Three Pennsylvania residents who rely on well water sued five energy companies, including EQT Corporation, alleging that hydraulic fracturing operations contaminated their water supply. The plaintiffs sought a preliminary injunction to compel the defendants to provide safe drinking water to all members of the putative class while the litigation proceeded. Before seeking class certification, the plaintiffs moved for this injunction and requested an evidentiary hearing. The District Court denied the motion without holding a hearing, concluding that the plaintiffs had not sufficiently alleged irreparable harm. The plaintiffs then appealed this interlocutory order to the Third Circuit.
The Third Circuit focused its analysis on the threshold issue of subject-matter jurisdiction rather than the merits of the environmental claims or the standard for irreparable harm. The court reiterated that federal courts are courts of limited jurisdiction and that the party invoking jurisdiction bears the burden of establishing it. Specifically, the plaintiffs relied on the Class Action Fairness Act (CAFA) to establish jurisdiction. To succeed under CAFA, the complaint must show that the amount in controversy exceeds five million dollars, the class has at least 100 members, and there is minimal diversity of citizenship. The court explained that while minimal diversity is a low bar, it requires a facial showing that at least one plaintiff is a citizen of a different state than at least one defendant. The court distinguished between 'residency' and 'citizenship,' noting that they are not synonymous terms. The plaintiffs' complaint alleged that they were residents of Pennsylvania and that at least one class member was a citizen of a different state, but it failed to allege the specific citizenship of any named plaintiff. The court held that without allegations demonstrating the citizenship of at least one diverse plaintiff, the complaint did not make the required facial showing of jurisdiction. Consequently, the District Court could not have properly granted the preliminary injunction without first establishing that it had jurisdiction over the case.
The decision vacates the District Court's order and remands the case. The immediate effect is that the preliminary injunction denial is set aside, but the plaintiffs must now amend their complaint or motion papers to specifically allege the citizenship of at least one class member to establish diversity jurisdiction under CAFA. If they cannot make this showing, the federal court may lack jurisdiction to hear the case at all. The ruling clarifies that general allegations of residency are insufficient for CAFA jurisdiction and reinforces the strict pleading requirements for establishing diversity in class actions.
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