d's response to motion to dismiss

35146634

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF TEXAS

MARSHALL DIVISION

SAMMY D. YORK, HENRY H. HOLUBEC, JR., and GREGORY R. HAYES Plaintiffs,

) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

No. 2:15-CV-00352

v.

DEFENDANT TEXAS A&M UNIVERSITY 12TH MAN FOUNDATION’S (1) REPLY TO PLAINTIFFS’ AMENDED JOINDER IN MOTION TO DISMISS AND (2) RESPONSE TO PLAINTIFFS’ REQUEST FOR DISMISSAL WITHOUT PREJUDICE PURSUANT TO RULE 41(a)(2)

TEXAS A&M UNIVERSITY 12TH MAN FOUNDATION a/k/a THE 12TH MAN FOUNDATION,

Defendant.

Otis Carroll (State Bar No. 03895700) IRELAND, CARROLL & KELLEY, P.C. 6101 S. Broadway, Suite 500 Tyler, Texas 75703

Layne E. Kruse (State Bar No. 11742550) Randall S. Richardson (State Bar No. 24027658) Otway Denny (State Bar No. 05755500) NORTON ROSE FULBRIGHT US LLP 1301 McKinney, Suite 5100 Houston, Texas 77010

Attorneys for Defendant Texas A&M University 12th Man Foundation a/k/a The 12th Man Foundation

Case 2:15-cv-00352-JRG Document 12 Filed 03/31/15 of 26 PageID #: 693

35146634

TABLE OF CONTENTS

TABLE OF AUTHORITIES ......................................................................................................... ii

SUMMARY OF ARGUMENT ..................................................................................................... 1

FACTS RELEVANT TO THIS MOTION .................................................................................... 1

1. Plaintiffs file this case in the Eastern District of Texas ......................................... 1

2. Plaintiffs re-file this case in the Southern District of Florida ................................ 3

3. Plaintiffs are wasting judicial resources with their gamesmanship ....................... 7

ARGUMENT AND AUTHORITIES ............................................................................................ 8

1. This Court can determine there is no class before dismissing with conditions ............................................................................................................... 9

A. This Court has jurisdiction to determine there is no class ....................... 10

B. This Court has authority to require that class allegations be eliminated ................................................................................................. 10

(1) The alleged class is not adequately defined ................................. 11

(2) The alleged class does not satisfy the numerosity requirement .................................................................................. 12

(3) The alleged class does not satisfy the commonality or typicality requirements................................................................. 13

(4) Intra-class conflicts are inherent in the proposed class ................ 14

2. The proposed conditions are proper under Rule 41(a)(2) .................................... 15

A. This Court has jurisdiction to impose conditions on dismissal ................ 16

B. This Court has authority to impose conditions on dismissal ................... 16

C. This Court has discretion to impose the proposed conditions ................. 18

PRAYER ...................................................................................................................................... 19


35146634

TABLE OF AUTHORITIES

Page(s)

Cases

American Express Co. v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013) .............................................................................................................18

Bell v. Cheswick Generating Station, Genon Power Midwest, L.P., No. 12-929, 2015 WL 401443 (W.D. Pa. Jan. 28, 2015) ........................................................10

Clark v. Lender Processing Servs., 562 F. App'x 460 (6th Cir. 2014) .............................................................................................15

Conley v. Aetna Life Ins. Co., No. 99-10149, 213 F.3d 635, 2000 WL 554056 (5th Cir. Apr. 11, 2000) ...............................16

Cunningham Charter Corp. v. Learjet, Inc., 592 F.3d 805 (7th Cir. 2010) ...................................................................................................10

Dennis Melancon, Inc. v. City of New Orleans, 703 F.3d 262 (5th Cir. 2012) .....................................................................................................6

Garcia v. Boyar & Miller, P.C., No. CIV.A.3:06CV1936-D, 2007 WL 1556961 (N.D. Tex. May 30, 2007) ...........................10

Hart v. FedEx Ground Package Sys. Inc., 457 F.3d 675 (7th Cir. 2006) ...................................................................................................16

Jaynes v. United States, 69 Fed. Cl. 450 (Fed. Cl. 2006) ...............................................................................................12

Lang v. Manufacturers & Traders Trust Co., 274 F.R.D. 175 (D. Md. 2011) .................................................................................................18

LeCompte v. Mr. Chip, 528 F.2d 601 (5th Cir. 1968) .............................................................................................16, 17

Mortgage Guar. Inc. Corp. v. Richard Carlyon Co., 904 F.2d 298 (5th Cir. 2000) ...................................................................................................17

Opelousas Gen. Trust Auth. v. Multiplan, Inc., 533 F. App’x 488 (5th Cir. 2013) ............................................................................................16

Philadelphia Gear Works v. Kerotest Mfg. Co., 101 F. Supp. 820 (W.D. Pa. 1951) ...........................................................................................18


35146634 iii

Preston v. Tenet Healthsystem Mem’l Med. Ctr., Inc., 485 F.3d 804 (5th Cir. 2007) ......................................................................................................9

Randall v. Rolls-Royce Corp., 637 F.3d 818 (7th Cir. 2011) ...................................................................................................14

Robles v. Atl. Sounding Co., 77 F. App’x 274 (5th Cir. 2003) ..............................................................................................18

Save Power Ltd v. Syntek Fin. Corp., 121 F.3d 947 (5th Cir. 1997) .....................................................................................................8

Serrano v. 180 Connect, Inc., 478 F.3d 1018 (9th Cir. 2007) .................................................................................................16

Simms v. Jones, 296 F.R.D. 485 (N.D. Tex. 2013) ............................................................................................12

Stirman v. Exxon Corp., 280 F.3d 544 (5th Cir 2002) ....................................................................................................13

