Harold Hoffman v. Nordic Naturals, Inc. , 837 F.3d 272 ( 2016 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 15-1362
_____________
HAROLD M. HOFFMAN,
individually and on behalf of those similarly situated,
Appellant
v.
NORDIC NATURALS, INC.
_____________
On Appeal from the United States District Court
for the District of New Jersey
(D.C. No. 2-14-cv-03291)
District Judge: Honorable Susan D. Wigenton
_____________
Submitted Under Third Circuit L.A.R. 34.1(a)
February 9, 2016
Before: FUENTES, KRAUSE, and ROTH, Circuit Judges
(Filed: September 14, 2016)

Honorable Julio M. Fuentes assumed senior status on July
18, 2016.
Harold M. Hoffman, Esq.
240 Grand Avenue
Englewood, NJ 07631
Pro Se Attorney
Michael R. McDonald, Esq.
Jennifer M. Thibodaux, Esq.
Gibbons
One Gateway Center
Newark, NJ 07102
Counsel for Appellee
_____________
OPINION OF THE COURT
_____________
FUENTES, Circuit Judge.
Harold M. Hoffman is a serial pro se class action
litigant from New Jersey who frequently sues under the New
Jersey Consumer Fraud Act. In a previous opinion, we noted
that Hoffman is “an attorney who has made a habit of filing
class actions in which he serves as both the sole class
representative and sole class counsel.”1 According to the
1
Hoffman v. Nutraceutical Corp., 563 F. App’x 183, 184 (3d
Cir. 2014); see, e.g., Hoffman v. Liquid Health Inc., No. 14-
1838, 2014 WL 2999280 (D.N.J. July 2, 2014); Hoffman v.
DSE Healthcare Sols., LLC, No. 13-7582, 2014 WL 1155472
(D.N.J. Mar. 21, 2014); Hoffman v. Lumina Health Prods.,
2
record in this case, Hoffman has sued nearly 100 defendants
in New Jersey state court in a period of less than four years.2
These defendants include Target, Whole Foods Market, GNC,
Trader Joes, Barleans Organic Oils LLC, Paradise Herbs &
Essentials Inc., Honest Tea Inc., Time Warner Cable,
American Express, Bio Nutrition Inc., and many more.3
In this case, Hoffman chose to sue Nordic Naturals,
Inc. for its allegedly false and misleading advertisements for
fish oil supplements. Prior to bringing the present action,
Hoffman filed a similar lawsuit against Nordic, asserting
virtually identical claims based on the same set of facts. The
District Court dismissed that first lawsuit for failure to state a
claim. The District Court accordingly dismissed this second
lawsuit as procedurally barred by the first. For the following
reasons, we will affirm.
I.
In August 2012, Harold Hoffman filed a putative class
action lawsuit pro se against Nordic Naturals in New Jersey
state court for violations of the New Jersey Consumer Fraud
Act (“Hoffman I”).4 He alleged that Nordic misrepresented
Inc., No. 13-4936, 2013 WL 5773292 (D.N.J. Oct. 24, 2013);
Hoffman v. Nat. Factors Nutritional Prods., No. 12-7244,
2013 WL 5467106 (D.N.J. Sept. 30, 2013).
2
Hoffman v. Nordic Naturals, Inc., No. 2-14-cv-3291, ECF
No. 12, Ex. 2.
3
See id.
4
In Hoffman I, Hoffman alleged five claims under the New
Jersey Consumer Fraud Act, N.J. Stat. Ann. § 56:8-1 et seq.:
(i) unconscionable commercial practice; (ii) deception;
3
the “safety, quality, testing, constituent ingredients and
purity” of its product “Ultimate Omega,” a fatty acid fish oil
supplement.5 Specifically, Hoffman claimed that, contrary to
Nordic’s product labeling and marketing representations,
Ultimate Omega is “tainted by an undisclosed overdose of a
potentially harmful ingredient.”6 Thus, according to
Hoffman, Nordic’s representations that it is committed to
delivering the “world’s safest” omega oils and has achieved
“award-winning” purity levels are false.7 The putative class
consisted of all nationwide purchasers of Ultimate Omega
within a six-year period.8
Nordic removed Hoffman I to federal court pursuant to
the Class Action Fairness Act (“CAFA”).9 CAFA gives
federal district courts original jurisdiction over class actions
in which (i) the aggregate amount in controversy exceeds $5
million, (ii) there are at least 100 members in the putative
class, and (iii) there is minimal diversity between the
parties.10 Hoffman filed a motion in the District Court to
remand the case back to state court, which the District Court
(iii) fraud; (iv) false pretense, false promise and/or
misrepresentation; and (v) knowing concealment, suppression
and/or omission of material facts. Suppl. App. 31-33. He
also asserted claims for common law fraud, unjust
enrichment, breach of express warranty, and breach of
implied warranty of merchantability. Id. at 34-39.
