ATLAS DATA PRIVACY CORPORATION v. ORACLE INTERNATIONAL CORPORATION

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

BLACKBAUD, INC., et al. : NO. 24-3993

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

WHITEPAGES, INC., et al. : NO. 24-3998

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

HIYA, INC., et al. : NO. 24-4000

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

COMMERCIAL REAL ESTATE : NO. 24-4073

EXCHANGE, INC., et al. :

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

CARCO GROUP INC., et al. : NO. 24-4077

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

TWILIO INC., et al. : NO. 24-4095

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

6SENSE INSIGHTS, INC., : NO. 24-4104

et al. :

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

LIGHTBOX PARENT, L.P., : NO. 24-4105

et al. :

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

SEARCH QUARRY, LLC, et al. : NO. 24-4106

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

ACXIOM, LLC, et al. : NO. 24-4107

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

ENFORMION, LLC, et al. : NO. 24-4110

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

COSTAR GROUP, INC., et al. : NO. 24-4111

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

ORACLE INTERNATIONAL : NO. 24-4112

CORPORATION, et al. :

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

RED VIOLET, INC., et al. : NO. 24-4113

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

RE/MAX, LLC, et al. : NO. 24-4114

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

EPSILON DATA MANAGEMENT, LLC, : NO. 24-4168

et al. :

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

PEOPLE DATA LABS, INC., : NO. 24-4171

et al. :

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

CLARITAS, LLC, et al. : NO. 24-4175

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

DATA AXLE, INC., et al. : NO. 24-4181

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

REMINE INC., et al. : NO. 24-4182

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

LUSHA SYSTEMS, INC, et al. : NO. 24-4184

________________________________________________________________

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

TELTECH SYSTEMS, INC., : NO. 24-4217

et al. :

________________________________________________________________

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

PEOPLECONNECT, INC., et al. : NO. 24-4227

________________________________________________________________

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

CORELOGIC, INC., et al. : NO. 24-4230

________________________________________________________________

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

BLACK KNIGHT TECHNOLOGIES, : NO. 24-4233

LLC, et al. :

________________________________________________________________

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

THOMSON REUTERS CORPORATION, : NO. 24-4269

et al. :

________________________________________________________________

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

CHOREOGRAPH LLC, et al. : NO. 24-4271

________________________________________________________________

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

TRANSUNION, LLC., et al. : NO. 24-4288

________________________________________________________________

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

EQUIFAX INC., et al. : NO. 24-4298

________________________________________________________________

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

V. :

:

SPOKEO, INC, et al. : NO. 24-4299

________________________________________________________________

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

TELNYX LLC, et al. : NO. 24-4354

________________________________________________________________

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

MYHERITAGE, LTD., et al. : NO. 24-4392

________________________________________________________________

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

WILAND, INC., et al. : NO. 24-4442

________________________________________________________________

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

ATDATA, LLC, et al. : NO. 24-4447

________________________________________________________________

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

PRECISELY HOLDINGS, LLC, : NO. 24-4571

et al. :

________________________________________________________________

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

OUTSIDE INTERACTIVE, INC. : NO. 24-4696

________________________________________________________________

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

VALASSIS DIGITAL CORP., : NO. 24-4770

et al. :

_______________________________________________________________

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

THE LIFETIME VALUE CO. LLC, : NO. 24-4850

et al. :

________________________________________________________________

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

FIRST AMERICAN FINANCIAL : NO. 24-5334

CORPORATION, et al. :

________________________________________________________________

ATLAS DATA PRIVACY : CIVIL ACTION

CORPORATION, et al. :

:

v. :

:

LEXISNEXIS RISK DATA : NO. 24-6160

MANAGEMENT, LLC, et al. :

________________________________________________________________

MEMORANDUM

Bartle, J. November 20, 2024

Plaintiffs in these forty actions allege violations of

a New Jersey statute known as Daniel's Law.1

The actions were originally filed in the Superior

Court in a number of different counties in New Jersey. The

defendants thereafter removed them to the United States District

for the District of New Jersey under 28 U.S.C. §§ 1441 and 1446

on the ground that subject matter jurisdiction exists either

under 28 U.S.C. § 1332(a) as a result of complete diversity of

citizenship or under the Class Action Fairness Act (“CAFA”), 28

U.S.C. § 1332(d). Defendants assert that plaintiffs have

collusively attempted to defeat federal jurisdiction. In two of

the cases, the defendants maintain that plaintiffs’ joinder of

non-diverse defendants was fraudulent. Before the court is the

consolidated motion of the plaintiffs to remand to the state

court under 28 U.S.C. § 1447(c) on the ground that this court

lacks subject matter jurisdiction.2

1. Daniel’s Law as amended is codified as follows: N.J. Stat.

Ann. §§ 2C:20-31.1, 17:46B-1.1, 19:31-18:1, 46:26A–12, 47:1-17,

47:1A-1.1, 47:1A-5, 47:1B-1, 47:1B-2, 47:1B-3, 47:1B–4, 56:8-

166.1, 56:8-166.3.

2. All judges in the District of New Jersey have recused. The

Chief Judge of the United States Court of Appeals for the Third

Circuit reassigned these and all related actions to the

undersigned pursuant to 28 U.S.C. § 292(b).

Daniel's Law provides that New Jersey judges,

prosecutors, law enforcement officers, and their immediate

families (“covered persons”) may request that persons and

businesses (“entities”) not disclose or make available their

home addresses or unlisted telephone numbers. See, e.g., N.J.