Sutter Corp. v. P&P Indus., Inc., 125 F.3d 914 (5th Cir. 1997) .....................................................................................................8

Texas Midstream Gas Servs., LLC v. City of Grand Prairie, No. 3:08-CV-1724-D, 2010 WL 3565232 (N.D. Tex. Sept. 8, 2010) .....................................18

In re TWL Corp., 712 F.3d 886 (5th Cir. 2013) ...................................................................................................12

Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) .............................................................................................................13

Yoffe v. Keller Indus., Inc., 580 F.2d 126 (5th Cir. 1978) ...................................................................................................17

Young v. Nationwide Mut. Ins., 693 F.3d 532 (6th Cir. 2012) ...................................................................................................11

Rules and Statutes

28 U.S.C. § 1332(d)(1)(B) .............................................................................................................10

28 U.S.C. § 1332(d)(2) ...................................................................................................., 10, 15, 16

28 U.S.C. § 1332(d)(4) ..................................................................................................................15

28 U.S.C. § 1332(d)(8) ..................................................................................................................10


35146634 iv

Fed. R. Civ. P. 12(b)(1)....................................................................................................................2

Fed. R. Civ. P. 12(f) .......................................................................................................................11

Fed. R. Civ. P. 23 ...........................................................................................................................18

Fed. R. Civ. P. 23(a) ......................................................................................................................11

Fed. R. Civ. P. 23(b)(1)..................................................................................................................11

Fed. R. Civ. P. 23(c)(1)(A) ............................................................................................................11

Fed. R. Civ. P. 23(d) ......................................................................................................................14

Fed. R. Civ. P. 23(d)(1)(D) ............................................................................................................11

Fed. R. Civ. P. 23(d)(5)....................................................................................................................4

Fed. R. Civ. P. 41 .........................................................................................................................3, 8

Fed. R. Civ. P. 41(a)(2) ............................................................................................................16, 17

Fed. R. Civ. P. 54(d)(2)..................................................................................................................19

Other Authorities

2 William B. Rubenstein, Newburg on Class Actions § 6:18 (5th ed. 2013).................................10


35146634

Defendant Texas A&M University 12th Man Foundation (the “Foundation”) files this

(1) Reply to Plaintiffs’ Amended Joinder in Motion to Dismiss and (2) Response to Plaintiffs’

Request for Dismissal Without Prejudice Pursuant to Rule 41(a)(2) of the Federal Rules of Civil

Procedure. Doc. 9.

SUMMARY OF ARGUMENT

After invoking the minimal diversity jurisdiction provisions of the Class Action Fairness

Act (“CAFA”), Plaintiffs now assert that the Foundation has convinced them that CAFA’s home

state and local controversy exceptions apply. Under CAFA, therefore, any class action belongs

in state court in Texas. But rather than wait for this Court to rule on their motion to dismiss,

Plaintiffs re-filed their alleged class action in Florida federal court asking that court for the same

expedited injunctive relief this Court has already denied.

This Court has the jurisdiction and the authority to impose conditions on Plaintiffs’

motion for voluntary dismissal. Moreover, the pleadings and other filings in this Court’s record

make it apparent that Plaintiffs’ proposed class is not suitable for class treatment. The

Foundation therefore asks this Court to set conditions on the dismissal to protect the interests of

the Foundation, including ordering that any case arising from the facts of this case cannot be

maintained as a class action, that no temporary or preliminary injunctive relief can be granted in

any case arising from the same nucleus of facts, and that Plaintiffs must pay the Foundation’s

fees, expenses, and costs of defending this case.

FACTS RELEVANT TO THIS MOTION

1. Plaintiffs file this case in the Eastern District of Texas.

On Wednesday, March 11, 2015, Plaintiffs filed a 34-page Class Action Complaint for

Breach of Contract, Declaratory Judgment, and Injunctive Relief Including Specific Performance


35146634 2

with 204 pages of exhibits. Doc. 1. They simultaneously filed a 31-page Application for

Temporary Restraining Order and for Preliminary Injunction with another 198 pages of exhibits.

Doc. 2.

Although the Court was in trial, it held a telephonic status conference at 4:00 that very

afternoon and ordered the Foundation to respond to Plaintiffs’ application by noon on Friday,

March 13th. The Foundation did so, filing a 27-page Opposition to Plaintiffs’ Application for

Temporary Restraining Order and for Preliminary Injunction with 143 pages of exhibits. Doc. 3.

The Foundation also filed an 8-page Motion to Dismiss under Rule 12(b)(1) for Lack of Subject-

Matter Jurisdiction with a 7-page exhibit. Doc. 4.

This Court undoubtedly invested considerable time and effort in reviewing those

extensive filings before issuing its ruling on Saturday, March 14th, denying Plaintiffs’

application. Doc. 7. The Court explained that Plaintiffs sought the following injunctive relief:

(a) restraining the Foundation from applying its Priority Points Program and Kyle Field Reseating Plan to change the established seating locations of any of the Foundation’s Permanently Endowed Donors, including each Plaintiff;

(b) ordering the Foundation to cease and desist its harassment and intimidation of the Permanently Endowed Donors who object to the Foundation’s plan to reseat Kyle Field; and

(c) ordering the Foundation to refrain from taking any action that would punish or disadvantage Plaintiffs or any other Permanently Endowed Donor by reason of the bringing of this lawsuit.

Doc. 7 at 1.

The Court then denied Plaintiffs’ request in its entirety:

Having reviewed the record before the Court, the Court does not find that Plaintiffs have clearly carried their burden of persuasion on the requirements for a preliminary injunction . . . . The Court is not clearly persuaded that the elements necessary for a preliminary injunction have been proven and therefore DENIES Plaintiffs’ Motion for Temporary Restraining Order and for Preliminary Injunction.”


35146634 3

Id. at 2-3.

