Oshana, Carol B. v. Coca-Cola Company ( 2006 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 05-3640
CAROL B. OSHANA,
Plaintiff-Appellant,
v.
COCA-COLA COMPANY,
a Delaware corporation,
Defendant-Appellee.
____________
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 04 C 3596—Suzanne B. Conlon, Judge.
____________
ARGUED MARCH 29, 2006—DECIDED DECEMBER 29, 2006
____________
Before BAUER, KANNE, and SYKES, Circuit Judges.
SYKES, Circuit Judge. This putative class action alleges
the Coca-Cola Company (“Coke”) deceived Diet Coke®
consumers in Illinois by failing to disclose that fountain
Diet Coke and bottled Diet Coke are not the same product.
Fountain Diet Coke contains a blend of the sweeteners
aspartame and saccharin; bottled Diet Coke is sweetened
only with aspartame. The plaintiff ’s lawyers, on behalf
of a prior named class representative and a class of all
Illinois purchasers of fountain Diet Coke from March 12,
1999 forward, initially filed the lawsuit in Illinois state
court alleging that Coke violated the Illinois Consumer
Fraud and Deceptive Practices Act (“ICFA”) and was
2 No. 05-3640
unjustly enriched. Coke removed the lawsuit to federal
court, defeated class certification, and eventually offered
a substituted named plaintiff, Carol Oshana, a judgment
of $650, which she accepted. Oshana reserved the right
to challenge on appeal the district court’s jurisdiction
and the order denying class certification. We affirm.
I. Background
Oshana filed this lawsuit in Illinois state court alleging
Coke tricked consumers into believing that fountain Diet
Coke and bottled Diet Coke have the same ingredients.1
In fact, bottled Diet Coke is sweetened with aspartame,
while fountain Diet Coke is sweetened with a mixture of
aspartame and saccharin. The additional ingredient in
fountain Diet Coke apparently addresses concerns about
the staying power of aspartame as a sweetener in foun-
tain syrup. Oshana complained, in relevant part, that
Coke began advertising in 1984 that Diet Coke would be
sweetened with 100% NutraSweet® brand aspartame,
leading consumers to believe that all forms of Diet Coke
would follow that formula, even though fountain Diet
Coke continued to use saccharin.
Consistent with Illinois practice, Oshana did not claim
an amount of damages in her complaint. She did, however,
disclaim individual damages over $75,000. She sought
compensatory damages, disgorgement of Coke’s profits
from the sale of fountain Diet Coke in Illinois, attorneys’
fees and costs, and any other relief the court saw fit to
grant.
1
Oshana was not the original named plaintiff in this lawsuit.
David Hahn, the initial plaintiff and proposed class representa-
tive, voluntarily withdrew after moving for class certification,
and Oshana was substituted. Because Oshana is the named
plaintiff as the case comes to us, we refer only to Oshana.
No. 05-3640 3
Coke thought that Oshana’s disclaimer of individual
damages was unclear. It asked her to formally admit that
in the event a class was not certified, Oshana would not
individually seek disgorgement of all Coke profits from
the sale of fountain Diet Coke in Illinois. Coke also asked
Oshana to admit she would not individually seek an award
of attorneys’ fees over $75,000; punitive damages over
$75,000; a combined award of compensatory and punitive
damages and attorneys’ fees over $75,000; or a combined
award of disgorgement, attorneys’ fees, and punitive
damages over $75,000. Oshana refused to do so.
Coke removed the case to federal court invoking diver-
sity jurisdiction and claiming a good-faith belief that the
amount in controversy in fact exceeded the $75,000
threshold. See 28 U.S.C. § 1332. Oshana moved to remand;
she argued the complaint unambiguously disclaimed
individual damages in excess of $75,000 so that federal
jurisdiction could not exist. The district court denied
Oshana’s motion to remand, concluding that Coke had
established Oshana’s damages could plausibly exceed
$75,000. Oshana’s refusal to admit otherwise reinforced
the district court’s conclusion. Defeated, Oshana filed an
amended complaint in federal court praying for about
$1000 in actual damages and, either as a class or indi-
vidually, disgorgement of millions in Coke profits from
the sale of fountain Diet Coke in Illinois.
