{"id":2975,"date":"2026-06-01T09:55:28","date_gmt":"2026-06-01T13:55:28","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/classactiondefense\/?p=2975"},"modified":"2026-06-01T09:55:29","modified_gmt":"2026-06-01T13:55:29","slug":"doctors-orders-michigan-data-breach-class-action-dismissed-due-to-the-cafas-home-state-exception","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/classactiondefense\/2026\/06\/01\/doctors-orders-michigan-data-breach-class-action-dismissed-due-to-the-cafas-home-state-exception\/","title":{"rendered":"Doctor\u2019s Orders: Michigan Data Breach Class Action Dismissed Due To The CAFA\u2019s Home-State Exception"},"content":{"rendered":"\n

By Gerald L. Maatman, Jr., George J. Schaller, and Denis Yavorskiy<\/strong><\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

Duane Morris Takeaways<\/em>: <\/strong>On May 26, 2026, in Berven v. Sturgis Hosp., Inc., 25-CV-1142 (W.D. Mich. May 26, 2026), Judge Robert J. Jonker of the U.S. District Court for the Western District of Michigan dismissed<\/a> two related data breach class actions for lack of subject matter jurisdiction, finding that the Class Action Fairness Act\u2019s (\u201cCAFA\u201d) home-state exception prevented the Court from exercising jurisdiction over the cases.\u00a0<\/em><\/p>\n\n\n\n

The Court found that the defendant, Sturgis Hospital, Inc., carried its burden of proving that the CAFA\u2019s home-state exception applied by demonstrating that it is more likely than not that over two-thirds of the class members are Michigan citizens.  Sturgis Hospital\u2019s records suggested that roughly 90% of its employees and former patients, the two populations impacted by the alleged data breach, reside in Michigan.  Companies facing data breach and other class actions should consider similar ways to challenge jurisdiction by invoking the home-state exception.<\/em><\/p>\n\n\n\n

Case Background<\/strong><\/p>\n\n\n\n

Plaintiffs Lavonna Berven and Paul Minor filed two related class actions against Sturgis Hospital asserting multiple \u201cstate law claims \u2014 negligence, negligence per se, breach of implied contract, unjust enrichment, and violations of the Michigan Consumer\u2019s Protection Act\u201d arising from an alleged data breach.  Id<\/em>. at *3.  Plaintiffs alleged that they had \u201csubject-matter jurisdiction under 28 U.S.C. 1332(d)(2), the CAFA provisions of the diversity jurisdiction statute.\u201d  Id.<\/em><\/p>\n\n\n\n

Sturgis Hospital is a nonprofit hospital with its principal place of business in Sturgis, Michigan, near the Indiana border, and primarily employs and serves Michigan residents.  Id<\/em>. at *2.  Sturgis Hospital collects \u201ca home address\u201d from every employee and patient that uses its services.  Id. <\/em>at *2, n 1.  According to its records, \u201c[r]oughly 90% of Sturgis\u2019 employees reside in Michigan\u201d and \u201csince 2010, at least 90% of all patient visits to Sturgis were from individuals with a Michigan home address.\u201d  Id. <\/em>at *2. <\/p>\n\n\n\n

In September 2025, after detecting unauthorized activity in its computer network, the hospital sent \u201capproximately 21,379 notice letters\u201d to former patients and employees with \u201cknown addresses that were affected by the data breach.\u201d  Id<\/em>.  Of those notice letters \u201c19,412\u2014or 90.80%\u2014were sent to individuals with Michigan addresses.\u201d  Id.  <\/em>Plaintiffs alleged a breach resulting in \u201can unauthorized third party\u201d acquiring \u201cPersonal Identifying Information (PII) and Private Health Information (PHI)\u201d of approximately 77,771 employees and former patients and sought to represent a purported class of those impacted.  Id.<\/em>  Sturgis Hospital moved to dismiss both cases under the CAFA\u2019s home-state exception.<\/p>\n\n\n\n

The Court\u2019s Decision<\/strong><\/p>\n\n\n\n

Judge Jonker dismissed both complaints, determining that Sturgis Hospital demonstrated \u201cby a preponderance of evidence that the home-state exception applies[.]\u201d  Generally, under the \u201cCAFA, federal courts have jurisdiction over class actions where: (1) any<\/em> member of the class of Plaintiffs is a citizen of a different state than any <\/em>defendant; (2) the class includes more than 100 putative class members; and (3) the aggregate amount in controversy exceeds $5,000,000.\u201d  Id.<\/em> at *3-4 (emphasis in original).  However, under the CAFA\u2019s home-state exception, federal courts must \u201cdecline jurisdiction if \u2018two-thirds or more of the members of all proposed plaintiff classes in the aggregate,\u2019 and the primary defendants, \u2018are citizens of the State in which the action was originally filed.\u2019\u201d  Id. <\/em>at *4 (quoting 28 U.S.C. \u00a7 1332(d)(4)(B)).<\/p>\n\n\n\n

Judge Jonker noted that Sturgis Hospital did not need to prove the \u201cactual citizenship of the class members\u201d and instead had to show domicile, which turns on proof of residence and an intent to remain.  Id<\/em>. at *4.  Sturgis Hospital produced a declaration from its CFO and COO to demonstrate, along with \u201cover ten thousand pages of hospital records\u201d that suggested that \u201croughly 90% of its employees and former patients \u2014 the only two populations affected by the data breach\u2014reside in Michigan.\u201d  Id.<\/em>  These records, along with testimony, showed that between 2010 to 2025, the percent of Sturgis employees and former patients that resided in Michigan ranged from 89.55% to 92.15%., and from 93.96% to 95.80%, respectively.  Id. <\/em>at *5-6.<\/p>\n\n\n\n

