Nat'l Consumers League v. Bimbo Bakeries USA

• Decision Date: 04 June 2014
• Docket Number: No. 1:13–cv–01674 RCL,1:13–cv–01674 RCL
• Citation: 46 F.Supp.3d 64
• Court: U.S. District Court — District of Columbia
• Parties: The National Consumers League, Plaintiff, v. Bimbo Bakeries USA, Defendant.

46 F.Supp.3d 64

The National Consumers League, Plaintiff

v.Bimbo Bakeries USA, Defendant.

No. 1:13–cv–01674 RCL

United States District Court, District of Columbia.

Signed June 4, 2014

Tracy Diana Rezvani, Rezvani Volin & Rotbert P.C., Washington, DC, for Plaintiff.

James D. Pagliaro, Thomas J. Sullivan, Morgan, Lewis & Bockius LLP, Philadelphia, PA, Steven P. Hollman, Susan Margaret Cook, Hogan Lovells U.S. LLP, Steven A. Luxton, Morgan, Lewis & Bockius LLP, Washington, DC, for Defendant.

MEMORANDUM OPINION

The Honorable Royce C. Lamberth, U.S. District Court Judge

The sole question before this Court is whether it has subject matter jurisdiction over this case, and, if so, whether an award of attorneys' fees to the plaintiff is appropriate. Defendant BBUSA, resisting remand, claims that there is either diversity jurisdiction under 28 U.S.C. § 1332(a) or jurisdiction under the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d). Under § 1332(a), diversity of citizenship is not an issue, as the NCL is an incorporated resident of Washington, D.C., and BBUSA is incorporated in Delaware with its primary place of business in Philadelphia. So the Court is tasked only with deciding whether the amount in controversy exceeds $75,000. Under § 1332(d), the Court must decide whether this case fits the definition of a “class action” or a “mass action.”

Finding that the $75,000 amount in controversy is not met, and that this case is neither a “class action” nor a “mass action,” this Court lacks subject matter jurisdiction, and thus plaintiff NCL's motion to remand to the D.C. Superior Court will be GRANTED. However, the Court finds that defendant BBUSA had an objectively reasonable basis for removing this case to the district courts, and thus plaintiff NCL's motion for an award of attorneys' fees will be DENIED.

FACTUAL BACKGROUND

Plaintiff, the National Consumers League (“NCL”), represents consumers in actions against businesses it believes are engaged in misconduct. Defendant, Bimbo Bakeries USA (“BBUSA” or “Bimbo”) sells well-known brands such as Sara Lee bread and Thomas' English Muffins within the District of Columbia and the rest of the United States. The NCL brought this action on September 26, 2013 in the Superior Court of the District of Columbia on behalf of the general public under District of Columbia Code § 28–3905(k)(1)(A)–(D) against defendant BBUSA. Plaintiff NCL alleges a “pervasive pattern of fraudulent, deceptive, and otherwise improper marketing practices” in regard to BBUSA's wheat-labeled products, and seeks remedies under § 28–3905(k)(2). Pl.'s Mot. Remand 3. On October 28 2013, defendant BBUSA filed a Notice of Removal seeking that the case be tried in the U.S. District Court for D.C. See Notice of Removal. On November 28, 2013, plaintiff NCL filed a motion to remand the case. See Pl.'s Mot. Remand. Defendant BBUSA resists the remand on the basis that this Court has jurisdiction on either a basis of diversity jurisdiction under 28 U.S.C. § 1332(a) or CAFA jurisdiction under § 1332(d).

ANALYSIS

I. STANDARD OF REVIEW

Civil actions filed in state court may be removed to a United States district court by the defendant so long as the case could have originally been filed in federal court. 28 U.S.C. § 1441(a). However, “[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.” Id. § 1447(c). A challenge to subject matter jurisdiction may be raised on a motion to remand by the parties. Id. A “party opposing a motion to remand bears the burden of establishing that subject matter jurisdiction exists in federal court.” Int'l Union of Bricklayers & Allied Craftworkers v. Ins. Co. of T he W., 366 F.Supp.2d 33, 36 (D.D.C.2005) (citation omitted); see also Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97–98, 42 S.Ct. 35, 66 L.Ed. 144 (1921).

Courts should apply a strict reading to the removal statute to avoid federalism concerns. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 107–09, 61 S.Ct. 868, 85 L.Ed. 1214 (1941). Any uncertainty about the existence of subject matter jurisdiction should 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. TIMELINESS

At the threshold of this case, defendant BBUSA argues that plaintiff NCL has waived its ability to challenge the validity of the Monachelli declaration under the legal standard set forth in Harmon v. OKI Sys., 115 F.3d 477, 478 (7th Cir.1997). Def.'s Mem. Opp'n 6. Harmon distinguishes between a plaintiff alleging a mere “procedural defect” with defendant's notice of removal and a plaintiff alleging a substantive issue with the subject matter jurisdiction of a case. 115 F.3d at 478 (finding that defendant's failure to include amount in controversy in notice of removal was “procedural defect” rather than substantive issue with subject matter jurisdiction, and thus affirming the denial of plaintiffs motion to remand). Subject matter jurisdiction may be challenged at any point, but a motion to remand for a “procedural defect” must be plead within 30 days of the notice of removal. See 28 U.S.C. § 1447(c).

