Christine Dancel v. Groupon, Inc.

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 19-1831
C HRISTINE D ANCEL ,
Plaintiff-Appellant,
v.
G ROUPON, I NC.,
Defendant-Appellee.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 1:18-cv-02027 — Ronald A. Guzmán, Judge.
____________________
A RGUED SEPTEMBER 16, 2019 — D ECIDED OCTOBER 9, 2019
____________________
Before BAUER , BRENNAN, and ST . EVE , Circuit Judges.
ST . EVE , Circuit Judge. We accepted Christine Dancel’s pe-
tition under Federal Rule of Civil Procedure 23(f) so that we
could review the district court’s denial of class certification.
Dancel, however, has proceeded as though we gave her a free
ticket to redo her opposition to the removal of her suit from
state court. Although we refuse to entertain the bulk of her
arguments, she has drawn our attention to a critical hole in
the notice of removal—it does not allege the citizenship of

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2 No. 19-1831
even one diverse member of the putative class. We therefore
order a limited remand so that the district court can patch this
hole, securing its jurisdiction over the case.
I
Dancel sued Groupon, Inc. in the Circuit Court of Cook
County in 2016. She alleged that Groupon, an online market-
place that sells discount vouchers to businesses, had used her
photograph on one of its pages to promote a voucher for a
restaurant in Vernon Hills, Illinois. Groupon had collected
this photograph automatically from Dancel’s public Insta-
gram account based on data linking it to the restaurant’s loca-
tion. Her complaint sought damages under the Illinois Right
of Publicity Act, 765 ILCS 1075/1, 30, on behalf of a class of
“[a]ll Illinois residents (1) who maintain an Instagram ac-
count, and (2) whose photograph(s) from such Instagram ac-
count have appeared on a Groupon Deal offer page.”
The parties litigated in state court for two years until Dan-
cel moved to certify a class that differed from the one in her
complaint. Her new class (which also had a subclass) was to
consist of “[a]ll persons who maintained an Instagram Ac-
count and whose photograph (or photographs) from such ac-
count was (or were) acquired and used on a groupon.com
webpage for an Illinois business.” Unlike the original class,
this one was not defined by its members’ residency, though it
was still limited to advertisements of Illinois businesses.
In response to the modified class definition, Groupon filed
a notice of removal under the Class Action Fairness Act,
28 U.S.C. § 1453 (CAFA). The CAFA permits removal of a pro-
posed class action to federal court as long as there is minimal
diversity, meaning just one member of the plaintiff class

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No. 19-1831 3
needs to be a citizen of a state different from any one defend-
ant. Id. § 1332(d)(2)(A). (There are other requirements regard-
ing numerosity and the amount in controversy, but they are
met here—Dancel alleges each of the tens of thousands of
class members is entitled to $1000 in statutory damages, 765
ILCS 1075/40(a)(2).) Groupon, the sole defendant, is a Dela-
ware corporation with its principal place of business in Illi-
nois and thus is a citizen of those two states. To meet the min-
imal-diversity requirement, its notice of removal stated that
the new class “undoubtedly would include at least some un-
determined number of non-Illinois and non-Delaware citi-
zens as class plaintiffs.” Groupon did not identify any one of
these class members or his or her citizenship.
Dancel initially let this omission slide. She moved to re-
mand on the theory that Groupon’s removal was improper
not because jurisdiction was lacking but because it had always
existed, and therefore Groupon had waived its right to re-
move. See 28 U.S.C. § 1446(b). Indeed, she expressly told the
district court she did not challenge the existence of minimal
diversity, which, she argued, had been apparent from her
complaint’s use of residency: some Illinois residents are citi-
zens of another state, and it was likely at least one such person
was within the original class definition. She changed her tune
in her reply in support of remand, though, and argued there
that Groupon was required to “specifically identify some ab-
sent class member who is not a citizen of Illinois or Delaware”
to show minimal diversity. In a sur-reply, Groupon insisted
that it could easily cure the deficiency, if pressed, but thought
it unnecessary to do so. The district court rejected Dancel’s
waiver argument and denied the motion to remand but did
not address minimal diversity or direct Groupon to cure its

