Hall v. Welch Foods, Inc.

• Decision Date: 04 October 2017
• Docket Number: Civ. No. 17-3997
• Parties: LAUREN HALL, Plaintiff, v. WELCH FOODS, INC., A COOPERATIVE, THE PROMOTION IN MOTION COMPANIES, INC. Defendants.
• Court: U.S. District Court — District of New Jersey

LAUREN HALL, Plaintiff, v. WELCH FOODS, INC., A COOPERATIVE, THE PROMOTION IN MOTION COMPANIES, INC. Defendants.

Civ. No. 17-3997

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

RECEIVED: October 5, 2017

October 4, 2017

NOT FOR PUBLICATION

OPINION

THOMPSON, U.S.D.J.

INTRODUCTION

This matter comes before the Court on two motions: a Motion to Transfer brought by Defendants Welch Foods, Inc. ("Defendant Welch") and The Promotion in Motion Companies, Inc. ("Defendant PIM") (collectively "Defendants") (ECF No. 7), and a Motion to Remand brought by Plaintiff Lauren Hall ("Plaintiff") (ECF No. 16). Plaintiff opposes Defendants' Motion to Transfer. (ECF No. 12.) Defendants oppose Plaintiff's Motion to Remand. (ECF Nos. 18, 19.) The Court has decided the motions after considering the parties' written submissions without oral argument pursuant to Local Civil Rule 78.1(b). For the following reasons, Defendants' motion is granted, and Plaintiff's motion is denied.

BACKGROUND

Plaintiff brings this putative class action on behalf of herself and all others similarly situated against Defendants Welch and PIM. Plaintiff is a citizen of New Jersey. (Compl. ¶ 11, ECF No. 1-1; Am. Compl. ¶ 14, ECF No. 11.) Defendant PIM is a New Jersey corporation with its principal place of business in New Jersey. (Compl. ¶ 14; Am. Compl. ¶ 17.) Defendant Welch is a Michigan corporation with its principal executive office in Massachusetts. (Compl. ¶ 15; Am. Compl. ¶ 18.) Plaintiff's Complaint includes seven counts: (1) breach of express warranty; (2) breach of implied warranty of merchantability under N.J.S.A. 12A:2-212; (3) common law fraud under New Jersey law; (4) unjust enrichment; (5) violation of the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1 et seq.; (6) violation of the Truth in Consumer Contract, Warranty and Notice Act, N.J.S.A. 56:12-14 et seq.; and (7) injunctive and declaratory relief under the New Jersey Declaratory Judgments Act, N.J.S.A. 2A:16-51 et seq.

Plaintiff's allegations are as follows. For the last six years, Defendants have engaged in a deceptive marketing campaign to convince consumers that Welch's Fruit Snacks contain significant amounts of the actual fruits shown in the marketing and labeling of the products. (Compl. ¶ 2; Am. Compl. ¶ 2.) Defendants have also attempted to convince consumers that Welch's Fruit Snacks are nutritious and healthful to consume and more healthful than similar products. (Compl. ¶ 2; Am. Compl. ¶ 2.) Defendant PIM produces the Fruit Snacks in question, and licenses the product line using the trademarked Welch's brand. (Compl. ¶¶ 24-29; Am. Compl. ¶¶ 27-32.) The marketing relies on healthful characterizations of the products, including that the Fruit Snacks are "Made With REAL Fruit." (Compl. ¶¶ 32-34; Am. Compl. ¶¶ 35-37).

Plaintiff further alleges that, during the Class Period, Plaintiff purchased Welch's Fruit Snacks for herself and her family, relying on Defendants' representations that the Fruit Snacks contained a significant amount of the actual fruit emphasized in their marketing and labeling, were nutritious and healthful, and were more healthful than similar products. (Compl. ¶ 12; Am. Compl. ¶ 15.) However, Defendants' claims about the fruit content and nutritional qualities of the Fruit Snacks are deceptive, as the fruit content in the product is overstated, different types of fruit are used than the labeling depicts, and the Fruit Snacks contain significant amounts of added sweeteners, artificial colors, and artificial flavors. (See generally Compl. ¶¶ 38-54; Am. Compl.¶¶ 41-57.) Plaintiff emphasizes that, after a 2015 lawsuit alleging similar misrepresentations, Defendants altered the composition and ingredient list of the Fruit Snacks, including "fruit puree" as the first ingredient as opposed to juices from concentrate. (Compl. ¶¶ 40, 43-44; Am. Compl. ¶¶ 43, 46-47.) Nevertheless, Plaintiff asserts the products remain misbranded and the marketing and labeling remain misleading. (Compl. ¶¶ 40, 43-44; Am. Compl. ¶¶ 43, 46-47.)

