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Breathe DC v. Santa Fe Natural Tobacco Co.

United States District Court, District of Columbia

February 8, 2017

BREATHE DC, Plaintiff,
v.
SANTA FE NATURAL TOBACCO COMPANY, et al. Defendants.

          MEMORANDUM OPINION

          ELLEN SEGAL HUVELLE United States District Judge.

         Plaintiff Breathe DC filed this lawsuit on behalf of the “general public” in D.C. Superior Court against defendants Santa Fe Natural Tobacco Company (“Santa Fe”), R.J. Reynolds Tobacco Company (“RJRT”), and Reynolds American Inc. (“RAI”), alleging violations of the D.C. Consumer Protection Procedures Act (“DCCPPA”), D.C. Code § 28-3901, et seq. (Compl. [ECF No. 1-1].) Defendants removed the case to federal court pursuant to 28 U.S.C. § 1441, claiming diversity jurisdiction under 28 U.S.C. § 1332. (Notice of Removal (“Notice”), December 6, 2016 [ECF No. 1].) Plaintiff filed the present motion for remand on the grounds that this Court lacks subject-matter jurisdiction. (Pl.'s Mot. to Remand for Lack of Subject-Matter Jurisdiction (“Mot.”), December 7, 2016 [ECF No. 5].) Plaintiff also seeks attorneys' fees and costs incurred in preparing the motion. (Id. at 9.)

         Upon consideration of the pleadings[1] and for the reasons stated below, the case will be remanded to state court, but the Court will not award attorneys' fees. Accordingly, the motion will be granted in part and denied in part.

         BACKGROUND

         Plaintiff is a non-profit organization based in Washington, D.C. whose mission is to “safeguard the lung health of Washington, D.C.-area residents.” (Compl. ¶¶ 1, 28, 37.) Defendants manufacture, market, and distribute Natural American Spirit (“NAS”) brand cigarettes in Washington, D.C.[2] (Compl. ¶ 32.) Plaintiff, acting as a private attorney general, alleges that the defendants falsely implied that NAS cigarettes are safer than other cigarettes by marketing them as “Natural, ” “Additive-Free, ” and “100% Additive-Free, ” in violation of the DCCPPA. (Compl. ¶¶ 2-5.) Based on those allegations, plaintiff seeks a declaration that defendants are in violation of DCCPPA, an injunction, and attorneys' fees and costs with prejudgment interest. (See Id. at 26-27.) Plaintiff's proposed injunction would (1) “enjoin[] Defendants' deceptive marketing and sale of the Products, ” (2) “direct[] Defendants to remove [the allegedly deceptive] language and graphics on their marketing and labeling, ” and (3) direct defendants “to engage in a corrective advertising campaign.” (Id.)

         On December 6, 2016, defendants removed the case to federal court. (See Notice at 1.) In their Notice of Removal, defendants invoke diversity jurisdiction under 28 U.S.C. § 1332 as the sole basis of federal jurisdiction. (See Id. at 2.) Plaintiff filed this Motion to Remand for Lack of Subject-Matter Jurisdiction. (Mot. at 1.)

         With their opposition to plaintiff's motion, defendants' submitted the sworn declaration of David P. DePalma, Senior Director of Marketing for Santa Fe Natural Tobacco Company. (Decl. of David P. DePalma, January 11, 2017 [ECF No. 18-1].) In his capacity as Senior Director of Marketing, Mr. DePalma oversees “strategic planning and execution of NAS packaging, mass market NAS print advertising, the NAS brand website . . ., direct marketing communications . . ., and retail point-of-sale NAS marketing communications.” (Id. ¶ 2.) Mr. DePalma's declaration “describes the impact that would result from implementation of the injunctive relief requested in the Complaint.” (Id. ¶ 3.)

         “[B]ased on both [his] historical experience with the development of packing and marketing communications and the activities and costs associated with those activities, ” Mr. DePalma estimates that the cost of complying with plaintiff's proposed injunction “would exceed $900, 000 . . . before accounting for the irreparable damage to the NAS brand that the requested relief would impose.” (Decl. of DePalma ¶ 15.)[3] That estimate involves two cost components. First, Mr. DePalma estimates that removing the allegedly deceptive terms from its packaging and advertising would cost “at least $700, 000, ”[4] not including lost employee time. (Id. ¶ 15.) Second, Mr. DePalma estimates that the “corrective advertising campaign” that plaintiff seeks “would readily exceed $200, 000 (including cost of developing and testing communication messages, creative, and accompanying media buying costs).” (Id. ¶ 16.) DePalma estimates the value of the NAS domestic trademark is over $5 billion. (Id. ¶ 6.)[5]

         ANALYSIS

         I. LEGAL STANDARD

         A defendant may remove a civil action filed in state court to a United States district court as long as the lawsuit could have originally been filed in federal court. See 28 U.S.C. § 1441(a). Removal is effective when the defendant files a notice of removal in federal court with “a short and plain statement of the grounds for removal, together with a copy of all process, pleadings, and orders” from state court. Id. § 1446(a). However, “[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.” Id. § 1447(c). A party may challenge the federal court's subject matter jurisdiction on a motion to remand to state court. Id.

         Upon a motion to remand to state court, the party opposing the motion “bears the burden of establishing that subject matter jurisdiction exists in federal court.” RWN Dev. Grp., LLC v. Travelers Indem. Co., 540 F.Supp.2d 83, 86 (D.D.C. 2008) (quoting Int'l Union of Bricklayers & Allied Craftworkers v. Ins. Co. of the West, 366 F.Supp.2d 33, 36 (D.D.C. 2005)). In order to avoid federalism concerns, courts are to construe the removal statute narrowly. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108 (1941). Thus, any doubts about the existence of subject matter jurisdiction are to be resolved in favor of remand. Hood v. F. Hoffman-La Roche, Ltd., 639 F.Supp.2d 25, 28 (D.D.C. 2009) (citing Gasch v. Hartford Accident & Indem. Co., 491 F.3d 278, 281-82 (5th Cir. 2007)).

         II. DIVERSITY JURISDICTION

         A federal court has diversity jurisdiction when (1) there is complete diversity of citizenship among the parties (that is, no plaintiff is a citizen of the same state as any defendant), and (2) the “amount in controversy” is greater than $75, 000. See 28 U.S.C. § 1332(a). Based on the representations of the parties, the Court is satisfied that there is complete diversity of citizenship. Plaintiff is a citizen of Washington, D.C. (Compl. ¶ 28.) Defendants are citizens of North Carolina and New Mexico. ...


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