The district court denied class certification, holding that
Oshana could not satisfy the requirements of Federal
Rule of Civil Procedure 23(a) or Rule 23(b). The district
court held that Oshana’s proposed class—“All individuals
who purchased for consumption and not resale fountain
Diet Coke in . . . Illinois from March 12, 1999, through the
date of entry of an order certifying the class”—was not
sufficiently ascertainable. The class could potentially
include millions of customers, some (if not many) of whom
may not have been deceived by Coke’s marketing because
4 No. 05-3640
at least some of Coke’s ads contained a disclaimer. The
court also held that Oshana could not show her claims to
be typical of the class. See FED. R. CIV. P. 23(a)(3). Oshana
claimed she was deceived by Coke’s marketing, but Coke’s
marketing may have been only a minor factor in the
purchasing decisions of other class members. Moreover,
some putative class members may have known about the
presence of saccharin and bought fountain Diet Coke
anyway. Finally, the district court concluded that Oshana
could not satisfy any of the requirements of Rule 23(b).
The district court then partially granted Coke’s sum-
mary judgment motion, limiting Oshana’s claims because
of the statute of limitations and holding that Oshana could
not personally collect all of Coke’s disgorged profits from
the sale of fountain Diet Coke in Illinois if she prevailed
on the merits. Instead, the court held she could recover
only the $650 in damages she personally incurred. Coke
made an offer of judgment for $650 plus reasonable attor-
neys’ fees and costs (to be determined by the district
court), see FED. R. CIV. P. 68, and Oshana accepted,
reserving the right to appeal the issues of jurisdiction
and the denial of class certification.
II. Discussion
A. Jurisdiction
Oshana’s first argument is that her case never belonged
in federal court. She maintains that $75,000 was never
in controversy because she disclaimed damages in excess
of the federal jurisdictional amount in her state-court
complaint. Although the amended complaint sought
millions in individual damages (by way of Coke’s disgorged
profits), Oshana argues that the amount in controversy
was not satisfied because it is measured only at the time
of removal and is not affected by later amendments.
No. 05-3640 5
We need not concern ourselves with the effect of the
amended complaint in this case because removal was
proper.
We review the propriety of removal de novo. Boyd v.
Phoenix Funding Corp., 366 F.3d 524, 529 (7th Cir. 2004).
A defendant has the right to remove a case from state to
federal court when the federal court could exercise jurisdic-
tion in the first instance. 28 U.S.C. § 1441. In this
case, subject-matter jurisdiction could be based only on
diversity of citizenship. 28 U.S.C. § 1332. There is no
question that the parties are diverse—Oshana is an
Illinois citizen (as was her predecessor) and Coke is a
Delaware corporation with its principal place of business
in Georgia. The only question for us is whether the
amount in controversy exceeded $75,000.
The amount in controversy is the amount required to
satisfy the plaintiff ’s demands in full on the day the
suit begins, Hart v. Schering-Plough Corp., 253 F.3d 272,
273 (7th Cir. 2001), or in the event of removal, on the day
the suit was removed, BEM I, L.L.C. v. Anthropologie, Inc.,
301 F.3d 548, 552 (7th Cir. 2002). Because Coke is the
proponent of jurisdiction, it has the burden of showing
by a preponderance of the evidence facts that suggest
the amount-in-controversy requirement is met. Meridian
Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 543 (7th Cir.
