Tylka, Pamela J. v. Gerber Products ( 2000 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 99-2893
PAMELA J. TYLKA, H. JOSHUA CHAET,
CHERYL KELLER, et al.,
Plaintiffs-Appellants,
v.
GERBER PRODUCTS COMPANY,
a Michigan Corporation,
Defendant-Appellee.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
Nos. 96 C 1647, 96 C 1648, 96 C 1649,
and 96 C 1964--Charles R. Norgle, Sr., Judge.
Argued February 22, 2000--Decided May 1, 2000
Before COFFEY, EASTERBROOK and WILLIAMS, Circuit
Judges.
COFFEY, Circuit Judge. In February and March of
1996, Pamela Jean Tylka, H. Joshua Chaet, Cheryl
Keller, Jeanette DeLeon, Toni Cainkar, Elaine T.
Hyneck, and Barbara F. Berg filed almost
identical class-action lawsuits against Gerber
Products in the Circuit Court of Cook County,
Illinois. In their complaints, the plaintiffs
alleged that Gerber engaged in a pattern of false
and deceptive advertising concerning the
nutritional value and content of its baby food
products, in violation of the Illinois Consumer
Fraud and Deceptive Business Practices Act, 815
Ill. Comp. Stats. 505/1, the Uniform Deceptive
Trade Practices Act, 815 Ill. Comp. Stats. 510/1,
and Illinois common law fraud. Pursuant to 28
U.S.C. sec. 1446,/1 Gerber removed these cases
to the United States District Court for the
Northern District of Illinois, alleging that
diversity jurisdiction existed.
Obviously unhappy with their lawsuits being
removed to federal court, the plaintiffs moved to
remand their cases back to the state court
system, arguing that the amount in controversy
requirement of 28 U.S.C. sec. 1332 ($50,000 at
the time the suit was filed)/2 was not met. The
district court judge denied the plaintiffs’
motion for a remand to the state courts because,
according to the court, the injunctive relief
sought by at least one plaintiff would cost
Gerber more than $50,000, and therefore diversity
jurisdiction existed./3 Subsequently, the judge
entered summary judgment in favor of Gerber.
Plaintiffs appeal the trial court’s determination
of subject matter jurisdiction; that is, the
judge’s conclusion that the requirements for
diversity jurisdiction were met. Because Gerber
has failed to take the steps necessary to ensure
federal jurisdiction, a surprising failure given
this court’s direction at oral argument, we VACATE
the district court’s opinion and REMAND this case
with instructions to REMAND these lawsuits back to
Illinois state court.
Because the basis for the resolution of this
appeal lies in Gerber’s failure to perfect
subject matter jurisdiction as directed by the
court, only the facts relevant to that issue will
be addressed in this opinion and we will leave it
up to the Illinois courts to determine the
precise nature of the plaintiffs’ claims.
In February and March 1996, seven plaintiffs
filed six virtually identical lawsuits against
Gerber in the Circuit Court of Cook County,
Illinois,/4 in which they claimed that Gerber’s
advertising describing its baby food products as
nutritious and of high quality was false and
misleading. All six complaints sought
compensatory damages, punitive damages,
injunctive relief, and attorney’s fees. But, as
mentioned earlier, the complaint filed by Tylka
and the one jointly filed by Chaet and Keller
requested, in addition to the relief sought by
the other plaintiffs, that Gerber "run corrective
marketing, publicity, and advertising for an
appropriate period of time."
Gerber removed the actions to federal court in
the Northern District of Illinois. See 28 U.S.C.
sec. 1441(a)./5 However, in its notice of
removal Gerber referred to the residence of the
individual plaintiffs, not their citizenship as
required by 28 U.S.C. sec. 1332(a)(1). Despite
this obvious shortcoming, none of the parties
brought this to the trial judge’s attention and
the cases were allowed to proceed in federal
court.
Instead of focusing on the obvious deficiency
of Gerber’s notice of removal, the parties (and
the district court) directed their attention to
the question of whether the jurisdictional
minimum for diversity jurisdiction was satisfied.
Given that determinations as to the exact nature
of the plaintiffs’ claims are now better left to
the sound discretion of the Illinois state
courts, it is enough to say that the judge was of
the opinion that the demand for corrective
advertising made by three of the named plaintiffs
satisfied the jurisdictional minimum of $50,000
and thus the court had subject matter
jurisdiction. The trial judge then granted
summary judgment in favor of Gerber.
We review the propriety of the removal of a
state action to federal court de novo, see Chase
v. Shop ’N Save Warehouse Foods, Inc., 110 F.3d
424, 427 (7th Cir. 1997) (citing Seinfeld v.
Austen, 39 F.3d 761, 763 (7th Cir. 1994)),
keeping in mind that federal courts are always
"obliged to inquire sua sponte whenever a doubt
arises as to the existence of federal
jurisdiction." Mt. Healthy City Board of Educ. v.
Doyle, 429 U.S. 274, 278 (1977) (emphasis added)
(citations omitted).
