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Animal Legal Defense Fund v. Hormel Foods Corporation

United States District Court, District of Columbia

April 5, 2017



          COLLEEN KOLLAR-KOTELLY, United States District Judge

         Plaintiff Animal Legal Defense Fund ("ALDF") filed suit against Defendant meat producer Hormel Foods Corporation ("Hormel") in the Superior Court of the District of Columbia, alleging that Defendant violated the District of Columbia Consumer Protection Procedures Act ("DCCPPA") by misleading consumers with its "Natural Choice" advertising campaign. In short, Plaintiffs Complaint claims that Hormel's meat products are not "natural" in the way that its advertising campaign implies. Defendant removed the case to this Court, invoking the Court's federal question, diversity and Class Action Fairness Act ("CAFA") jurisdiction. Plaintiff has moved to remand the case back to Superior Court. Upon consideration of the pleadings, [1] the relevant legal authorities, and the record as a whole, the Court will GRANT Plaintiffs [15] Motion to Remand.

         Remand is required because the Court lacks subject matter jurisdiction. First, the Court lacks federal question jurisdiction because Plaintiff asserts only a single cause of action under District of Columbia law, and the Court rejects Defendant's argument that Plaintiffs Complaint nonetheless "necessarily raises" federal issues. Second, the Court finds that it lacks diversity jurisdiction because Defendant has not demonstrated that $75, 000 is in controversy in this case. The Court does not deem it appropriate to measure the amount in controversy as the total cost to the Defendant of complying with the requested injunctive relief and is also not convinced that speculation as to possible attorneys' fees is sufficient to establish jurisdiction. Finally, the Court lacks class action jurisdiction under CAFA because this case is not a class action.

         I. BACKGROUND

         Plaintiff is a non-profit organization that focuses on animal protection issues. Compl., ECF No. 1-1, ¶¶ 28-30. Plaintiff brought this suit in the Superior Court of the District of Columbia, alleging that Defendant Hormel misleads consumers in Washington D.C. when it sells them meat products pursuant to a "Make the Natural Choice" marketing campaign that suggests that Defendant's products are "natural" when in fact they are not. Id. ¶¶ 1-23. Based on these and other alleged misrepresentations Plaintiff asserts a cause of action under the DCCPPA. Id. ¶¶ 211-26. As relief, Plaintiff seeks a declaration that Hormel's conduct is in violation of the DCCPPA, an order enjoining such conduct and requiring corrective advertising, and attorneys' fees, costs and pre-judgment interest. Id. at 41-42.

         After this Complaint was filed in the Superior Court of the District of Columbia, Defendant removed it to this Court, invoking the Court's federal question, diversity and CAFA jurisdiction. Notice of Removal, ECF No. 1. Defendant then filed in this Court a Motion to Dismiss the Complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Def.'s Mot. to Dismiss PL's Compl., ECF No. 11. Before it was required to respond to that Motion, Plaintiff filed the pending Motion to Remand for Lack of Subject Matter Jurisdiction. ECF No. 15. The Court then stayed briefing on Defendant's Motion to Dismiss pending the resolution of Plaintiff s Motion to Remand.[2] Plaintiffs Motion is now fully briefed and ripe for resolution.


         The Court of Appeals for the District of Columbia Circuit has explained that "[w]hen it appears that a district court lacks subject matter jurisdiction over a case that has been removed from a state court, the district court must remand the case." Republic of Venezuela v. Philip Morris Inc., 287 F.3d 192, 196 (D.C. Cir. 2002) (emphasis added). Because removal implicates significant federalism concerns, a court must "strictly construe[ ] the scope of its removal jurisdiction." Downey v. Ambassador DeveL, LLC, 568 F.Supp.2d 28, 30 (D.D.C. 2008) (citing Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 107-09 (1941)). '"[I]f federal jurisdiction is doubtful, a remand to state court is necessary.'" Id. (quoting Dixon v. CoburgDairy, Inc., 369 F.3d 811, 816 (4th Cir. 2004)); see also Johnson-Brown v. 2200 MSt. LLC, 257 F.Supp.2d 175, 177 (D.D.C. 2003) ("Where the need to remand is not self-evident, the court must resolve any ambiguities concerning the propriety of removal in favor of remand."). "The party seeking removal of an action bears the burden of proving that jurisdiction exists in federal court." Downey, 568 F.Supp.2d at 30. If the party "cannot meet this burden, the court must remand the case." Johnson-Brown, 257 F.Supp.2d at 177.


         Defendant presents three different theories by which it contends that this Court has subject matter jurisdiction over this case. First, Defendant invokes the Court's federal question jurisdiction because Defendant claims that despite the fact that this case arises under District of Columbia law, it necessarily raises federal issues. Second, Defendant asserts that the Court has diversity jurisdiction because the parties are of diverse citizenship and the cost of complying with the requested injunction, plus the attorneys' fees at issue, exceeds $75, 000. Finally, Defendant asserts that the Court has jurisdiction under CAFA. The Court is not convinced by any of these arguments, and accordingly it must remand this case back to Superior Court.