Plaintiff originally brought this action in New Jersey Superior Court. (See Compl.) Defendants Welch and PIM removed the case to this Court pursuant to jurisdiction under the Class Action Fairness Act of 2005 ("CAFA"), 28 U.S.C. § 1332. (Defs.' Notice of Removal, ECF No. 1.) Shortly thereafter, Defendants filed a Motion to Transfer the action to federal district court in the Eastern District of New York ("EDNY"), arguing that Plaintiff's action was essentially the same litigation as a nationwide class action filed in the EDNY in 2015, evidenced by substantially similar complaints and overlapping plaintiff's counsel. (Defs.' Mot. Transfer, ECF No. 7.) In response, Plaintiff notified the Court of her intent to amend her complaint to clarify the nature of the class and move to remand the action back to New Jersey State Court. (ECF No. 9.) Plaintiff then filed an amended complaint. (Am. Compl., ECF No. 11.) In an effort to divest this Court of jurisdiction under CAFA, the amended complaint altered the definition of the putative class from "all persons in New Jersey who purchased Defendants' Products during the Class Period" (Compl. ¶ 59) to "all citizens of New Jersey who purchased Defendants' Products in New Jersey during the Class Period" (Am. Compl. ¶ 62). Plaintiff then filed a motion to remand to New Jersey State Court. (ECF No. 16.)

LEGAL STANDARDS

I. Motion to Remand

A defendant may remove a civil action filed in state court to the federal court where the action might originally have been brought. 28 U.S.C. § 1441(a), (b). The federal court must havesubject matter jurisdiction over the action. 28 U.S.C. § 1441(b). Federal district courts have subject matter jurisdiction over civil actions that involve a federal question or diversity of citizenship. 28 U.S.C. §§ 1331, 1332. Federal question jurisdiction exists when the action arises "under the Constitution, laws, or treaties of the United States." Id. § 1331. Diversity jurisdiction exists when the action arises between citizens of different states and the amount in controversy exceeds $75,000. Id. § 1332. Under CAFA, federal district courts have "'original jurisdiction of any civil action' in which three requirements are met: (1) an amount in controversy that exceeds $5,000,000, as aggregated across all individual claims; (2) minimally diverse parties; and (3) that the class consist of at least 100 or more members ('numerosity requirement')." Judon v. Travelers Prop. Cas. Co. of Am., 773 F.3d 495, 500 (3d Cir. 2014) (citing 28 U.S.C. § 1332(d)(2), (5)(B), (6); Standard Fire Ins. Co. v. Knowles, 568 U.S. 588 (2013)).

If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case must be remanded to state court. 28 U.S.C. § 1447(c). The party that removed the case bears the burden of establishing federal jurisdiction. Frederico v. Home Depot, 507 F.3d 188, 193 (3d Cir. 2007); Morgan v. Gay, 471 F.3d 469, 473 (3d Cir. 2006). To determine whether jurisdiction is met under CAFA, "a court evaluates allegations in the complaint and a defendant's notice of removal." Judon, 773 F.3d at 500. Under CAFA, "class member citizenship may be determined even after the time-of-filing," including "'as of the date of the filing of the complaint or amended complaint . . . .'" Kaufman v. Allstate N.J. Ins. Co., 561 F.3d 144, 153 (3d Cir. 2009) (quoting 28 U.S.C. § 1332(d)(7)).

"[O]nce jurisdiction has been established, the burden shifts to the party seeking remand to show that an exception requiring remand . . . applies." Gallagher v. Johnson & Johnson Consumer Cos., Inc., 169 F. Supp. 3d 598, 602 (D.N.J. 2016) (citing Kaufman, 561 F.3d at 153).CAFA includes two mandatory exceptions from federal jurisdiction which require remand. 28 U.S.C. § 1332(d)(4)(A), (B).

Subsection (A), the 'local controversy' exception, may apply when at least one significant defendant and more than two-thirds of the members of the putative classes are local. Subsection (B), the 'home-state' exception, may apply when the primary defendants and at least two-thirds of the members of the putative classes are local.

Kaufman, 561 F.3d at 149; see also Vodenichar v. Halcón Energy Props., Inc., 733 F.3d 497, 503-04 (3d Cir. 2013). CAFA also gives district courts discretion to decline jurisdiction under a totality of the circumstances balancing test, considering statutorily enumerated factors. See 28 U.S.C. § 1332(d)(3). "If the balance of factors suggests that the dispute is local, the court may exercise its discretion to remand." Dicuio v. Brother Int'l Corp., 2011 WL 5557528, at *2 (D.N.J. Nov. 15, 2011).

II. Motion to Transfer

A court may transfer an action "to any other district where it might have been brought" "[f]or the convenience of parties and witnesses, [and] in the interest of justice." 28 U.S.C. § 1404(a). Courts may consider any number of relevant factors that affect the "private and public interests protected by the language of § 1404(a)," including those not specifically enumerated in the statute. Jumara v. State Farm Ins. Co., 55 F.3d 873, 879-80 (3d Cir. 1995) (listing private interests such as the plaintiff's choice of forum, defendant's forum preference, where the claim arose, convenience of the parties, convenience of the witnesses, and location of books and records and public interests such as enforceability of a resulting judgment, practical considerations for judicial efficiency, administrative difficulties, public policies of the fora, and the trial judge's familiarity with state law in diversity actions). The burden of "establishing the need for transfer . . . rests with the movant . . . ." Id. at 879.

The Third Circuit applies the first-to-file (or "first-filed") rule: "in all cases of federal concurrent jurisdiction, the court which first has possession of the subject must decide it." EEOC v. Univ. of Pa., 850 F.2d 969, 971 (3d Cir. 1988) (quoting Crosley Corp. v. Hazeltine Corp...