2006). That is easier said than done when the plaintiff, the
master of the complaint, does not want to be in federal
court and provides little information about the value of
her claims. In such a case, a good-faith estimate of the
stakes is acceptable if it is plausible and supported by
a preponderance of the evidence. See, e.g., Rubel v. Pfizer,
Inc., 361 F.3d 1016, 1020 (7th Cir. 2004). Once the defen-
dant in a removal case has established the requisite
amount in controversy, the plaintiff can defeat jurisdic-
tion only if “it appears to a legal certainty that the claim
is really for less than the jurisdictional amount.” St. Paul
6 No. 05-3640
Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289
(1938); Meridian Sec., 441 F.3d at 541.
In a class action, the amount in controversy must be
satisfied by one of the named plaintiffs; aggregating
claims is not allowed for purposes of determining the
jurisdictional amount.2 Del Vecchio v. Conseco, Inc., 230
F.3d 974, 977 (7th Cir. 2000); Garbie v. DaimlerChrysler
Corp., 211 F.3d 407, 409 (7th Cir. 2000); In re Brand Name
Prescription Drugs Antitrust Litig., 123 F.3d 599, 607 (7th
Cir. 1997). Once one plaintiff satisfies the amount-in-
controversy requirement for diversity jurisdiction, the
other plaintiffs come in under the court’s supplemental
jurisdiction regardless of whether their individual
claims satisfy the requirements of § 1332. 28 U.S.C.
§ 1367; Exxon Mobil v. Allapattah Servs., Inc., 125 S. Ct.
2611, 2615 (2005); In re Brand Name Prescription Drugs,
123 F.3d at 607; Stromberg Metal Works, Inc. v. Press
Mach., Inc., 77 F.3d 928, 930-33 (7th Cir. 1996). So Coke
must establish that at the time of removal Oshana per-
sonally had placed over $75,000 in controversy.
On the face of Oshana’s state-court complaint, she did
not. She expressly disclaimed individual damages over
$75,000: “Plaintiff seeks no relief, cause of action, remedy
or damages that would confer federal jurisdiction upon
the claims asserted herein, and expressly disclaims
individual damages in excess of $75,000.” Such disclaimers
have been long approved as a way of staying out of fed-
2
The Class Action Fairness Act of 2005 (“CAFA”) did away
with the nonaggregation rule. See 28 U.S.C. § 1332(d)(6). But
this case was filed before CAFA was enacted and CAFA is not
retroactive. Pub. L. 109-2, § 9, 119 Stat. 14 (“The amendments
made by this act shall apply to any civil action commenced on
or after [February 18, 2005].”); Exxon Mobil v. Allapattah Servs.,
Inc., 125 S. Ct. 2611, 2627-28 (2005).
No. 05-3640 7
eral court, see St. Paul Mercury, 303 U.S. at 294, but only
when the disclaimer is binding. BEM I, L.L.C., 301 F.3d
at 552; The Barbers, Hairstyling for Men & Women, Inc.
v. Bishop, 132 F.3d 1203, 1205 (7th Cir. 1997). Illinois
does not bind plaintiffs to such disclaimers in complaints—
like in federal court, plaintiffs in Illinois are not limited
to the amounts they’ve requested. So Oshana’s disclaimer
had no legal effect. 735 ILL. COMP. STAT. 5/2-604 (2004);
BEM I, L.L.C., 301 F.3d at 552; The Barbers, 132 F.3d
at 1205. If Oshana really wanted to prevent removal, she
should have stipulated to damages not exceeding the
$75,000 jurisdictional limit. BEM I, L.L.C., 301 F.3d at
552; Workman v. United Parcel Service, Inc., 234 F.3d 998,
1000 (7th Cir. 2000); Chase v. Shop ‘N Save Warehouse
Foods, Inc., 110 F.3d 424, 430 (7th Cir. 1997); In re Shell
Oil Co., 970 F.2d 355, 356 (7th Cir. 1992) (“Litigants
who want to prevent removal must file a binding stipu-
lation or affidavit with their complaints . . . .”). A stipula-
tion would have had the same effect as a statute that
limits a plaintiff to the recovery sought in the complaint.
BEM I, L.L.C., 301 F.3d at 552.
