Toothman v. Redwood Toxicology Laboratory, Inc.

Background

Robert Toothman brought a wage-and-hour class action against Redwood Toxicology Laboratory, Inc. The opinion describes the claims as arising exclusively under California law. Redwood removed the case to federal court. Toothman moved to remand, arguing that an exception to federal jurisdiction under the Class Action Fairness Act (CAFA) applied. Redwood also moved to compel arbitration.

The court ordered jurisdictional discovery concerning CAFA’s home-state exception. The record showed that 97% of the more than 350 proposed class members had last-known addresses in California, and most of those addresses were in Santa Rosa, where Redwood’s laboratory is located, or within driving distance. Redwood argued that a last-known address did not establish citizenship and pointed to records identifying about one-third of the class as non-citizens.

Court’s analysis

CAFA generally gives federal courts jurisdiction over qualifying class actions when at least one class member is a citizen of a different state from a defendant. CAFA also contains a mandatory home-state exception and a discretionary home-state exception. The discretionary exception allows a federal court to decline jurisdiction when more than one-third but less than two-thirds of the proposed class and the primary defendants are citizens of the state where the case was originally filed, if the statutory factors support returning the case to state court.

The court held that the record supported discretionary remand. Even accepting Redwood’s evidence that 114 of 364 class members identified as non-citizens, more than 68% of the class were United States citizens. Of the United States citizens identified by Redwood, only 8 of 250 had last-known addresses outside California. Although a last-known address is not the same as citizenship, the court found it reasonable to infer that at least one-third of the class members were California citizens. The court noted that this met the minimum threshold for discretionary remand, even if the higher threshold for mandatory remand was not met.

The court found that the discretionary factors favored remand. The claims involved no national or interstate interests, were governed exclusively by California law, and were not shown to have been pleaded to avoid federal jurisdiction. California had a distinct connection to the class members, the alleged harm, and Redwood because most class members had California addresses, the alleged harm occurred in California where the class members worked, and Redwood was described as a California-based corporation. California also had more class members with likely citizenship there than any other state, while the other identified addresses were dispersed among several states.

The court additionally relied on the case’s history. The case had been litigated in state court for almost a year, discovery had begun, and at least one deposition had occurred. Redwood removed the case after filing and losing a motion to compel arbitration. The court stated that the late removal had stalled the proceedings in federal court and bore the hallmarks of forum shopping. The court did not reach Toothman’s arguments that removal was untimely or that the amount in controversy was insufficient.

Rulings

The court granted Toothman’s motion to remand. It denied as moot Redwood’s motion to compel arbitration. The court ordered the parties to submit supplemental briefs by October 3, 2025, addressing whether Toothman should receive costs and fees under 28 U.S.C. § 1447(c).