National Consumers League v. Bimbo Bakeries USA ( 2014 )

THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
THE NATIONAL CONSUMERS LEAGUE
Plaintiff,
No. l:13-cv-0l674 (RCL)
v. Hon. Royce C. Lamberth
BIMBO BAKERIES USA
Defendant.
MEMORANDUM OPINION
The sole question before this Court is whether it has subject matter jurisdiction over this
case, and, if so, whether an award of attomeys’ fees to the plaintiff is appropriate. Defendant
BBUSA, resisting remand, claims that there is either diversity jurisdiction under 28 U.S.C. §
l332(a) or jurisdiction under the Class Action Fairness Act ("CAFA"), 28 U.S.C. § l332(d).
Under § l332(a), diversity of citizenship is not an issue, as the NCL is an incorporated resident
of Washington, D.C., and BBUSA is incorporated in Delaware with its primary place of business
in Philadelphia. So the Court is tasked only with deciding whether the amount in controversy
exceeds $75,000. Under § l332(d), the Court must decide whether this case fits the definition of
a "class action" or a "mass action."
Finding that the $75,000 amount in controversy is not met, and that this case is neither a
"class action" nor a "mass action," this Court lacks subject matter jurisdiction, and thus plaintiff
NCL’s motion to remand to the D.C. Superior Court will be GRANTED. However, the Court
finds that defendant BBUSA had an objectively reasonable basis for removing this case to the
district courts, and thus plaintiff NCL’s motion for an award of attorneys’ fees will be DENIED.
FACTUAL BACKGROUND
Plaintiff, the National Consumers League ("NCL"), represents consumers in actions
against businesses it believes are engaged in misconduct. Defendant, Bimbo Bakeries USA
("BBUSA" or "Bimbo") sells well-known brands such as Sara Lee bread and Thomas’ English
l\/Iuffins within the District of Columbia and the rest of the United States. The NCL brought this
action on September 26, 2013 in the Superior Court of the District of Columbia on behalf of the
general public under District of Columbia Code § 28-3905(k)(l)(A)-(D) against defendant
BBUSA. Plaintiff NCL alleges a "pervasive pattern of fraudulent, deceptive, and otherwise
improper marketing practices" in regard to BBUSA’S wheat-labeled products, and seeks
remedies under § 28-3905(k)(2). Pl.’s Mot. Remand 3. On October 28 2013, defendant BBUSA
filed a Notice of Removal seeking that the case be tried in the U.S. District Court for D.C. See
Notice of Removal. On November 28, 20l3, plaintiff NCL filed a motion to remand the case.
See Pl.’s Mot. Remand. Defendant BBUSA resists the remand on the basis that this Court has
jurisdiction on either a basis of diversity jurisdiction under 28 U.S.C. § l332(a) or CAFA
jurisdiction under § l332(d).
ANALYSIS
I. STANDARD OF REVIEW
Civil actions filed in state court may be removed to a United States district court by the
defendant so long as the case could have originally been filed in federal court. 28 U.S.C. §
l44l(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." Ia’. § l447(c). A challenge to subject
matter jurisdiction may be raised on a motion to remand by the parties. Id. A "party opposing a
motion to remand bears the burden of establishing that subject matter jurisdiction exists in
federal court." Int’l Um'on of Bricklayers & Alll``ed Crafrworkers v. Ins. C0. of the W., 366 F.
Supp. 2d 33, 36 (D.D.C. 2005) (citation omitted); see also Wz``lson v. Republic Iron & Sz‘eel Co.,
257 U.S. 92, 97-98 (1921).
Courts should apply a strict reading to the removal statute to avoid federalism concerns.
See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 107-09 (1941). Any uncertainty about
the existence of subject matter jurisdiction should be resolved in favor of remand. Hood v. F.
Hojfman-La Roche, Lld., 639 F. Supp. 2d 25, 28 (D.D.C. 2009) (citing Gasch v. Hart]"ord
Accident & Ina'em. Co., 491 F.3d 278, 281-82 (5th Cir. 2()07)).
II. TIMELINESS
At the threshold of this case, defendant BBUSA argues that plaintiff NCL has waived its
ability to challenge the validity of the Monachelli declaration under the legal standard set forth in
Harmon v. OKI Sys., ll5 F.3d 477, 478 (7th Cir. l997). Def.’S Mem. Opp’n 6. Harmon
distinguishes between a plaintiff alleging a mere "procedural defect" with defendant’s notice of
removal and a plaintiff alleging a substantive issue with the subject matter jurisdiction of a case.
