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Hackman v. One Brands LLC

United States District Court, District of Columbia

April 1, 2019

GLORIA HACKMAN, Plaintiff
v.
ONE BRANDS, LLC, d/b/a/ Oh Yeah!, Defendant.

          MEMORANDUM OPINION

          COLLEEN KOLLAR-KOTELLY United States District Judge

         Plaintiff Gloria Hackman filed suit against Defendant One Brands LLC, producer of One Bars, in the Superior Court of the District of Columbia (“Superior Court”), alleging that Defendant violated the District of Columbia Consumer Protection Procedures Act (“DCCPPA ”) by misleading consumers about the amount of sugar in One Bars. In short, Plaintiff's Complaint claims that One Bars contain far more sugar than is reported on labels and in advertising. Defendant removed the case to this Court, invoking Class Action Fairness Act (“CAFA”) jurisdiction and traditional diversity 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 GRANTS Plaintiff's [10] Motion to Remand.

         The Court concludes that remand is required because the Court lacks subject matter jurisdiction. First, the Court lacks class action jurisdiction under CAFA because this case is not a class action. Second, the Court lacks traditional diversity jurisdiction because, due to the non-aggregation principle, Defendant has not demonstrated that $75, 000 or more is in controversy in this case.

         I. BACKGROUND

         Plaintiff is a resident of the District of Columbia who is a nurse as well as a public health and consumer watchdog. Compl., ECF No. 1-1, ¶ 5. Plaintiff brought this suit in Superior Court, alleging that Defendant misled consumers in the District of Columbia when it sold them One Bars which are improperly labeled and marketed as low in sugar. Id. at ¶¶ 9-22. Based on these and other alleged misrepresentations, Plaintiff asserts a cause of action under the DCCPPA, D.C. Code § 28-3905(k)(1)(B). Id. at ¶¶ 28-34. As relief, Plaintiff seeks on behalf of the general public “[a]n injunction against Defendant, including that Defendant be barred from selling OneBars in the District of Columbia until the front of OneBar labels give truthful information about the sugar content of the bars.” Id. at ¶ 34a. She also seeks attorneys' fees and costs and punitive damages. Id. at ¶ 34. Finally, Plaintiff seeks statutory damages on her own behalf. Id. at ¶ 33. She does not make a class action claim.

         After this Complaint was filed in Superior Court, Defendant removed it to this Court, invoking the Court's CAFA jurisdiction and traditional diversity jurisdiction. See generally Notice of Removal, ECF No. 1. Defendant then filed in this Court a Motion to Dismiss the Complaint on grounds of preemption, standing, and failure to state a claim for which relief may be granted. See generally Def.'s Mot. to Dismiss, ECF No. 5. Plaintiff responded to that Motion, and later filed a Motion to Remand for Lack of Subject Matter Jurisdiction, which is currently pending before the Court.

         Because this Court ultimately concludes that it does not have subject matter jurisdiction, the Court GRANTS Plaintiff's [10] Motion to Remand and ORDERS this case remanded to Superior Court. Lacking jurisdiction over this case, the Court also ORDERS that Defendant's [5] Motion to Dismiss be HELD IN ABEYANCE, to be resolved on remand.

         II. LEGAL STANDARD

         The Court of Appeals for the District of Columbia Circuit (“D.C. 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. Coburg Dairy, Inc., 369 F.3d 811, 815-16 (4th Cir. 2004)); see also Johnson-Brown v. 2200 M St. 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.

         III. DISCUSSION

         In its notice of removal, Defendant presents two grounds as to why this Court has subject matter jurisdiction. First, Defendant argues that removal is proper because this Court has diversity jurisdiction pursuant to CAFA. 28 U.S.C. § 1332(d). Second, Defendant argues that removal is proper because this Court has traditional diversity jurisdiction. 28 U.S.C. § 1332(a). For the reasons explained below, the Court concludes that neither of the grounds presented by Defendant provide this Court with subject matter jurisdiction over the case.

         A. CAFA Jurisdiction

         First, Defendant argues that this Court has jurisdiction over the case pursuant to CAFA. Under CAFA, a district court has subject matter jurisdiction over “any civil action in which the matter in controversy exceeds the sum or value of $5, 000, 000, exclusive of interest and costs, and is a class action in which … any member of a class of plaintiffs is a citizen of a State different from any defendant.” 28 U.S.C. § 1332(d)(2)(A). Additionally, the proposed class must consist of 100 persons or more. 28 U.S.C. § 1332(d)(5)(B). Defendant contends that all of the requirements under CAFA are met in this lawsuit.

         Defendant argues that the amount in controversy exceeds $5, 000, 000, the minimum amount required by CAFA. Defendant has sold over 12, 000 individual bars to consumers in the District of Columbia who are similarly situated to Plaintiff. Decl. of David Ziegert, ECF No. 1-2, ¶ 5. And, the DCCPPA imposes statutory damages of $1, 500 per violation. D.C. Code § 28-3905(k)(2)(A). Accordingly, the amount in controversy is as high as $18, 000, 000, which exceeds the minimum amount of controversy of $5, 000, 000.

         Defendant also contends that this case meets CAFA's requirement for minimum diversity. Defendant is incorporated in Delaware and has its principal place of business in North Carolina. Decl. of David Ziegert, ECF No. 1-2, ¶ 1. And, Plaintiff is a citizen of the District of Columbia. Compl., ECF No. 1-1, ¶ 5. Accordingly, the diversity requirement is met.

         Finally, Defendant claims that the potential class consists of more than 100 persons. Defendant has submitted a Declaration from its Chief Operating Officer declaring that more than 100 people in the District of Columbia purchased One Bars in the three-year period prior to this lawsuit. Decl. of David Ziegert, ECF No. 1-2, ¶ 6.

         Accordingly, all three CAFA requirements appear to be met. And, Plaintiff does not contest that the requirements of CAFA are met in this lawsuit. Instead, Plaintiff contends that CAFA 's requirements are irrelevant because Plaintiff's Complaint pleads no class action which would trigger an analysis of jurisdiction under CAFA. Instead, Plaintiff brings suit under the DCCPPA, which is “a separate and distinct procedural vehicle from a class action.” Animal Legal Def. Fund v. Hormel Foods Corp., 249 F.Supp.3d 53, 64 (D.D.C. 2017) (internal quotation marks omitted). Because Plaintiff's lawsuit is not a class action, Plaintiff argues that CAFA cannot confer jurisdiction on this Court. The Court agrees.

         CAFA permits removal of class actions to federal court. 28 U.S.C. § 1332(d)(2). Under CAFA, a “class action” is “any civil action filed under rule 23 of the Federal Rules of Civil Procedure or similar State statute or rule of judicial procedure authorizing an action to be brought by 1 or more representative persons as a class action.” 28 U.S.C. § 1332(d)(1)(B). Accordingly, the question in analyzing CAFA jurisdiction becomes “whether an action under [the DCCPPA] constitutes ‘a suit filed under a state statute or rule of judicial procedure similar to Rule 23 that authorizes a class action.'” Nat'l Consumers League v. Flowers Bakeries, LLC, 36 F.Supp.3d 26, 36 (D.D.C. 2014) (quoting Baumann v. Chase Inv. Servs. Corp., 747 F.3d 1117, 1120 (9th Cir. 2014)). “Absent the ‘hallmarks of Rule 23 class actions; namely, adequacy of representation, numerosity, commonality, ...


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