Four days after this Court entered its Saturday order, on March 18th, Plaintiffs filed their

own motion to dismiss their lawsuit asking this Court to give them a get-out-of-jail-free card

posthaste. Plaintiffs asserted that they were filing their own dismissal motion under Rule 41 “to

insure that dismissal is not delayed” so they could file another class action injunction case

involving the same issues in another state right away. Doc. 10 at 2-3. In other words, Plaintiffs

in essence admitted that after this Court turned them down on so-called “emergency” relief, they

wanted to shop for a new court.

In their Motion to Dismiss, Plaintiffs sought to reassure the Court that its work was not

entirely in vain. They said “the new court will be fully informed of this Court’s ruling” and the

new plaintiff “will not seek to revisit the following: the request that the court enjoin the

Defendant from putting the Permanent Endowed Donor seats in the seat selection process which

commenced March 16, 2015.” Id. at 3.

2. Plaintiffs re-file this case in the Southern District of Florida.

Apparently this Court did not act quickly enough for Plaintiffs. Their Texas counsel filed

a new case the very next day, March 19th, in the United States District Court for the Southern

District of Florida, Fort Lauderdale, more than 1,000 miles away from Marshall in another state

and a different federal circuit. Arguably, they have a new plaintiff, but she is only identified as

“Jane Doe,” and she brings the case on behalf of the identical alleged class as the case in this

Court.1 The re-filed complaint includes all the same exhibits as were filed in this Court,

including the affidavits of the three named plaintiffs before this Court. Id.

1 See Jane Doe, individually and for all others similarly situated v. Texas A&M University 12th Man Foundation a/k/a The 12th Man Foundation, No. 0:15-cv-60581-WPD, filed in the United States District Court for the Southern District of Florida, Fort Lauderdale Division (Complaint attached as Ex. A to this Response). The Florida plaintiff allegedly filed “as a ‘Jane Doe’


35146634 4

And despite Plaintiffs’ assurances to this Court the day before the Florida complaint was

filed, the Florida complaint is a blatant collateral attack on this Court’s denial of Plaintiffs’

request for a temporary restraining order and preliminary injunction. For example, on behalf of

the same alleged class as in this case, the new plaintiff in the Florida complaint alleges:

9. Plaintiff respectfully asks the Court to act on an expedited basis to certify a class of the Permanently Endowed Donors holding contractual rights to seating locations in Kyle Field that were established for life (or 30 years), . . . and; to help protect its right to specific performance by requiring the Foundation to provide notice to other Foundation members now selecting seat locations that the Permanently Endowed Donors’ established seat locations at issue are subject to this litigation, the outcome of which could affect their actual availability for sale. This notice . . . will . . . provide the new (otherwise unwitting) ticket purchasers with the notice of the true status of the seat locations they think they are selecting/purchasing. Preservation of the rights of the Permanently Endowed Donors, and notice to all potential purchasers, is necessary until such time as this Court can address Class Certification and Declaratory Judgment. This notice will serve to further protect the rights of the Plaintiff and the Putative Class Members and will not cause a hardship on the Foundation.

11. Plaintiff is entitled to the equitable remedy of specific performance. Her established seat location rights are as unique as real estate because they are location rights. Monetary damages are impossible to measure, as the (substantial) amount of additional contributions required of Plaintiff and the Class under the Foundation’s Reseating Plan is uncertain because the various new fees unilaterally imposed on them can change at the whim of the Foundation based on its assessment of what the market will bear.

Id. ¶¶ 9, 11 (emphasis added).

On March 24th, another pleading was filed in Florida entitled “Motion for Orders

Pursuant to Rule 23(d)(5) [sic] and the Inherent Authority of the Court” with “Expedited Relief

Requested.” Ex. B. The motion states that “The Court’s acting on an expedited basis is

because she realistically fears the reprisals and retribution with which others similarly situated and who have opposed the Foundation’s efforts have been threatened.” Ex. A at 7. Plaintiffs’ lead counsel wasted no time letting the Houston Chronicle know about that. See http://www.chron.com/sports/aggies/article/New-Kyle-Field-seating-lawsuit-filed-in-Florida-6146698.php.


35146634 5

necessary because the Defendant’s Seating Selection process began March 16, 2015, and is

ongoing. Each day, the highest ranked donors of the Foundation are selecting their seats

from the best, remaining seating locations, some of which belong to Plaintiff and the Class.

Thus, each day that passes the rights of the Class to seek specific performance of the Endowment

Agreement to regain their established seating locations at Kyle Field may be diminished to the

extent the new persons could maintain that they acquired their seats in good faith without notice

of the claims of Plaintiff and the Class.” Id. at 2 (emphasis in original).

The motion asks the Florida Court for orders:

• requiring the Foundation to disclose in writing prior to the time of purchase and within 48 hours of the Court’s order to the purchasers of seating locations in the Redeveloped Kyle Field that correspond to the locations of Plaintiffs’ established seating locations and to those of proposed Class members that the right to be seated at those locations this year, and for the term of their 15-year endowment and thereafter, is disputed in this action and subject to determination by the Court. Plaintiff asks the Court to order Defendant to mail notice to purchasers and to provide notice in advance of purchase via notice posted or appearing at mouse-click or hover-over selection of a disputed seating location on the Foundation’s Seat Selection webpage.2

• restraining the Foundation from its efforts to harass and intimidate the Permanently Endowed Donors who object to the Foundation’s plan to reseat Kyle Field; and

• ordering the Foundation to refrain from taking any action that would punish or disadvantage Plaintiff or any other Permanently Endowed Donor by reason of the bringing of this lawsuit.

