Ferrari v. Best Buy Co.
| Decision Date | 28 September 2016 |
| Docket Number | Civil No. 14-2956 (DWF/FLN) |
| Parties | Rick Ferrari, on behalf of himself and all others similarly situated, Plaintiff, v. Best Buy Co., Inc.; Best Buy Stores, L.P.; and Bestbuy.com, LLC, Defendants. |
| Court | U.S. District Court — District of Minnesota |
Gregory R. Merz, Esq., Kathryn J. Bergstrom, Esq., Dean C. Eyler, Esq., and Richard C. Landon, Esq., Gray Plant Mooty Mooty & Bennett, PA; Hayward J. Kaiser, Esq., Mitchell Silberberg & Knupp LLP; Francis O Scarpulla, Esq., and Patrick B. Clayton, Esq., Law Offices of Francis O. Scarpulla; and Jonathan Shub, Esq., and Scott A George, Esq., Seeger Weiss LLP, counsel for Plaintiff.
Elliot S. Kaplan, Esq., Stephen P. Safranski, Esq., Katherine S. Barrett Wiik, Esq., and Cassandra B. Merrick, Esq., Robins Kaplan LLP, counsel for Defendants.
This matter came before the Court on March 18, 2016, pursuant to a Motion to Dismiss with Prejudice Pursuant to Rule 41(a)(2) filed by Plaintiff Rick Ferrari. (Doc. No. 89.) Defendants Best Buy Co., Inc., Best Buy Stores, L.P., and Bestbuy.com, LLC (collectively "Best Buy") oppose the Motion. (Doc. No. 94.) For the reasons set forth below, the Court grants Ferrari's Motion and dismisses the case with prejudice.
Ferrari filed suit against Best Buy claiming that Best Buy's marketing and labeling of its Insignia-brand LED televisions violated various Minnesota and Massachusetts consumer protection statutes. (Doc. No. 34.) Ferrari proposed to pursue a claim on behalf of a nationwide class of purchasers of all models of Insignia LED televisions and on behalf of a subclass of Massachusetts purchasers. (Id.) Best Buy moved to dismiss Ferrari's claims under Federal Rule of Civil Procedure 12(b)(1), (6) and Rule 9(b). (Doc. No. 16.)
On March 18, 2015, Magistrate Judge Franklin L. Noel issued a Report and Recommendation recommending the dismissal of most of Ferrari's claims for lack of standing under Article III. (Doc. No. 48 at 9-13.) Specifically, Magistrate Judge Noel concluded that Ferrari lacked standing to bring claims for damages over Insignia LED television models that he never purchased. (Id.) Magistrate Judge Noel also concluded that Ferrari lacked standing to bring consumer protection claims under Minnesota law because he did not reside in Minnesota or suffer injury in Minnesota. (Id. at 15-16.) Magistrate Judge Noel did not recommend the dismissal of Ferrari's claims for injunctive relief under Massachusetts law. (Id. at 16-28.) Claims for injunctive relief and damages under Massachusetts law on behalf of a putative class of Massachusetts purchasers of one model of Insignia LED televisions remained. (Id.) Judge Michael J. Davis adoptedMagistrate Judge Noel's Report and Recommendation in its entirety on May 12, 2015. (Doc. No. 66.)1
Subsequent to Judge Davis's Order, the parties engaged in discovery on Ferarri's remaining claims. During discovery, Ferrari claims that he learned that Best Buy sold approximately 600-700 models of the television purchased by Ferrari and that each television was purchased for just over $300. (Doc. No. 90 ¶¶ 4, 7.) Based on these numbers, Ferrari states that he "no longer believes that it is worthwhile to pursue his claim on behalf of the putative class or individually" and believes that the Court does not have continuing jurisdiction under the Class Action Fairness Act ("CAFA"), 28 U.S.C. § 1332(d). (Doc. No. 89 at 1-2.) Ferrari thereafter sought a potential stipulation for voluntary dismissal with prejudice. (Doc. No. 91.) The parties were unable to agree upon a stipulation. (Id.)
With no stipulation, Ferrari filed a Motion to Dismiss with Prejudice Pursuant to Rule 41(a)(2). Best Buy does not oppose the dismissal of Ferrari's case with prejudice, but wishes the Court to impose two conditions on the dismissal of the action. (Doc. No. 94 at 8.) First, Best Buy contends that it is entitled to its legal fees accrued since at least July 21, 2015. (Id.) Second, Best Buy contends that the Court should require Ferrari's counsel to file any new litigation concerning "'LED TV' consumer-fraudlitigation" against Best Buy or any of its affiliates concerning the labeling and marketing of Insignia-branded televisions in the District of Minnesota.
The Court first addresses whether it has subject matter jurisdiction over the case. In his motion, Ferrari raises the possibility that Judge Davis's prior ruling on Best Buy's Motion to Dismiss resulted in a limited claim that falls short of the $5 million matter-in-controversy requirement under CAFA. (Doc. No. 89 at 2.)