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4 No. 19-1831
allegations. Dancel did not apply for leave to appeal the de-
nial. See 28 U.S.C. § 1453(c)(1).
Instead, the parties litigated the class certification motion,
which eventually the court denied on predominance grounds.
Fed. R. Civ. P. 23(b)(3). Dancel petitioned for review of that
denial, and we granted the petition. Fed. R. Civ. P. 23(f).
II
Despite asking for and receiving only permission to ap-
peal the class-certification decision, Dancel begins this appeal
by relitigating her motion to remand. She repeats her asser-
tion of waiver based on Groupon’s delay in seeking removal.
She also argues that Groupon’s allegations of jurisdiction
were deficient, and therefore urges us to direct that the case
be remanded to state court.
We refuse the invitation to expand the scope of this appeal.
Generally, in an appeal under Rule 23(f) we will consider only
“those issues related to [the] class certification decision.”
DeKeyser v. Thyssenkrupp Waupaca, Inc., 860 F.3d 918, 922 (7th
Cir. 2017) (quoting Andrews v. Chevy Chase Bank, 545 F.3d 570,
576 n.2 (7th Cir. 2008)). Here, there is no overlap between the
denial of remand and the later denial of certification. Rather
than try to draw such a relationship, Dancel insists that we
must address her arguments because they go to the district
court’s subject-matter jurisdiction. True, we must, even on in-
terlocutory review, be assured that the district court has juris-
diction, for if it does not then “we cannot decide the merits of
an appeal; we can only direct that the suit be dismissed.”
Isaacs v. Sprint Corp., 261 F.3d 679, 683 (7th Cir. 2001). That gets
her only so far, though. Dancel concedes that the timing of
Groupon’s removal is a question of procedure and not

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No. 19-1831 5
jurisdiction. See In re Contʹl Cas. Co., 29 F.3d 292, 294 (7th Cir.
1994). We are, thus, not obligated to reach the argument, and
so we decline to do so.
In contrast to her concededly procedural waiver argu-
ment, Dancel frames her belated challenge to the allegations
in Groupon’s notice of removal as a question of the district
court’s jurisdiction. Whether a party has failed “to demonstrate
diversity,” however, is distinct from whether diversity “in
fact existed,” and only the latter is a question of subject-matter
jurisdiction that cannot be waived. See Harmon v. OKI Sys., 115
F.3d 477, 479 (7th Cir. 1997) (quoting In re Allstate Ins. Co., 8
F.3d 219, 221 (5th Cir. 1993)); see also Hart v. FedEx Ground
Package Sys. Inc., 457 F.3d 675, 677 (7th Cir. 2006) (finding chal-
lenge to allegations waived by late motion to remand). We
must be assured only of the existence of subject-matter juris-
diction for purposes of this appeal, so we need not direct that
this case be immediately remanded to state court, even
though we agree Groupon’s allegations are deficient. As long
as the existence of subject-matter jurisdiction is either appar-
ent from the record, see Harmon, 115 F.3d at 479–80, or cured
through amendment of the notice of removal, see Heinen v.
Northrop Grumman Corp., 671 F.3d 669, 670 (7th Cir. 2012), we
can proceed to the class-certification issue.
The record does not currently reveal the existence of juris-
diction, so Groupon must amend its allegations, as it may do
even on appeal. See 28 U.S.C. § 1653. Groupon, as the remov-
ing party, bears the burden of showing the existence of federal
jurisdiction. See Appert v. Morgan Stanley Dean Witter, Inc., 673
F.3d 609, 617 (7th Cir. 2012). It has rested on its speculation
that “undoubtedly” a class member is a citizen of a state other
than Illinois or Delaware, even now, over a year after the

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6 No. 19-1831
deficiency was first identified in Dancel’s reply. We asked
Groupon to correct the jurisdictional statement in its appellate
brief, but it added only that its system did not screen photos
for their owners’ citizenship—still providing nothing but a
guess of diversity, educated and sensible though it may be.
Groupon sees no problem with its allegations because, in
its view, Dancel waived her opportunity to contest them. Sub-
ject-matter jurisdiction cannot be waived or forfeited, it
acknowledges, but the facts underlying jurisdiction can. So,
we have held that when a district court makes an unchal-
lenged factual determination that supports jurisdiction, an
opposing party “forfeits his objection to the finding, though
not to the inference of jurisdiction drawn from the finding.”
Workman v. United Parcel Serv., Inc., 234 F.3d 998, 1000 (7th Cir.
2000). (This rule is subject, of course, to the court’s investiga-
tion if it doubts its own jurisdiction. See id.)
Groupon’s allegations here do not have the necessary fac-
tual content for Dancel’s waiver to permit an inference of ju-
risdiction. If Groupon had alleged, even if only “on infor-
mation and belief,” that a specific member of the putative
class had “a particular state of citizenship,” then we may have
accepted Dancel’s waiver as establishing jurisdiction “for
now.” Med. Assur. Co. v. Hellman, 610 F.3d 371, 376 (7th Cir.
2010). Groupon instead posited that some “undetermined
number” of class members are “non-Illinois and non-Dela-
ware citizens.”
This allegation of negative citizenship fails to satisfy the
minimal diversity requirement. In ordinary, non-class diver-
sity cases, we have admonished parties that they cannot
“merely allege diversity of citizenship without identifying the
[parties’] states of citizenship,” for that is no better than a

