Buscema v. Wal-Mart Stores E. LP

• Decision Date: 16 April 2020
• Docket Number: Case No. 19-CV-01089-MV-KK
• Parties: Rita BUSCEMA, individually, and on behalf of all others similarly situated, Plaintiff, v. WAL-MART STORES EAST LP, Wal-Mart Stores, Inc., Spectrum Brands, Inc., and The Black & Decker Corporation, Defendants.
• Court: U.S. District Court — District of New Mexico

485 F.Supp.3d 1319

Rita BUSCEMA, individually, and on behalf of all others similarly situated, Plaintiff,

v.WAL-MART STORES EAST LP, Wal-Mart Stores, Inc., Spectrum Brands, Inc., and The Black & Decker Corporation, Defendants.

Case No. 19-CV-01089-MV-KK

United States District Court, D. New Mexico.

Signed April 16, 2020

David A. Freedman, Christopher A. Dodd, Freedman Boyd Hollander Goldberg Urias & Ward P.A., Albuquerque, NM, Floyd D. Wilson, Floyd D. Wilson, P.C., Cedar Crest, NM, for Plaintiff.

Jennifer G. Anderson, Emil Kiehne, Jeffrey Adam Wright, Modrall Sperling Roehl Harris & Sisk PA, Albuquerque, NM, for Defendants.

MEMORANDUM OPINION AND ORDER

MARTHA VÁZQUEZ, UNITED STATES DISTRICT JUDGE

THIS MATTER is before the Court on Plaintiff Rita Buscema's ("Plaintiff's") Motion for Remand and Supporting Memorandum. Doc. 7. Defendants Wal-Mart Stores East LP, Wal-Mart Stores, Inc., Spectrum Brands, Inc., and The Black & Decker Corporation ("Defendants") filed a response in opposition [Doc. 12] and Plaintiff filed a reply [Doc. 13]. Having considered the briefs, exhibits, relevant law, and being otherwise fully informed, the Court finds that the motion is well-taken in part and will be GRANTED IN PART .

BACKGROUND

I. Plaintiff's Complaint

On September 19, 2019, Plaintiff filed a Class Action Complaint for Breach of Consumer Protection Statutes and for Injunctive Relief in the Second Judicial District Court in Bernalillo County. See Doc. 1 at Ex. 1 ("Complaint"). The Complaint alleges that Plaintiff purchased what was advertised as a Black & Decker coffeemaker at a Wal-Mart store in Albuquerque. Complaint at ¶ 3–4. Plaintiff later learned, however, that the coffeemaker was not actually a Black & Decker product but was instead produced and warranted by a company called Spectrum. Id. at ¶ 7. She alleges that Defendants "deceptively and falsely stated and represented that the coffeemaker was a Black & Decker product" and that these "false and deceptive statements" allowed Defendants to charge customers, including Plaintiff, more money. Id. at ¶¶ 5 and 8. In so doing, Plaintiff alleges that Defendants violated two New Mexico laws: (1) the New Mexico Unfair Practices Act ("UPA"), NMSA 1978 § 57-12-1 et seq. ; and (2) the New Mexico False Advertising Act ("FAA"), NMSA 1978 § 57-15-1 et seq. Id. at ¶¶ 18–20.

The Complaint ultimately asserts two claims for relief. First, Plaintiff asserts an individual claim for money damages in the amount of $300 pursuant to NMSA 1978 § 57-12-10B. Id. at ¶ 30. Second, Plaintiff asserts a class claim for injunctive relief on behalf of a class that she is seeking to certify under NMRA (2019) 1-023C(4)(a). Id. at ¶¶ 22 and 30. The proposed class includes "all individual purchasers, for consumer purposes, of one or more Black & Decker-branded small kitchen appliances at any Wal-Mart store in the states of California, Florida, Hawaii, Kansas, Michigan, Nevada, New Hampshire, New Mexico, New York, Ohio, Tennessee, Texas, Utah or Vermont at any time within four years of the filing of this Complaint through the date of final approval of class certification." Id. at ¶¶ 22 and 30. Plaintiff requests an injunction on behalf of the class prohibiting Defendants from selling "Spectrum-produced/Black & Decker-branded small kitchen appliances" in the subject states "unless and until the Defendants should change their labeling of such small kitchen appliances so as to explicitly and unambiguously make clear to consumers that such small kitchen appliances are Spectrum products, warranted only by Spectrum, and are not Black & Decker products." Id. at ¶ 30. Importantly, Plaintiff explains that "[a]lthough [she] is now aware of Defendants’ false and deceptive conduct ... the class [she] seeks to represent, and the general public, would be significantly and irreparably harmed should Defendants be allowed to continue their false and deceptive conduct." Id. at ¶ 17. In addition to the requested injunction, Plaintiff seeks an award of costs and attorney fees on behalf of the proposed class. Id. at ¶¶ 23 and 30.

II. Defendants’ Notice of Removal

On November 21, 2019, Defendants filed a Notice of Removal removing the case from the Second Judicial District to this Court under 28 U.S.C. §§ 1332, 1441, and 1446. See Doc. 1 at 1. In the Notice, Defendants assert that this Court has subject-matter jurisdiction over Plaintiff's class action claim for injunctive relief under 28 U.S.C. § 1332(d)(2), the Class Action Fairness Act ("CAFA"), and over Plaintiff's individual claim for money damages under 28 U.S.C. § 1332(a), the federal diversity jurisdiction statute. See Doc. 1 at 3, 11.