The complaint sought several types of damages: actual
damages; disgorgement of Coke’s profits from the sale of
fountain Diet Coke in Illinois; and attorneys’ fees. Coke
asked Oshana to admit in formal Requests for Admission
that in the event the class was not certified, she would
not personally seek (1) disgorgement of Coke’s profits;
(2) punitive damages in excess of $75,000; (3) attorneys’
fees in excess of $75,000; (4) an award of compensatory
and punitive damages and attorneys’ fees in excess of
$75,000; or (5) an award of disgorgement, punitive dam-
ages, and attorneys’ fees in excess of $75,000. Oshana
refused to admit any of those things. So when the district
court considered whether jurisdiction was proper, it had
only Coke’s good-faith belief that the amount in contro-
versy exceeded $75,000, facts suggesting the amount
8 No. 05-3640
Oshana sought may exceed $75,000, and Oshana’s re-
fusal to say otherwise.
Oshana’s refusal to admit that she would not seek
individual damages in excess of $75,000 worked against
her. As we said in Workman, if the plaintiff does not
stipulate to damages of $75,000 or less, “the inference
arises that he thinks his claim may be worth more.” 234
F.3d at 1000. Although the complaint said nothing about
the amount of Oshana’s actual damages, Coke’s profits
from the sale of fountain Diet Coke in Illinois during the
relevant time period stretched into the millions. That alone
would put this case securely over the amount
in controversy were it not doubtful that Oshana could
force Coke to cough up all of its profits from the sale of
fountain Diet Coke in Illinois just by showing she alone
had been deceived. But attorneys’ fees up to the time of
removal also count toward the jurisdictional amount, see
Smith v. Am. Gen’l Life & Accident Ins. Co., 337 F.3d 888,
896-97 (7th Cir. 2003); Hart, 253 F.3d at 273; Gardynski-
Leschuck v. Ford Motor Co., 142 F.3d 955, 957 (7th Cir.
1998), and an award of fees is properly considered in
addition to compensatory damages and some degree of
disgorgement. Oshana’s refusal to admit that the com-
bination of these recoveries would not exceed $75,000
raised the reasonable inference that it would.
Finally, although the complaint was silent about puni-
tive damages, the ICFA permits recovery of punitive
damages, and Oshana could have amended her state
court complaint to seek a punitive damages award.
Oshana’s refusal to admit she would not seek more than
$75,000 in compensatory damages, disgorged profits
(recoverable individually), punitive damages, and attor-
neys’ fees makes it plausible that more than $75,000 was
at stake. Removal was proper.
This result is only fair. Oshana cannot benefit by play-
ing a cat-and-mouse game, purporting to disclaim dam-
No. 05-3640 9
ages in excess of $75,000 but refusing to admit or stipu-
late that her damages will not exceed that amount. See
Rubel, 361 F.3d at 1020 (“[P]laintiffs can’t prevent re-
moval by refusing to concede that the controversy exceeds
the jurisdictional minimum . . . .”). A contrary result
would be unjust. Oshana might have returned to state
court and after the time had passed for removal, see 28
U.S.C. § 1446(b), amended her complaint to seek punitive
damages and recovered more than $75,000. Coke wanted
either to avail itself of federal jurisdiction (to which it
was entitled if the amount in controversy was more
than $75,000) or secure a binding commitment from
Oshana that her claims did not exceed $75,000. Oshana
cannot have it both ways—she cannot disclaim damages
in excess of $75,000 in order to defeat federal jurisdiction
but preserve her right to recover more than that amount
by refusing to admit or stipulate to the jurisdictional limit.
Oshana argues that the district judge’s ultimate hold-
ing that she could not individually recover more than
$650 as a matter of law shows that it was a legal cer-
tainty all along that her claim did not exceed the juris-
dictional minimum. Not so. Whether she actually recovers
more than $75,000 is immaterial; what matters is the
amount put in controversy on the day of removal. BEM I,
L.L.C., 301 F.3d at 552. On the day of removal, the district
court had not narrowed the scope of Oshana’s claims, but
did so only at the time of the summary judgment motion
in concluding that damages could be no more than $650.
