The Franchise Memorandum

A Minnesota federal court has denied a motion to remand a class action lawsuit to state court, holding that the federal court had jurisdiction over the action under the Class Action Fairness Act (CAFA). In Green et al. v. SuperShuttle Int’l, Inc. et al., 2010 U.S. Dist. LEXIS 7456 (D. Minn. Jan. 29, 2010), a putative class of current and former franchisees sued various SuperShuttle entities that provide shared-ride airport shuttle services, claiming the entities had mischaracterized them as franchisees rather than as employees. The plaintiff-franchisees originally sued in state court for back wages and a return of franchise fees. SuperShuttle removed the case to federal court on the basis of federal question jurisdiction.

In seeking a remand to state court, the plaintiffs contended that their case fell within CAFA’s exceptions. CAFA requires federal courts to decline jurisdiction when the dispute is a “local controversy” within the state in which the action was filed and does not reach into multiple states. The federal court rejected the plaintiffs’ argument, finding that a significant portion of the relief would, if awarded, be paid by non-Minnesota defendants SuperShuttle International, Inc. and SuperShuttle Franchise, Inc. The only Minnesota defendant, SuperShuttle Minnesota, was not the primary defendant or the target of a request for significant relief, because its financial situation made it unlikely that it could satisfy any judgment.