Defendants first address the Court's jurisdiction under CAFA. Id. at 3–11. They submit that the lawsuit qualifies as a "class action" for the purposes of CAFA because it seeks to certify a class of plaintiffs under New Mexico law and is therefore filed under the state statute "authorizing an action to be brought by 1 or more representative persons as a class action." Id. at 4 (citing 28 U.S.C. § 1332(d) ). Defendants further submit that the suit satisfies CAFA's minimal diversity requirement because Plaintiff is a citizen of New Mexico while at least one defendant is not: Wal-Mart Stores East LP, for example, is a citizen of Delaware and Arkansas. Id. at 5 (citing § 1332(d)(2)(A) ). Last, Defendants assert that the suit satisfies CAFA's $5,000,000 amount in controversy requirement. Id. at 6. First, they argue that it is "eminently possible that over $5 million from attorneys’ fees alone would be at issue." Id. at 8. Defendants point to the fact that Plaintiff is seeking to recover such fees under the UPA and the fact that Plaintiff's counsel sought $2.3 million in attorneys’ fees in a previous case against Defendants, Puma v. Wal-Mart Stores, Inc., No. D-202-CV-2013-06321, 2013 WL 12450176 (N.M. Dist. 2013), that dealt only with a single coffeemaker model and involved a much smaller proposed class limited to customers in the State of New Mexico. Id. at 7. By contrast, Defendants argue, the instant case involves over 700 independent models of "small kitchen appliances" and a proposed class of customers covering 14 states. Id.

Defendants additionally argue that the cost of Plaintiff's proposed injunctive relief would exceed $5 million. See Doc. 1 at 9–11. They submit that an estimated 2.6 million Spectrum appliances would be affected and that a ban on sales would cost over $5,000,000 because each appliance sells for well over the price of $1.88 that it would take to reach that threshold amount. See id. at 9. Defendants further argue that the less intrusive remedy of applying corrective stickers to the appliances would still cost over $5,000,000 because "the cost of affixing corrective [stickers] to each unit is at least $2 per unit." Id. at 10.

Defendants next address the Court's jurisdiction over Plaintiff's individual claim under 28 U.S.C. § 1332(a). Id. at 11. First, they submit that the suit satisfies § 1332(a) ’s "complete diversity" requirement because neither Plaintiff nor the members of the proposed class are citizens of any of the Defendants’ states of citizenship: Delaware, Wisconsin, Maryland, and Arkansas. Id. Next, Defendants argue that the individual claim satisfies § 1332(a) ’s "amount in controversy" requirement because "Plaintiff Buscema's own claim bears a value that exceeds $75,000." Id. In support, Defendants point to the fact that Plaintiff's counsel sought the recovery of attorneys’ fees at a rate of $400 per hour in the previous case against Defendants, ultimately requesting $2.3 million for time billed. Id. at 12. Moreover, because the class in that case failed to recover, counsel sought the attorneys’ fees solely on behalf of the two named plaintiffs, the only "prevailing parties" for the purposes of fee allocation under the UPA. Id. Defendants accordingly argue that there is an "eminent possibility ... that Plaintiff and her counsel will seek to recover more than $75,000 in fees solely attributable to her own claim." Id.

III. Plaintiff's Motion for Remand

On December 20, 2019, Plaintiff filed the instant Motion for Remand. Doc. 7. In it, she asks the Court to remand this case back to the Second Judicial District under 28 U.S.C. § 1447 on the ground that the Court lacks subject-matter jurisdiction over her claims. Id. at 1. First, Plaintiff argues that her class action claim must be remanded because she lacks Article III standing to pursue it in federal court. Id. at 3. More specifically, she argues that she lacks standing to pursue injunctive relief on behalf of the proposed class because, having discovered Defendants’ deceptive practices, she is no longer at risk of being harmed by their conduct. Id. In support, Plaintiff points to caselaw holding that "claims for prospective relief require a continuing injury" Id. at 4 (quoting Baca v. Colorado Dept. of State , 935 F.3d 887 (10th Cir. 2019) ). She also points to cases holding that a named plaintiff in a class action must have standing (citing Warth v. Seldin , 422 U.S. 490, 502, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) ) and that a plaintiff must have Article III standing with respect to each form of relief sought in federal court (citing Baca , 935 F.3d at 908 ). Id.

Second, Plaintiff argues that this Court also lacks subject-matter jurisdiction over her individual claim because that claim does not meet the $75,000 amount in controversy requirement in 28 U.S.C. § 1332(a). Id. at 7. She argues that while attorneys’ fees may be included in the amount in controversy, in a class action context such fees must be "allocated as among all potential class members on a pro rata basis and cannot be allocated specifically to the individual plaintiff." Id. (citing Martin v. Franklin Capital Corp. , 251 F.3d 1284, 1293 (10th Cir. 2001) abrogated on other grounds by Dart Cherokee Basin Operating Co. v. Owens , 574 U.S. 81, 135 S.Ct. 547, 190 L.Ed.2d 495 (2014) ). Because the proposed class...