Also, as we have noted, it was not clear on the day of
removal that Oshana would not seek or recover punitive
damages, because she refused to stipulate or admit she
would not. Moreover, it was not clear at the time of
removal that adding attorneys’ fees to compensatory and
punitive damages and individually recoverable disgorged
profits would total less than $75,000. There is no reason
to believe on the day the case was removed that it was
10 No. 05-3640
legally impossible for Oshana to recover more than
$75,000. See Workman, 234 F.3d at 999.
B. Class Certification
Oshana also challenges the district court’s decision not
to certify a class. The district court may certify a class of
plaintiffs if the putative class satisfies all four require-
ments of Federal Rule of Civil Procedure 23(a)—
numerosity, commonality, typicality, and adequacy of
representation—and any one of the conditions of Rule
23(b). FED. R. CIV. P. 23; Williams v. Chartwell Fin. Servs.,
Ltd., 204 F.3d 748, 760 (7th Cir. 2000). The plaintiff
must also show (it is the plaintiff ’s burden to prove the
class should be certified, Trotter v. Klincar, 748 F.2d 1177,
1184 (7th Cir. 1984)) that the class is indeed identifiable
as a class. Simer v. Rios, 661 F.2d 655, 669 (7th Cir. 1981)
(“It is axiomatic that for a class action to be certified
a ‘class’ must exist.”); Alliance to End Repression v.
Rochford, 565 F.2d 975, 977 (7th Cir. 1977) (agreeing
that class definitions must be definite enough that the
class can be ascertained). We review the district court’s
decision not to certify a class for abuse of discretion. Uhl
v. Thoroughbred Tech. & Telecomm., Inc., 309 F.3d 978,
986 (7th Cir. 2002). The district court did not abuse its
discretion.
The district court determined that the proposed class
was not sufficiently definite to warrant class certification.
Oshana sued Coke for violating the ICFA and for unjust
enrichment. To prevail on a claim for damages under the
ICFA, Oshana and her fellow class members must prove:
(1) a deceptive act or practice by Coke; (2) that the act or
practice occurred in the course of conduct involving trade
or commerce; (3) that Coke intended Oshana and the
members of the class to rely on the deception; and (4) that
actual damages were proximately caused by the decep-
No. 05-3640 11
tion. Avery v. State Farm Mut. Auto. Ins. Co., 835 N.E.2d
801, 850 (Ill. 2005); Oliveira v. Amoco Oil Co., 776 N.E.2d
151, 164 (Ill. 2002). In other words, a damages claim under
the ICFA requires that the plaintiff was deceived in some
manner and damaged by the deception. Oliveira, 776
N.E.2d at 164 (“Zekman [v. Direct Am. Marketers, 695
N.E.2d 853 (Ill. 1998),] makes clear that, to properly
plead the element of proximate causation in a private
cause of action for deceptive advertising brought under
the Act, a plaintiff must allege that he was, in some
manner, deceived.”).
Membership in Oshana’s proposed class required only
the purchase of a fountain Diet Coke from March 12, 1999,
forward. Such a class could include millions who were
not deceived and thus have no grievance under the
ICFA. Some people may have bought fountain Diet Coke
because it contained saccharin, and some people may
have bought fountain Diet Coke even though it had sac-
charin. Countless members of Oshana’s putative class
could not show any damage, let alone damage proximately
caused by Coke’s alleged deception. See Oliveira, 776
N.E.2d at 164 (holding that those who “knew the truth” do
not have valid ICFA claims because they cannot claim to
have been deceived).
For the same reasons, Oshana’s claims were not typical
of the putative class. A claim is typical if it “arises from
the same event or practice or course of conduct that
gives rise to the claims of other class members and . . . her
claims are based on the same legal theory.” Rosario v.
