeles Superior Court
after it was removed to federal court by Great American
Chicken Corp., Inc. under the Class Action Fairness Act
(“CAFA”).
Plaintiff sought remand back to state court based on the
local controversy or home-state controversy exception to
CAFA jurisdiction. Plaintiff had the burden to prove that
“greater than two-thirds” of the putative class members were
“citizens” of California. See 28 U.S.C. § 1332(d)(4). The
defendant proposed a stipulation, which plaintiff opposed,
that at least two-thirds of the putative class members under
plaintiff’s proposed definition—current and former
defendant’s employees—had last known addresses in
California. The district court accepted the stipulation, found
that plaintiff made the necessary factual finding, and granted
plaintiff’s motion to remand.
The panel held that plaintiff did not meet her burden of
proof to establish the local controversy exception to CAFA.
The panel held that the district court’s stipulation of class
members’ citizenship left very little cushion, if any, to
account for former employees who were not domiciled in
California at the time this case was removed to federal court,
because, for example, they had moved to another state.
** This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.

-- 2 of 16 --

KING V. GREAT AMERICAN CHICKEN CORP. 3
Similarly, the panel held that there was little margin to cover
employees who may have had last-known addresses in
California but did not qualify as citizens of California
because they were not citizens of the United States. The
panel further held that there was no evidentiary basis for the
district court to find that subtracting those groups would not
reduce the fraction of class members that were California
citizens at the time of removal to a level less than the required
“greater than two-thirds.” The panel concluded that because
there was no other evidence before the district court on that
subject, the finding that more than two-thirds of the putative
class members were citizens of California at the time of
removal was clearly erroneous.
The panel remanded to federal district court to allow
plaintiff to conduct jurisdictional discovery and to renew her
motion to remand.
COUNSEL
Scott A. Brooks (argued), Kayvon Sabourian, Launa Adolph,
and Matthew J. Matern, Matern Law Group PC, Manhattan
Beach, California, for Plaintiff-Appellant.
Mark D. Kemple (argued) and Ashley Farrell Pickett,
Greenberg Traurig LLP, Los Angeles, California, for
Defendants-Appellees.

-- 3 of 16 --

KING V. GREAT AMERICAN CHICKEN CORP. 4
OPINION
CLIFTON, Circuit Judge:
Great American Chicken Corp, Inc. (“GAC”), which does
business in California as Kentucky Fried Chicken, appeals the
district court’s remand of plaintiff Celena King’s putative
class action to Los Angeles Superior Court. The action was
originally filed in that court and removed to federal court by
GAC under the Class Action Fairness Act (“CAFA”). It is
undisputed that removal under CAFA was proper here, but
King sought remand to state court based on the local
controversy or home-state controversy exception to CAFA
jurisdiction. The question presented in this appeal is whether
the district court correctly found that King met her burden of
proving a factual requirement for remand under these
exceptions, specifically that greater than two-thirds of the
putative class members were California citizens at the time
the case was removed to federal court.
After GAC removed the case to federal court, King
sought discovery from GAC relevant to that factual question.
GAC resisted King’s discovery requests. In lieu of providing
responses to the requests, GAC proposed a stipulation that at
least two-thirds (sometimes expressed as at least 67 percent)
of the putative class members under the definition proposed
by King—current and former GAC employees—had last-
known addresses in California. King declined GAC’s
proposal, but the district court held that the stipulation
resolved the discovery dispute and ordered that it be accepted.
Subsequently, based on the stipulation and other inferences,
the district court granted King’s motion to remand, finding
King had made the necessary factual showing.