Stat. Ann. § 56:8-166.1(d). These entities are in violation of

Daniel's Law if they fail to take down this information within

ten business days after receiving a written takedown request.

N.J. Stat. Ann. § 56:8-166.1(a). Daniel's Law provides a

private right of action for damages and injunctive relief not

only for covered persons but also for their assignees. N.J.

Stat. Ann. § 56:8-166.1(b)-(c). Under Daniel’s Law, “’assignee’

means a person or entity to whom or which an authorized person

has assigned, in writing, a covered person’s right to bring a

civil action for” Daniel’s Law violations. N.J. Stat. Ann.

§ 56:8-166.1(d).

Plaintiffs in all of the actions are Atlas Data

Privacy Corporation (“Atlas”), Jane Doe-1, Jane Doe-2, Edwin

Maldonado, Scott Maloney, Justyna Maloney, Patrick Colligan,

Peter Andreyev, and William Sullivan. Atlas, a Delaware

corporation with its principal place of business in New Jersey,

has filed suit as the assignee of the Daniel's Law claims of

over 19,000 New Jersey covered persons. The named individual

plaintiffs, all current or former law enforcement officers, are

also citizens of New Jersey. They have brought their own claims

for violations of Daniel's Law. In each of these forty cases,

there is a named defendant which, like Atlas, is a citizen of

Delaware.

Upon the filing of the motions to remand, the court

authorized limited discovery on the issue of subject matter

jurisdiction. E.g., Order, Atlas Data Privacy Corp. v.

Blackbaud, Inc., Civil Action No. 24-3993, (D.N.J. July 24,

2024), ECF No. 53.

I

Atlas provides a range of services for persons covered

under Daniel's Law who sign up for Atlas's platform (“users”).

Before a Daniel's Law claim ever arises, Atlas monitors the

internet for data brokers who are potentially disclosing the

users' home addresses and unlisted telephone numbers. Atlas

then identifies those data brokers for its users. Additionally,

Atlas provides each user with an individual e-mail address, from

which the user may request that the data brokers remove his or

her personal information. To do so, users may send either the

form e-mail that Atlas provides or their own personalized e-

mail. Atlas then schedules the delivery dates of the takedown

notices. After takedown notices are sent, Atlas continues to

monitor the recipients to see if they have complied with the

requests.

Upon signing up for Atlas's platform, users agree to

Atlas's terms of service (“the terms”). In so doing, users

agree that “upon written notice from Atlas,” the users assign

their “right to bring civil enforcement actions for violations

of [their] rights under” Daniel's Law. The terms further state

that, upon receipt of this written notice, a user is “deemed

. . . to have irrevocably assigned to [Atlas] all of [the

user's] rights to bring a claim (and seek damages, other legal

remedies, and fees, costs, and litigation expenses) for

violations of [the user's] rights under” Daniel's law, and

“following such assignment, [Atlas] will have the exclusive

right to bring such civil enforcement actions . . . .”

Atlas has discretion whether to take an assignment.

Atlas may choose to send an assignment confirmation and litigate

the Daniel's Law claim itself, or it may choose not to send a

confirmation, in which case the users may litigate their own

claims. In either case, the terms provide that Atlas will keep

35% of any recovery from the action with the user receiving the

remaining 65%. Users also pay a subscription fee, whether or

not a Daniel's Law claim arises.

In early February 2024, following an alleged failure

of the defendants to comply with users' takedown requests, Atlas

sent assignment confirmations to over 19,000 of its users.

Shortly thereafter, it filed lawsuits on these assigned claims

in the state court.

II

Plaintiffs first contend that remand is required

because complete diversity of citizenship has not been satisfied

under 28 U.S.C. § 1332(a). The statute requires that the

citizenship of each plaintiff must be different from the

citizenship of each defendant.3 Exxon Mobil Corp. v. Allapattah

Servs., Inc., 545 U.S. 546, 553-54 (2005); see also Strawbridge

v. Curtiss, 7 U.S. (3 Cranch) 267, 267 (1806). A corporation is

deemed a citizen of both its state of incorporation and the

state where it has its principal place of business. 28 U.S.C.

§ 1332(c). A limited liability company (“LLC”) takes on the

citizenship of each of its members. See Zambelli Fireworks Mfg.

Co., Inc. v. Wood, 592 F.3d 412, 420 (3d Cir. 2010).

It is undisputed that Atlas is a citizen of Delaware,

as is at least one defendant in all these cases. Thus, at first

glance, it appears that complete diversity is absent under

§ 1332(a).

The defendants, as the party asserting jurisdiction,

bear the burden of establishing that federal jurisdiction

exists. Samuel-Bassett v. KIA Motors Am., Inc., 357 F.3d 392,

3. Defendants do not dispute that plaintiffs have satisfied

the required amounts in controversy under § 1332(a).

396 (3d Cir. 2004). All doubts must be resolved in favor of

remand. Id. at 403.

The defendants first maintain that diversity

jurisdiction is lacking because Atlas as an assignee is not a

real party in interest and accordingly its citizenship should be

disregarded. The real parties in interest, defendants contend,

are the users as assignors. If defendants are correct, there

will be complete diversity since the assignors as well as the

individual named plaintiffs are all citizens of New Jersey while

no defendant is a citizen of this state.