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No. 19-1831 7
“bare assertion that the defendants are citizens of ‘another
state different from the Plaintiff.’” Dalton v. Teva N. Am., 891
F.3d 687, 690 (7th Cir. 2018). That the hurdle of minimal di-
versity for the CAFA is lower than the complete diversity re-
quired in most cases does not provide a basis to alter this rule,
and we have applied it vigorously even in the class-action
context. In Toulon v. Continental Casualty Co., 877 F.3d 725 (7th
Cir. 2017), we criticized the plaintiff—who had originally
brought the suit in federal court—for failing to “identify a
specific class member who is a citizen of a state other than Il-
linois.” Id. at 733. The class was broad—astonishingly so, for
it involved claims under the laws of fifty states (and the Dis-
trict of Columbia) relating to an insurance policy sold in at
least thirty-two states, id. at 730, 732—but this breadth did not
relieve our skepticism. We were content to conclude that the
district court had jurisdiction only because the defendant sup-
plemented the record under 28 U.S.C. § 1653 with affidavits
demonstrating that minimal diversity existed. Id. at 733; see
also Hart, 457 F.3d at 677 (relying on similar affidavits).
At argument, we asked Groupon whether it could supple-
ment the record to identify a specific, diverse class member. It
responded that it would need discovery and requested re-
mand to the district court for that purpose. We recently con-
sidered this procedure in Miller v. Southwest Airlines Co., 926
F.3d 898 (7th Cir. 2019), an appeal under 28 U.S.C.
§ 1453(c)(1). In Miller, the plaintiff asserted that the proposed
class of employees at Chicago’s O’Hare Airport was limited
to Illinois citizens. Id. at 905. We expressed doubt about this
assumption and pondered why the removing defendant had
not alleged minimal diversity by identifying, in its notice of
removal, one of its employees domiciled in a nearby state. Id.
We found federal-question jurisdiction over the case, but

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8 No. 19-1831
hypothesized that if this were not an option, we might have
remanded to the district court to explore whether a class
member was a citizen of another state. Id. Without an alterna-
tive basis for jurisdiction here, we elect to follow the approach
we hinted at in Miller and will return this case to the district
court so that it may inquire into its jurisdiction. †
III
We order a limited remand for the district court to permit
discovery to whatever extent the court deems necessary for
Groupon to allege that at least one member of the putative
class was a citizen of a state other than Illinois or Delaware at
the time of removal. This remand is limited solely to the ques-
tion of subject-matter jurisdiction and does not independently
obligate the district court to consider or reconsider any non-
jurisdictional issues, including the home-state or local-contro-
versy exceptions to the CAFA, 28 U.S.C. § 1332(d)(3)–(4). See
† Though the parties do not direct us to this issue, the Eleventh Circuit
has prohibited jurisdictional discovery in cases removed under the CAFA.
Lowery v. Alabama Power Co., 483 F.3d 1184, 1215 (11th Cir. 2007). That court
has since limited this holding to cases (like this one) removed on amended
pleadings, Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 762 (11th Cir.
2010), and two of its judges have suggested that Lowery should be over-
ruled. See id. at 775–76 (W. Pryor, J., concurring). We agree with those con-
curring judges that Lowery’s reasoning, which is based on a strict reading
of Rules 8 and 11 and little other authority, is unpersuasive and its holding
is in tension with the Supreme Court’s recognition that “where issues arise
as to jurisdiction or venue, discovery is available to ascertain the facts
bearing on such issues,” Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340,
351 n.13 (1978). Nevertheless, because our ruling may be creating a split
with the present position of the Eleventh Circuit, we have circulated this
opinion to all active judges. See Cir. R. 40(e). No judge voted to hear the
case en banc; Judge Flaum did not participate in the consideration of the
matter.

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No. 19-1831 9
Myrick v. WellPoint, Inc., 764 F.3d 662, 665 (7th Cir. 2014) (rec-
ognizing exceptions are not jurisdictional). We will retain our
jurisdiction over this appeal pending resolution of this issue.
See Jasonʹs Foods, Inc. v. Peter Eckrich & Sons, Inc., 768 F.2d 189,
190 (7th Cir. 1985). If the district court, after a reasonable time,
is not convinced that Groupon can carry its burden, then it
may enter an indicative ruling that it is inclined to remand for
lack of subject-matter jurisdiction under 28 U.S.C. § 1447(c),
and we will take appropriate steps.
SO ORDERED.

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