-- 4 of 16 --

KING V. GREAT AMERICAN CHICKEN CORP. 5
King had the burden to prove that “greater than two-
thirds” of the putative class members were “citizens” of
California. See 28 U.S.C. § 1332(d)(4). The stipulation left
very little cushion, if any, to account for former employees
who were not domiciled in California at the time this case
was removed to federal court, because, for example, they had
moved to another state. Similarly, there was little margin to
cover employees who may have had last-known addresses in
California but who did not qualify as citizens of California
because they were not citizens of the United States. There
was no evidentiary basis for the district court to find that
subtracting those groups would not reduce the fraction of
class members that were California citizens at the time of
removal to a level less than the required “greater than two-
thirds.” Because there was no other evidence before the
district court on that subject, the finding that more than two-
thirds of the putative class members were citizens of
California at the time of removal was clearly erroneous. The
order of remand to state court must be vacated, and this case
must be remanded to federal district court for further
proceedings. In district court, however, King should be
permitted to conduct jurisdictional discovery in this matter
and to renew her motion to remand.
I. Background
King filed a putative class action complaint on behalf of
all non-exempt California GAC employees in the Los
Angeles Superior Court on January 10, 2017. The complaint
alleged various violations of California wage-and-hour laws.
A first amended complaint was filed on February 21, 2017.
It defined the putative class as “all current and former non-

-- 5 of 16 --

KING V. GREAT AMERICAN CHICKEN CORP. 6
exempt employees of DEFENDANTS[1] in the State of
California at any time within the period beginning four
(4) years prior to the filing of this action and ending at the
time this action settles or proceeds to final judgment.” The
district court later noted that the putative class may include as
many as 6,000 employees.
GAC removed the case to the United States District Court
for the Central District of California on June 19, 2017,
pursuant to 28 U.S.C. §§ 1332(a), 1332(d), and 1446(b). As
will be explained in greater detail below, CAFA provides that
some class actions removed to federal court may be subject
to remand to state court if plaintiffs can make specified
showings that the cases involve local controversies and are
not interstate disputes that qualify for adjudication in federal
court. After removal, King sought jurisdictional discovery in
the form of names, last-known addresses, telephone numbers,
and email addresses for all putative class members, as well as
information regarding the percentage of the putative class
members whose last-known address was in California.
GAC failed to provide the information sought by the
discovery requests. It argued, among other things, that the
precise requests posed by King would not satisfy her burden
to prove the requirements for remand. As an alternative, GAC
offered to stipulate that at least two-thirds of the putative
class members had last-known addresses in California,
though GAC also argued that this would not be enough for
King to meet her burden. King declined GAC’s offer.
1 The plural “defendants” may be explained by the fact that the
complaints filed by King in state court named as defendants unidentified
“Does,” in addition to GAC. GAC was the only identified defendant, so
we will continue to refer to it by itself.

-- 6 of 16 --

KING V. GREAT AMERICAN CHICKEN CORP. 7
The precise term of the stipulation was not entirely clear.
No formal stipulation was filed with the court. It arose during
the court’s resolution of the discovery dispute. GAC
described it to the district court as a stipulation “that at least
two-thirds (at least 67%) of the putative class are shown with
addresses in California.” King characterized it as a
stipulation “that two-thirds of the putative class members had
a last-known residential address in California.”
At a scheduling conference on November 30, 2017, the
discovery dispute was raised with the district court. The
court concluded that the stipulation was sufficient to satisfy
King’s requests and declined to order GAC to provide
additional discovery. The district court’s minute order
following the conference stated that, “[i]n lieu of the requests
for discovery, the Court finds [GAC’s] stipulation is
sufficient in that at least 67% of the last-known addresses are
in California.” (Emphasis in original.)
King moved to remand the case to state court. GAC
argued that the motion to remand should be denied because
King had not established that over two-thirds of the putative
class members were California citizens. After a hearing, the
district court granted the motion to remand on January 30,
2018. In that order, the court relied upon the stipulation “that
at least two-thirds of the putative class members had last-
known addresses in California.”
GAC petitioned for permission to appeal, and we granted
that petition on July 9, 2018. This appeal followed.
II. Discussion

