United States District Court, D. Colorado
RCHFU, LLC, a Colorado limited liability company, et al., Plaintiffs,
MARRIOTT VACATIONS WORLDWIDE CORPORATION, et al., Defendants.
ORDER TO SHOW CAUSE
A. BRIMMER, United States District Judge
Court takes up this matter sua sponte on the fifth
amended complaint [Docket No. 119] filed by plaintiffs. On
March 27, 2016, this action was removed from the District
Court for Pitkin County, Colorado by defendants Marriott
Vacations Worldwide Corporation, Marriott Ownership Resorts,
Inc., The Ritz-Carlton Management Company, LLC, The Cobalt
Travel Company, LLC, and The Lion & Crown Travel Company,
LLC (collectively, “removing defendants”). Docket
No. 1 at 2. Removing defendants claimed that the Court had
subject matter jurisdiction over this lawsuit pursuant to the
Class Action Fairness Act of 2005, 28 U.S.C. §§
1332, 1446, 1453 (“CAFA”). Docket No. 1 at 2. At
that time, the operative complaint contained class claims,
see Docket No. 5; however, subsequent amendments
have removed all such claims. See, e.g., Docket No.
119 at 92-100.
every case and at every stage of the proceeding, a federal
court must satisfy itself as to its own jurisdiction, even if
doing so requires sua sponte action.
Citizens Concerned for Separation of Church
& State v. City & Cty. of Denver, 628 F.2d 1289,
1297 (10th Cir. 1980). Absent an assurance that jurisdiction
exists, a court may not proceed in a case. See Cunningham
v. BHP Petroleum Great Britain PLC, 427 F.3d 1238, 1245
(10th Cir. 2005). Courts are well-advised to raise the issue
of jurisdiction on their own, regardless of parties'
apparent acquiescence. First, it is the Court's duty to
do so. See Laughlin v. Kmart Corp., 50 F.3d 871, 873
(10th Cir. 1995) (“[I]f the parties fail to raise the
question of the existence of jurisdiction, the federal court
has the duty to raise and resolve the matter.”),
abrogated on other grounds by Dart Cherokee Basin
Operating Co., LLC v. Owens, 135 S.Ct. 547 (2014).
Second, “[s]ubject matter jurisdiction cannot be
conferred or waived by consent, estoppel, or failure to
challenge jurisdiction early in the proceedings.”
Id. Finally, delay in addressing the issue only
compounds the problem if it turns out that, despite much time
and expense having been dedicated to a case, a lack of
jurisdiction causes it to be dismissed or remanded regardless
of the stage it has reached. See U.S. Fire Ins. Co. v.
Pinkard Constr. Co., No. 09-cv-00491-PAB-MJW, 2009 WL
2338116, at *3 (D. Colo. July 28, 2009). It is well
established that “[t]he party invoking federal
jurisdiction bears the burden of establishing such
jurisdiction as a threshold matter.” Radil v.
Sanborn W. Camps, Inc., 384 F.3d 1220, 1224 (10th Cir.
CAFA provisions in 28 U.S.C. § 1332 grant jurisdiction
over some claims not brought under Fed.R.Civ.P. 23 or a state
law analogue. In particular, 28 U.S.C. § 1332(d)(11)(A)
states that “a mass action shall be deemed to be a
class action.” The term “mass action” is
defined as “any civil action (except a civil action
within the scope of section 1711(2)) in which monetary relief
claims of 100 or more persons are proposed to be tried
jointly on the ground that the plaintiffs' claims involve
common questions of law or fact, except that jurisdiction
shall exist only over those plaintiffs whose claims in a mass
action satisfy the jurisdictional amount requirements under
subsection (a).” 28 U.S.C. § 1332(d)(11)(B)(i).
Exempted from the definition of a mass action are cases in
which “all of the claims in the action arise from an
event or occurrence in the State in which the action was
filed, and that allegedly resulted in injuries in that State
or in States contiguous to that State.” 28 U.S.C.
§ 1332(d)(11)(B)(ii)(I). This exception to mass action
jurisdiction has been referred to variously as the
“local controversy exception, ” “local
occurrence rule, ” “local single event exclusion,
” or “local single event exception.”
See, e.g. Hamilton v. Burlington N. Santa Fe Ry.
Co., 2008 WL 8148619, at *8 (W.D. Tex. Aug. 8, 2008);
Rainbow Gun Club, Inc. v. Denbury Onshore, L.L.C.,
760 F.3d 405, 408 (5th Cir. 2014); Allen v. Boeing
Co., 784 F.3d 625, 632 (9th Cir. 2015). The Court uses
the term “local occurrence exception.”
is a split of authority on what constitutes “an event
or occurrence” under the local occurrence exception.
