ED CARNES, Chief Judge.
The City of Montgomery has a red-light camera program that is managed by American Traffic Solutions, Inc. Under that program Charles Hunter and Mike Henderson were ticketed and required to pay civil fines. They are the named plaintiffs in a would-be class action that was filed in Alabama state court claiming that the program and fines violate state law. (The complaint included a federal law claim but it was later dropped.)
The defendants, the City and Traffic Solutions, removed the case to federal court under the Class Action Fairness Act, 28 U.S.C. § 1332(d). The district court remanded the case to state court after deciding that the local controversy and home state exceptions, which bar the exercise of jurisdiction under CAFA, applied.
I. FACTUAL BACKGROUND
Accepting the factual allegations in the complaint as true for present purposes, in 2007 Traffic Solutions approached the City and offered to install and manage a system of red light cameras within the city limits. The City liked the idea and enacted an ordinance authorizing a system of "Automated Photographic Enforcement of Traffic Control Device Violations." Under the system Traffic Solutions sends photographs of potential red light violations to the Montgomery Police Department. Those photographs are viewed by police officers. If the officers determine that the red light was run, Traffic Solutions sends out a notice of violation to the owner of the vehicle that was driven through the red light. The resulting fine is paid to Traffic Solutions, which keeps a portion of it and remits the remainder to the City.
Under generally applicable law, Alabama classifies running a red light as a criminal misdemeanor. But in 2009, to accommodate Montgomery's program, the Alabama Legislature enacted a law creating a new "non-criminal category of state law called a civil violation." That category is the opposite of a generally applicable one because it applies only to red light violations detected by cameras within Montgomery's city limits.
After receiving a notice of violation based on a photo taken by one of Traffic Solutions' red light cameras, Hunter brought this lawsuit as a class action in Alabama state court. His complaint contended that the Legislature's creation of the category of "civil violations" violated the Alabama Constitution, and that the City's ordinance violated state law. It also claimed that the defendants intentionally made yellow lights too short so that drivers would not have enough time to stop before the light turned red, leading to more violations and more revenue. Finally, the complaint contained a claim under 42 U.S.C. § 1983, alleging that the defendants had acted under color of state law to deprive the class of rights protected by the federal Constitution.
The relief sought was: a declaration that the red light camera program was unlawful; a judgment requiring the City to refund all red light violation fines it had collected as a result of the program; an injunction directing both defendants to stop issuing tickets based on the program; an award of attorney's fees under 42 U.S.C. § 1988 and the common fund doctrine; and the entry of any other necessary and proper orders.
Traffic Solutions, with the City's consent, removed the lawsuit to federal court based on the § 1983 claim, the request for attorney's fees under § 1988, and CAFA diversity jurisdiction. Hunter then amended his complaint to drop the § 1983 claim and his reliance on § 1988 for attorney's fees. The amendment also added as a second named plaintiff Henderson, another Alabamian who had received a red light ticket because of a Traffic Solutions camera. The amended complaint sought the same types of relief as the original one, except that its request for attorney's fees relied on the common fund doctrine alone.
About ten months after the case had been removed to federal court, without prompting the district court ordered supplemental briefing on whether it had subject matter jurisdiction. The order doing that noted the plaintiffs had dropped the § 1983 claim, which was the sole federal claim, and it mentioned that one of CAFA's exceptions to the exercise of federal jurisdiction might apply and require a remand to state court. Taking the hint, the plaintiffs' supplemental brief contended that both CAFA's local controversy exception and its home state exception to the exercise of federal jurisdiction applied.
The district court agreed, finding that both exceptions applied so that "[j]urisdiction over this case [was] not appropriate under . . . the Class Action Fairness Act." The court also declined to exercise supplemental jurisdiction over the plaintiffs' claims (a part of its order the defendants do not challenge). This is the defendants' appeal from the remand order.
II. APPELLATE JURISDICTION
We start with whether we have jurisdiction to review the district court's order.
But our analysis cannot end with that general principle supporting jurisdiction because some of what § 1291 giveth, § 1447 taketh away. Section 1447(c) reads, in relevant part:
28 U.S.C. § 1447(c). That text encompasses two types of remands: (1) those following a timely motion that are based on a defect other than lack of subject matter jurisdiction, and (2) those, whether motion-motivated or not, that are based on the lack of subject matter jurisdiction.
