Gallagher v. Johnson & Johnson Consumer Cos.

• Decision Date: 14 March 2016
• Docket Number: Civil No. 15-6163 (JBS/AMD)
• Citation: 169 F.Supp.3d 598
• Court: U.S. District Court — District of New Jersey
• Parties: Jillian Gallagher, on behalf of herself and all others similarly situated, Plaintiff, v. Johnson & Johnson Consumer Companies, Inc., Defendant.

169 F.Supp.3d 598

Jillian Gallagher, on behalf of herself and all others similarly situated, Plaintiff,

v.Johnson & Johnson Consumer Companies, Inc., Defendant.

Civil No. 15-6163 (JBS/AMD)

United States District Court, D. New Jersey.

Signed March 14, 2016

Filed March 15, 2016

John W. Trimble, Esq., TRIMBLE & ASSOCIATES, Washington Professional Campus, 900 Route 168, Suites B1-B2, Turnersville, NJ 08012, and Natalie Finkelman Bennett, Esq., James C. Shah, Esq., SHEPHERD, FINKELMAN, MILLER & SHAH, LLP, 475 White Horse Pike, Collingswood, NJ 08107, Attorneys for Plaintiff Jillian Gallagher, on behalf of herself and all others similarly situated.

David R. Kott, Esq., McCARTER & ENGLISH, LLP, Four Gateway Center, 100 Mulberry Street, P.O. Box 652, Newark, NJ 07101, Attorney for Defendant Johnson & Johnson Consumer Companies, Inc.

OPINION

SIMANDLE

, Chief Judge:

I. INTRODUCTION

This is a putative consumer class action suit against Defendant Johnson & Johnson Consumer Companies, Inc. (“Johnson & Johnson”) for alleged deceptive labeling and advertising practices related to their line of BEDTIME®> products, which are marketed to help babies sleep better. The case, which alleges violations of the New Jersey Consumer Fraud Act (“NJCFA”), N.J.S.A. § 56:8-1, et seq.

, was filed in New Jersey state court, but was subsequently removed by Defendant to this Court.

Presently before the Court is Plaintiff's motion to remand the case back to the Superior Court [Docket Item 14], and Defendant's motion to transfer the case to the Central District of California [Docket Item 4]. Because the case does not meet the jurisdictional requirements of the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. § 1332(d)(2)

, the Court will grant Plaintiff's motion and remand this case back to the Superior Court. Defendant's motion to transfer will be dismissed as moot.

II. BACKGROUND

In this putative class action, Plaintiff Jillian Gallagher alleges that Defendant Johnson & Johnson engaged in false and deceptive sale and advertising practices with its JOHNSON's® BEDTIME® Bath and JOHNSON's® BEDTIME® Lotion products (collectively, “Bedtime products” or “Products”), which are marketed for babies. Specifically, Plaintiff alleges that the Bedtime products, which are sold at a premium over Defendant's other baby washes and lotions, falsely advertise that they are “clinically proven” to “help baby sleep better.” Plaintiff alleges that no studies show that the Bedtime products are clinically proven to provide any results, and Defendant has no basis for its claim. (Compl. [Docket Item 1] ¶¶ 1-3.)

The Complaint alleges a cause of action under New Jersey's Consumer Fraud Act, N.J.S.A. § 56:8-1, et seq.

Johnson & Johnson is a New Jersey company, and Plaintiff, a New Jersey consumer who purchased Defendant's products in New Jersey, filed the case in the Superior Court of New Jersey, Camden County, Law Division. The putative class is defined in the Complaint as

[a]ll New Jersey citizens who purchased the Bedtime Products within New Jersey, not for resale or assignment.

(Compl. ¶ 48.)

Three other putative class action complaints alleging deceptive advertising practices for BEDTIME® products were also filed against Defendants in federal district courts in California, Illinois, and New York:

Real v. Johnson & Johnson Consum er Co., No. 15–cv–5025 (C.D.Cal. July 2, 2015); Leiner v. Johnson & Johnson Consumer Co., No. 15–cv–5876 (N.D.Ill. July 2, 2015); and Hidalgo v. Johnson & Johnson Consumer Co., No. 15–cv–5199 (S.D.N.Y. July 2, 2015).¹ The suits contain substantially similar allegations and each seeks relief under its respective state's consumer statute. The instant case was the only one filed in state court.

Invoking federal jurisdiction under the Class Action Fairness Act, 28 U.S.C. § 1332(d)(2)

, Johnson & Johnson removed the suit to the District of New Jersey under 28 U.S.C. § 1446, and shortly thereafter, filed a motion to transfer this case to the Central District of California [Docket Item 4]. Plaintiff opposed the transfer [Docket Item 16], and filed a motion to remand the case back to state court [Docket Item 17], asserting that the requirements for federal jurisdiction under CAFA are not satisfied because the parties are all New Jersey citizens.

Because this Court's subject matter jurisdiction has been placed in dispute, Plaintiff's remand motion will be decided first.

III. PLAINTIFF's MOTION TO REMAND

A. The Removal Statute and Requirements for Diversity Jurisdiction Under CAFA

The removal statute, 28 U.S.C. § 1441(a)

, permits only state-court actions that originally could have been filed in federal court to be removed. 28 U.S.C. § 1441(a) (“[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed ... to the district court of the United States for the district and division embracing the place where such action is pending.”); see also Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987).