See Rainbow Gun Club, Inc., 760 F.3d at
A district court in the Tenth Circuit construed the phrase as
limiting the local occurrence exception to “apply only
in cases involving a single event or occurrence, such as an
environmental accident, that gives rise to the claims of all
plaintiffs, ” but the Tenth Circuit did not reach the
issue on appeal. Lafalier v. Cinnabar Serv. Co.,
2010 WL 1486900, at *4 (N.D. Okla. Apr. 13, 2010),
aff'd sub nom. Lafalier v. State Farm Fire & Cas.
Co., 391 F. App'x 732 (10th Cir. 2010)
(unpublished). By contrast, the Fifth Circuit held that,
“[a]lthough the exclusion certainly applies in cases in
which the single event or occurrence happens at a discrete
moment in time, the single event or occurrence may also be
constituted by a pattern of conduct in which the pattern is
consistent in leading to a single focused event that
culminates in the basis of the asserted liability.”
Rainbow Gun Club, Inc., 760 F.3d at 412. It is
unclear whether these differences in interpretation are
material to the events in this case. See Armstead v.
Multi-Chem Grp., LLC., 2012 WL 1866862, at *7 (W.D. La.
May 21, 2012) (“The exception clearly does not focus .
. . on the defendant's conduct. Rather, the exception
focuses on whether the plaintiffs' claims ‘arise
from' a single event or occurrence in the forum state
that results in injuries in the forum state.”).
parties agree that plaintiffs allege harms resulting from the
“trading program” allowing Marriot Vacation Club
members to use their timeshare points to stay in the
Ritz-Carlton Club, Aspen Highlands, Colorado. Docket No. 119
at 13-14, ¶¶ 9-10 and at 91-92, ¶¶ 83-86;
Docket No. 129 at 2; Docket No. 131 at 2 (“Plaintiffs
have no complaints about [Ritz-Carlton (“RC”)]
Club Aspen, their fractional interests per se, or the RC Club
Membership Program in general. Rather, they complain that, in
2014, RC Club Aspen's Program Manager, Cobalt, decided to
affiliate RC Club Aspen with Marriott Vacation Club
Destinations.”). Plaintiffs' alleged harms are the
loss of value of their Colorado real estate, i.e., the
fractional unit interests that they own in the Ritz-Carlton
Club, Aspen Highlands, Colorado. See, e.g., Docket
No. 119 at 94, ¶ 94 (“Plaintiffs . . . suffered
damages, including the destruction of the value in their
fractional units.”). Defendant Aspen Highlands
Condominium Association, Inc. states that this trading
program was “formalized” in an “April 2014
Memorandum of Understanding.” Docket No. 129 at 2. The
Court has limited information about the formalization and
implementation of the trading program, in part, because
defendants did not file a copy of the April 2014 Memorandum
of Understanding with their motions to dismiss and it is not
attached to or discussed in the complaint. See id.
Without such information, the Court cannot independently
assess its jurisdictional import. See Pinkard Constr.
Co., 2009 WL 2338116, at *3; Affordable Cmty. of Mo.
v. EF & A Capital Corp., 2008 WL 4966731, at *2-3
(E.D. Mo. Nov. 19, 2008).
Tenth Ciruit has held that, “absent compelling reasons
to the contrary, ” courts should decline to exercise
supplemental jurisdiction where only state law claims over
which they have pendant jurisdiction remain. Brooks v.
Gaenzle, 614 F.3d 1213, 1230 (10th Cir. 2010) (internal
quotation marks omitted). Because the removing defendants
seek to assert federal jurisdiction and, therefore, bear the
burden on this issue, the Court will order the removing
defendants to address whether the local occurrence exception
applies under the facts of this case and, if so, whether
compelling reasons exist for the Court to exercise pendant
foregoing reasons, it is ORDERED that, on or
before 5:00 p.m. on March 8, 2018,
defendants Marriott Vacations Worldwide Corporation, Marriott
Ownership Resorts, Inc., The Ritz-Carlton Management Company,
LLC, The Cobalt Travel Company, LLC, and The Lion & Crown
Travel Company, LLC shall show cause why this case should not
be remanded due to the Court's lack of subject matter
 Some courts have held that the burden
shifts to the party opposing removal under CAFA when that
party seeks to invoke the exceptions to 28 U.S.C. §
1332(d). See Allen v. Boeing Co., 784 F.3d 625, 628
(9th Cir. 2015). “Two provisions that generally are
regarded as exceptions . . . for purposes of the allocation
of the burden of proof are sections 1332(d)(4)(A) and
(B).” 14B Charles Alan Wright & Arthur R.
Miller, Fed. Prac. & Proc. § 3724 (4th ed.).
Title 28 U.S.C. § 1332(d)(11)(B)(ii)(I) forms an
exception to the definition of a mass action removable
pursuant to CAFA, and the Court is not aware of any courts
that have shifted the burden to establish that a case is a
mass action away from the removing party.
 As accurately described by the
Eleventh Circuit, “CAFA's mass action provisions
present an opaque, baroque maze of interlocking
cross-references that defy easy interpretation.”
Lowery v. Alabama Power Co., 483 F.3d ...