115 F.3d at 478 (finding that defendant’s failure to include amount in controversy in notice of
removal was "procedural defect" rather than substantive issue with subject matter jurisdiction,
and thus affirming the denial of plaintiff s motion to remand). Subject matter jurisdiction may
be challenged at any point, but a motion to remand for a "procedural defect” must be plead
within 30 days of the notice of removal. See 28 U.S.C. § l447(c).
First, whether plaintiff NCL waived the ability to challenge the Monachelli declaration is
irrelevant because the Court finds the declaration to be valid. See III.A.l-2, infra. Second, if the
Court were to find that diversity jurisdiction was met here, the Monachelli declaration would
play a substantive role in that finding rather than a procedural one. Therefore, the Court finds no
issue with the timeliness of plaintiffs challenges.
III. DIVERSITY JURISDICTION
Federal courts have diversity jurisdiction when (l) there is complete diversity of
citizenship (i.e. no plaintiff is a citizen of the same state as any defendant) and (2) the "amount in
controversy" exceeds $75,000. 28 U.S.C. § l332(a). There is no issue as to diversity: plaintiff
NCL is a citizen of Washington, D.C., and defendant BBUSA is a citizen of Delaware and
Pennsylvania. Notice of Removal W 26-28. Thus, the sole issue is the amount in controversy.
When calculating the amount in controversy, "the separate and distinct claims of two or more
plaintiffs cannot be aggregated in order to satisfy the jurisdictional requirement." Snyder v.
Harrz``s, 394 U.S. 332, 335 (l969). "[This] doctrine still applies when separate and distinct
claims are asserted on behalf of a number of individuals, regardless of whether an action
involves a simple joinder of multiple plaintiffs, [or is] a representative action." Breakman v_
AOL LLC, 545 F. Supp. 2d 96, 103-04 (D.D.C. 2008).
The Court discusses a number of issues: (A) the validity of a declaration establishing
defendant’s sales amounts as well as aggregation of different types of damages, and (B) whether
a settlement offer from the plaintiff can establish the amount in controversy. Finding that none
of the arguments put forth by defendant BBUSA are sufficient to establish the amount in
controversy, this Court does not have diversity jurisdiction under 28 U.S.C. § l332(a) over this
case.
A. The Monachellii Declaration and Aggregation of Damages
Crucial to defendant’s theory that the amount in controversy is greater than $75,000 is the
Monachelli declaration, a sworn statement establishing BBUSA’s sales information for
"Thomas’ Light Multi-Grain Hearty English Muffins" and "Sara Lee Classic Honey Wheat
Bread" within the District of Columbia the year prior to the filing of the notice of removal. See
Def.’s Ex. A. Plaintiff NCL asserts two problems with the declaration itself: (l) it was amended
without leave of the Court after the time for amendments of right had passed, and (2) it is
speculative. See Pl.’s Reply Brief 7-8. Even if the Monachelli declaration is found valid,
plaintiff NCL still contends that the declaration does not support removal. Ia’. at 6-7.
1. Timeliness of Amendment
The original Monachelli declaration was taken on October 25, 2013, and contained
BBUSA’s sales data from the beginning of the calendar year through October 6, 20l3. Notice of
Removal, Ex. B, ECF No. 1-2. The amended, or as defendant BBUSA characterizes it,
supplemented, Monachelli declaration was conducted on December 12, 2013, and includes a
more specific breakdown of data: September 26, 2012 - September 26, 2013, sales for the year
prior to the filing of the complaint, and September 26, 2013 - October 28, 2013, sales between
the filing of the complaint and filing of the notice of removal. Def.’s Ex. A. Plaintiff NCL
argues that the declaration was not appropriately amended, and thus the more specific data
should not be considered. Pl.’s Reply Brief 7. Working from the premise that the December 12,
2013 declaration is excluded, plaintiff NCL contends that under Mostofz`` v. Network Capital
Fundz``ng Corp., 798 F. Supp. 2d 52, 55 (D.D.C. 2011) the original Monachelli declaration would
be invalid because it considers data up until October 6, 2013, wrongfully including 11 days of
sales after the complaint. See Pl.’s Mot. Remand 8. However, plaintiff misapplies Mostoy”z: "the
Court . . . considers the value of the claim as aflhe dale Qfrenzo\>cz/." 798 F. Supp. 2d at 55
(e1nphasis added). Although the complaint was filed on September 26, 2013, the case was
removed on October 28, 2013. 'l``hus, the original Monachelli declaration, covering the year
through October 6, 2013, is actually tinder-inclusive See Def.’s l\/lein. Opp’n 7-8.
