Witte v. General Nutrition Corporation

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
PATRICK ANDREW WITTE,
Plaintiff,
v. Civil Action No. 15-0344 (ESH)
GENERAL NUTRITION CORPORATION
and GNC PARENT, LLC,
Defendants.
MEMORANDUM OPINION
Plaintiff Patrick Andrew Witte brings this action against defendants General Nutrition
Company and GNC Parent, LLC, alleging that defendants engaged in an unlawful trade practice
in violation of the District of Columbia Consumer Protection Procedures Act (“DCCPPA”), D.C.
Code § 28-3904 et seq., by selling several of their products with nonfunctional slack-fill.
Defendants removed the case to federal court, and now before this Court is plaintiff’s motion to
remand [ECF No. 14]. For the reasons stated herein, plaintiff’s motion will be granted and the
case will be remanded.
BACKGROUND
Plaintiff, a D.C. resident, filed suit on February 6, 2015, in the Superior Court of the
District of Columbia. (Complaint [ECF No. 1-2] (“Compl.”) ¶ 4.) Defendants are Pennsylvania
companies that “manufacture[], produce[], package[], and sell[] dietary supplements,” with
stores in the District of Columbia. (Id. ¶¶ 5-6, 8.) Plaintiff purchased two items – GNC Pro
Performance 100% Whey Protein and GNC Beyond Raw Re-Size – from one of defendants’
retail stores on December 16, 2014. (Id. ¶ 20.) The products’ containers were “completely
opaque” and “unable to be opened and inspected prior to purchase.” (Id. ¶ 21-22.) When
plaintiff did open the containers, he found that they contained several inches of “non-functional
slack-fill.” (Id. ¶ 26.) Plaintiff describes “slack-fill” as “the area of empty space in a consumer
bottle or packaging.” (Id. ¶ 14; see also 21 C.F.R. § 100.100(a) (“Slack-fill is the difference
between the actual capacity of a container and the volume of product contained therein.”).)
Plaintiff alleges that “non-functional slack-fill . . . is an unlawful and deceptive trade practice
pursuant to DC Code § 28-3904.” (Id. ¶ 38.) His suit, which he brings “on behalf of himself as
an individual and on behalf of the general public,” requests “[a]n injunction against GNC,
including that GNC be barred from producing, manufacturing and packaging its propriety
products with non-functional slack-fill in the District of Columbia.” (Id. ¶¶ 37, 43.) He also
requests “[a]dditional relief to restore to the consumer money which was acquired by means of
the unlawful trade practice in the District of Columbia,” punitive damages, attorney’s fees, and
“[a]ny other statutory relief the court determines proper under D.C. Code § 28-3905(k)(1).” (Id.
¶ 43.)
On March 10, 2015, Defendants filed a notice of removal. (Notice of Removal, [ECF
No. 1] (“Notice”).) With respect to the amount in controversy, defendants argued that
“[p]laintiff has alleged an undefined number of violations, which could, unto themselves, exceed
the sum of $75,000.” (Id. ¶ 10 (citation omitted).) Defendants also contend that “the value of
injunctive relief sought by Plaintiff would cost the Defendants more than $75,000.” (Id.) In
support of this latter proposition, defendants submitted an affidavit from a “Senior Litigation
Paralegal” who has “worked for General Nutrition Corporation for five . . . years.” (Aff. of
Kevin C. Macken [ECF No. 1-5] ¶ 1.) That affidavit only asserts that “[t]he injunctive relief
sought by Plaintiff would require Defendants to incur significant costs in order to change its
packaging procedures. The retrofit would entail revisions to the packaging procedures
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nationwide, and in all facilities. To do so would entail expenses well in excess of $75,000.00.”
(Id. ¶ 5.)
On April 7, 2015, plaintiff moved to remand this case back to D.C. Superior Court. (See
Mem. of P. & A. in Supp. of Pl.’s Mot. to Remand for Lack of Subject Matter Jurisdiction [ECF
No. 14] (“Pl.’s Mem.”).)
ANALYSIS
I. STANDARD OF REVIEW
A civil action filed in state court may only be removed to a United States district court if
the case could originally have been brought in federal court. 28 U.S.C. § 1441(a). Upon a
motion to remand a removed case to state court, the party opposing the motion “bears the burden
of establishing that subject matter jurisdiction exists in federal court.” Nat’l Consumers League
v. Bimbo Bakeries USA, 46 F. Supp. 3d 64, 69 (D.D.C. 2014) (quoting Int’l Union of Bricklayers
& Allied Craftworkers v. Ins. Co. of the W., 366 F. Supp. 2d 33, 36 (D.D.C. 2005)). Courts are
to construe the removal statute narrowly in order to avoid federalism concerns, Shamrock Oil &
Gas Corp. v. Sheets, 313 U.S. 100, 108 (1941), and any doubts about the existence of subject
matter jurisdiction are to be resolved in favor of remand. Hood v. F. Hoffman-La Roche, Ltd.,
639 F. Supp. 2d 25, 28 (D.D.C. 2009) (citing Gasch v. Hartford Accident & Indem. Co., 491
F.3d 278, 281-82 (5th Cir. 2007)).