First, whether plaintiff NCL waived the ability to challenge the Monachelli declaration is irrelevant because the Court finds the declaration to be valid. See III.A.1–2, infra. Second, if the Court were to find that diversity jurisdiction was met here, the Monachelli declaration would play a substantive role in that finding rather than a procedural one. Therefore, the Court finds no issue with the timeliness of plaintiff s challenges.

III. DIVERSITY JURISDICTION

Federal courts have diversity jurisdiction when (1) there is complete diversity of citizenship (i.e. no plaintiff is a citizen of the same state as any defendant) and (2) the “amount in controversy” exceeds $75,000. 28 U.S.C. § 1332(a). There is no issue as to diversity: plaintiff NCL is a citizen of Washington, D.C., and defendant BBUSA is a citizen of Delaware and Pennsylvania. Notice of Removal ¶¶ 26–28. Thus, the sole issue is the amount in controversy. When calculating the amount in controversy, “the separate and distinct claims of two or more plaintiffs cannot be aggregated in order to satisfy the jurisdictional requirement.” Snyder v. Harris, 394 U.S. 332, 335, 89 S.Ct. 1053, 22 L.Ed.2d 319 (1969). “[This] doctrine still applies when separate and distinct claims are asserted on behalf of a number of individuals, regardless of whether an action involves a simple joinder of multiple plaintiffs, [or is] a representative action.” Breakman v. AOL LLC, 545 F.Supp.2d 96, 103–04 (D.D.C.2008).

The Court discusses a number of issues: (A) the validity of a declaration establishing defendant's sales amounts as well as aggregation of different types of damages, and (B) whether a settlement offer from the plaintiff can establish the amount in controversy. Finding that none of the arguments put forth by defendant BBUSA are sufficient to establish the amount in controversy, this Court does not have diversity jurisdiction under 28 U.S.C. § 1332(a) over this case.

A. The Monachellii Declaration and Aggregation of Damages

Crucial to defendant's theory that the amount in controversy is greater than $75,000 is the Monachelli declaration, a sworn statement establishing BBUSA's sales information for “Thomas' Light Multi–Grain Hearty English Muffins” and “Sara Lee Classic Honey Wheat Bread” within the District of Columbia the year prior to the filing of the notice of removal. See Def.'s Ex. A. Plaintiff NCL asserts two problems with the declaration itself: (1) it was amended without leave of the Court after the time for amendments of right had passed, and (2) it is speculative. See Pl.'s Reply Brief 7–8. Even if the Monachelli declaration is found valid, plaintiff NCL still contends that the declaration does not support removal. Id. at 6–7.

1. Timeliness of Amendment

The original Monachelli declaration was taken on October 25, 2013, and contained BBUSA's sales data from the beginning of the calendar year through October 6, 2013. Notice of Removal, Ex. B, ECF No. 1–2. The amended, or as defendant BBUSA characterizes it, supplemented, Monachelli declaration was conducted on December 12, 2013, and includes a more specific breakdown of data: September 26, 2012–September 26, 2013, sales for the year prior to the filing of the complaint, and September 26, 2013–October 28, 2013, sales between the filing of the complaint and filing of the notice of removal. Def.'s Ex. A. Plaintiff NCL argues that the declaration was not appropriately amended, and thus the more specific data should not be considered. Pl.'s Reply Brief 7. Working from the premise that the December 12, 2013 declaration is excluded, plaintiff NCL contends that under Mostofi v. Network Capital Funding Corp., 798 F.Supp.2d 52, 55 (D.D.C.2011) the original Monachelli declaration would be invalid because it considers data up until October 6, 2013, wrongfully including 11 days of sales after the complaint. See Pl.'s Mot. Remand 8. However, plaintiff misapplies Mostofi: “the Court ... considers the value of the claim as of the date of removal. ” 798 F.Supp.2d at 55 (emphasis added). Although the complaint was filed on September 26, 2013, the case was removed on October 28, 2013. Thus, the original Monachelli declaration, covering the year through October 6, 2013, is actually under-inclusive. See Def.'s Mem. Opp'n 7–8.

With plaintiff NCL's underlying argument dispensed with, plaintiff has little reason to oppose the inclusion of the December 12, 2013 supplement to the Monachelli declaration. Further, the more specific numbers add dimension and certainty to the parties' arguments, so excluding it on a technical basis may be detrimental to achieving the correct result. Plaintiff NCL was also not denied an opportunity to consider and respond to the new data. See...