5
Id. at 26, ¶ 19.
6
Id.
7
Id. at 22, ¶ 3.
8
[Id. at 28, ¶ 27.]
9
See 28 U.S.C. §§ 1441(a), 1453; id. § 1332(d).
10
Id. § 1332(d)(2), (d)(5)(b).
4
denied.11 Nordic moved for judgment on the pleadings under
Federal Rule of Civil Procedure 12(c).12 The District Court
dismissed Hoffman I without prejudice and gave Hoffman
leave to file an amended complaint within 30 days.13
But rather than file an amended complaint in the
District Court, Hoffman filed a new class action lawsuit
against Nordic in New Jersey state court within the 30-day
window given to amend Hoffman I. This second lawsuit
(“Hoffman II”) arose from facts identical to those in Hoffman
I—Hoffman’s purchase of Ultimate Omega in May 2012—
and it asserted virtually identical claims under the New Jersey
Consumer Fraud Act.14 But there was one significant
difference: the putative class size was substantially smaller.
Rather than a class consisting of all nationwide purchasers of
all available sizes of Ultimate Omega within a six-year
period, the putative class in Hoffman II was restricted to New
Jersey consumers who purchased only a 60-count bottle of
Ultimate Omega (as opposed to a 120-count or 180-count
bottle) within a one-year period.15 The purpose of this change
was, it seems, to reduce the amount recoverable and therefore
defeat federal jurisdiction.
Undeterred by Hoffman’s tactics, Nordic removed
Hoffman II back to the District Court. Nordic then moved to
11
[Suppl. App. 51-60.]
12
[See id. at 61.]
13
[Id.]
14
In Hoffman II, Hoffman alleged the same five claims under
the New Jersey Consumer Fraud Act. App. 37-40. He did
not raise any common law claims.
15
[App. 26.]
5
dismiss the complaint under Federal Rule of Civil Procedure
12(b)(6), claiming that Hoffman II was barred by New
Jersey’s entire controversy doctrine, which is New Jersey’s
“application of traditional res judicata principles.”16 In the
alternative, Nordic argued that the complaint failed to state a
claim under the New Jersey Consumer Fraud Act.17 Hoffman
moved for limited discovery to determine whether subject
matter jurisdiction existed under CAFA.18 He argued that,
given the significantly reduced class size in Hoffman II,
limited discovery would help the court ascertain whether the
amount in controversy exceeded the $5 million jurisdictional
minimum.19
The District Court granted Nordic’s motion and
dismissed Hoffman II with prejudice.20 It held that the action
was procedurally barred under New Jersey’s entire
controversy doctrine and, in the alternative, that Hoffman’s
claims under the New Jersey Consumer Fraud Act failed for
substantially the same reasons they failed in Hoffman I.21 The
District Court then dismissed as moot Hoffman’s motion for
limited discovery, explaining that Hoffman’s artificial
narrowing of the putative class was a “poorly disguised
16
Rycoline Prods., Inc. v. C & W Unlimited, 109 F.3d 883,
886 (3d Cir. 1997).
17
[See App. 5.]
18
[App. 74-78.]
19
[Id.]
20
[App. 14.]
21
[App. 1-13.]
6
attempt” to destroy CAFA jurisdiction.22 Hoffman appealed
to this Court.23
II.
Hoffman challenges (1) the District Court’s subject
matter jurisdiction under CAFA; (2) the District Court’s
application of New Jersey’s entire controversy doctrine; and
(3) the District Court’s alternative conclusion that the
complaint failed to state a claim upon which relief could be
granted. We review these issues de novo.24
22
Hoffman v. Nordic Naturals, Inc., No. 14-3291, 2015 WL
179539, at *7 (D.N.J. Jan. 14, 2015).
23
Nordic claims that Hoffman’s appeal was untimely. We
disagree. Hoffman’s notice of appeal was filed within 30
days of the District Court’s order dismissing Hoffman II. See
Fed. R. App. P. 4(a)(1)(A). Accordingly, we will deny
Nordic’s motion to dismiss for lack of appellate jurisdiction.