2 In their proposed order in Florida, Plaintiffs ask for numerous factual findings that directly contradict this Court’s denial of injunctive relief, and specifically ask the Florida court to require that the Foundation “identify contiguous seats in the number issued the Plaintiff and the putative Class Members upon Endowment and in the location that most closely resembles each Plaintiff and putative class members established seat location,” and then to order the Foundation to notify purchasers and potential purchasers that the seats are in litigation. See Ex. E at 3. This Court has already rejected the virtually identical request for an injunction requiring the Foundation to “[r]eserve, for issuance to Class Members . . . contiguous seats in the number issued the Class Member upon endowment and in the location that most closely resembles each Class Member’s established seat location . . . .” Doc. 1 ¶ 91(3).


35146634 6

Ex. B at 4.

As this Court is aware, almost all endowed donors (the alleged “class”) previously sat in

the west side of stadium, which was demolished on December 21, 2014, and no longer exists. So

now, rather than asking to stop reseating for the entire new Kyle field, Plaintiffs essentially ask

the Florida court to preserve the uncertified class’s supposed right to specific performance.3

Their latest proposal is that the Florida court in essence stop the reseating of the entire west side

by sending their proposed notice. But this Court has already determined that if Plaintiffs suffer

any damage from having to choose allegedly “inferior” seats, that harm could be compensated by

monetary damages. Doc. 7 at 2-3. Plaintiffs are therefore not entitled to specific performance.

Dennis Melancon, Inc. v. City of New Orleans, 703 F.3d 262, 279 (5th Cir. 2012).

The Motion for Orders is also apparently intended to fulfill Plaintiffs’ promise that “the

new court will be fully informed of this Court’s ruling.” They provide the following version of

events:

Activity Prior to This Filing

The Foundation’s goal from the very beginning has to been to string the Endowed Donors along and continuously jerk them around until the Reseating Process began, at which point the Foundation thought it would be home free from the claims of the Endowed Donors. A detailed account of the despicable actions of the Foundation is contained in the Affidavit of Claude M. McQuarrie III, Exhibit 4 hereto . . . .

* * *

[Plaintiffs York, Holubec, and Hayes] filed a Class Action Complaint and Motion for Temporary Restraining Order (TRO) and Preliminary Injunction in the United States District Court for the Eastern District of Texas. Judge Rodney Gilstrap of that court denied the TRO and Preliminary Injunction, finding that those plaintiffs had not met the high standard for such extraordinary relief. York v. Texas A&M

3 The request for specific performance in the Florida complaint is copied nearly verbatim from Plaintiffs request for specific performance in this case. Compare Ex. A ¶¶ 94-96 with Doc. 1 ¶¶ 73-75.


35146634 7

12th Man Foundation, No. 2:15-cv-00352-JRG, slip op. at 3 (U.S. Mar. 14, 2015) (copy attached as Exhibit 1).

At the time of filing its Opposition to the Motion for TRO and Preliminary Injunction, the Foundation filed a Motion to Dismiss for Lack of Jurisdiction and submitted credible evidence that an exception to CAFA existed in that case, and Texas court lacked jurisdiction. Rather than rush to non-suit, the York Plaintiffs researched whether the jurisdictional defect could be cured by adding an out of state Plaintiff. The Foundation’s position is that Plaintiff Doe cannot proceed in Florida with her case as long as the York case is pending. So, as the games continued, the Foundation rushed and filed an answer in an attempt to keep the very case alive that the Foundation said could not proceed in federal court in Texas. The York Plaintiffs, who do not wish to waste the Texas court’s resources, joined in the Defendant’s Motion to Dismiss and filed their own Motion to Dismiss the Texas action. These motions are pending before the Texas court.

Ex. B at 2-4 (emphasis added).4

3. Plaintiffs are wasting judicial resources with their gamesmanship.

Plaintiffs are right in one respect: the “games” they are playing with the federal courts

and the Foundation are in fact continuing. Two examples highlight that fact. First, Plaintiffs

profess their belief in “full disclosure to this Court,” but then say they filed the case in this Court

“based on the good faith belief that at least one-third of the proposed class of Permanently

Endowed Donors could reside outside the state of Texas such that CAFA jurisdiction could be

maintained in this Court.” Doc. 10 at 3. They claim they found out they were wrong only when

the Foundation “informed Plaintiffs and the Court shortly before noon on Friday, March 13,

2015, that only 14 of the 440” of their proposed class members reside outside of Texas and that

the Foundation “appears likely to establish that a mandatory exception exists to federal

jurisdiction in this case as it is currently constituted.” Id.

4 After the Foundation notified the Florida court that the request for expedited treatment had not been made in accordance with the local rules, Plaintiffs’ counsel agreed that the Foundation could have until April 24, 2015, to respond to the Complaint and the Motion for Orders.


35146634 8

That “good faith belief” is belied by the actions of Plaintiffs’ counsel. Plaintiffs neglect

to disclose that their lead counsel called two of the Foundation’s lawyers on Thursday,

March 12, 2015, the day before the Foundation filed its opposition to the request for injunctive

relief and its motion to dismiss. See Exs. C and D (Declarations of Layne Kruse and Randall

Richardson respectively). Each of the two lawyers independently returned her call on

March 12th, and Plaintiffs’ lead counsel told each of them separately that the Foundation should

not challenge jurisdiction in federal court in Marshall because Plaintiffs would just file in another

federal court. Id. When asked where they were considering filing, she would not say which

exact court, but she said that they were considering Mississippi, Oklahoma, or Florida. Id. The

Foundation’s lawyers did not agree not to challenge jurisdiction. Id.

Second, the Plaintiffs in this Court are all working together with the “new” plaintiff in the

Florida case. After filing their Motion for Orders in Florida, Plaintiffs’ lawyers forwarded it to

the Foundation’s counsel by email. Included in the email chain they forwarded was a (non-

privileged) email forwarding the same pleading not only to the Jane Doe plaintiff (whose name

and email the Foundation has redacted from the email), but also to the three Plaintiffs in this

Court. See Ex. E. Plaintiffs’ gamesmanship should not be countenanced.