Livaditis, 963 F.2d 1013, 1018 (7th Cir. 1992). Even
though some factual variations may not defeat typicality,
the requirement is meant to ensure that the named repre-
sentative’s claims “ ‘have the same essential characteris-
tics as the claims of the class at large.’ ” Retired Chi. Police
Ass’n v. City of Chi., 7 F.3d 584, 597 (7th Cir. 1993) (quot-
12 No. 05-3640
ing De la Fuente v. Stokely-Van Camp, Inc., 713 F.2d 225,
232 (7th Cir. 1983)).
Oshana’s proposed class includes people who knew
fountain Diet Coke contained saccharin and bought it
anyway. Oshana, on the other hand, claims she was
deceived and injured. Also, Oshana’s ICFA claim is sub-
ject to certain specific factual defenses that undermine
typicality: she admitted she did not see any Coke adver-
tisements during the relevant period and that she knew
fountain and bottled Diet Coke were different because
bottled Diet Coke tasted better. She also admitted that
she continues to drink fountain Diet Coke even though
she now knows it contains saccharin. We cannot say the
district court’s conclusion that Oshana’s claims are
atypical was an abuse of discretion.3
Oshana contends that this conclusion addresses only
her deceptive marketing ICFA claim but not her “per se”
ICFA violation claim or her unjust enrichment claim. She
argues that it is a per se violation of the ICFA to represent
that a product has ingredients it does not have because
that is a violation of the Uniform Deceptive Trade Prac-
tices Act, and violations of the Uniform Deceptive Trade
Practices Act are also violations of the ICFA. 815 ILL.
COMP. STAT. 505/2. Oshana maintains that a per se
violation of the ICFA does not require her to show actual
damage caused by deception. It is true that a violation of
the Uniform Deceptive Trade Practices Act violates the
ICFA, 815 ILL. COMP. STAT. 505/2, but such violations
do not automatically entitle an individual to damages.
Unlike public actions for violating the ICFA, a private
3
Because we find no abuse of discretion in the district court’s
consideration of the requirements of Rule 23(a), we need not
address the district court’s additional conclusion that the
requirements of Rule 23(b) were not satisfied.
No. 05-3640 13
cause of action under the ICFA requires a showing of
proximate causation. 815 ILL. COMP. STAT. 505/10a;
Oliveira, 776 N.E.2d at 160 (“Unlike an action brought
by the Attorney General under [815 ILL. COMP. STAT.
505/2], which does not require that ‘any person has in fact
been misled, deceived or damaged[,]’ . . . a private cause of
action brought under [815 ILL. COMP. STAT. 505/10a]
requires proof of ‘actual damage’ . . . . [and] proof that the
damage occurred ‘as a result of ’ the deceptive act or
practice.” (citations omitted)). There is no per se viola-
tion that automatically makes Coke liable to Oshana
and the members of the proposed class for private dam-
ages. Oshana’s so-called per se claim suffers from the
same typicality infirmities as her deceptive marketing
claim.
Her unjust enrichment claim carries similar shortcom-
ings. Oshana cannot show Coke was unjustly enriched
unless she shows that Coke benefitted to her detriment,
and that Coke’s retention of the profits would violate the
fundamental principles of justice, equity, and good con-
science. HPI Healthcare Servs., Inc. v. Mt. Vernon Hosp.,
Inc., 545 N.E.2d 672, 679 (Ill. 1989). Unjust enrichment
claims do not necessarily require wrongdoing on the
part of the defendant, see Stathis v. Geldermann, Inc., 692
N.E.2d 798, 812 (Ill. App. Ct. 1998), but in this case Coke
cannot have been unjustly enriched without proof of
deception. As such, the proposed class is not sufficiently
identifiable or definite, nor is Oshana’s claim sufficiently
typical to qualify for class certification.
AFFIRMED.
14 No. 05-3640
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—12-29-06