Rule 17(a) of the Federal Rules of Civil Procedure

requires an action to be prosecuted in the name of the real

party in interest. Fed. R. Civ. P. 17(a). The citizenship of

the real party in interest, rather than that of mere nominal

parties, governs whether diversity jurisdiction exists. See

Navarro Sav. Ass'n v. Lee, 446 U.S. 458, 460 (1980). As

explained in Cranpark, Inc. v. Rogers Grp., Inc., “the real

party in interest is the person who is entitled to enforce the

right asserted under the governing substantive law.” 821 F.3d

723, 730 (6th Cir. 2016) (quoting Certain Interested

Underwriters at Lloyd's London, Eng. v. Layne, 26 F.3d 39, 42-43

(6th Cir. 1994); see also Katzovicz v. HIH Logistics, Inc., No.

21-4535, 2021 WL 3038816, at *2 (D.N.J. July 19, 2021).

The plaintiffs rely on the Supreme Court’s decision in

Sprint Communications Co., L.P. v. APCC Services Inc., 554 U.S.

269 (2008) to support their position that this court should look

to the citizenship of Atlas as the real party in interest. In

Sprint, roughly 1,400 payphone operators assigned the entirety

of their small claims against long-distance communications

carriers to “aggregators,” which then brought suit in their own

names under the federal Communications Act of 1934 to collect

what was due. Sprint, 554 U.S. at 271-72. In the assignments,

the operators transferred to the aggregators the legal title to

their claims. Id. at 272. In a separate agreement, the

aggregators promised to remit all proceeds recovered to the

assignor-operators, which would in turn pay a service fee to the

aggregators. Id. The Court observed:

Because litigation is expensive, because the

evidentiary demands of a single suit are often great,

and because the resulting monetary recovery is often

small, many payphone operators assign their . . .

claims to billing and collection firms called

'aggregators' so that, in effect, these aggregators

can bring suit on their behalf.

Id. at 271-72.

The defendants there argued that only the assignors

had standing to sue. Id. at 274. The Supreme Court disagreed.

The Court reiterated the well-established standard for standing:

(1) there must be an injury in fact, that is a concrete and

particularized invasion of a legally protected interest; (2)

there must be causation, that is a fairly traceable causation

between the injury in fact and the conduct of defendant; and (3)

it is likely that plaintiff’s injury will be remedied by the

relief plaintiff seeks. Id. at 273. The Court held that the

aggregators, as the absolute assignees of the claims, had

standing under these criteria and could bring suit in the

federal court in their own names. Id. at 285.

It makes no difference, the Court noted, what the

assignees do with the money after a victory in court or after

settlement. Id. at 279-81. For purposes of standing, it does

not matter whether the assignees remit the money to the

operators, donate it to charity, or build a new corporate

headquarters. Even if the assignees return all of the money to

the assignors, the assignees are no different than trustees,

guardians, executors, or bankruptcy receivers who seek relief

not for themselves but for others. See id. at 287-88.

The defendants here attempt to distinguish Sprint on

the ground that it was a federal question case and that the

Supreme Court ruled only on the issue of standing. The specific

question, defendants argue, is whether there is diversity

jurisdiction and whether Atlas is a real party in interest.

The Supreme Court in deciding the issue of standing in

Sprint relied on Waite v. City of Santa Cruz, 184 U.S. 302

(1902), one of its own precedents and a diversity case. That

case explained that assignments do not defeat jurisdiction “if

the only objection to the jurisdiction of the Circuit Court is

that the . . . [assignee] was invested with legal title to the

bonds and coupons simply for purposes of collection.”4 Sprint,

554 U.S. at 283 (quoting Waite, 184 U.S. at 325).

The Supreme Court in Sprint also surveyed the history

of state court cases allowing assignees to sue in their own

names. It stated: “During [the 19th] century American law at

the state level became less formalistic through its merger of

law and equity, through statutes more generously permitting an

assignor to pass legal title to an assignee, and through the

adoption of rules that permitted any ‘real party in interest’ to

bring suit.” Id. at 279 (emphasis added). The Court took the

trouble to list in an Appendix those state cases which allow

assignees to sue. See id. at 292-93. It pointed out that some

specifically referred to the assignee as a real party in

interest. See, e.g., Allen v. Brown, 44 N.Y. 228, 231, 234

(1870); Jackson v. Hamm, 23 P. 88, 88-89 (Colo. 1890); McDaniel

v. Pressler, 29 P. 209, 210 (Wash. 1892); Cox’s Ex'rs v.

4. The Supreme Court in Waite ultimately held there was no

subject matter jurisdiction because the amount in controversy

had not been satisfied by the individual assignments. 184 U.S.

at 328-29. All parties agree that the requisite amounts in

controversy in the pending cases here have been met under 28

U.S.C. § 1332(a).

Crockett & Co., 22 S.E. 840, 843 (Va. 1895); Chase v. Dodge, 86

N.W. 548, 549 (Wis. 1901). The Supreme Court found this history

and these precedents among others to be “well nigh conclusive.”

Sprint, 554 U.S at 285 (quoting Vt. Agency of Nat. Res. v.

United States ex. rel. Stevens, 529 U.S. 705, 777-78 (2000).5

The Supreme Court treated standing to sue and the real

party in interest as synonymous, at least in the present

context. See id. at 279-85. As in Sprint, Atlas has an

absolute assignment of the rights of 19,000 of Atlas’s users.

As in Sprint, the assignments of Daniel's Law claims will

facilitate the vindication of the rights originally possessed by

the assignors. Under the terms of service and upon receipt of

Atlas’s assignment confirmations, Atlas was “irrevocably

assigned” the users’ rights to “bring a claim []and seek damages

[or] other legal remedies” and has “the exclusive right to bring

. . . civil enforcement actions.” While Atlas intends to return

to the assignors much but not all of what it collects, it does

not matter for jurisdictional purposes what Atlas does with the

money once it is collected.