         A. Federal Question Jurisdiction

         First, the Court rejects Defendant's contention that federal question jurisdiction exists over this action. Federal question jurisdiction grants district courts "original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. The scope of this jurisdiction is defined by the well-pleaded complaint rule, which states that "federal jurisdiction exists only when a federal question is presented on the face of the plaintiffs properly pleaded complaint." Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). No such federal issue appears on the face of Plaintiff s Complaint. Plaintiff does not assert a federal cause of action, nor does it otherwise rely on federal law in any way. Because no federal issue appears on the face of Plaintiff s well-pleaded Complaint, federal question jurisdiction does not exist in this case.

         Defendant seeks to avoid this result by invoking a narrow doctrine whereby cases brought under state law may be heard in federal court if they "necessarily raise" certain federal issues. In Gunn v. Minton, the Supreme Court explained that "even where a claim finds its origins in state rather than federal law, " there exists "a 'special and small category' of cases in which arising under jurisdiction still lies." 133 S.Ct. 1059, 1064 (2013). The Court in Gunn stated that this "special and small category" is comprised of cases where "a federal issue is: (1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress." Id. at 1065 (citing Grable & Sons Metal Prod, Inc. v. Darue Eng'g &Mfg, 545 U.S. 308, 313-14 (2005)).

         Defendant attempts to bring this case under the doctrine discussed in Gunn by claiming that "Plaintiffs CPPA claims necessarily challenge" a "federal scheme." Def's Opp'n at 41. Defendant asserts that "[a] comprehensive national regulatory system governs nearly every aspect of meat and poultry production, including the various practices directly challenged in Plaintiffs lawsuit" and that the United States Department of Agriculture "has issued specific guidance on use of 'natural' and 'no preservative' claims, and [the Food Safety and Inspection Service] has specifically approved Hormel Foods' use of those claims to describe the Natural Choice products at issue." Id. at 40. According to Defendant, "[t]he Complaint thus calls into question the scope and validity of federal law governing meat and poultry products." Id. at 41.

         This argument fails at the first step of the Gunn analysis because it does not demonstrate that a federal issue is "necessarily raised" by Plaintiffs claims. First, despite Defendant's rather extreme statement that Plaintiffs claims are an "attempt to subvert the federal system of regulation, " id. at 42, it is not at all clear that there is any real conflict between the false advertising claims in this case and the federal laws Defendant cites. Defendant has directed the Court to certain federal laws and regulations related to meat labelling and packaging. But this case is not about the labels or packages on particular meat products produced by Defendant. It is about a national advertising campaign including, among other things, magazine advertisements, newspaper inserts and webpages. The federal laws and regulations cited by Defendant may grant Defendant the right to use various terms on its meat labels-when accompanied by certain disclaimers-but they do not appear to have given Defendant any sort of approval to produce the advertisements challenged in this case. Nor has Defendant pointed to any federal law that would permit advertisements for meat products simply because those advertisements contain pictures of federally-approved meat labels or contain phrases similar to those found on such labels, as Defendant argues is the case here. Moreover, the Court is not convinced that the fact that Defendant's treatment of animals is, allegedly, in compliance with certain federal laws means that the challenged advertisements could not be misleading with respect to how such treatment is portrayed. As Plaintiff persuasively argues in its Reply, the Complaint in this case does not allege that Defendant's treatment of animals is necessarily illegal. PL's Reply at 24. It merely alleges that such treatment is misleadingly portrayed. For all of these reasons, the Court does not agree that Plaintiffs advertising claims are inherently in conflict with the federal laws relied on by Defendant.

         Second, even if some degree of conflict did exist between Plaintiffs claims and the federal laws cited, jurisdiction under Gunn would still not be appropriate because this is not a case where the resolution of Plaintiff s claims would "necessarily require application of [federal] law to the facts of [Plaintiffs] case." Gunn, 133 S.Ct. at 1065. In Gunn, "the Court found that application of patent law was a necessary part of a legal malpractice claim brought by a plaintiff, who was the losing party in a prior patent infringement action, since the plaintiff would have to show that he would have prevailed if his prior counsel had timely made a particular patent law argument on his behalf." Millepede Mktg. Ltd. v. Harsley, 928 F.Supp.2d 109, 116 (D.D.C. 2013). The situation here is fundamentally different. Unlike in Gunn, where application of federal patent law was necessary to resolve plaintiffs legal malpractice claim, it is not necessary to apply any federal laws or regulations to resolve Plaintiffs DCCPPA claims. Instead, these federal laws would constitute, if anything, a defense that Defendant may choose to present.

         In fact, Defendant has raised precisely such a defense, based on federal preemption and its compliance with these federal laws, in its pending Motion to Dismiss Plaintiffs Complaint. But such a defense by its very nature is not "necessarily raised" by Plaintiffs Complaint, and indeed it is black letter law that "a case may not be removed to federal court on the basis of a federal defense, including the defense of pre-emption." Caterpillar Inc., 482 U.S. at 393. Indeed, Defendant concedes that the defense of preemption that it has raised in its pending Motion to Dismiss "is ...

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