With plaintiff NCL``s underlying argument dispensed with. plaintiff has little reason to
oppose the inclusion of the December 12, 2013 supplement to the Monachelli declaration.
Further, the more specific numbers add dimension and certainty to the paities’ arguments. so
excluding it on a technical basis may be detrimental to achieving the correct result. Plaintiff
NCL was also not denied an opportunity to consider and respond to the new data. See Pl.’s
Reply Brief. Therefore, the Court sees no issue with accepting the December 12th Monachelli
declaration, regardless of whether it is characterized as an amendment or a supplement to the
original declaration.
2. Speculative Sales Data
PlaintiffNCL next contends that the data contained in the Monachelli declarations, both
original and amended, are speculative primarily for the reason that the "sales [data] are not based
on BBUSA’s own records" but rather on those of a third-party market-research company,
information Resources, lnc. ("IRI"). Pl.’s Mot. Remand 12; see also Pl.’s Reply Brief 7-8. Yet
plaintiff NCL has presented no evidence that the swom statement of Mr. Monachelli is untrue,
namely that "BBUSA does not track this data itself." Def.’s Ex. A 11 5. Nor has plaintiff NCL
presented any evidence refuting the actual 1R1 numbers. ln Strawn v. AT&T Mobz``lily LLC, 530
F.3d 293, 299 (4th Cir. 2008), the plaintiffs "offered nothing" to contradict the accuracy of the
defendant’s swom affidavit, which was then used to establish a jurisdictional amount. Here, as
in Strawn, plaintiff NCL offers only conclusory statements in support of its position that the 1RI
numbers are speculative. Moreover, it would be erroneous for this Court to find that defendant
BBUSA must present intemal numbers that it does not collect. While intemal numbers may be
more convincing, external data is certainly not barred as a matter of course.
Further, plaintiff suggests that lRl data is inherently speculative. See Pl.’s Mot. Remand
11-12; Pl.’s Reply Brief 7-8. The Court does not agree with this position. lRl is a company
founded entirely on providing accurate market information and analysis to its clients, including
tracking retail information at the store level. Who We Are, IRlworldwide.com,
http://www.iriworldwide.com/About/WhoWeAre.aspx. Over 95% of the Fortune Global 500 in
CPG and retail use lRl’s services. Id. The Court infers that staying in business and thriving in
any competitive marketplace is contingent upon consistently providing a reliable product that
meets its customers’ needs. Here, the sales data is lRl’s product, and neither party presents, nor
could this Court locate, any case ruling that third-party research data is inherently speculative or
not speculative. Thus, the Court concludes that, at least in this case where sales data was
unavailable intemally and the plaintiff offered no evidence refuting the numbers, third-party data
from a respected company such as lRl is a valid means of determining sales information.
3. Amount in C0ntr0versy
With the validity of the Monachelli declaration firmly established, the Court now tums to
whether it supports removal. The parties agree that the dispute in this case is between only the
NCL and BBUSA - that no other plaintiffs have been joined to the case. So the Court’s task is
to identify what damages plaintiff NCL may recover for itself and whether these meet the
amount in controversy. D.C. Code § 28-3905(k), under which this action is brought, establishes
a few discreet pools of damages. Relevant to this case are (a) statutory damages of $l,SOO per
violation, payable to the consumer, (b) attomeys’ fees, and (c) an injunction against the unlawful
trade practices. § 28-3905(k)(2). Defendant BBUSA essentially argues that because there is
only one named plaintiff, NCL, and no scheme in this action for compensating injured
consumers, plaintiff NCL would be entitled to all potential damages; taken together with the
Monachelli declaration citing hundreds of thousands of dollars in business done within D.C. in
the past year, the amount in controversy requirement is clearly met. See Def.’s Mem. Opp’n 9-
10. Defendant BBUSA would also add attomeys’ fees and the value of injunctive relief to the
overall pool. Id. On the other hand, plaintiff NCL contends that most or all of the statutory
damages do not apply to it, that attorneys’ fees are not appropriate to add when establishing
amount in controversy, and that any damages resulting from an injunction have not been pled to
any extent beyond speculation See Pl.’s Mot. Remand 7-11. 'l``he Court will discuss each
potential remedy in turn.