-- 7 of 16 --

KING V. GREAT AMERICAN CHICKEN CORP. 8
Under CAFA, federal courts have original diversity
jurisdiction over class actions where the aggregate amount in
controversy exceeds $5,000,000, where the putative class size
exceeds 100 persons, and where, among other possibilities,
“any member of a class of plaintiffs is a citizen of a State
different from any defendant.” 28 U.S.C. § 1332(d)(2)(A),
(d)(5)(B). In its notice of removal, GAC noted that this
action satisfied these requirements. Regarding the last
element, that at least one member of the putative class was a
citizen of a state other than California, GAC specifically
identified one class member who was a citizen of Texas at the
time of removal. King has not disputed that these
requirements were met in this case.
The statute includes a number of exceptions that require
a federal district court to decline jurisdiction even if the
above requirements were met. They include what are
commonly referred to as the local controversy exception, see
28 U.S.C. § 1332(d)(4)(A); see also Mondragon v. Capital
One Auto Fin., 736 F.3d 880, 881 (9th Cir. 2013), and
the home-state controversy exception, see 28 U.S.C.
§ 1332(d)(4)(B); see also Serrano v. 180 Connect, Inc.,
478 F.3d 1018, 1019 (9th Cir. 2007).2 These exceptions
2 In its entirety, the relevant subsection of CAFA, 28 U.S.C.
§ 1332(d)(4), provides:
A district court shall decline to exercise jurisdiction
under paragraph (2)–
(A)(i) over a class action in which–
(I) greater than two-thirds of the members of
all proposed plaintiff classes in the aggregate
are citizens of the State in which the action

-- 8 of 16 --

KING V. GREAT AMERICAN CHICKEN CORP. 9
require the party seeking remand to state court to prove,
among other things, that greater than two-thirds of proposed
class members “are citizens of the State in which the action
was originally filed.” 28 U.S.C. §§ 1332(d)(4)(A), (B).
The only issue on appeal is whether King met her burden
to establish that greater than two-thirds of the putative class
members were California citizens as of the date the case
was originally filed;
(II) at least 1 defendant is a defendant–
(aa) from whom significant relief is
sought by members of the plaintiff class;
(bb) whose alleged conduct forms a
significant basis for the claims asserted
by the proposed plaintiff class; and
(cc) who is a citizen of the Sate in which
the action was originally filed; and
(III) principal injuries resulting from the
alleged conduct or any related conduct of each
defendant were incurred in the State in which
the action was originally filed; and
(ii) during the 3-year period preceding the filing of
that class action, no other class action has been filed
asserting the same or similar factual allegations against
any of the defendants on behalf of the same or other
persons; or
(B) two-thirds or more of the members of all
proposed plaintiff classes in the aggregate, and the
primary defendants, are citizens of the State in which
the action was originally filed.

-- 9 of 16 --

KING V. GREAT AMERICAN CHICKEN CORP. 10
became removable. See 28 U.S.C. § 1332(d)(7). CAFA was
intended to strongly favor federal jurisdiction over interstate
class actions. See Brinkley v. Monterey Fin. Servs., Inc.,
873 F.3d 1118, 1121 (9th Cir. 2017). The burden of
establishing that a CAFA exception applies is on King, as the
party seeking to remand. Id. The individual factors of a
party’s citizenship are “essentially factual.” Lew v. Moss,
797 F.2d 747, 750 (9th Cir. 1986). King must establish the
required facts by a preponderance of evidence. Mondragon,
736 F.3d at 884.
A. Our opinion in Mondragon
In Mondragon we vacated an order of remand based on
the local controversy exception in a putative class action
because the plaintiff “submitted no evidence regarding the
disputed issue, the citizenship of prospective class members.”
Id. at 881. We concluded that the plaintiff, Jose Mondragon,
“did not present any evidence of the citizenship of the
putative class members” in his motion to remand, but
“[i]nstead, he sought to rely entirely on his proposed class
definitions, arguing that the court should infer from those
definitions that more than two-thirds of the class members
were citizens of California.” Id. at 882. Mondragon, like the
plaintiff here, had the burden to “establish that greater than
two-thirds of prospective class members were citizens of
California as of the date the case became removable.” Id. at
883. Our court joined the Fifth, Seventh, and Eleventh
Circuits in concluding that a district court must base its
findings about class members’ citizenship on “at least some
facts in evidence” for the local controversy exception to
apply. Id. at 884. Mondragon failed “to produce any
evidence regarding citizenship in the face of [the defendant’s]