We have jurisdiction pursuant to 28 U.S.C. § 1291.
24
See Ricketti v. Barry, 775 F.3d 611, 613 (3d Cir. 2015);
Judon v. Travelers Prop. Cas. Co. of Am., 773 F.3d 495, 500
(3d Cir. 2014); Covington v. Int’l Ass’n of Approved
Basketball Officials, 710 F.3d 114, 118 (3d Cir. 2013).
7
A. Subject Matter Jurisdiction
Hoffman devotes much of his appeal to challenging
the District Court’s subject matter jurisdiction. According to
him, the District Court was required to make jurisdictional
findings of fact to ensure that the amount in controversy met
the jurisdictional minimum under CAFA. Hoffman is
incorrect.
It is true that a federal court may not rule on the merits
of an action without first ascertaining whether it has subject
matter jurisdiction to do so.25 But in Sinochem International
Co. v. Malaysia International Shipping Corp.,26 the Supreme
Court held that a court is not required to establish jurisdiction
before dismissing a case on non-merits grounds, since such a
dismissal “means that the court will not proceed at all to an
adjudication of the cause.”27 In other words, “jurisdiction is
vital only if the court proposes to issue a judgment on the
merits.”28 In Sinochem itself, the district court dismissed the
case on the ground of forum non conveniens, which the
Supreme Court explained is merely “a determination that the
merits should be adjudicated elsewhere.”29
In this case, the District Court dismissed Hoffman II on
claim preclusion grounds, which is not technically a judgment
25
See Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94
(1998).
26
549 U.S. 422 (2007).
27
Id. at 431 (internal quotation marks omitted).
28
Id. (internal quotation marks omitted).
29
Id. at 432.
8
on the merits.30 Rather, claim preclusion is merely “a
determination that the merits [have already been] adjudicated
elsewhere.”31 Indeed, for reasons of fairness, finality, and
judicial economy, claim preclusion prohibits a court from
reaching the merits of a claim. The District Court was
therefore permitted to “bypass” the jurisdictional inquiry in
favor of a non-merits dismissal on claim preclusion
grounds.32 Accordingly, we reject Hoffman’s subject matter
jurisdiction challenge on appeal.33
B. Claim Preclusion
The District Court operated under the assumption that
New Jersey’s entire controversy doctrine—“a state rule of
procedure that discourages successive litigation concerning
30
See Comm’r of Internal Revenue v. Sunnen, 333 U.S. 591,
597 (1948) (“If the doctrine of res judicata is properly
applicable . . . the case may be disposed of without reaching
the merits of the controversy.”).
31
Sinochem, 549 U.S. at 432.
32
See Davis Int’l, LLC v. New Start Grp. Corp., 488 F.3d
597, 604 (3d Cir. 2007) (holding that, per Sinochem, the
district court was not required to first establish jurisdiction
before dismissing the case on estoppel grounds).
33
The District Court reached the merits of Hoffman’s claims
in the alternative, and, per Sinochem, was required to
establish subject matter jurisdiction before doing so. But the
District Court properly held that Hoffman II should be
dismissed on claim preclusion grounds, and Sinochem tells us
that we can affirm on that non-merits dismissal without
addressing the merits-based dismissal at all.
9
the same subject matter”34—applies in this case. However, in
Paramount Aviation Corp. v. Agusta,35 we held that the entire
controversy doctrine “is not the right preclusion doctrine for a
federal court to apply when prior judgments were not entered
by the courts of New Jersey.”36 Upon conducting an
extensive Erie analysis, we concluded that federal, not New
Jersey, claim preclusion principles apply in successive federal
diversity actions.37 That is, when the first judgment is
rendered by a federal district court in New Jersey sitting in
diversity, as it was here, federal claim preclusion, not New
Jersey’s entire controversy doctrine, determines whether a
successive lawsuit is permissible.38 Indeed, courts in our
Circuit have routinely applied Paramount Aviation to reject
applying New Jersey’s entire controversy doctrine when the
first judgment was not rendered by a New Jersey state court.39
34
Ricketti, 775 F.3d at 612.
35
178 F.3d 132 (3d Cir. 1999).
36
Id. at 138.