II. WAIVER
Defendants argue that plaintiff has waived his right to move for remand by engaging in
discovery. (Defs.’ Mem. of P. & A. in Opp. to Pl.’s Mot. to Remand for Lack of Subject Matter
Jurisdiction [ECF No. 16] (“Defs.’ Opp.”) at 14.) Defendants explain that “Plaintiff has
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propounded and has granted Defendants an extension to April 23, 2015 to respond to broad
written discovery addressing liability and damages.” (Id.)
To be sure, “[a] plaintiff might waive the right to a remand on the basis of procedural
defects by supplementing a complaint, litigating a summary judgment motion, or proceeding in a
trial.” Busby v. Capital One, N.A., 841 F. Supp. 2d 49, 53 (D.D.C. 2012). However, “merely
engaging in offensive or defensive litigation (such as limited discovery) especially when the
plaintiff has already filed a motion for remand, does not forfeit the right to a remand.” Id. In
Busby, the Court found that “plaintiff ha[d] waived . . . her objection to the procedural defects in
the defendants’ notice of removal” where “plaintiff ha[d] litigated her claim . . . for well over a
year,” including filing several motions and pursuing an appeal. Id. at 53-54 (emphasis omitted).
Plaintiff in this case has, at most, exchanged some discovery with defendants, although the
extent of the exchange is unclear. (See Defs.’ Opp., Ex. C [ECF No. 16-3].) This limited
engagement falls far short of the activity that gave rise to waiver in Busby. Moreover, as
plaintiff correctly points out, his “motion to remand is not based upon a mere procedural defect,
but that as a matter of law the Court lacks subject matter jurisdiction to hear the claim.” (Pl.’s
Reply in Further Supp. of Pl.’s Mot. to Remand for Lack of Subject Matter Jurisdiction [ECF
No. 18] (“Pl.’s Reply”) at 11.) Objections based on subject matter jurisdiction cannot be
forfeited. Arbaugh v. Y & H Corp., 546 U.S. 500, 514 (2006). For these reasons, the Court finds
that plaintiff’s motion to remand has not been waived.
III. DIVERSITY JURISDICTION
A federal court has diversity jurisdiction when (1) there is complete diversity of
citizenship among the parties (that is, no plaintiff is a citizen of the same state as any defendant)
and (2) the “amount in controversy” is greater than $75,000. See 28 U.S.C. § 1332(a). There is
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no dispute that there is complete diversity of citizenship among the parties. (See Compl. ¶¶ 4-6.)
In their notice of removal, defendants identify two reasons why the amount in controversy
exceeds $75,000. First, they contend that plaintiff “alleged an undefined number of violations,
which could, unto themselves exceed the sum of $75,000.” (Notice ¶ 10.) Second, they argue
that “the value of the injunctive relief sought by Plaintiff would cost the Defendants more than
$75,000.” (Id.) Defendants, however, make no mention of their first rationale in their opposition
brief. The Court thus considers that argument waived 1 and will instead focus on defendants’
contention that “[t]his Court should deny Plaintiff’s Motion to Remand . . . because the cost to
Defendants of complying with the injunctive relief sought in this action exceeds $75,000.00.”
(Defs.’ Opp. at 1.)
Plaintiff’s first argument is that “the potential cost of the injunctive relief should not be
viewed from the defendant’s point of view, but rather from the perspective of the plaintiff.”
(Pl.’s Mem. at 8.) Although mentioned by neither party, there is a deep circuit split on this issue.
“The majority of federal courts have chosen to use the plaintiff viewpoint rule.” 15 Moore’s
Federal Practice § 102.109 (Matthew Bender 3d ed.) (citing cases from the Second, Third,
Eighth, and Eleventh Circuits). Under this approach, “[t]he test of the jurisdictional amount is
the value of the plaintiff’s right that is to be protected, and not the extent of the monetary loss or
damage that has been suffered or is threatened by the invasion.” Id. Several other circuits
“ha[ve] adopted the ‘either viewpoint’ approach.” Id. (citing cases from the Seventh, Tenth,
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The Court would reject defendants’ argument in any case. Plaintiff only alleges that he
“purchased two items containing non-functional slack-fill.” (Pl.’s Mem. at 7; see also Compl. ¶
20.) The DCCPPA only entitles him to three times his actual damages or $1,500 per violation,
whichever is greater. D.C. Code § 28-3905(k)(2)(A). The fact that other consumers may have
purchased the same products is irrelevant since “defendant[s] cannot aggregate the claims of the
individual customers in order to establish . . . the requisite amount in controversy.” Nat’l
Consumers League v. Flowers Bakeries, LLC, 36 F. Supp. 3d 26, 32 (D.D.C. 2014).