a. Statut0ry, actual, and restituti0nal damages
The crux of defendant BBUSA’s argument is that plaintiff NCL, if victorious, may be
entitled to recover for itself up to $l,500 per violation, pushing the potential amount in
controversy into the millions. See Def.’s Mem. Opp’n 9-10. Yet this is premised on an incorrect
reading of the DCCPPA.l Plaintiff NCL is suing "on behalf of the interests of a consumer," §
28-3095(k)(1)(D), and thus statutory damages for such violations are "payable to the consumer,"
§ 28-3905(k)(2)(A). Indeed, "only the damages to which [the plaintiff] would be personally
entitled ~ rather than those on behalf of the public - will count toward satisfying the $75,000
jurisdictional threshold." Zuckman v. Monster Beverage Corp., 958 F. Supp. 2d 293. 297-98
(D.D.C. 2013). 'l``his is a logical application of the non-aggregation principle established in
Snyder v. Harris, 394 U.S. 332, 335 (1969), which held that aggregation of damage amounts for
l Defendant’s argument would apparently allow for a single individual (or non-profit) to recover ALL the damages
associated with a defendant’s wrongful actions. This would greatly incentivize litigation and potentially result in
huge windfalls to whomever brings a lawsuit the fastest.
jurisdictional purposes may be permitted only "in cases in which a single plaintiff seeks to
aggregate two or more of his own claims against a single defendant" (emphasis added).
Here, plaintiff NCL does not allege that it has individually been harmed by the
defendant’s trade practices, and therefore will independently recover no statutory damages. Due
to the non-aggregation principle, the thousands of products purchased by D.C. consumers on
whose behalf plaintiff seeks to recover may not be considered to establish the amount in
controversy, as they are "separate and distinct claims" rather than part of a disgorgement action.z
See Nat’l Consumers League v. Flowers Bakeries, LLC, Civ. A. No. 13-1725, 2014 WL
1372642, at *3 (D.D.C. Apr. 8, 2014); Zuckman, 958 F. Supp. 2d at 303-04. The Court
unequivocally rejects defendant BBUSA’s chief attempt to distinguish this case from the on-
point Flowers decision. Defendant’s argument is that
NCL has asked in its Complaint that damages be payable to only one entity -
NCL. Because of that fact, the rule against aggregation is irrelevant and has no
application here. The Flowers decision does not address this issue, nor have other
courts in this district. Accordingly, diversity jurisdiction exists between NCL and
BBUSA.
Def.’s Resp. Supp. Authority 2. A glance at the complaints of these two very similar cases,
brought by the same counsel for the same plaintiff, reveals, unsurprisingly, that the prayers for
relief are exactly verbatim. Compare Complaint at 24, Na’t’l Consumers League v. Bimbo
Bakeries USA, 1:13-cv-01674 (D.D.C. removed Oct. 28, 2013), ECF No. 1-1 at 31 with
Complaint at 18, Nat’l Consumers League v. Flowers Bakeries, LLC, l:13-cv-01725, 2014 WL
1372642 (D.D.C. Apr. 8, 2014), ECF No. 1-1 at 20. There is therefore no reason for these
undistinguishable cases to come out differently on the issue of potential statutory damages. This
2 lf each of the consumers were named and joined to the suit, they would not be able to aggregate their individually
small claims to meet the amount in controversy requirement. lt would be promoting gamesmanship to allow for an
exception to the rule against aggregation via a representative action.