37
Id. at 144-45; see also Gannon v. Am. Home Prods., Inc.,
48 A.3d 1094, 1104 (N.J. 2012) (concluding that because the
first judgment was rendered by a federal court, it “look[s] to
federal law to determine that judgment’s preclusive effect”
(citing Paramount, 178 F.3d at 145)).
38
See Paramount, 178 F.3d at 142 (“New Jersey’s main
justification for the doctrine, its interest in preserving its
judicial resources, is minimized when none of the prior
litigation took place in New Jersey state courts.”).
39
See, e.g., Bach v. McGinty, No. 12-5853, 2015 WL
1383945, at *2 (D.N.J. Mar. 25, 2015) (“The entire
controversy doctrine will preclude claims brought in federal
court only if the preclusive judgment came from a New
Jersey court . . . .”); Yantai N. Andre Juice Co. v. Kupperman,
10
The Supreme Court’s decision in Semtek International
Inc. v. Lockheed Martin Corp.40 creates an interesting
doctrinal question vis-à-vis Paramount Aviation.41 In Semtek,
the Supreme Court held that we apply the claim preclusion
law “that would be applied by state courts in the State in
which [a] federal diversity court sits,” unless “the state law is
incompatible with federal interests.”42 This seems to suggest
that we should apply New Jersey’s entire controversy
doctrine to judgments rendered by federal diversity courts in
New Jersey. Yet Paramount Aviation tells us that the entire
controversy doctrine is procedural rather than substantive and
that, therefore, consistent with Erie, we should apply federal
claim preclusion principles to federal diversity judgments.
We need not resolve this conflict, however, because under
either New Jersey or federal claim preclusion principles we
come to the same result.43
No. 05-CV-1049, 2005 WL 2338854, at *3 (D.N.J. Sept. 23,
2005) (“In this case, the issuing court in 2002 was the United
States District Court for the District of New Jersey.
Therefore, the New Jersey Entire Controversy Doctrine is
inapplicable.”).
40
531 U.S. 497 (2001).
41
We recently discussed this issue in Chavez v. Dole Food
Co., --- F.3d ---, 2016 WL X, at *Y n.130 (3d Cir. Sept. Z,
2016) (en banc) [placeholder].
42
Id. at 508-09.
43
This approach is consistent with the approach taken by
another panel of this Court when addressing a similar issue.
See McHale v. Kelly, 527 F. App’x 149, 151-52 (3d Cir.
2013).
11
“Both New Jersey and federal law apply res judicata or
claim preclusion when three circumstances are present: (1) a
final judgment on the merits in a prior suit involving (2) the
same parties or their privies and (3) a subsequent suit based
on the same cause of action.”44 The third factor “generally is
thought to turn on the essential similarity of the underlying
events giving rise to the various legal claims.”45
All three elements are present here.46 There is no
question that the parties in Hoffman I and Hoffman II are
identical. Likewise, the underlying event giving rise to
Hoffman’s claims is the same in both cases: Hoffman’s
exposure to Nordic’s advertising for Ultimate Omega and
consequent decision to purchase Ultimate Omega in New
Jersey in May 2012. Recognizing these similarities, Hoffman
seems to argue only that the District Court’s dismissal
44
In re Mullarkey, 536 F.3d 215, 225 (3d Cir. 2008) (internal
quotation marks omitted).
45
Blunt v. Lower Merion Sch. Dist., 767 F.3d 247, 277 (3d
Cir. 2014) (citations and internal quotations omitted).
46
We note that although Nordic technically raised an entire
controversy defense in its motion to dismiss, because the
substantive analysis for purposes of this case is functionally
the same, we will construe Nordic’s motion as raising a res
judicata defense. See Rycoline Prods., 109 F.3d at 886
(describing the entire controversy doctrine and res judicata as
“blood relatives”); Electro-Miniatures Corp. v. Wendon Co.,
889 F.2d 41, 43 n.5 (3d Cir. 1989) (describing the entire
controversy doctrine and res judicata as “inextricably
related”). We may affirm on any ground supported by the
record. Hildebrand v. Allegheny Cty., 757 F.3d 99, 104 (3d
Cir. 2014).
12
without prejudice of Hoffman I was not a “final” judgment.
We disagree.