Atlas, as the assignee, is the real party in interest

and has standing to sue. Its citizenship, not that of the

5. The Court noted at the end of its opinion in Sprint that

none of the parties had alleged that the assignments were made

in bad faith. The Court also noted that the assignments were

made “for ordinary business purposes.” 554 U.S. at 292.

assignors, is determinative. Because Atlas is a citizen of

Delaware, complete diversity of citizenship under § 1332(a) is

lacking in all these cases absent proof of collusion to destroy

diversity or proof of fraudulent joinder.

III

Defendants argue that even if Atlas is a real party in

interest, the assignments and the joinder of Atlas as a

plaintiff were collusive. If so, diversity of citizenship

exists under 28 U.S.C. § 1332(a).

As background, the court begins with 28 U.S.C. § 1359,

which provides that “[a] district court shall not have

jurisdiction of a civil action in which any party, by assignment

or otherwise, has been improperly or collusively made or joined

to invoke the jurisdiction of such court.” The Supreme Court in

Kramer v. Caribbean Mills, Ltd., 394 U.S. 823 (1969) faced the

question whether an assignment was collusive under § 1359. The

inquiry is a factual one. In Kramer, a single Panamanian

corporation assigned its contract claim against a Haitian

corporation to a Texas attorney. 394 U.S. at 824. The

attorney, who had a “total lack of previous connection with the

matter,” paid only $1 as consideration for the assignment and

agreed to remit 95% of any recovery back to the Panamanian

corporation. Id. at 824, 827. Without the assignment, there

would be no diversity jurisdiction since both corporations were

foreign entities. See 28 U.S.C. § 1332(a).

The issue of collusion, the Court explained, is a

matter of federal law as collusion affects subject matter

jurisdiction. The legality of the assignment under state law is

not a relevant consideration for this purpose. Kramer, 394 U.S.

at 829. The Court found that the assignment was improperly or

collusively made within the meaning of § 1359 and as a result,

diversity jurisdiction was not made out. Id. at 828, 830. It

grounded its decision on the assignee's lack of prior connection

to the matter, his lack of substantial interest in the

litigation, and his candid admission that the assignment was “in

substantial part motivated by a desire” to create diversity

jurisdiction. Id. at 827-28.

Here, the situation is the reverse of what the Supreme

Court dealt with in Kramer. The defendants contend that Atlas

was collusively joined not to get into federal court but to stay

out of federal court. No statute has been cited which deals

with efforts to avoid federal jurisdiction. Nonetheless, taking

their cue from § 1359 and Kramer, courts have treated diversity-

destroying assignments and diversity-creating assignments

similarly for jurisdictional purposes. See, e.g., Grassi v.

Ciba-Geigy, Ltd., 894 F.2d 181, 186 (5th Cir. 1990); Att'ys

Trust v. Videotape Comput. Prods., Inc., 93 F.3d 593, 597-98

(9th Cir. 1996); Gentle v. Lamb-Weston, Inc., 302 F. Supp. 161,

164-65 (D. Me. 1969).

The Fifth Circuit in Grassi v. Ciba-Geigy, Ltd., for

example, held that a plaintiff was collusively joined to avoid

federal jurisdiction. 894 F.2d at 186. There, a Texas family

had filed a collection action in state court against a Swiss

corporation. Id. at 182. On the same day, the family also

assigned 2% of its interest in the claim to a Costa-Rican

corporation, which had previously had no involvement in the

matter. Id. The Costa Rican corporation provided only

“investigative and collection work” as consideration for the

assignment, and the family controlled the litigation throughout.

Id. Although the addition of the Costa Rican corporation would

destroy complete diversity,6 the Swiss corporation nevertheless

removed the case to federal court on the ground that the joinder

of the Costa Rican corporation was collusive. Id. The Court

of Appeals agreed. It found that the “overriding motive” behind

the assignment was a desire to prevent federal diversity

jurisdiction and accordingly refused to remand the action to

state court. Id. at 186. As evidence for its finding, the

court pointed to the assignee's lack of prior connection to the

6. In the Fifth Circuit, “there is no diversity where there

are foreign parties on both sides” absent collusion. Grassi,

894 F.2d at 182.

matter, the lack of meaningful consideration, its minimal 2%

interest in the litigation, and the family-assignor’s control of

the litigation. Id.7

As noted, whether a party is collusively joined either

to evoke or destroy federal diversity jurisdiction is a question

of fact for the court. While the cases consider various factors

as an aid in making this decision, the court must ultimately

decide based on the particular facts before it the underlying

motive or purpose for the joinder or the assignments. In sum,

the court must ascertain what was really going on.

The facts and circumstances in the pending cases are

quite different from those in any other case called to the

court’s attention. At the outset, the New Jersey Legislature

authorized the assignment of claims to aid in the enforcement of

Daniel’s Law. As counsel readily admitted at oral argument, it

is highly unlikely that even a single member of the General

Assembly or the Senate of New Jersey had in mind the avoidance

of federal diversity jurisdiction when the votes were cast to

7. Defendants urge the court to consider Attorneys Trust v.

Videotape Computer Products, Inc. because that case lists motive

as only one factor in assessing diversity-destroying

assignments. 93 F.3d 593, 597 (9th Cir. 1996). That case

involved unusual circumstances, in which the assignees brought

suit in federal court in the first instance and then challenged

jurisdiction only after an adverse judgment was entered. Id. at

594. In any event, Attorneys Trust predates Sprint, and it is

not controlling here.

approve assignments. Nor is there any evidence that Atlas or

its users in making the assignments had in mind a desire to gain

an advantage by having the assigned claims tried in the Superior

Court of New Jersey rather than in the United States District

Court for the District of New Jersey.

