Nat'l Consumers League v. Flowers Bakeries, LLC.

• Decision Date: 08 April 2014
• Docket Number: Civil Action No. 13–1725 ESH
• Citation: 36 F.Supp.3d 26
• Parties: National Consumers League, on behalf of the general public, Plaintiff, v. Flowers Bakeries, LLC., Defendant.
• Court: U.S. District Court — District of Columbia

36 F.Supp.3d 26

National Consumers League, on behalf of the general public, Plaintiff

v.Flowers Bakeries, LLC., Defendant.

Civil Action No. 13–1725 ESH

United States District Court, District of Columbia.

Signed April 8, 2014

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

Cheryl Anne Falvey, Andrew D. Kaplan, Lauren B. Patterson, Christopher A. Cole, Crowell & Moring LLP, Washington, DC, for Defendant.

MEMORANDUM OPINION

ELLEN SEGAL HUVELLE, United States District Judge

On September 28, 2013, the National Consumers League (“NCL”) filed suit on behalf of the “general public” in D.C. Superior Court against Flowers Bakeries, LLC (“Flowers”), alleging violations of the D.C. Consumer Protection Procedures Act (“DCCPPA”). D.C.Code § 28–3901, et seq. After defendant removed the case to federal court on the basis of diversity jurisdiction and the Class Action Fairness Act (“CAFA”) (Notice of Removal (“Notice”), Oct. 31, 2013 [ECF No. 1] ), plaintiff filed the present motion for remand on the grounds that this Court lacks subject matter jurisdiction. (Pl.'s Mot. to Remand for Lack of Subject Matter Jurisdiction (“Mot.”), Dec. 4, 2013 [ECF No. 8].) For the reasons stated below, this motion will be granted.

FACTUAL BACKGROUND

Plaintiff is a non-profit organization headquartered in Washington, D.C. (Compl., Sept. 28, 2013 [ECF No. 1–1], at ¶ 34.) Defendant is a manufacturer of food products based in Georgia.¹ (See Flowers Bakeries, LLC's Resp. to Court Order (“Flowers Resp.”), Feb. 19, 2014 [ECF No. 17], at ¶ 2.) In its complaint, plaintiff, acting as a private attorney general, alleges that the defendant engaged in a “pervasive pattern of fraudulent, deceptive, and otherwise improper marketing practices ... regarding the sale of Nature's Own Honey Wheat Bread and Whitewheat Bread” in violation of the DCCPPA. (Compl. at ¶ 1.) Based on those allegations, plaintiff demands (a) a declaration that “Defendant's conduct is in violation of the [DCCPPA],” (b) an injunction “ordering corrective advertising or revised labeling,” (c) relief for the “Plaintiff and the General Public of the District of Columbia [in the form of] restitution, treble damages or statutory damages in the amount of $1,500 per violation, whichever is greater,” and (d) “costs of prosecuting this action, including attorneys' fees, experts' fees and costs together with interest.” (Id. at Prayer for Relief.)

On October 31, 2013, defendant removed the case to federal court. In its Notice of Removal defendant identified three independent grounds for removal: (1) diversity jurisdiction, (2) the class action provision of CAFA, and (3) the mass action provision of CAFA. (See Not. at 1–2.) Along with this Notice of Removal, defendant submitted a sworn declaration from Daniel J. Scott, the President of Flowers Baking Co. of Oxford, LLC. (Decl. of Daniel J. Scott, Oct. 30, 2013 [ECF No. 1–4].) Flowers Oxford is a wholly-owned subsidiary of defendant Flowers and is the exclusive provider of the relevant bread products to retailers in the District of Columbia. (Id. at ¶¶ 1, 4.) In this declaration, Mr. Scott stated that more than 300,000 loaves of the breads had been sold in the District of Columbia since January 2011 and that at least one consumer had purchased more than 50 loaves from locations in the District of Columbia since September 5, 2012. (Id. at ¶¶ 5–6.)