ARGUMENT AND AUTHORITIES

This Court has the authority under the circumstances to impose conditions to Plaintiffs’

voluntary dismissal. In addition to this Court’s authority under Rule 41 and its inherent

authority, the first-to-file rule, which is based on “principles of comity and sound judicial

administration,” Save Power Ltd v. Syntek Fin. Corp., 121 F.3d 947, 950 (5th Cir. 1997), vests

in the court in which the first of the two related actions was filed the responsibility of

“determin[ing] whether subsequently filed cases involving substantially similar issues should

proceed.” Sutter Corp. v. P&P Indus., Inc., 125 F.3d 914, 920 (5th Cir. 1997). Accordingly, the


35146634 9

Foundation asks that the following conditions be imposed by this Court on the dismissal of this

lawsuit:

• That any case arising from the same nucleus of facts as this case cannot be maintained as a class action because the proposed class is not a class;

• That no temporary or preliminary injunctive relief can be granted in any case arising from the same nucleus of facts as this case; and

• That Plaintiffs must pay the Foundation’s fees, expenses, and costs of defending this case, the amount of which shall be determined by this Court pursuant to Rule 54(d)(2) of the Federal Rules of Civil Procedure.

1. This Court can determine there is no class before dismissing with conditions.

Before dismissing with conditions, this Court can determine from the record before it that

the facts of this case demonstrate it is not suitable for class treatment. Plaintiffs concede that the

Foundation has established that two CAFA abstention provisions, the home-state and local-

controversy exceptions, apply to the case because far more than two-thirds of the proposed class

members and the sole defendant are citizens of Texas and the primary alleged injuries occurred

in Texas. Doc. 10 at 3.5 An additional ground for dismissal under CAFA, however, is the fact

that this case is not appropriate for class treatment, which this Court has both the jurisdiction and

the authority to determine.

5 CAFA jurisdiction is also improper in federal court in Florida, where the only connection with this case is that a single member of the proposed class apparently currently resides there. The “home-state” and “local controversy” exceptions, are “designed to draw a delicate balance between making a federal forum available to genuinely national litigation and allowing the state courts to retain cases when the controversy is strongly linked to that state.” Hart v. FedEx Ground Package Sys. Inc., 457 F.3d 675, 682 (7th Cir. 2006). If a federal court in Texas should not hear the case because it is “a truly localized controversy,” see Preston v. Tenet Healthsystem Mem’l Med. Ctr., Inc., 485 F.3d 804, 823 (5th Cir. 2007) (“This particular Hurricane Katrina case symbolizes a quintessential example of Congress’ intent to carve-out exceptions to CAFA’s expansive grant of federal jurisdiction when our courts confront a truly localized controversy.”), then a federal court in Florida certainly should not hear the case.


35146634 10

A. This Court has jurisdiction to determine there is no class.

This Court has jurisdiction to determine that the case should not proceed as a class. A

federal court gains jurisdiction over a CAFA lawsuit when the suit is filed as a CAFA class

action. See 28 U.S.C. § 1332(d)(2) (“The district courts shall have original jurisdiction of any

civil action in which the matter in controversy exceeds the sum or value of $5,000,000, exclusive

of interest and costs, and is a class action . . . .”); 28 U.S.C. § 1332(d)(1)(B) (“the term ‘class

action’ means any civil action filed under rule 23 of the Federal Rules of Civil Procedure . . . or

similar rule of judicial procedure authorizing an action to be brought by 1 or more representative

persons as a class action”).

A court’s jurisdiction over an alleged class attaches upon filing even if there is not a

proper class. Cunningham Charter Corp. v. Learjet, Inc., 592 F.3d 805, 806 (7th Cir. 2010)

(“jurisdiction attaches when a suit is filed as a class action, and that invariably precedes

certification”) (emphasis in original); Garcia v. Boyar & Miller, P.C., No. CIV.A.3:06CV1936,

2007 WL 1556961, *5 (N.D. Tex. 2007) (“Class certification is neither a requirement for

removal nor a prerequisite for federal jurisdiction under CAFA.”) (citing 28 U.S.C. §

1332(d)(8)); 2 William B. Rubenstein, Newburg on Class Actions § 6:18, at 563 (5th ed. 2013)

(“[A]ll courts agree that a federal court has jurisdiction over a putative class action, that is, a case

filed as a class suit. Thus, the denial of class certification does not mean that the court never had

subject matter jurisdiction, and therefore that denial has a binding effect on the parties to it.”).

B. This Court has authority to require that class allegations be eliminated.

Where the pleadings demonstrate that the requirements for maintaining a class action

cannot be met, a court may require that the pleadings be amended to eliminate allegations about

representation of absent persons even before a plaintiff moves for class certification. Bell v.

Cheswick Generating Station, Genon Power Midwest, L.P., No. 12-929, 2015 WL 401443, at *2


35146634 11

(W.D. Pa. Jan. 28, 2015). “As an initial matter, the authority to strike class allegations stems

from Federal Rules of Civil Procedure 12(f), 23(c)(1)(A), and 23(d)(1)(D).” Id. (citations

omitted). Indeed, Rule 23(d)(1)(D) specifically provides that in CAFA class actions, a “court

may issue orders that . . . require that the pleadings be amended to eliminate allegations about

representation of absent persons and that the action proceed accordingly.” Id.

Although Plaintiffs do not even cite the applicable class action rule, regardless of whether

this is a proposed Rule 23(b)(1) or (b)(2) or (b)(3) class, their proposed class is not a class under

any theory.6 All classes must satisfy the four baseline requirements of Rule 23(a):

(1) numerosity, (2) commonality, (3) typicality, and (4) adequacy of representation. The

proposed class does not do so.