Defendants argue that Atlas and the Union representing

police officers in New Jersey colluded to avoid federal

diversity jurisdiction. While there is evidence that the New

Jersey State Policemen’s Benevolent Association representing

some 33,000 active law enforcement officers did work with Atlas

to create assignments from its members, there is no evidence

that the question of federal subject matter jurisdiction played

any role.

In addition, the assignments here are not being made

with respect to a single action or to a limited number of

actions where the assignee has a small monetary interest in the

outcome. The assignments to Atlas are absolute. Atlas controls

the litigation. It has a significant stake in the outcome and

will retain for itself 35% of what it collects. Furthermore,

there are thousands of assignments and dozens of defendants.

Although Atlas is a citizen of Delaware and New Jersey, it

cannot avoid removal to federal court of any of its many

lawsuits where the defendants are citizens of other states. In

fact, this court has before it approximately three dozen other

actions originally filed by Atlas as assignee under Daniel’s Law

in the state court where the defendants are not citizens of

Delaware or New Jersey and thus complete diversity exists. They

have been removed and no remand motions are pending. It is not

reasonable to infer that Atlas or its users were engaged in

collusive assignments or joinder when there are so many diverse

defendants which possess information protected under Daniel’s

Law.

Defendants in support of their collusion argument

point to the short timeframe between the assignment of claims

and the filing of the lawsuits. This factor is of no

consequence here. The amendment to Daniel's Law allowing

assignments was enacted on July 20, 2023. See 2023 N.J. Laws

ch. 113. Atlas and covered persons promptly took advantage of

the amendment as was their right once alleged violations of

Daniel’s Law had occurred. Atlas obtained absolute assignments

and stood fully in the shoes of the assignors. In return for

consideration, the assignors no longer had any claims under

Daniel’s Law. Atlas succeeded to the assignors’ rights to bring

civil actions. See N.J. Stat. Ann. § 56:8-166.1(d). Atlas, as

any claimant would, then filed lawsuits sooner rather than

later. It was the decision of Atlas, not that of the assignors.

That Atlas and its users moved swiftly to effect the assignments

and Atlas then speedily sued does not create an inference that

collusion to avoid federal jurisdiction was afoot.

There are sound legal and business reasons unrelated

to federal diversity jurisdiction for the assignments in

question and for the joinder of Atlas as a plaintiff. The court

finds there was good faith and no collusion or improper motive

or purpose. Accordingly, defendants have not established the

existence of diversity of citizenship under 28 U.S.C. § 1332(a)

based on collusion of Atlas, its assignors, or anyone else.

IV

Defendants in two of these forty actions filed notices

of removal from the Superior Court of New Jersey on the

additional ground that plaintiffs fraudulently joined non-

diverse defendants whose presence would destroy complete

diversity of citizenship between plaintiffs and the remaining

defendants.

The first action is Atlas Data Privacy Corp. v.

Thomson Reuters Corp., Civil Action No. 24-4269 (D.N.J. filed

Mar. 27, 2024). There the named defendants are Thomson Reuters

Corporation, Thomson Reuters Holdings Inc. (“Holdings”), Thomas

Reuters Canada Limited, and Thomson Reuters Applications Inc.

(“Applications”). Plaintiff Atlas, a corporation, is a citizen

of both Delaware and New Jersey. The defendants Thomson Reuters

Corporation and Thomson Reuters Canada Limited have citizenship

which is diverse from all named plaintiffs. However, Holdings

is a citizen of Delaware and New York, and Applications is a

citizen of Delaware and Minnesota. The citizenship of these two

defendants destroys subject matter jurisdiction under 28 U.S.C.

§ 1332(a) unless they are improperly joined.

The complaint describes Holdings and Applications in

the same way as entities which disclose or redisclose on the

internet or otherwise make available the home addresses and/or

unpublished home telephone numbers of covered persons. See

Compl. ¶¶ 39, 40. The complaint thereafter alleges that

“Defendants offer and engage in the disclosure of data and

information through one or more websites or applications, or

otherwise in New Jersey, and to businesses and individuals who

operate or reside in New Jersey. Those websites include:

thomsonreuters.com.” See Compl. ¶ 42.

Accompanying the notice of removal was a Declaration

of Heather O’Hagan, the “Head of Tax, Canada & LatAm at Thomson

Reuters.” She makes the declaration on the “personal knowledge

of Thomson Reuters Corporation, and its subsidiaries, as well as

[her] review of Thomson Reuters business records and the

Complaint in this case.” In her declaration, she simply states

that the website “thomsonreuters.com” is “not owned by or

registered to [Holdings] or [Applications].”

The second action is Atlas Data Privacy Corp. v.