-- 10 of 16 --

KING V. GREAT AMERICAN CHICKEN CORP. 11
challenge to his jurisdictional allegations” and therefore did
not meet his burden. Id.
We were careful to point out that “the burden of proof
placed upon a plaintiff should not be exceptionally difficult
to bear.” Id. at 886. Instead, a district “court should consider
‘the entire record’ to determine whether evidence of
residency can properly establish citizenship.” Id. (quoting
Preston v. Tenet Healthsystem Mem’l Med. Ctr., Inc.,
485 F.3d 793, 800 (5th Cir. 2007)). We noted, moreover, that
“[a]s a general proposition, district courts are permitted to
make reasonable inferences from facts in evidence, and that
is true in applying the local controversy exception under
CAFA, as well.” Id.
B. Evidence of citizenship in this case
In the current case, the district court relied in its order of
remand upon the stipulation that “at least two-thirds of the
putative class members had last-known addresses in
California.” Elsewhere, as previously noted, the district court
described the stipulation as being that “at least 67% of the last
known addresses [of the putative class members] are in
California.” Those two fractions are not exactly the same, of
course, because two-thirds actually translates into 66 & 2/3
percent, not 67 percent.
To qualify for remand under the local controversy
exception in CAFA, King had to establish that “greater than
two-thirds” of the class members were citizens of California.
On its face, a stipulation that spoke to “at least two-thirds” of
the class members would be insufficient, because “at least” is
not the same as “greater.”

-- 11 of 16 --

KING V. GREAT AMERICAN CHICKEN CORP. 12
The alternative understanding of the stipulation, “at least
67 percent,” would produce a figure “greater than two-
thirds,” but by an extremely narrow margin. If we assume for
the moment that the class included 6,000 members, as the
district court estimated it might, two-thirds would be 4,000,
while 67 percent would be 4,020. “Greater than two-thirds”
would mean at least 4,001, so “at least 67 percent,” or 4,020,
would leave a cushion of only 19 class members.
While King’s burden of proof should not be
“exceptionally difficult to bear,” Mondragon, 736 F.3d at
886, she did not meet it here. In addition to the former
employee identified by GAC in its notice of removal who had
become a citizen of Texas, GAC provided evidence that at
least one other employee permanently moved to Arizona. It
seems likely that at least some others in the group would have
moved out of California as well. Given the class definition,
many of the addresses were at least four years old, and there
was evidence that GAC’s records included last-known
addresses that were even older. Moreover, it is not
implausible that at least a few GAC employees were citizens
of other states even if they temporarily had a residential
address in California, such as an out-of-state student working
while attending college in California. A person’s state of
citizenship is established by domicile, not simply residence,
and a residential address in California does not guarantee that
the person’s legal domicile was in California. See Kanter v.
Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001).
In addition, it is very likely that some putative class
members were not United States citizens. CAFA expresses
the requirement for remand that at least two-thirds of the
proposed class members be “citizens of the State,” in this
case California. “To be a citizen of a state, a natural person