(1) The alleged class is not adequately defined.

First, Plaintiffs’ proposed class is not adequately defined or clearly ascertainable. Young

v. Nationwide Mut. Ins., 693 F.3d 532, 537-38 (6th Cir. 2012). A class is not definable if it is too

vague or if the court would be required to hold extensive and individualized fact-finding to

determine membership. Id. Plaintiffs’ proposed class includes donors with Permanently

Endowed Scholarship Program agreements whose “established seat locations; priority parking or

other endowment benefits, including upgrade rights, are subject to alteration or termination if

they do not make additional, continuing payments to Defendant.” Doc. 1 ¶ 62. But none of the

endowment contracts, oral or written, expressly confer a right to an “established seat location.”

6 Plaintiffs assert that this is an injunction class, but it is clear that they also want a large sum of money. Paragraph 62 of Plaintiffs’ Complaint demands a “refund of all monies paid by Class members as additional payments to the Foundation to maintain their established seat locations . . or to upgrade the same . . . .” Doc. 1 ¶ 62. In essence, this is a damage claim based on the breach of contract theory. The complaint in Florida seeks injunctive relief and also expressly seeks a damages class.


35146634 12

Thus, individualized hearings would be required on each endowed donor’s contract. As a result,

class certification would be improper because Plaintiffs have failed to propose a definable class.

(2) The alleged class does not satisfy the numerosity requirement.

Second, the 97% Texas class does not satisfy the numerosity requirement. Although

there is no definite standard for what size class satisfies this prong, in assessing numerosity the

Court should consider the geographic dispersion of the class, the ease with which class members

can be identified, the nature of the action, and the size of each plaintiff’s claim. In re TWL

Corp., 712 F.3d 886, 894 (5th Cir. 2013). In considering these factors, the fundamental inquiry

turns on whether joinder of the proposed class member is impracticable. Simms v. Jones, 296

F.R.D. 485, 497 (N.D. Tex. 2013).

Here Plaintiffs have inaccurately claimed that membership in the class is so numerous as

to make it “impracticable to bring all Class members before the Court.” Doc. 1 ¶ 62. But with

97% of the class residing in Texas, Plaintiffs cannot show that the proposed class would suffer

from significant geographic diversity or that the difficulty in identifying potential members

would make joinder impracticable. Id. (the plaintiffs failed to satisfy numerosity where no

evidence of geographic diversity was presented); Jaynes v. United States, 69 Fed. Cl. 450, 454-

55 (Fed. Cl. 2006) (a class with as many as 258 alleged members failed to satisfy numerosity

because 80% of the proposed class was located within the state). In fact, Plaintiffs admit that the

class members can be “readily determined” from records the Foundation maintains. Doc. 1 ¶ 63.

Plaintiffs also ignore the fact that the seating procedures for the new Kyle Field were

announced over two years ago, and since then, only a handful of state court lawsuits related to

this issue have been filed, and nearly all have been resolved. More than 95% of the alleged class

members have signed up for new seats without objection. Accordingly, it defies common sense

to believe that the purported class of objectors to reseating meets any level of “numerosity.”


35146634 13

This case was filed by three individuals on the eve of the last step of the seat selection process in

an obvious attempt to extract more benefits by claiming they should represent a class. Thus, the

proposed class cannot satisfy the numerosity requirement of class certification.

(3) The alleged class does not satisfy the commonality or typicality requirements.

Third, Plaintiffs also cannot satisfy commonality or typicality. The dispositive inquiry

into determining commonality is not whether the class raises common questions, but whether the

class generates common answers that are capable of resolving the suit. Wal-Mart Stores, Inc. v.

Dukes, 131 S. Ct. 2541, 2551 (2011). The Supreme Court in Wal-Mart noted that

“[d]issimilarities within the proposed class are what have the potential to impede the generation

of common answers.” Id. (citation omitted). To establish typicality, the claims or defenses of

the class and the proposed class representative must (1) arise from the same event, pattern, or

practice, and (2) be based on the same legal theories. Stirman v. Exxon Corp., 280 F.3d 544, 562

(5th Cir 2002). Plaintiffs allege there are “numerous” substantial questions of law and fact

common to all members of the proposed class, such as whether the Foundation is contractually

obligated to provide endowment benefits to Plaintiffs and whether Plaintiffs or other members

have any further obligations to maintain their “established seat locations,” priority parking, or

other endowed benefits. Doc. 1 ¶ 63.

Yet, as the Supreme Court has noted, any cleverly crafted complaint can “literally raise

common questions.” Id. Plaintiffs have not, and cannot, show that common answers can be

generated by the proposed class. Plaintiffs allege that Permanently Endowed Donors were

promised benefits in the “best available” seating locations and game day parking in the “best

available” locations for home games. Id. Plaintiffs’ endowment agreements, however, never use


35146634 14

the words “best available” to describe the bargained-for seat or parking location. Indeed, what

seats are “best available” is an entirely subjective determination for each proposed class member.

Nor do Plaintiffs’ endowment agreements identify an “established seat location.” In fact,

the vast majority of the proposed class’s endowment agreements were made orally. Plaintiffs’

success on the merits is predicated not on the plain language of their individual agreements, if

written, but on oral representations allegedly made outside of the agreement. Thus, the class

would be unable to generate a common answer that would be capable of resolving the entire suit

because whether the Foundation breached each agreement would require a factual inquiry into

each agreement. Doing so would devolve into 450 mini-trials. Here, the dissimilarities are too

great to satisfy commonality.

(4) Intra-class conflicts are inherent in the proposed class.

Fourth, it is apparent from the record in this case that the proposed class representatives

cannot show that they will adequately protect the interest of the class because their interests

necessarily conflict with other potential class members’ interests. See Fed. R. Civ. P. 23(d);

Randall v. Rolls-Royce Corp., 637 F.3d 818, 824 (7th Cir. 2011) (if there is conflict of interest

related to the specific issues being litigated, the proposed class representative cannot adequately

represent the class).