The District Court dismissed Hoffman I without
prejudice for failure to state a claim – a decision on the merits
– and provided Hoffman 30-days’ leave to amend.47 When
that 30-day period expired, the District Court’s decision
became final. Indeed, we have held that a plaintiff can
convert a dismissal without prejudice into a final order by
“declar[ing] his intention to stand on his complaint.”48 By
opting to not amend his complaint in Hoffman I within the
time frame provided by the District Court, Hoffman elected to
“stand on his complaint,” thereby converting the District
Court’s dismissal into a final order.49 We reject Hoffman’s
47
For these purposes, a motion for judgment on the pleadings
under Rule 12(c) is identical to a motion to dismiss for failure
to state a claim under Rule 12(b)(6). See Turbe v. Gov’t of
V.I., 938 F.2d 427, 428 (3d Cir. 1991).
48
Borelli v. City of Reading, 532 F.2d 950, 951-52 (3d Cir.
1976).
49
See, e.g., Huertas v. Galaxy Asset Mgmt., 641 F.3d 28, 31
n.3 (3d Cir. 2011) (“[Plaintiff’s] failure to amend his
complaint in the time frame allotted by the District Court
reflects his intention to stand on his complaint, which renders
the District Court’s order final . . . .”); Berke v. Bloch, 242
F.3d 131, 135 (3d Cir. 2001) (concluding that the plaintiffs’
failure to reinstate their action within the 60-day leave given
to do so was “akin to standing on their complaint”); Batoff v.
State Farm Ins., 977 F.2d 848, 851 n.5 (3d Cir. 1992) (“[B]y
failing to move to amend within the 30 days granted by the
court, [plaintiff] elected to stand on his complaint. Thus,
13
contention that his filing of Hoffman II evidenced his
intention to not stand on his complaint in Hoffman I.
Hoffman cannot plausibly make this argument, which implies
that he intended to fix the flaws in Hoffman I, while at the
same time adamantly maintaining that Hoffman II is an
entirely different lawsuit based on entirely different claims.
If Hoffman had intended to fix the problems in Hoffman I, he
was required to file an amended complaint in the District
Court. Filing a new action in a different court does not
prevent the District Court’s order from ripening into a final
order. Thus, we conclude that all three elements of claim
preclusion are satisfied. Hoffman II is therefore procedurally
barred by Hoffman I.
We acknowledge that res judicata is an affirmative
defense that typically may not afford the basis for a Rule
12(b)(6) dismissal unless it is “apparent on the face of the
complaint.”50 If not apparent, the district court must either
deny the 12(b)(6) motion or convert it to a motion for
summary judgment and provide both parties an opportunity to
present relevant material.51 The ultimate purpose of this rule
is to avoid factual contests at the motion to dismiss stage.
However, we find this rule to be inapplicable to the
circumstances of this case.
There are no factual disputes here. Moreover, both the
District Court and the parties were not only aware of but
even if the order of dismissal was not final when entered, it
became final after 30 days.”).
50
Rycoline Prods., 109 F.3d at 886 (quoting Bethel v.
Jendoco Constr. Corp., 570 F.2d 1168, 1174 (3d Cir. 1978)).
51
Id. at 886-87.
14
intimately familiar with Hoffman’s previous lawsuit, since
the same judge adjudicated Hoffman I and ruled on those
claims. The ordinary requirement that a potential res judicata
defense appear “on the face” of Hoffman II is unnecessary
when the District Court was already aware of Hoffman I and
indeed entered a final judgment in that case. And, of course,
the two pleadings that are before us and were before the
District Court – the complaint in Hoffman I and the complaint
in Hoffman II – as well as the judgment in Hoffman I, are
matters of public record.52 We therefore find no error in the
District Court’s decision to look to these records and grant
Nordic’s 12(b)(6) motion to dismiss.
III.
For the foregoing reasons, we will affirm the District
Court’s dismissal of Hoffman II.
52
See Papasan v. Allain, 478 U.S. 265, 268 n.1 (1986)
(“Although this case comes to us on a motion to dismiss
under Federal Rule of Civil Procedure 12(b), we are not
precluded in our review of the complaint from taking notice
of items in the public record . . . .”); Pension Benefit Guar.
Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d
Cir. 1993) (“To decide a motion to dismiss, courts generally
consider only the allegations contained in the complaint,
exhibits attached to the complaint and matters of public
record.”); see also C.H. Robinson Worldwide, Inc. v.
Lobrano, 695 F.3d 758, 764 (8th Cir. 2012) (“Our
interpretation of the phrase ‘face of the complaint’ includes
public records and materials embraced by the complaint, and
materials attached to the complaint.” (citations omitted)).
15