Judge Jonker found that this evidence \u201cstrongly suggest[ed]\u201d that the \u201ctwo populations affected by the data breach \u2014 resided, and were therefore presumptively domiciled, in Michigan.\u201d  Id.<\/em> at *6.  Further, Sturgis Hospital\u2019s notice letter process was \u201ceven more persuasive[]\u201d support, as testimony showed that the hospital mailed \u201capproximately 21,379 notice letters to potential class members[,]\u201d 90.8% of which \u201cwere sent to individuals with Michigan home-addresses.\u201d  Id.<\/em>  Considering this evidence, it was \u201ceasy for the Court to find Sturgis has shown that it is more likely than not that over two-thirds of the proposed class members are residents, and therefore citizens, of Michigan.\u201d  Id. <\/em>at *6-7.<\/p>\n\n\n\n

Plaintiffs attempted to \u201cpoke holes\u201d in the records, claiming they are \u201care unreliable indicators of residence and citizenship\u201d and that \u201cthe addresses of former patients may be faulty.\u201d  Id<\/em>. at *7.  Plaintiffs also argued that \u201cthe patient-visit data . . . does not fairly represent the class because it includes \u2018repeat patients\u2019 that may have sought care . . . multiple times and other individuals that may have not been affected by the breach.\u201d  Id.<\/em>  Judge Jonker was unpersuaded by Plaintiffs\u2019 \u201cspeculations[.]\u201d  Sturgis Hospital \u201crequired their employees to provide a home address\u201d and \u201casked patients to provide a home address at every visit,\u201d and for those patients with multiple visits, it used \u201cthe most recent address provided.\u201d  Id.<\/em> at *8.  Additionally, before sending notice letters, the hospital \u201cused a third-party vendor to check for address changes for everyone<\/em> that had been identified as involved in the data breach.\u201d  Id.<\/em> (emphasis in original).  Judge Jonker found that these procedures in verifying address residence data \u201censure[d] that residence data [was] reasonably accurate.\u201d  Id.<\/em>     <\/p>\n\n\n\n

Judge Jonker also found that potential \u201cdouble counting had a negligible impact\u201d since \u201cthe percentage of patient visits from individuals with a Michigan address\u201d and \u201cthe percentage of notice letters that were sent to actual <\/em>individuals\u201d were both consistent at \u201croughly 90%.\u201d  Id. <\/em>at *8-9.  Further, Sturgis Hospital\u2019s physical location nearing the Indiana border did not \u201crebut the presumption of domicile.\u201d  Id<\/em>. at *9. Rather, the fact that Sturgis Hospital \u201cis located \u2018exclusively\u2019 in Sturgis, Michigan, and markets itself as a \u2018hometown\u2019 medical service\u2019\u201d weighed in favor of applying the home-state exception.  Id.<\/em>  <\/p>\n\n\n\n

The Court concluded that \u201cthe consistency of the data suggests that Sturgis\u2019 information easily meets the preponderance standard\u201d and found \u201cthe home-state exception to [the] CAFA applies.\u201d  Id.<\/em> at *10.  Accordingly, the Court dismissed for lack of jurisdiction.  Id.<\/em><\/p>\n\n\n\n

Implications For Businesses<\/strong><\/p>\n\n\n\n

Berven<\/em> illustrates that the CAFA is not an unbounded vehicle for litigating class actions in federal court, and when an exception applies, here the home-state exception, this defeats federal court jurisdiction and requires dismissal.  Sturgis Hospital presented hospital records and notice letter statistics showing that the home-state exception applied because over two-thirds of the proposed class members are citizens of Michigan.<\/p>\n\n\n\n

Jurisdictional challenges are strategic decisions that should be carefully considered when defending against class actions.  Corporate counsel should weigh the pros and cons of proceeding in federal versus state court before asserting a jurisdictional exception to the CAFA.  Corporate counsel should also consider the strength of the support and whether it proves by a preponderance of the evidence that an exception applies.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Gerald L. Maatman, Jr., George J. Schaller, and Denis Yavorskiy Duane Morris Takeaways: On May 26, 2026, in Berven v. Sturgis Hosp., Inc., 25-CV-1142 (W.D. Mich. May 26, 2026), Judge Robert J. Jonker of the U.S. District Court for the Western District of Michigan dismissed two related data breach class actions for lack of … <\/p>\n

Continue reading “Doctor\u2019s Orders: Michigan Data Breach Class Action Dismissed Due To The CAFA\u2019s Home-State Exception”<\/span><\/a><\/p>\n","protected":false},"author":575,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[171],"ppma_author":[7,96,160],"class_list":["post-2975","post","type-post","status-publish","format-standard","hentry","category-general","tag-class-action-fairness-act-cafa"],"authors":[{"term_id":7,"user_id":575,"is_guest":0,"slug":"gmaatman","display_name":"Gerald L. Maatman, Jr.","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2022\/09\/maatmangerald-100x100.jpg","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""},{"term_id":96,"user_id":655,"is_guest":0,"slug":"gschaller","display_name":"George Schaller","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2023\/07\/schallergeorge-100x100.jpg","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""},{"term_id":160,"user_id":761,"is_guest":0,"slug":"dyavorskiy","display_name":"Denis Yavorskiy","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2026\/03\/yavorskiydenis-100x100.jpg","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/2975","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/users\/575"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/comments?post=2975"}],"version-history":[{"count":0,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/2975\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/media?parent=2975"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/categories?post=2975"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/tags?post=2975"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/ppma_author?post=2975"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}