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Fourth, and D.C. Circuits). Courts that follow this view “may look either to the value of the right
that the plaintiff seeks to enforce or to protect, or to the cost to the defendants to remedy the
alleged denial of that right.” Id.
The D.C. Circuit appears to have adopted the “either-viewpoint” rule. In Tatum v. Laird,
444 F.2d 947 (D.C. Cir. 1971), rev’d on other grounds, 408 U.S. 1 (1972), the Circuit noted the
split of authorities and stated that “the test for determining the amount in controversy is the
pecuniary result to either party which the judgment would directly produce.” Id. at 951 n.6
(quoting Ronzio v. Denver & R. G. W. R. Co., 116 F.2d 604, 606 (10th Cir. 1940)). The Tatum
Court remanded because “the cost to the [defendant] of complying with [an injunction] might
well exceed $10,000.” Id. at 951. The Circuit has twice followed Tatum. See Smith v.
Washington, 593 F.2d 1097, 1099 (D.C. Cir 1978) (“In assessing whether a complaint satisfies
that standard, a court may look either to the value of the right that plaintiff seeks to enforce or to
protect or to the cost to the defendants to remedy the alleged denial.” (internal quotation marks
and footnote omitted)); Comm. for GI Rights v. Callaway, 518 F.2d 466, 472 (D.C. Cir 1975)
(“[T]he amount in controversy may be measured either by the ‘value of the right sought to be
gained by the plaintiff or the cost of enforcing that right to the defendant.’” (quoting Tatum, 444
F.2d at 951)). Plaintiff cites no Circuit precedent reversing Tatum and its progeny. 2 Instead, he
cites several D.C. district court cases that have refused to consider the cost of an injunction from
the defendant’s viewpoint. (Pl.’s Mem. at 8-9). These cases, however, identify no D.C. Circuit
2
The D.C. Circuit did question the Tatum rule in Fenster v. Schneider, 636 F.2d 765, 767 n.1
(D.C. Cir. 1980), noting that the Ninth Circuit had recently held that the “cost-to-defendant rule”
“was an impermissible way of circumventing” the Supreme Court’s non-aggregation cases –
Snyder v. Harris, 394 U.S. 332 (1969), and Zahn v. International Paper Co., 414 U.S. 291
(1973). However, the Fenster Court held that it did not need to “resolve any possible conflict . . .
at this time,” since the plaintiff had jurisdiction under a different statute. 636 F.2d at 767 n.1.
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or Supreme Court precedent overturning Tatum; 3 indeed, the majority of recent district court
cases in this jurisdiction adhere to the either-viewpoint rule. 4 This Court must follow Circuit
precedent and consider the cost of the injunction to defendant.
Plaintiff next argues that, even if this Court considers defendants’ compliance costs, the
relevant amount in controversy is not defendants’ total costs but rather the “portions of the
injunctive relief that run to the individual Plaintiff.” (Pl.’s Mem. at 9 (internal quotation marks
omitted).) As a practical matter, plaintiff argues that defendants should have “identif[ied] a sum
certain cost of injunctive relief . . . and divide[d] that sum certain by the amount of consumers in
the District of Columbia that [would] benefit from the relief.” (Id.) Failing to do so “render[ed]
the basis for removal speculative.” (Id.)
The D.C. Circuit has not ruled on the proper method for calculating a defendant’s
injunction costs in representative suits such as this one. (See Compl. ¶ 43 (“[Plaintiff] seeks the
following damages for himself and on behalf of the general public: An injunction against
[defendants] . . . .” (emphasis added)).) One district court, however, did consider the issue in the
context of a DCCPPA suit, brought on behalf of “each individual District of Columbia
3
See Nat’l Consumers League v. General Mills, Inc., 680 F. Supp. 2d 132, 140 (D.D.C. 2010);
Breakman v. AOL, LLC, 545 F. Supp. 2d 96, 105 (D.D.C. 2008); Nat’l Org. for Women v. Mut.
of Omaha Ins. Co., 612 F. Supp. 100, 107-08 (D.D.C. 1985). These three cases all make a
similar argument: that “viewing the jurisdictional amount issue from the defendant’s point of
view is simply another way of aggregating claims which is what the Supreme Court disallowed
in Snyder.” Nat’l Organization for Women, 612 F. Supp. at 108. This argument is problematic,
however, since Snyder was decided in 1969 (and the related case, Zahn, in 1973), but the D.C.