Here, Plaintiffs ask the Court to order the Foundation to provide each proposed class

member with “best available” parking and seats in a location that is commensurate to each

member’s seat location in the old stadium. But the number of parking spaces available for

allocation to donors has declined each year as entire parking lots have been eliminated due to

ongoing construction and will continue to decline as new construction eliminates the availability

of parking adjacent to the stadium. Likewise, the reconstruction of the west side of Kyle Field

reduced capacity by approximately 4,100 seats. Thus, because of the reduced amount of benefits


35146634 15

as well as the subjective nature of the remedy sought, there will necessarily be endowed donors

that demand seating or parking in the same location as the proposed class representatives, which

would improperly place them in direct conflict as to the specific issues being litigated.

Plaintiffs, moreover, cannot show that their interests are aligned with those of class

members. Of the 450 total endowed donors, only a small fraction have raised an issue with the

reseating. The vast majority have participated in the reseating process without complaint, and

several have voiced strong support for the process. In fact, 334 endowed donors have used their

opportunity to choose first and elected to purchase seats in locations that require a donation

above and beyond the $2,000 credit provided by the Foundation, and eight endowed donors have

selected seats located in a suite.

Out of the top 1000 donors, 243 are endowed donors with priority point levels that enable

them to be among the first to select seats within their desired sections. Those potential class

members would have no interest in enjoining the reseating; thus, the proposed representatives’

interests do not align with the entire class they seek to represent. What’s more, many donors

would reject a remedy that may ultimately jeopardize the 2015 football season. Thus, enjoining

the Foundation from moving forward with the reseating does not align with interests of all

proposed class members and Plaintiffs would not be able to show that their representation of the

class is adequate.

2. The proposed conditions are proper under Rule 41(a)(2).

The conditions that the Foundation proposes are well within the Court’s jurisdiction.

Jurisdiction exists under CAFA if the requirements under 28 U.S.C. § 1332(d)(2) are satisfied.

While they do not divest a court of jurisdiction, two exceptions under 28 U.S.C. § 1332(d)(4),

the “home-state exception” and the “local-controversy exception,” require a court to abstain from

continuing to exercise that jurisdiction under certain circumstances.


35146634 16

A. This Court has jurisdiction to impose conditions on dismissal.

These exceptions to CAFA, however, do not divest a court of jurisdiction before the court

abstains from exercising it. See Clark v. Lender Processing Servs., 562 F. App'x 460, 465 (6th

Cir. 2014) (“[T]he local-controversy and home-state exceptions do not deprive a court of

jurisdiction. The statute speaks only of a district court’s declining jurisdiction if the exceptions

apply. This language clearly indicates that the exceptions do not deprive the court of jurisdiction

it otherwise possesses because a court could not ‘decline’ jurisdiction that it never had in the first

place.”) (citations omitted); Opelousas Gen. Trust Auth. v. Multiplan, Inc., 533 F. App’x 488,

490 (5th Cir. 2013) (“The propriety of the district court's remand order turns on its assessment of

the ‘local controversy exception’ to CAFA jurisdiction. The phrase is something of a misnomer.

No one disputes that CAFA imbued the district court with jurisdiction over this matter. Instead,

the pertinent part of the ‘exception’ instructs that ‘[a] district court shall decline to exercise

[CAFA] jurisdiction’ . . . .”).7

B. This Court has authority to impose conditions on dismissal.

In the exercise of that jurisdiction, this Court also has authority to attach conditions to a

voluntary dismissal. After a defendant has filed an answer, “an action may be dismissed at the

plaintiff's request only by court order, on terms that the court considers proper.” Fed. R. Civ. P.

41(a)(2). “Thus, under Rule 41(a)(2), a district court has the discretion to create and attach

conditions to the grant of a plaintiff’s motion to dismiss without prejudice.” Conley v. Aetna Life

7 See also Serrano v. 180 Connect, Inc., 478 F.3d 1018, 1022-23 (9th Cir. 2007) (“Implicit in both subsections (d)(3) and (d)(4) is that the court has jurisdiction, but the court either may or must decline to exercise such jurisdiction . . . . The provisions fit into the statutory structure as exceptions to jurisdiction, not elements of original jurisdiction.”); Hart v. FedEx Ground Package Sys. Inc., 457 F.3d 675, 681 (7th Cir. 2006) (“The case might be different if Congress had put the home-state and local controversy rules directly into the jurisdictional section of the statute, § 1332(d)(2), but it did not.”).


35146634 17

Ins. Co., No. 99-10149, 213 F.3d 635 (table), 2000 WL 554056, at *3 (5th Cir. Apr. 11, 2000)

(citing LeCompte v. Mr. Chip, 528 F.2d 601, 604 (5th Cir. 1968). “Allowing the court to attach

conditions to the order of dismissal prevents defendants from being unfairly affected by such

dismissal.” LeCompte, 528 F.3d at 604 (citation omitted). As a result, “[w]hen considering a

dismissal without prejudice, the court should keep in mind the interests of the defendant, for it is

his position which should be protected.” Id. (citation omitted); see also Conley, 2000 WL

554056, at *3 (the authority to attach conditions “exists so that the court can protect the interests

of defendants”) (citations omitted).

“Most cases under the Rule have involved conditions that require payment of costs and

attorney’s fees.” LeCompte, 528 F.3d at 603 (citations omitted); Mortgage Guar. Inc. Corp. v.

Richard Carlyon Co., 904 F.2d 298, 300 (5th Cir. 2000) (“Most often, the courts require

plaintiffs to bear the attorneys’ fees and costs of the dismissed defendant.”) (citations omitted).