9
Court agrees with its sister court in Flowers and the above cited authorities, and concludes that
defendant BBUSA has established no statutory damages in regard to the jurisdictional amount.
b. Att0rneys’ fees
Defendant BBUSA next argues that plaintiffs attomeys’ fees may be sufficient to
establish the amount in controversy because the underlying state statute includes attomeys’ fees
as a substantive option of recovery. See, e.g., 14AA Wright, Miller, & Cooper, Fea'eral Practice
and Procea’ure § 3704.2 nn.28-29 (4th ed. 2011) ("lf a state statute allows an award of attorneys’
fees . . . , the prospect of those fees being awarded can be factored into the amount in
controversy."); Breakman, 545 F. Supp. 2d at 107. However, plaintiff NCL points to a body of
jurisprudence cited by the Breakman court that would reject the usual aggregation of statutory
attomeys’ fees and include them only on a pro rata basis. See 545 F. Supp. 2d at 107 (citing
Kessler v. National Enterprz``ses, Inc., 437 F.3d 1076, 1079-80 (8th Cir. 2003); National
Organl``zationfor Women v. Mutual of Omaha Insurance Co., 612 F. Supp. 100, 108-09 (D.D.C.
1985)). The Court recognizes that the district courts of this circuit have generally adopted the
Breakman view, see, e.g., Zuckman, 958 F. Supp. 2d at 301-02; Nat’l Consumers League v.
General Mz``lls, Inc., 680 F. Supp. 2d 132, 140-41 (D.D.C. 2010), and so conforms itself to this
analysis.
Defendant BBUSA cites the Zuckman analysis for establishing appropriate attomeys’
fees, Notice of Removal 11 32, which analyzes the damages claimed by the representative plaintiff
separately from those being recovered on behalf of the general public. 958 F. Supp. 2d at 301
("[T]he Court may consider only [plaintiff``s] share of the total fees when calculating the amount
in controversy" in a DCCPA case). Because plaintiff NCL is suing under § 28-3905(k)(1)(D)
and is recovering no independent damages, the amount of attorneys’ fees applicable to it for
10
jurisdictional purposes are $0.3 See Zuckman, 958 F. Supp. 2d at 302. Further, it would be
troubling "that an action should be retained in federal court where satisfaction of the amount in
controversy requirement depends [only] upon a lump sum award of attorneys' fees." Breakman,
545 F. Supp. 2d at 107. Even if the Court were not to reduce the attomeys’ fees according to the
above analysis, defendant BBUSA has not provided even an estimate as to what those fees would
be. Defendant’s speculation or conclusory statements as to the amount of attomeys`` fees is
insufficient to establish a jurisdictional amount. ’oz/r Gi)"l Fridrzy, LLC v. MGF Holclz'ngs', ]nc.,
Civ. A. No. 06-0385, 2006 WL 1028959. at *2 (D.D.C. Apr. 18, 2006). Unlike in Zuckman
where the plaintiffs represented in an affidavit that they expected to work l,750 or more hours
should their case proceed to trial, here neither party presents evidence of plaintiff NCL’s
expected hours. 958 F. Supp. 2d at 301. The Court could only speculate as to the eventual cost
of this litigation As such, including attorneys" fees in the jurisdictional calculus here is not
appropriate.
c. Cost of injunction
Finally, defendant BBUSA argues that the cost of the injunction should be added to the
amount in controversy calculation. See Notice of Removal il 31. Generally, "[t]he value of
injunctive relief for determining the amount in controversy can be calculated as the cost to the
defendant." Wexler v. United Air Lines, Inc., 496 F. Supp. 2d 150, 154 (D.D.C. 2007) (citing
Comm. for GI Rights v. Callaway, 518 F.2d 466, 472-73 (D.C. Cir. 1975). But "[c]ourts have
found that general assertions that the cost of injunctive relief would exceed $75,000 are too
3 The Court realizes that this would mean that every case brought under § 28-3905(k)(1)(D) would fail to satisfy
diversity jurisdiction. ln light of the fact that every case brought under the DCCPPA that has been removed to the
district courts has been remanded, the Court sees no problem with articulating a rule that would, in effect, exclude
just one category of recovery from diversity jurisdiction eligibility. See, e.g., Zuckman, 958 F. Supp. 2d at 306;
Stein v. Am. Express Travel Related Servs., 812 F. Supp. 2d 69, 73 (D.D.C. 20l1); Mostoj?, 798 F. Supp. 2d at 52;
General Mills, 680 F. Supp. 2d at 132; Breakman, 545 F. Supp. 2d at 96; Ctr. for Sci. in the Pub. Interest v. Burger
King Corp., 534 F. Supp. 2d l4l, 144 (D.D.C. 2008); Reigner v. lngersoll-Rana’ C0., 461 F. Supp. 2d l, 2 (D.D.C.
