Streamers Clarify Court Jurisdiction in Franchise Fee Case

The appellees responded to a concern Judge Frank Easterbrook raised at oral argument earlier this month (see 2309120039). Easterbrook said there might not be diversity jurisdiction because Warner Media Direct is owned by AT&T Capital Services, which is based in Illinois where the complaint was first filed. The appellees conceded that’s the case and said they “withdraw any contention that diversity jurisdiction independently exists under Section 1332(a)” of the 2005 Class Action Fairness Act. They amended their jurisdictional statement to show how the court can act without needing to establish diversity jurisdiction. "The federal courts have subject-matter jurisdiction over this action under the" Fairness Act "because this putative class action involves minimally diverse parties, at least 100 class members, and an amount in controversy exceeding $5,000,000,” the streamers said. A local controversy exception in Section 1332(d)(4) "provides no basis to 'decline to exercise' jurisdiction for two independent reasons,” they said. No defendant is a citizen of the state where the action was first filed, under the meaning of Section 1332(d)(10), said the appellees: WarnerMedia Direct "is a citizen only of New York (its principal place of business) and Delaware (under whose laws it is organized)." Another reason the local controversy exception doesn't apply is that there have been many other class actions by different groups of cities asserting similar factual allegations against multiple defendants around the U.S., said the streamers: The 7th Circuit declined to apply the exception in a similar situation last year in Schutte v. Ciox Health.