For example, the Fifth Circuit has not only upheld a district court’s award of attorney fees and

costs incurred through the time of the plaintiff’s motion to dismiss, it added the costs the

defendant incurred in preparing for an evidentiary hearing in the district court to determine the

amount of those costs and the costs of defending the appeal. Yoffe v. Keller Indus., Inc., 580

F.2d 126, 129 n.9, 130 (5th Cir. 1978) (“There is no doubt that a court has ample authority to

award attorneys' fees as a term and condition of a Rule 41(a)(2) voluntary dismissal in order to

protect defendants”).

The conditions a trial court may impose, however, are “not limited to conditions of

payment of cost, expenses, and fees.” LeCompte, 528 F.2d at 603. The dismissal may be

conditioned upon the imposition of other terms designed to reduce inconvenience to the

defendant. Id. (citations omitted). Courts have therefore attached various non-monetary


35146634 18

conditions in granting a plaintiff’s motion to voluntarily dismiss. For example, in Texas

Midstream Gas Servs., LLC v. City of Grand Prairie, No. 3:08-CV-1724-D, 2010 WL 3565232,

at *5 (N.D. Tex. Sept. 8, 2010), where the plaintiff’s request for preliminary injunction had

already been denied, the court conditioned dismissal “on the requirement that, if [the plaintiff]

refiles this lawsuit or files any related case, it must file the suit in the Dallas Division of the

Northern District of Texas.”8

Ultimately, the trial court has wide latitude to impose conditions that “are focused on

protecting the defendant,” rather than on disadvantaging the plaintiff” provided that the

conditions would not “serve[] to transform the dismissal without prejudice into a dismissal with

prejudice.” Robles v. Atl. Sounding Co., 77 F. App’x 274, 276 (5th Cir. 2003) (affirming

conditions that prohibited the plaintiff from refiling the case in the court’s jurisdiction).

C. This Court has discretion to impose the proposed conditions.

The conditions the Foundation requests are well within the Court’s discretion under Rule

41(a)(2). A condition that any case arising from the same nucleus of facts as this case cannot be

maintained as a class action will save judicial resources and cannot prejudice any class member

because the case is not suitable for class treatment under Rule 23. There is no entitlement to

have a case proceed as a class action. American Express Co. v. Italian Colors Restaurant, 133 S.

Ct. 2304, 2309-10 (2013) (Rule 23 “imposes stringent requirements for certification that in

practice exclude most claims.”). Any class member who wishes would be free to file an

individual lawsuit. The fact that certain class members have exercised that right in state court

8 See also Lang v. Manufacturers & Traders Trust Co., 274 F.R.D. 175, 186 (D. Md. 2011) (limiting the plaintiffs to maximum damages of $53,000 in any subsequent lawsuit); Philadelphia Gear Works v. Kerotest Mfg. Co., 101 F. Supp. 820, 821 (W.D. Pa. 1951) (forbidding the plaintiffs from reasserting the same patent infringement claim against the defendant).


35146634 19

only demonstrates the lack of need for any class action. The ability to file an individual suit is

not tantamount to a dismissal with prejudice.

The same is true for a condition that no temporary or preliminary injunctive relief can be

granted in any case arising from the same nucleus of facts as this case. Injunctive relief is an

extraordinary remedy. Doc. 7 at 2-3. As this Court has held, any injury a class member may

have suffered from receiving allegedly “inferior” seating would be compensable in damages.

Doc. 7 at 3. Any class member would be free to file a damage case. Finally, the Fifth Circuit

routinely affirms conditioning voluntary dismissal upon the plaintiffs’ payment of fees.

Each proposed condition is designed to protect the Foundation and not to punish

Plaintiffs. None is tantamount to a dismissal with prejudice. Each is within this Court’s broad

discretion.

PRAYER

Texas A&M University 12th Man Foundation a/k/a The 12th Man Foundation

respectfully asks that the Court dismiss Plaintiffs’ case conditioned upon (1) an order that any

case arising from the same nucleus of facts as this case cannot be maintained as a class action;

(2) an order that no temporary or preliminary injunctive relief can be granted in any case arising

from the same nucleus of facts as this case; and (3) an order that Plaintiffs must pay the

Foundation’s fees, expenses, and costs of defending this case (the amount of which shall be

determined by this Court pursuant to Rule 54(d)(2) of the Federal Rules of Civil Procedure), and

to grant the Foundation such other relief to which it may be entitled.

Dated: March 31, 2015.


35146634 20

Respectfully submitted, /s/ Otis Carroll Otis Carroll (State Bar No. 03895700) Lead Attorney IRELAND, CARROLL & KELLEY, P.C. 6101 S. Broadway, Suite 500 Tyler, Texas 75703 Tel: (903) 561-1600 Fax: (903) 581-1071 [email protected]

Layne E. Kruse (State Bar No. 11742550) [email protected] Randall S. Richardson (State Bar No. 24027658) [email protected] Otway Denny (State Bar No. 05755500) [email protected] NORTON ROSE FULBRIGHT US LLP 1301 McKinney, Suite 5100 Houston, Texas 77010 Telephone: (713) 651-5151 Telecopier: (713) 651-5246

Attorneys for Defendant Texas A&M University 12th Man Foundation a/k/a The 12th Man Foundation


35146634 21

CERTIFICATE OF FILING AND SERVICE

I certify that on March 31, 2015, the foregoing document was electronically transmitted

to the Clerk of the Court using the ECF System for filing. Based on the records currently on file,

the Clerk of the Court will transmit a Notice of Electronic Filing to all registered counsel of

record.

/s/ Otis Carroll Otis Carroll


d's response to motion to dismiss

Documents

proposed class

alleged class

defendant texas

class conflicts

class allegations

man foundation case

proposed conditions

rule 41a2 texas