-- 12 of 16 --

KING V. GREAT AMERICAN CHICKEN CORP. 13
must first be a citizen of the United States.” Kanter, 265 F.3d
at 857. It cannot be assumed that all residents of California
are citizens of the United States. There is no evidence in the
record regarding what proportion of California residents are
not citizens, let alone what proportion of GAC employees,
but it is not obvious that the number would be fewer than
one-third of 1 percent, or fewer than 19 out of 6,000.
In sum, given the narrow cushion provided by the
stipulation, the likelihood that some putative class members
were legally domiciled in or subsequently relocated to
another state, and the probability that some class members
were not United States citizens, we cannot conclude that there
was sufficient evidence to support a finding that greater than
two-thirds of the putative class members were California
citizens. The order of remand to Los Angeles Superior Court
must be vacated.
We appreciate why the district court drew the inference
that it did, and why it hoped to avoid discovery that could be
burdensome and contentious. The impression that this case
would qualify for the local or home-state controversy
exception is easy to understand. It seems unlikely that
allowing this case to proceed in state court would defeat
“CAFA’s primary objective: ensuring Federal court
consideration of interstate cases of national importance.”
Standard Fire Ins. Co. v. Knowles, 568 U.S. 588, 595 (2013)
(internal quotation marks omitted). GAC has affirmatively
acknowledged that it is incorporated in the state of California
and, in its own words, has its “principal (indeed, exclusive)
place of business” there. King’s claim is based entirely on
California law. Although the stipulation GAC offered and
that the district court adopted spoke to only “at least two-
thirds” of the employees having California addresses, it is

-- 13 of 16 --

KING V. GREAT AMERICAN CHICKEN CORP. 14
hard to imagine that the proportion would not be substantially
larger than that. King speculated that it would exceed
90 percent. The geography of California, notably the
substantial distances between California’s major population
centers and other states, make it unlikely that many of GAC’s
employees traveled from residences outside of California.
Jobs at fast food restaurants are not likely to attract
employees commuting great distances. Though some
employees might have maintained legal domiciles in other
states, that number was probably not great.
The problem is that this impression rests on guesswork.
See Mondragon, 736 F.3d at 884 (“A jurisdictional finding of
fact should be based on more than guesswork.”). There was
no evidence to support a factual finding that the proportion of
California citizens was greater than two-thirds. With the
likelihood that some number of the employees were not
legally domiciled in California, that others may later have
moved out of state, and that some were not citizens, the
stipulation was insufficient, and there was no other evidence
to fill the gap.
In Mondragon we suspected that the plaintiff in that case
could, if he decided to expend the effort, come up with
sufficient evidence to establish that two-thirds of prospective
class members were citizens of California. Id. at 885. The
same is true in this case.
The ultimate outcome here does not mean that a
stipulation could never establish state citizenship for purposes
of the local or home-state controversy exceptions to CAFA
jurisdiction. Nor does it mean that a similar stipulation would
be insufficient if it provided a more substantial cushion and
was bolstered by evidence that the number of class members

-- 14 of 16 --

KING V. GREAT AMERICAN CHICKEN CORP. 15
who were not domiciled in California or might not qualify as
citizens are likely covered by the cushion. We have
previously noted that “[w]e do not think . . . that evidence of
residency can never establish citizenship.” Id. at 886. There
simply needs to be sufficient evidence to support a factual
finding by a preponderance of evidence that greater than two-
thirds were California citizens at the time of removal.
Though we have concluded that King did not prove by a
preponderance of the evidence that greater than two-thirds of
the putative class members were California citizens, it is clear
from the record that King did not have a full opportunity
to do so. GAC resisted King’s requests for jurisdictional
discovery. The district court accepted GAC’s stipulation
instead of permitting King to pursue that discovery. In its
order, the district court expressed support for allowing King
additional jurisdictional discovery, if necessary. In
Mondragon, we vacated the district court’s order and
remanded “with instructions to allow Mondragon an
opportunity, if he so chooses, to renew his motion to remand
and to gather evidence to prove that more than two-thirds of
putative class members are citizens of California.” Id. We
do the same here. If GAC complains that the burden placed
on it is too onerous, it is free to propose a stipulation that
would better address King’s burden.
III. Conclusion
The district court’s finding that King proved by a
preponderance of the evidence that greater than two-thirds of
the putative class members were California citizens was not
supported by sufficient evidence. The order of remand must
be vacated. On remand to the district court, however, King

-- 15 of 16 --

KING V. GREAT AMERICAN CHICKEN CORP. 16
should be given an opportunity to seek additional
jurisdictional discovery and to renew her motion to remand.
VACATED and REMANDED for further proceedings.

-- 16 of 16 --