In Allen v. Boeing Co., 821 F.3d 1111 (9th Cir. May 5, 2016), the Ninth Circuit held that the district court had correctly applied the "local controversy" exception to CAFA jurisdiction, and that the case, a mass tort class action, was correctly remanded to state court.
Urging the inapplicability of the "local controversy" exception put the out-of-state defendant in the odd position of arguing that it bore greater responsibility for the alleged harm than its co-defendant, who was local. See id. at 1116-21. The Ninth Circuit concluded that the plaintiffs did, in fact, seek "significant relief" from the local defendant, and that the local defendant's conduct formed a "significant basis" for the plaintiff's claims. Id. The out-of-state defendant also argued that the plaintiffs failed to state a valid claim against the local defendant -- another very strange thing to hear a defendant asserting. See id. at 1121-23. The court disagreed, without addressing the threshold question of whether a defendant can escape application of the "local controversy" exception by attacking the merits of the underlying claim. Id.
It seems like this case has a long history, even though it is just getting started. This is the second CAFA-related appeal heard by the Ninth Circuit. I reported on the earlier Ninth Circuit opinion here.