Because Gallagher's Complaint contains only claims under the NJCFA, there is no federal question jurisdiction under 28 U.S.C. § 1331

. At issue is whether the Court has diversity jurisdiction to hear Plaintiff's claims.

Diversity jurisdiction in class action cases is governed by the Class Action Fairness Act of 2005. Congress passed CAFA to put an end to certain allegedly abusive practices by plaintiffs' class counsel, and because it was concerned that class actions were too often precluded from federal court by unnecessary procedural requirements. See S. Rep. No. 109–14, at 43

, 2005 U.S.C.C.A.N. 3, 41 (2005); see also Kaufman v. Allstate New Jersey Ins. Co., 561 F.3d 144, 148–49 (3d Cir.2009). CAFA sought to address these problems by amending the federal diversity statute to “broaden[ ] federal diversity jurisdiction over class actions with interstate implications.” Lowery v. Alabama Power Co., 483 F.3d 1184, 1193 (11th Cir.2007).

Before the enactment of CAFA, courts looked to 28 U.S.C. § 1332(a)

to determine whether they had diversity jurisdiction over class actions, and required that each named member of the plaintiff class be diverse from each of the defendants. See, e.g., Snyder v. Harris, 394 U.S. 332, 340, 89 S.Ct. 1053, 22 L.Ed.2d 319 (1969). CAFA eliminated the “complete diversity” requirement of § 1332(a) and inserted a new subsection, § 1332(d), which lowered the threshold requirements for jurisdiction in certain class actions.

Section 1332(d)(2)

provides federal district courts with “original jurisdiction” over a case when three requirements are met: (1) an amount in controversy that exceeds $5,000,000; (2) minimally diverse parties; and (3) a class consisting of at least 100 or more members (the numerosity requirement). Standard Fire Ins. Co. v. Knowles, ––– U.S. ––––, 133 S.Ct. 1345, 1348, 185 L.Ed.2d 439 (2013). With respect to the second requirement, known as the “minimal diversity” requirement, CAFA provides that diversity is satisfied if “any member of a class of plaintiffs is a citizen of a State different from any defendant.” 28 U.S.C. § 1332(d)(2)(A). In contrast to the complete diversity requirement of § 1332(a), § 1332(d)(2) requires “only one member of the plaintiff class—named or unnamed—[to] be diverse from any one defendant” for diversity to be satisfied. Lowery v. Alabama Power Co., 483 F.3d 1184, 1193 n. 24 (11th Cir.2007).

CAFA also provides several exceptions to federal court jurisdiction, one of which is called the “home state” exception. Under this exception, the district court must decline to exercise jurisdiction where “two-thirds or more of the members of all proposed plaintiff classes in the aggregate, and the primary defendants, are citizens of the State in which the action was originally filed.” 28 U.S.C. § 1332(d)(2)(4)(B)

. If a class action case falls into this category, a district court must remand it back to the state court where it was originally filed. See Vodenichar v. Halcon Energy Properties, Inc., 733 F.3d 497, 503–04 (3d Cir.2013) ; Dicuio v. Brother Int'l Corp., No. 11–1447, 2011 WL 5557528, at *2 (D.N.J. Nov. 15, 2011).

B. Standard of Review and Burden of Persuasion

Although removal statutes must generally be strictly construed, with any doubt to be resolved in favor of remand, see, e.g., Brown v. Jevic, 575 F.3d 322, 326 (3d Cir.2009)

, the presumption against removal does not apply to class actions invoking jurisdiction under the Class Action Fairness Act. Congress enacted CAFA to facilitate class actions in federal court, and its “provisions should be read broadly, with a strong preference that interstate class actions should be heard in a federal court if properly removed by any defendant.” Dart Cherokee Basin Operating Co., LLC v. Owens, ––– U.S. ––––, 135 S.Ct. 547, 554, 190 L.Ed.2d 495 (2014) (quoting S. Rep. No. 109-14, p. 43 (2005)).

To decide whether CAFA's jurisdictional requirements are satisfied, a court will consider the allegations in the complaint and in the defendant's notice of removal. Judon v. Travelers Property Cas. Co. of Am., 773 F.3d 495, 500 (3d Cir.2014)

; Frederico v. Home Depot, 507 F.3d 188, 196 (3d Cir.2007). The party asserting jurisdiction—here, Defendant Johnson & Johnson—has the burden of demonstrating that the case is properly before the federal court. Hertz Corp. v. Friend, 559 U.S. 77, 96–97, 130 S.Ct. 1181, 175 L.Ed.2d 1029 (2010) (citations omitted); Judon v. Travelers Property Cas. Co. of Am., 773 F.3d 495, 500 (3d Cir.2014). And, where relevant facts are in dispute, the removing party must justify its allegations by a preponderance of the evidence. Frederico v. Home Depot, 507 F.3d 188, 194 (3d Cir.2007). However, once jurisdiction has been established, the burden shifts to the party seeking remand to show that an exception requiring remand—in this case, the home state exception to CAFA—applies. Kaufman v. Allstate N.J. Ins. Co., 561 F.3d 144, 153 (3d Cir.2009) ; see also Breuer v....