2004y
ll
speculative to establish jurisdiction." Zuckman, 958 F. Supp. 2d at 302 (citing General Mills,
680 F. Supp. 2d at 140); see also Wexler, 496 F. Supp. 2d at 154 (finding defendant’s statement
that total costs of injunction were "certain" to exceed $75,000 was insufficient to meet
defendant’s burden).
Here, defendant BBUSA makes no effort to chronicle the costs that it would incur in the
event of an injunction, and the Court will not speculate as to what those costs may be. Because
defendant BBUSA’s statements are insufficient to support including any injunctive costs, there is
no need to proceed further.
B. Plaintiff s Settlement Offer and FRE 408
Defendant BBUSA argues that a settlement offer is sufficient to establish the amount in
controversy in a case, Def.’s Mem. Opp’n ll-l2, while plaintiff NCL contends that admitting
such evidence would violate Rule 408 of the Federal Rules of Evidence, Pl.’s Reply Brief 8-10.
Thus, the issue may be framed as whether Rule 408 prohibits the use of a settlement offer as
evidence of the amount in controversy. FRE 408 provides in relevant part:
(a) Prohibited Uses. Evidence of the following is not admissible ~ on behalf of
any party - either to prove or disprove the validity or amount of a disputed claim
or to impeach by a prior inconsistent statement or a contradiction:
(l) furnishing, promising, or offering ~ or accepting, promising to accept,
or offering to accept - a valuable consideration in compromising or
attempting to compromise the claim; and
(2) conduct or a statement made during compromise negotiations about
the claim
Fed. R. Evid. 408(a). Although the D.C. Circuit has yet to decide the question,4 other federal
courts of appeals have found that a plaintiffs settlement demand can be used as evidence of the
amount in controversy so long as it reflects a "reasonable estimate" of the plaintiffs claim.
4 The plaintiffs citation to United States v. Davis, 596 F.3d 852, 859 (D.C. Cir. 2010) is not on point because that
case is a criminal case where prior negotiations were being used to prove liability, while this case is a civil case
where the settlement offer is being used to decide a jurisdictional issue. See Pl.’s Reply Brief 8.
12
C0hn v. Petsmart, Inc., 281 F.3d 837, 839-40 (9th Cir. 2002) (holding that settlement letter
valuing trademark at $100,000 "is sufficient [evidence] to establish the amount in controversy");
accord Rising-Moore v. Red Roof]nns, Inc., 435 F.3d 813, 816 (7th Cir. 2006) (holding that
settlement offer was "used . . . to show the stakes, a question independent of the claim’s merit.");
McPhail v. Deere & C0., 529 F.3d 947, 956 (10th Cir. 2008); Burns v. Winds0r Ins. C0., 31 F.3d
1092, 1097 (1 lth Cir. 1994); Wils0n v. Belin, 20 F.3d 644, 651 n.8 (5th Cir. 1994).
Regardless of this persuasive body of jurisprudence, this Court is advised to avoid
predicting how the D.C. Circuit would rule on the question, and so adopts the narrow approach
recently followed by National Consumers League v. Flowers Bakeries, LLC, Civ. A. No. 13-
1725, 2014 WL 1372642, at *4-5 (D.D.C. Apr. 8, 2014). Assuming arguendo that the rule
allowing the settlement offer to be considered exists, “[a] plaintiffs proposed settlement amount
is [only] relevant evidence of the amount in controversy." Id. at 9-10 (quoting McPhail v. Deere
& Co., 529 F.3d 947, 956 (10th Cir. 2008) (emphasis in original) (intemal quotation marks
omitted)). Here, exactly like in Flowers, the settlement offer is insufficient to establish the
amount in controversy due to the nature of the NCL’s potential recovery as a plaintiff. As
discussed above and in Flowers, it is the consumers, rather than the NCL, who would be entitled
to recover more than $75,000 in this case, and thus a settlement demand of more than $75,000 is
not an independently sufficient determination of the amount in controversy.
IV. THE CLASS ACTION FAIRNESS ACT
Even if there is no diversity jurisdiction, Defendant BBUSA would argue that jurisdiction
is appropriate under two provisions of the Class Action Faimess Act ("CAFA"), 28 U.S.C. §
l332(d). First, defendant BBUSA contends that this case is a "class action" where the "amount
in controversy exceeds the sum or value of $5,000,000," and there is minimal diversity: "any
13
member of the class of plaintiffs is a citizen of a State different from any defendant." Id. §
1332(d)(2)-(A). Second, defendant BBUSA argues that this case is a "mass action" where the
"monetary relief claims of 100 or more persons" are being "tried jointly." Id. §
1332(d)(l1)(B)(i). For the reasons discussed below, the Court finds that this case is neither a
class action nor a mass action removable under CAFA.
