Ventura v. H & M Hennes & Mauritz L.P.

Background

Victoria Ventura brought a putative class action against H & M Hennes & Mauritz L.P. (“H&M”), individually and on behalf of people who worked as retail clothing-store employees for H&M in New York. She asserted one claim under New York Labor Law section 191(1)(a), alleging that H&M unlawfully paid the affected employees every two weeks instead of weekly.

Ventura alleged that federal jurisdiction existed under the Class Action Fairness Act (CAFA). H&M moved to dismiss under Federal Rule of Civil Procedure 12(b)(1), which addresses challenges to the court’s subject-matter jurisdiction. H&M argued that CAFA’s home-state exception required the federal court to decline jurisdiction.

The Court’s Analysis

CAFA generally gives federal courts jurisdiction over qualifying class actions involving at least $5 million in controversy and minimal diversity between at least one plaintiff and one defendant. But the home-state exception requires a court to decline jurisdiction when at least two-thirds of the proposed class and the primary defendant are citizens of the state where the action was filed.

The court first held that H&M raised the home-state exception within a reasonable time. H&M filed its motion just under one year after the complaint, but the parties had engaged in no other motion practice, there had been no substantive rulings, and only limited discovery had occurred. The court therefore concluded that H&M had not waived the exception.

The court next considered H&M’s citizenship for purposes of CAFA. It held that a limited partnership is treated as an unincorporated association under CAFA’s citizenship provision. Under that provision, the entity is a citizen of the state where it has its principal place of business and the state under whose laws it is organized.

The court found that H&M’s principal place of business was in New York because H&M’s headquarters were in Manhattan and virtually all of its national operations were directed from there. The court also noted that Ventura did not meaningfully dispute H&M’s evidence on this point. Ventura did not dispute that more than two-thirds of the proposed class were citizens of New York.

Because the proposed class and H&M were citizens of New York, the state where the action was filed, the court concluded that the home-state exception applied. The court rejected Ventura’s request to remand the case to state court because the action had originally been filed in federal court.

Disposition

The court granted H&M’s Motion to Dismiss. It directed the Clerk of Court to enter judgment dismissing the Complaint without prejudice and to close the case. The order did not decide the merits of Ventura’s claim that H&M violated New York wage law. The court stated that Ventura could continue pursuing the claims in an appropriate forum.

This Memorandum Order resolved docket entry no. 19.