We begin with the well-known rule that removal
is proper over any action that could have been
filed originally in federal court. See 28 U.S.C.
sec. 1441; Grubbs v. General Elec. Credit Corp.,
405 U.S. 699, 702 (1972). Here, Gerber removed
the case on diversity grounds, and as the party
seeking to invoke federal diversity jurisdiction,
Gerber bears the burden of demonstrating that the
complete diversity and amount in controversy
requirements were met at the time of removal. See
In Re County Collector, 96 F.3d 890, 895 (7th
Cir. 1996); NLFC, Inc. v. Devcom Mid-America,
Inc., 45 F.3d 231, 237 (7th Cir. 1995). As stated
before, the parties have ignored the fact that
the notice of removal was ineffective in terms of
properly alleging diversity because allegations
of residence are insufficient to establish
diversity jurisdiction. See Guaranty Nat’l Title
Co. v. J.E.G. Assocs., 101 F.3d 57, 58 (7th Cir.
1996) (It is well-settled that "[w]hen the
parties allege residence but not citizenship, the
court must dismiss the suit."); see also
Steigleder v. McQuesten, 198 U.S. 141 (1905);
Denny v. Pironi, 141 U.S. 121 (1891); Robertson
v. Cease, 97 U.S. 646 (1878).
While it is surprising that a counsel would
fail to follow the simple step of alleging
citizenship, what is even more surprising is
Gerber’s counsel’s failure to follow the
invitation and direction given to it at oral
argument.
At oral argument, this court advised the
parties that "28 U.S.C. sec. 1653 permits the
allegations of jurisdiction to be amended even in
the Court of Appeals. . . . But until that
happens we certainly don’t have [jurisdiction] on
the allegations in this record."/6 After Gerber
assured the court that there was diversity of
citizenship, counsel was informed that: "You may
then be able to amend the complaints under
section 1653, and should count your lucky stars
because this case should have been remanded
instantly."
Surprisingly to say the least, Gerber has yet
to file a section 1653 amendment of pleadings
addressing the jurisdictional problem despite the
fact that this court has given Gerber
approximately two months to do so.
On a number of occasions we have dismissed
actions where litigants fail to make section 1653
amendments to correct deficient allegations of
diversity of citizenship after being instructed
to do so. For example, during oral argument in
America’s Best Inns, Inc. v. Best Inns of
Abilene, L.P., 980 F.2d 1072, 1073 (7th Cir.
1992), as in this case, "the court reminded the
parties of the need to establish complete
diversity of citizenship." But "[d]espite
receiving express directions about what they had
to do, counsel did not do it. At some point the
train of opportunities ends." Id. at 1074.
Consequently, we vacated the district court’s
judgment on the merits and remanded with
instructions to dismiss for lack of subject
matter jurisdiction. See id.; see also Guaranty,
101 F.3d at 59; see, e.g., Held v. Held, 137 F.3d
998, 1000 (7th Cir. 1998); Dausch v. Ryske, 9
F.3d 1244, 1245 (7th Cir. 1993); Chicago Stadium
Corp. v. State of Indiana, 220 F.2d 797, 799 (7th
Cir. 1955).
As we have stated in the past,
These lawyers knew what they had to do, and they
did not do it. Failure in one round of
supplemental filings leads us to doubt that a
second would be any more successful. Anyway, it
is not the court’s obligation to lead counsel
through a jurisdictional paint-by-numbers scheme.
Litigants who call on the resources of a federal
court must establish that the tribunal has
jurisdiction, and when after multiple
opportunities they do not demonstrate that
jurisdiction is present, the appropriate response
is clear. Counsel have only themselves to blame
if they must now litigate this case from scratch
in state court.
Guaranty, 101 F.3d at 59.
Gerber, in this case, has neglected to file the
necessary documents with the court despite our
warning at oral argument that "we certainly don’t
have [jurisdiction] on the allegations in this
record." Consequently, the judgement of the
district court is VACATED, and this case is REMANDED
to the district court with instructions to REMAND
the plaintiffs’ lawsuits back to the Illinois
state court system.
/1 28 U.S.C. sec. 1446(a) provides:
A defendant or defendants desiring to remove any
civil action or criminal prosecution from a State
court shall file in the district court of the
United States for the district and division
within which such action is pending a notice of
removal signed pursuant to Rule 11 of the Federal
Rules of Civil Procedure and containing a short
and plain statement of the grounds for removal,
together with a copy of all process, pleadings,
and orders served upon such defendant or
defendants in such action.
/2 28 U.S.C. sec. 1332(a)(1) (1995) (emphasis added)
provides:
The district courts shall have original
jurisdiction of all civil actions where the
matter in controversy exceeds the sum or value of
$50,000, exclusive of interest and costs, and is
between--
(1) citizens of different States . . . .
/3 Two of the complaints (the one filed by Tylka and
the one jointly filed by Chaet and Keller)
requested that Gerber "run corrective marketing,
publicity, and advertising for an appropriate
period of time." The trial judge was of the
opinion that such an advertising campaign would
easily cost Gerber over $50,000. Because this
appeal is resolved on other grounds, we need not
address this issue.
/4 Chaet and Keller jointly filed one lawsuit.
/5 28 U.S.C. sec. 1441(a) provides:
Except as otherwise expressly provided by Act of
Congress, any civil action brought in a State
court of which the district courts of the United
States have original jurisdiction, may be removed
by the defendant or the defendants, to the
district court of the United States for the
district and division embracing the place where
such action is pending. For purposes of removal
under this chapter, the citizenship of defendants
sued under fictitious names shall be disregarded.
/6 Under section 1653, "[d]efective allegations of
jurisdiction may be amended, upon terms, in the
trial or appellate courts."