A. Class Action Jurisdiction
The district courts of the D.C. Circuit have generally looked to two factors to determine
whether a DCCPPA action is a class action: (l) whether the plaintiff attempted to comply with
the D.C. Superior Court’s Rule 23 for class actions, and (2) whether the plaintiff sought class
certification. See Zuckman, 958 F. Supp. 2d at 304-05; Breakman, 545 F. Supp. 2d at 101-02.
Defendant BBUSA attempts to distinguish this case from those requirements by arguing that
Zuckman and Breakman were brought under the individual provisions of the DCCPPA rather
than § 28-3905(k)(1)(D), and that actions brought under § 28-3905(k)(1)(D) are class actions
essentially by definition. Although this Court agrees with defendant BBUSA that the NCL most
likely has standing to bring this action only under § 28-3905(k)(l)(D) because plaintiff NCL
does not claim to have purchased any products itself,§ National Consumers League v. Flowers
Bakeries, LLC, Civ. A. No. 13-1725, 2014 WL 1372642, at *6 (D.D.C. Apr. 8, 2014) also dealt
with this exact characterization issue, concluding that even under § 28-3905(k)(1)(D) "the
statute’s use of the tenn ‘class’ would [not] automatically permit removal under CAFA’s class
action provisions."
5 ln this case, plaintiff NCL could be categorized either as a public interest organization or a non-profit. See Def.’s
Mem. Opp’n 13. As such, it potentially has standing under either § 28-3905(k)(l)(C) or § 28-3905(k)(l)(D). Under
defendant’s theory, in order to gain standing under § 28-3905(k)(1)(C), plaintiff would have to purchase some
products to "test or evaluate" them, and only then would its suit not be a class action. Requiring plaintiffs to jump
through procedural hoops to manufacture a particular type of standing is not sensible. For this reason and the
reasons discussed below, the Court construes § 28-3905(k)(1)(D) solely as enabling class actions, not requiring
them.
14
Rather, CAFA defines a "class action" as "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."é 28 U.S.C. §
1332(d)(1)(B). This frames the question as whether § 28-3905(k)(l)(D) is a "state statute or rule
of judicial procedure ‘similar’ to Rule 23 that authorizes a class action." Bau)nan v. Chase Inv.
Servs. Corp., 747 F.3d 1117, 1121 (9th Cir. 20l4). "A state statute or rule is similar to Federal
Rule of Civil Procedure 23 if it closely resembles Rule 23 or is like Rule 23 in substance or in
essentials." Id. (quoting West Virginia ex rel. McGraw v. CVS Pharmacy, Inc., 646 F.3d 169,
174 (4th Cir. 2011)). The "hallmarks of Rule 23 class actions [are] adequacy of representation,
numerosity, commonality, typicality, [and] the requirement of class certification;" absent these,
private attomey general actions lack "the equivalency to Rule 23 that CAFA demands." Id at
1 123 (quoting Purdue Pharma L.P. v. Kentucky, 704 F.3d 208, 216-17 (2d Cir. 2013));7 see also
Fed. R. Civ. Pro. 23(a).
Here, defendant BBUSA points out that § 28-3905(k)(l)(D)(ii) specifically requires
"public interest organizations" to be adequate, however, other important "hallmarks" are absent.
Particularly, there is no procedural element for class certification and no notice provision for
would-be class members. D.C. Code § 28-3905(k)(1)(D) certainly gives plaintiffs discretion to
file class actions under that provision, but that is not what plaintiff NCL chose to do. Because of
the conspicuous lack of class certification requirements in the statute, the precedent holding that
6 Defendant BBUSA places emphasis on the word "authorizing." Def.’s Resp. to Second Notice Supp. Authority 3.
However, as interpreted in Bauman v. Chase [nv. Servs. Corp., 747 F.3d 1117, 1121-23 (9th Cir. 2014) and cases
cited therein, the proper analysis requires a further comparison between the state statute and rule 23 of the Federal
Rules of Civil Procedure. A state statute expressly authorizing a class action is not by itself sufficient to establish
CAFA jurisdiction See West Virginia ex rel. McGraw v. CVS Pharmacy, ]nc., 646 F.3d 169, 174-75 (4th Cir.