Circuit affirmed the either-viewpoint rule in 1975 and 1978 in Callaway and Smith, respectively.
Regardless, as is discussed infra, the aggregation concern expressed in these district court cases
is allayed by limiting defendants’ costs to those that run to each individual plaintiff.
4
Nat’l Consumers League v. Bimbo Bakeries USA, 46 F. Supp. 3d 64, 74 (D.D.C. 2014); Geo
Specialty Chems., Inc. v. Husisian, 951 F. Supp. 2d 32, 39-40 (D.D.C. 2013); Lurie v. Mid-Atl.
Permanente Med. Grp., P.C., 729 F. Supp. 2d 304, 332 (D.D.C. 2010); Wexler v. United Air
Lines, 496 F. Supp. 2d 150, 153 (D.D.C. 2007).
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consumer,” seeking both damages and injunctive relief related to AOL’s pricing policy.
Breakman, 545 F. Supp. 2d at 100. AOL calculated that “its time and resources [for complying
with the injunction] would total $ 255,800” and estimated that plaintiff’s “complaint [would]
reach 28,451 consumers in the District of Columbia.” Id. at 100, 106. The Court held that
“when a court looks to the compliance costs of a defendant to determine the amount in
controversy in an action where separate and [distinct] claims are presented on behalf of multiple
parties, ‘the cost running to each plaintiff must meet the amount in controversy requirement.’”
Id. at 106 (quoting Lovell v. State Farm Mut. Auto. Ins. Co., 466 F.3d 893, 898 (10th Cir. 2006)).
Since “the cost running to each District of Columbia consumer [was] $ 8.99,” the Court
remanded the suit. Id.
This Court is persuaded by Breakman. As Judge Posner explained in In re Brand Name
Prescription Drugs Antitrust Litig., 123 F.3d 599, 610 (7th Cir. 1997), “[w]hatever the form of
relief sought, each plaintiff’s claim must be held separate from each other plaintiff’s claim from
both the plaintiff’s and the defendant’s standpoint.” As such, the relevant calculation is “the cost
to each defendant of an injunction running in favor of one plaintiff.” Id.; see also McCauley v.
Ford Motor Co., 264 F.3d 952, 960-61 (9th Cir. 2001) (holding that “the amount in controversy
requirement cannot be satisfied by showing that the fixed administrative costs of compliance
exceed $ 75,000” because to hold otherwise would be “fundamentally violative of the principle
underlying the jurisdictional amount requirement – to keep small diversity suits out of federal
court”). Defendants’ argument – that this Court should consider their total compliance costs in
calculating the amount in controversy – would circumvent the non-aggregation principle
articulated in Snyder and Zahn. See Zahn, 414 U.S. at 294 (“When two or more plaintiffs,
having separate and distinct demands, unite for convenience and economy in a single suit, it is
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essential that the demand of each be of the requisite jurisdictional amount; but when several
plaintiffs unite to enforce a single title or right, in which they have a common and undivided
interest, it is enough if their interests collectively equal the jurisdictional amount.” (quoting Troy
Bank v. G.A. Whitehead & Co., 222 U.S. 39, 40-41 (1911))). Defendants do not dispute that
plaintiff and the members of the public he represents have separate and distinct claims for relief
against defendants. See Flowers Bakeries, 36 F. Supp. 3d at 32 (“[C]ourts within this district
have unanimously concluded that so long as individual consumers are eligible to recover
individual damages, the consumers do not have a ‘common and undivided interest’ that may be
aggregated under the non-aggregation principal announced in Snyder.”). Thus, for defendants to
carry their burden to establish the amount in controversy, they must show that the costs of the
injunction that run to each plaintiff individually exceed the jurisdictional amount. They have not
attempted to do so. The Court, therefore, cannot exercise jurisdiction over this case. 5
CONCLUSION
For the foregoing reasons, the Court will grant plaintiff’s motion to remand [ECF No.
14]. A separate Order accompanies this Memorandum Opinion.
/s/ Ellen Segal Huvelle
ELLEN SEGAL HUVELLE
United States District Judge
Date: May 13, 2015
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Plaintiff argues in the alternative that the Macken Affidavit is insufficiently detailed for this
Court to find that defendants’ total costs would exceed $75,000. (Pl.’s Mem. at 10-11.) In light
of today’s holding, the Court need not reach this argument.
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