MyHeritage Ltd., Civil Action No. 24-4392 (D.N.J. filed Mar. 28,

2024). There the named defendants are MyHeritage Ltd. and

MyHeritage (USA), Inc. MyHeritage Ltd. is incorporated and has

its principal place of business in Israel. MyHeritage (USA),

like plaintiff Atlas, is incorporated in Delaware. If

MyHeritage (USA) is a proper defendant, complete diversity is

absent. The complaint avers identical claims against both

defendants. Each is characterized as “an entity that discloses

or re-discloses on the Internet or otherwise makes available the

home addresses and/or unpublished home telephone numbers of

covered persons.” See Compl. ¶¶ 36, 37. The complaint further

alleges: “Defendants offer and engage in the disclosure of data

and information through one or more websites or applications, or

otherwise in New Jersey, and to businesses and individuals who

operate or reside in New Jersey. Those websites include:

myheritage.com.” See Compl. ¶ 39.

In the MyHeritage action, Michael Stangel, the General

Manager for MyHeritage (USA), filed a declaration based on his

personal knowledge and his review and knowledge of the business

records of MyHeritage (USA). The declaration states that

MyHeritage (USA) does not “own, control, or otherwise operate

www.myheritage.com” and does not have access to its e-mail

inbox. It does not have a role in deciding what information is

available on www.myheritage.com and cannot remove any

information on that website. It does not have access to or

otherwise interact with www.myheritage.com. MyHeritage (USA)

has its own website, www.geni.com, which is not referenced in

the complaint.

Our Court of Appeals in Batoff v. State Farm Insurance

Co., has explained that joinder is fraudulent “where there is no

reasonable basis in fact or colorable ground supporting the

claim against the joined defendant, or no real intention in good

faith to prosecute the action against the defendant[] or seek a

joint judgment” 977 F.2d 848, 851 (3d Cir. 1992)(quoting Boyer

v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990)). The

court must not treat the issue of fraudulent joinder as it would

a motion to dismiss for failure to state a claim under Rule

12(b)(6) of the Federal Rules of Civil Procedure. Whether a

plaintiff’s claim against a defendant lacks merit as a matter of

law is not the relevant consideration. Instead, the issue is

whether the claim is “wholly insubstantial and frivolous.”

Batoff, 977 F.2d at 852. The heavy burden of persuasion rests

on the party asserting fraudulent joinder. Id. at 851.

The court must accept all well-pleaded facts as true.

Id. at 851-52. Nonetheless, it may venture outside the four

corners of the pleading, not to decide the case on the merits,

but to determine if fraudulent joinder exists. In Abels v.

State Farm Fire & Casualty Co., our Court of Appeals explained

that a court “must look beyond the face of the complaint for

indicia of fraudulent joinder.” 770 F.2d 26, 29 (1985).

Likewise, in Boyer v. Snap-On Tools Corp., the Court cited with

approval Smoot v. Chicago, Rock Island & Pacific Railroad Co.,

378 F.2d 879 (10th Cir. 1967). Boyer, 913 F.2d at 112. In

Smoot, the court looked beyond the complaint and accepted an

affidavit of a non-diverse defendant alleged to have been a

railroad employee culpable for a fatal accident at a railroad

crossing. 378 F.2d at 882. The affidavit declared he had

discontinued his employment with the railroad fifteen months

before the accident. Id. at 881. Smoot held that he had been

fraudulently joined. Id. at 882.

More recently, our Court of Appeals in In Re Briscoe

reaffirmed the principle that a court may look beyond the

pleading to decide the issue of fraudulent joinder. 448 F.3d

201, 219 (3d Cir. 2006). There the specific issue was whether

the statute of limitations had run. The court opined, “we see

no reason to preclude a district court from a limited

consideration of reliable evidence that the defendant may

proffer to support the removal.” Id. at 220.

In the Reuters action, the declaration is quite

narrow. It merely states that the website thomsonreuters.com is

not “owned or registered” to Holdings or Applications. This is

a far cry from total disassociation from that website. The

party asserting fraudulent joinder, as noted above, has the

burden of proof. After review of the allegations in the

complaint and the relevant facts presented outside the

complaint, defendants Holdings and Applications have not met

their burden. Their position that they were fraudulently joined

in Civil Action No. 24-4269 fails. Thus, subject matter

jurisdiction under § 1332(a) is lacking as Holdings and

Applications, like Atlas, are citizens of Delaware.

The situation is far different in MyHeritage. In

contrast to the declaration in Reuters, the declaration in

MyHeritage is all-encompassing. It states that MyHeritage (USA)

does not own, control, or otherwise operate www.myheritage.com,

the website referenced in the complaint. MyHeritage (USA) has

no role in deciding what information is available on that

website and has no ability to remove information. Plaintiffs

had the opportunity to take relevant discovery on subject matter

jurisdiction pursuant to court order but did not do so on the

issue of fraudulent joinder. See Order, Atlas Data Privacy

Corp. v. MyHeritage LTD, Civil Action No. 24-4392 (D.N.J. July

24, 2024), ECF No. 34. The declaration stands uncontested.

The undisputed facts before the court establish that

plaintiffs have no colorable claim against MyHeritage (USA).

The claim is wholly unsubstantiated and frivolous. MyHeritage

(USA) has no involvement whatsoever with the website in issue.

It is a total stranger to any alleged violation of Daniel’s Law.

The situation here is quite similar to that in Smoot, where the

non-diverse defendant was no longer employed by the railroad at

the time of the accident and therefore could not possibly have

been found liable.

MyHeritage (USA) has established that it was

fraudulently joined and will be dismissed. There is complete

diversity under 28 U.S.C. § 1332(a) in Civil Action No. 24-4392.