At any time, any party or the court may raise the issue of subject matter jurisdiction. GMAC Commercial Credit LLC v. Dillard Dep't Stores, Inc., 357 F.3d 827, 828 (8th Cir. 2004). "Even in the absence of a challenge from any party, courts have an independent obligation to determine whether subject matter jurisdiction exists." Sac & Fox Tribe of the Miss. in Iowa, Election Bd. v. Bureau of Indian Affairs, 439 F.3d 832, 836 (8th Cir. 2006).
The Court's jurisdiction in this case is invoked under CAFA, which provides for federal subject matter jurisdiction for certain class actions. Specifically, 28 U.S.C. § 1332(d)(2) provides that a district court has original jurisdiction of any class action in which "the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs," and, relevant here, in which "any member of a class of plaintiffs is a citizen of a State different from any defendant[.]" Section 1332(d) applies to any action "filed under rule 23 of the Federal Rules of Civil Procedure or similar Statestatute or rule of judicial procedure" and applies to any class action "before or after the entry of a class certification order by the court with respect to that action." 28 U.S.C. § 1332(d)(1)(B), (d)(8).
Courts in this District have been divided over whether subsequent developments in class action litigation deprive a federal court of subject matter jurisdiction to continue the litigation. In Avritt v. Reliastar Life Ins. Co., No. 07-CV-1817 (JNE/JJG), 2009 WL 1703224 at *2 (D. Minn. June 18, 2009) (Ericksen, J.), the court concluded that it was deprived of subject matter jurisdiction after class certification had been denied. The Court reasoned that CAFA applies only before or after the entry of a class certification order, which is defined only as "an order approving class certification." Id. (citing 28 U.S.C. § 1332(d)(1)(C)). Thus, to give meaning to that definition, jurisdiction cannot continue after an entry of an order denying class certification, which does not fit the definition of "class certification order." Id. Conversely, in Delsing v. Starbucks Coffee Corp., No. 08-CV-1154 (PJS/JSM), 2010 WL 1507642 at *2 (D. Minn. Apr. 14, 2010) (Schiltz, J.), the court concluded that the denial of class certification did not deprive the court of subject matter jurisdiction. Instead, the court concluded that "jurisdiction turns on whether a lawsuit is filed as a class action[.]" Id. The court further concluded that to find that federal jurisdiction depends on the outcome of a class-certification motion would be inconsistent with the general principal that "the existence of federal jurisdiction is determined as of the time the complaint is filed." Id. (citing Rheuport v. Ferguson, 819 F.2d 1459, 1467 n.13 (8th Cir. 1987)) (quotations and alterations omitted).
Neither of the two above opinions bears directly on the facts present here because no class certification order has been issued. Nonetheless, Ferrari believes that the limitation of the putative class claims he may pursue—which drops this case below the amount-in-controversy threshold necessary for jurisdiction under § 1332(d)—similarly requires the Court to relinquish jurisdiction. The Court disagrees.
As a general principal, this Court's jurisdiction is determined at the time of filing. Rheuport, 819 F.2d at 1467, n.13. The record is clear that the allegations in the Complaint are sufficient to invoke federal jurisdiction. (See Doc. No. 1.) Whether the court loses jurisdiction in a case validly filed in federal court when the amount in controversy is subsequently revised below the statutory threshold is a well-litigated question. The Supreme Court advised that "[e]vents occurring subsequent to the institution of suit which reduce the amount recoverable below the statutory limit do not oust jurisdiction." St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289-90 (1938). This principal remains true even when a complaint is limited through the dismissal of one or more claim in a multi-claim suit. Griep v. Yamaha Motor Corp. U.S.A., 120 F. Supp. 2d 1196, 1199 (D. Minn. 2000). For example, in Griep, the court retained jurisdiction over a case where dismissed claims brought the total amount in controversy below the statutory requirement. Id. There, a multi-claim complaint satisfied diversity jurisdiction requirements when filed in part through the inclusion of a defamation claim. Id. The defamation claim was subsequently dismissed. Id. Nonetheless, the court retained jurisdiction. Id. (citing Red Cab Co., 303 U.S. 283, 292).
Similarly here, the dismissal of certain claims after the filing of the Complaint has potentially reduced the remaining claims below the amount-in-controversy requirements for class actions under § 1332(d). Nonetheless, the Court retains jurisdiction as the requirements for federal jurisdiction were met at the time of filing. Red Cab Co., 303 U.S. 283, 289-90. Even though part of the claim was dismissed and arguably reduced Ferrari's claim below the requisite amount under CAFA, the Court retains jurisdiction over the balance of the claim. See Klepper v. First Am. Bank, 916 F.2d 337, 340 (6th Cir. 1990) (citing 14A Wright, Miller & Cooper, Federal Practice and Procedure § 3702 (1985)). Therefore, the Court may consider the merits of Ferrari's Motion and Best Buy's...
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