Background
In April 2023, an industrial facility in Richmond, Indiana caught fire and burned for more than seven days, emitting noxious gases and hazardous particulates that spread across hundreds of properties. The incinerated facility sat on three properties: two owned by the City of Richmond (purchased in 2021) and one jointly owned by private entities (My-Way Trading, Inc., Cornerstone Trading Group, LLC, and Seth Smith).
In April 2025, 150 plaintiffs sued the property owners in Wayne County Circuit Court alleging that the private defendants’ failure to maintain their properties and the City’s failure to remediate hazardous conditions caused the fire. Plaintiffs sought damages under strict liability, negligence, nuisance, trespass, battery, and emotional distress theories, requesting both compensatory and punitive damages. The defendants removed the case to federal court under the Class Action Fairness Act of 2005 as a “mass action.”
The district court sua sponte ordered briefing on the “local event or occurrence exception” under 28 U.S.C. § 1332(d)(11)(B)(ii)(I), which excludes from CAFA jurisdiction actions where all claims arise from a single event in the filing state resulting in injuries in that state or contiguous states. The district court concluded the exception applied and remanded the case to state court. The Seventh Circuit accepted an interlocutory appeal to address the nature of this exception as a matter of first impression in the circuit.
The Court’s Holding
The Seventh Circuit affirmed the remand to state court on two central holdings. First, the court held that the local event or occurrence exception is jurisdictional—not merely a waivable defense. Because the exception is part of the statutory definition of “mass action” itself, and only mass actions qualify for federal jurisdiction under CAFA, the exception directly affects subject matter jurisdiction and may be raised at any time, even sua sponte.
Second, the court held that all claims in the action arise from a single “event or occurrence”—the fire. The court defined “event or occurrence” broadly to include not just discrete moments in time but also continuing conditions that cause injury. A fire burning for more than a week that caused all alleged injuries and damages is plainly such an event. Critically, the court rejected the defendants’ argument that claims arose from multiple separate events. The underlying tortious acts (failure to maintain properties, failure to remediate) are not separate events or occurrences; they are the predicate facts establishing liability for the single injury-causing fire event. Claims arise from injuries, not from abstract tortious conduct.
The court further held that the exception applies even when multiple defendants engaged in different activities leading to the fire. The relevant question is whether different defendants’ acts contribute to the same injury-causing event, not whether they performed independent tortious acts. Here, though the private defendants allegedly failed to maintain properties and the City allegedly failed to remediate conditions after purchase, all such conduct culminated in a single fire that caused the injuries giving rise to all claims.
Key Takeaways
- CAFA’s local event or occurrence exception is jurisdictional and can be raised sua sponte at any stage; it is not waivable or subject to the 30-day motion-to-remand deadline.
- An “event or occurrence” is construed broadly and may encompass incidents persisting over time and resulting from multiple underlying causes or actors, provided all claims ultimately arise from a single injury-causing happening.
- The distinction between an injury-causing event and its underlying causes is critical: claims arise from injuries, not from the predicate tortious conduct establishing liability.
- The fire satisfied all four circuit definitions of “event or occurrence” circulating in federal case law, avoiding the need to resolve the existing three-way circuit split.
Why It Matters
This decision clarifies that CAFA’s local event exception, though jurisdictional, is readily invoked when plaintiffs’ claims stem from a circumscribed local incident—even if that incident results from multiple defendants’ separate failures or negligent acts. The ruling favors keeping locally-rooted mass tort cases in state court despite meeting CAFA’s monetary and diversity thresholds. For defendants, the decision constrains removal strategy: removal as a mass action is unavailable for claims concentrated around a single, localized injury-causing event, regardless of whether multiple defendants contributed to it or underlying wrongdoing predated the precipitating event.
The decision also establishes jurisdictional review standards under CAFA, confirming that structural provisions affecting the definition of removable actions (like the mass action definition itself) are subject-matter jurisdictional and must be addressed even absent proper pleading or motion.