V

Defendants urge that the jurisdictional requirements

have been met for a class action under the Class Action Fairness

Act, (“CAFA”) 28 U.S.C. § 1332(d)(1)-(10). In contrast to

§ 1332(a) but consistent with Article III of the Constitution,

CAFA requires only minimal diversity. See 28 U.S.C. §

1332(d)(2); State Farm Fire & Cas. Co. v. Tashire, 386 U.S. 523,

531 (1967). This element is satisfied, as it is here, if any

member of the class is a citizen of a state different from any

defendant. For CAFA class action status, there must also be a

total amount in controversy in excess of $5,000,000. No party

raises a challenge on this basis.

The only contested issue is whether these actions meet

the definition of a “class action” under § 1332(d)(1)(B). Under

this subsection, “the term ‘class action’ means any civil action

filed under rule 23 of the Federal Rules of Civil Procedure or

similar State statute or rule of judicial procedure authorizing

an action to be brought by 1 or more representative persons as a

class action.” 28 U.S.C. § 1332(d)(1)(B). Defendants contend

that these actions are “class actions in disguise” or

“alternatively that they were filed under Daniel’s Law which is

similar to Rule 23 in every relevant respect.”

First, these are not class actions in disguise. It is

pellucid that none of them was brought either explicitly,

implicitly, or obliquely under Rule 4:32-1 of the New Jersey

Rules of Court, which contains the requirements for maintaining

a class action. The New Jersey Rule is in all material respect

similar to Rule 23. Nowhere do the plaintiffs in the words of

the Rule or otherwise purport to “sue or be sued as

representative parties on behalf of” any other persons. See

N.J. Ct. R. 4:32-1(a). Plaintiffs are acting on behalf of

themselves. As noted, the assignments that Atlas has obtained

from its users are absolute. Atlas was “irrevocably assigned”

the users’ rights “to bring a claim []and seek damages [or]

other legal remedies” and has “the exclusive right to bring such

civil enforcement actions.” Under Daniel’s Law, an assignee is

a person or entity who has been assigned the covered person’s

right to bring a civil action. See N.J. Stat. Ann. § 56:18-

166.1(d). As explained in Sprint, what Atlas as the assignee

does with what it may collect is of no concern to the court in

these actions. Sprint, 554 U.S. at 279-81. In a class action,

of course, it is of great concern what happens to what the class

representative obtains on behalf of the class. The court in

such actions must review the adequacy of any settlement and take

steps to ensure the proper distribution of any judgment or

settlement. These actions as pleaded here bear no resemblance

to a class action under Rule 4:32-1 of the New Jersey Rules of

Court.

Defendants argue in the alternative that Daniel’s Law

is a statute similar to Rule 23. This argument seems a little

like trying to fit a round peg into a square hole. To begin,

there is no representative party provision. Under Daniel’s Law,

covered persons or assignees sue in their own names and not on

behalf of anyone else. Daniel’s Law treats an absolute assignee

such as Atlas as a real party in interest. The claims of Atlas

belong to Atlas and Atlas alone. Assignees are not acting on

behalf of the assignors.

Moreover, Daniel’s Law contains no numerosity

threshold. This is a sine qua non for class actions of all

stripes. Daniel’s Law clearly permits a lawsuit by a single

covered person or by an assignee of a single covered person.

The court need not make a detailed comparison between

Daniel’s Law and the other characteristics for a class action

such as commonality, typically, adequacy, and notice. In short,

Daniel’s Law contains no such provisions. Defendants’ entire

argument rests on the premise that the assignments were partial

and consequently Atlas is representing the interests of

assignors in these lawsuits. This is simply incorrect. As

explained previously, these assignments are absolute and Atlas

succeeds absolutely to the rights of the covered persons to

bring suit.

Our Court of Appeals addressed the class action

provision of CAFA in Erie Insurance Exchange v. Erie Indemnity

Co., 722 F.3d 154 (3d Cir. 2013) and Erie Insurance Exchange by

Stephenson v. Erie Indemnity Co., 68 F.4th 815 (3d Cir. 2023)

(“Erie Insurance I” and “Erie Insurance II”). An unincorporated

insurance exchange brought suit in its own name for breach of

fiduciary duty, purporting to seek relief “on behalf of its

members.” Erie Insurance I, 722 F.3d at 157. The exchange

brought its suit pursuant to two Pennsylvania procedural rules,

both of which addressed primarily whether the exchange could

bring its suit under its own name or under the name of its

members. Erie Insurance II, 68 F.4th at 818; see also Pa. R.R.

Civ. P. 2152, 2177.

The court rejected the defendant’s position that the

case was “in substance a class action insofar as [the exchange

was] a stand-in for a class of” its members because the state

procedural rules under which the actions were brought

“contain[ed] none of the defining characteristics of Rule 23.”

Erie Insurance I, 722 F.3d at 158-59. The court noted that the

rules contained no class certification mechanisms as in Rule

23(c)(1), no numerosity or commonality requirements as in Rule

23(a)-(b), no provisions addressing notice that must be given to

“class members” as in Rule 23(c)(2), or any provisions for

opting out or appointing a class representative. Id. at 159.

The circumstances here are similar to the

circumstances in both Erie cases. Again, these forty actions

bear no similarity to class actions under CAFA.

Accordingly, this court does not have subject matter

jurisdiction under the class action provisions of CAFA, 28

U.S.C. § 1332(d)(1)–(10).

VI

Finally, defendants assert that subject matter

jurisdiction exists, regardless of the citizenship of Atlas,

under the “mass action” provisions of the Class Action Fairness

Act, 28 U.S.C. § 1332(d)(11). As with a CAFA class action, only

minimal diversity is required. Jurisdiction exists if any

plaintiff has different citizenship from any defendant. It is

undisputed that minimal diversity is satisfied in all pending

cases.