201 1).
7 Pharma L.P. v. Kentucky, 704 F.3d 208 (2d Cir. 2013) involved a public attomey general action. However, private
and public attomey general actions have long been analogized, and where "an identical suit brought by the state . . .
itself would plainly not qualify as a CAFA class action, no different result should obtain when a private attomey
general is the nominal plaintiff." Bauman v. Chase 1nv. Servs. Corp., 747 F.3d lll7, 1123 (9th Cir. 2014).
15
private attomey general actions are not class actions, and the public policy reasons discussed in
footnote 5, supra, the Court concludes that this case is not removable as a class action under
CAFA.
B. Mass Action Jurisdiction
Defendant BBUSA also argues that this case is a mass action under 28 U.S.C. §
1332(d)(1 1). Mass action cases require: (l) "monetary relief claims of 100 or more persons" that
(2) "are proposed to be tried jointly on the ground that the plaintiffs’ claims involve common
questions of law or faet," and that (3) each plaintiff independently satisfies "the jurisdictional
amount requirements under subsection (a)." Id. § l332(d)(11)(B)(i). The Supreme Court has
interpreted the term "plaintiffs" in CAFA’s mass action provision to apply only "to the actual
named parties who bring an action." Ml``ssissippi ex rel. H00d v. AU Optronics Corp., 134 S. Ct.
736, 744 (2014) (emphasis added). This leads to a rather easy result: because plaintiff NCL is
the only named plaintiff - no other party has been identified or joined - CAFA’s mass action
provision does not grant jurisdiction to this Court.
V. PLAINTIFF’S ATTORNEYS’ FEES
The final issue concems plaintiff NCL’s request for attorneys’ fees. See Pl.’s Reply Brief
14-15. "An order remanding [a] case may require payment of just costs and any actual expenses,
including attomey fees, incurred as a result of the removal." 28, U.S.C. § l447(c). The Supreme
Court has outlined the standard for awarding attorneys’ fees under § 1447:
the standard for awarding fees should turn on the reasonableness of the removal.
Absent unusual circumstances, courts may award attorney’s fees under §
l447(c) only where the reinoving party lacked an objectively reasonable basis for
seeking removal. Conversely`` when an objectively reasonable basis exists, fees
should be denied. (citation omitted). ln applying this rule, district courts retain
discretion to consider w'liether' unusual circumstances warrant a departure from
the rule in a given case . . . . When a court exercises its discretion in this manner,
16
however, its reasons for departing from the general rule should be "faithful to the
purposes" of awarding fees under § l447(c).
Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005). As such, the key to the inquiry here
is whether the removal was "obj ectively reasonable." Id
Defendant BBUSA put forth several theories in support of its argument for removal.
While the Court does not find in defendant BBUSA’s favor, at the time the arguments were
submitted, there remained an objectively reasonable basis for removal. Particularly, defendant is
correct when it asserts that no DCCPPA cases had been brought under § 28-3905(k)(1)(D).
Although defendant’s arguments were ultimately not successful, both its arguments for diversity
jurisdiction under 28 U.S.C. § 1332(a) and CAFA jurisdiction under § 1332(d) were potentially
distinguishable on the § 28-3905(k)(1)(D) basis. The Court addressed these arguments head-on,
and was notably guided by the post-filing decisions of Hooa', Bawnan, and Fl0wers. 134 S. Ct.
at 744; 747 F.3d at 1121-23; 2014 WL 1372642 (D.D.C. Apr. 8, 2014). Therefore, the Court
concludes that an award of attomeys’ fees is not appropriate for this action.
VI. CONCLUSION
For the aforementioned reasons, the Plaintiffs Motion to Remand this case to the
Superior Court of the District of Columbia will be GRANTED, and the Plaintiff s Request for
Attomeys’ Fees and Costs will be DENIED. The case will be REMANDED to the Superior
Court of the District of Columbia. A separate order will be issued alongside this opinion
reflecting the relief discussed herein
Date; ¢A'///‘f Signature: C-
The Honorable Royce C. Larnberth
U.S. District Court Judge
17