Section 1447(d), in turn, provides in relevant part that "[a]n order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise." 28 U.S.C. § 1447(d). To readers not given to fanciful interpretation, those words would seem to rule out review in cases, like this one, where there is an order remanding a case to the state court from which it was removed. That is, after all, exactly what the words say. Yet, as Justice Thomas has pointed out, the Supreme Court has "interpreted § 1447(d) to mean the opposite of what it says."
The district court itself raised the possibility that a CAFA exception required remand. Because the remand was not done on motion, the first ground for a § 1447(d) jurisdictional bar to our review is out.
As to the second ground for a § 1447(d) jurisdictional bar to our review, the remand in this case was not for lack of subject matter jurisdiction because the CAFA exceptions that the remand was based on do not go to the existence of subject matter jurisdiction; instead they go to whether jurisdiction may be exercised in a particular circumstance. CAFA, through § 1332(d)(2), provides that "[t]he district courts shall have original jurisdiction" in cases where the amount in controversy is over $5 million and the parties are minimally diverse.
But if the local controversy exception or the home state exception applies, CAFA requires that the district court "decline to exercise jurisdiction."
For those reasons, a remand order based on CAFA's local controversy exception or home state exception does not fall within either of § 1447(d)'s categories, and review of it is not barred. We do have jurisdiction to entertain this appeal.
III. THE HOME STATE EXCEPTION
Having decided that we have jurisdiction, we turn now to the issue of whether the remand was proper. "Congress enacted CAFA to address inequitable state court treatment of class actions and to put an end to certain abusive practices by plaintiffs' class counsel."
As we have already explained, the allegations of the amended complaint in this case, as supplemented by a stipulation in the district court, are adequate to give the district court subject matter jurisdiction over it.
The home state exception applies if "two-thirds or more of the members of all proposed plaintiff classes in the aggregate, and the primary defendants, are citizens of the State in which the action was originally filed." 28 U.S.C. § 1332(d)(4)(B). The parties agree that two-thirds or more of the members of the proposed plaintiff classes are citizens of Alabama. And the defendants do not contest that that the City is a citizen of Alabama and that Traffic Solutions is not.
That leaves, as the dispositive question, whether Traffic Solutions is a "primary defendant[ ]" under CAFA. If it is, then one of the primary defendants is not a citizen of the state where the action was filed, the home state exception to the exercise of jurisdiction does not apply, and the remand cannot be justified under that exception. On the other hand, if Traffic Solutions is not a primary defendant under CAFA, the City is the sole primary defendant and it is a citizen of the state where the action was filed. As a result, the home state exception to the exercise of CAFA jurisdiction will apply, and the remand was proper.
What are primary defendants for CAFA home state exception purposes? The statutory language provides little guidance. The term "primary defendants" is undefined, and there are no contextual clues as to its meaning. The dictionary does not help much either. It tells us that a "primary" defendant is one "of first rank, importance, or value."
In this situation, absent any other source of guidance, we reluctantly and cautiously turn to legislative history materials.
The Senate Judiciary Committee's report on CAFA contains this statement about the meaning of the key term in the case before us:
S. Rep. No. 109-14 at 43 (2005).
The Third Circuit has stated that the House Judiciary Committee's report and other legislative history supports "constru[ing] the words `primary defendants' to capture those who are directly liable to the proposed class, as opposed to being vicariously or secondarily liable based upon theories of contribution or indemnification."
It is not difficult to apply this potential monetary loss standard in this case. The only request for monetary relief in the amended complaint is for a refund of all traffic fines collected in connection with the red light camera program. That monetary relief is sought from the City alone, not from Traffic Solutions. Even if the City could and did seek indemnification or contribution from Traffic Solutions for any refunds it paid, that would be "vicarious[ ] or secondar[y] liab[ility]" for Traffic Solutions, which is not enough to make it a "primary defendant."
The plaintiffs do seek injunctive relief against Traffic Solutions, but that is not monetary relief. And where monetary relief is sought, it is monetary relief — not injunctive, declaratory, or any other kind of relief — that matters.
Because the only primary defendant is a "citizen[ ] of the State in which th[is] action was originally filed," and the other requirements are met, the home state exception to CAFA jurisdiction applies.