A mass action is a civil action “in which monetary

relief claims of 100 or more persons are proposed to be tried

jointly on the ground that plaintiffs’ claims involve common

questions of law or fact. . . .” 28 U.S.C. § 1332(d)(11)(B)(i).

The aggregate amount in controversy must be at least $5,000,000,

and the claims of each plaintiff must exceed $75,000 exclusive

of interest and costs. Id. The parties are in accord that the

requisite amounts in controversy have been satisfied. Instead,

plaintiffs contend that mass action status fails because there

are not 100 named plaintiffs in any of the complaints. Only

Atlas and the six individuals are listed.

The plaintiffs cite the decision of the Supreme Court

in Mississippi ex rel. Hood v. AU Optronics Corp., 571 U.S. 161

(2014) as controlling. In Hood, the State of Mississippi

brought an action in the state court in which it claimed that

defendants, manufacturers and sellers of liquid crystal display

panels, had formed a cartel to restrict competition and raise

prices. 571 U.S. at 166. The State, the only named plaintiff,

sought restitution and injunctive relief on behalf of itself and

its citizens based on injuries they all suffered as purchasers.

Id. The citizens who were harmed were not named in the

complaint.

The defendants removed the action to the federal court

on the ground that it was either a class action or mass action

under CAFA. Id. at 166. The Supreme Court had before it the

question whether a mass action included lawsuits “brought by

fewer than 100 named plaintiffs.” Id. 168-69. The Court held

unanimously that a mass action cannot exist with fewer than 100

named plaintiffs even if there were 100 or more unnamed persons

who were real parties in interest as beneficiaries. Id. at 175.

The Court reached its conclusion based solely on its

construction of CAFA. It reasoned that CAFA explicitly requires

“100 or more persons” in a mass action, not “100 or more named

or unnamed real parties in interest.” Id. at 169. The Supreme

Court read “100 or more persons” to mean 100 or more plaintiffs.

See id. at 176. A plaintiff is a party who brings a civil suit.

Id. at 162.

The Court referenced that CAFA provides that the term

“class members” means “the persons (named and unnamed) who fall

within the definition of the proposed or certified class.” Id.

at 169; see also 28 U.S.C. § 1332(d)(1)(D). In contrast, there

is no reference to unnamed persons in a mass action. The Court

observed that if Congress had wanted to include unnamed persons

in the calculus, it knows how to say so. Hood, 571 U.S. at 169.

The Court also rejected a real party in interest analysis.

While relevant in other contexts, it is not germane to deciding

whether a lawsuit constitutes a mass action. Id. at 174, 176.

The defendants here emphasize that Hood was a parens

patriae action where it was not possible to determine the

identity of the citizens of Mississippi who were harmed. They

argue that the pending cases under Daniel’s Law are different

because the 19,000 unnamed covered persons are actually known.

Defendants point to a part of the Supreme Court’s opinion which

discusses how difficult it would be in that case to identify “a

majority of plaintiffs” to meet the requirements for the

transfer of the action to another court under

§ 1332(d)(11)(C)(i) if they were not named in the complaint.

See id. at 173. This problem, defendants contend, does not

exist here. While the Supreme Court does talk about the problem

of applying the transfer provision if unknown citizens of

Mississippi are deemed plaintiffs, its discussion of this

subject is not critical to its holding. It simply refers to

this difficulty as reinforcing – not as essential to – its

construction of the mass action provision of CAFA. See id.

Even if the 19,000 unnamed covered persons are real

parties in interest, this fact does not satisfy the criteria for

a mass action under CAFA. Nor is the difference between a

parens patriae action in Hood and the claims here relevant.

There is nothing in CAFA providing that the number of named

plaintiffs may vary depending on the nature of the underlying

claims. The defendants urge this court to construe CAFA

broadly. No policy concern or rule of construction, however,

can undermine the text of the statute as construed by the

Supreme Court. See Erie Ins. Exch. by Stephenson v. Erie Indem.

Co., 68 F.4th 815, 821 (3d Cir. 2023). The fact that Congress

loosened the complete diversity requirement for class actions

and mass actions does not mean that other requirements imposed

by Congress should be ignored.

In sum, Hood holds that CAFA requires at least 100

named plaintiffs for any mass action, not simply 100 or more

persons who are real parties in interest. The Supreme Court

could not have been clearer. Since there are not a hundred

named plaintiffs in any of the complaints, defendants’ argument

that subject matter jurisdiction exists because these lawsuits

are mass actions under 28 U.S.C. § 1332(d)(11) is without merit.

VII

The plaintiffs’ motions to remand these actions will

be granted except for Atlas Data Privacy Corp. v. MyHeritage

Ltd., Civil Action No. 24-4392, as to which the motion to remand

will be denied. The defendant MyHeritage (USA) Ltd. in that

action will be dismissed because it is fraudulently joined.

The court concludes that: (1) Atlas is a real party in

interest; (2) the assignments to and joinder of Atlas are not

collusive; (3) there is no fraudulent joinder except as noted

above; (4) complete diversity of citizenship is lacking under 28

U.S.C. § 1332(a) except for the one action noted above; and (5)

subject matter jurisdiction is absent under the class action and

mass action provisions of the Class Action Fairness Act, 28

U.S.C. § 1332(d).

BY THE COURT:

/s/ Harvey Bartle III

J.