On December 4, 2013, plaintiff filed a motion for remand. (Mot. at 1.) On December 23, 2013, defendant filed an opposition to this motion. (Def. Flowers Bakeries, LLC's Mem. of Law in Opp. to Pl.'s Mot. to Remand (“Opp.”), Dec. 23, 2013 [ECF No. 9].) With this opposition, defendant's counsel filed an affidavit stating that on November 9, 2013, she received a settlement demand for an amount exceeding $75,000, as well as several substantive concessions.² (Decl. of Cheryl A. Falvey, Dec. 23, 2013 [ECF No. 9–1].) On January 9, 2014, plaintiff filed a Reply, including a request for fees and costs pursuant to 28 U.S.C. 1447(c) (Pl.'s Reply Brief in Support of its Mot. to Remand for Lack of Subject Matter Jurisdiction (“Reply”), Jan. 9, 2014 [ECF No. 12] ), which it later withdrew. (See Notice of Withdrawal of Req. for Costs and Fees and Associated Legal Arg., Jan. 21, 2014 [ECF No. 14].)

ANALYSIS

I. STANDARD OF REVIEW

A civil action filed in state court may only be removed to a United States district court if the case could originally have been brought in federal court. 28 U.S.C. § 1441(a). Upon a motion to remand a removed case to state court, the party opposing the motion “bears the burden of establishing that subject matter jurisdiction exists in federal court.” RWN Dev. Grp., LLC v. Travelers Indem. Co., 540 F.Supp.2d 83, 86 (D.D.C.2008) (quoting Int'l Union of Bricklayers & Allied Craftworkers v. Ins. Co. of the West, 366 F.Supp.2d 33, 36 (D.D.C.2005) ). Courts are to construe the removal statute narrowly in order to avoid federalism concerns, Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108, 61 S.Ct. 868, 85 L.Ed. 1214 (1941), and any doubts about the existence of subject matter jurisdiction are to 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

Before reaching the merits of plaintiff's arguments for remand, the Court must address defendant's contention that remand should be denied on the grounds that it was not timely filed. (Opp. at 10.) Under the federal removal statute, 28 U.S.C. § 1447(c), “a motion to remand on the basis of any defect other than lack of subject matter jurisdiction must be made within thirty days after the filing of the notice of removal....” Plaintiff filed its motion to remand thirty-four days after the case was removed, which according to defendant, does not raise a defect in the Court's subject matter jurisdiction, but rather alleges procedural defects in defendant's Notice of Removal, and therefore should be denied.

Defendant is correct that “courts have distinguished between an argument that diversity jurisdiction actually does exist (i.e., because diversity of citizenship does not exist or the amount in controversy is too low) and an argument that the removing party failed to demonstrate those facts to a reasonable probability.” (Id. (citing Harmon v. O KI Sys. & Crown Equip. Corp., 115 F.3d 477, 478 (7th Cir.1997) ).) Yet, this legal principal is of little help to defendant. Plaintiff's motion does not challenge this Court's jurisdiction based on a failure to provide sufficient facts in the Notice of Removal to establish the necessary amount in controversy. To the contrary, plaintiff's motion to remand argues that based on the facts contained in the Notice of Removal, defendant has failed to establish that the amount in controversy exceeds the statutory minimum as a matter of law. Because the Court concludes that plaintiff's motion does not allege procedural defects in the Notice of Removal, but instead it presents a bona fide challenge to this Court's subject matter jurisdiction, defendant's arguments for denial on timeliness grounds is rejected.

III. DIVERSITY JURISDICTION

A federal court has diversity jurisdiction when (1) there is complete diversity of citizenship among the parties (that is, no plaintiff is a citizen of the same state as any defendant) and (2) the “amount in controversy” is greater than $75,000. See 28 U.S.C. § 1332(a). When calculating the amount in controversy for purposes of this statute, it is well-established that “the separate and distinct claims of two or more plaintiffs cannot be aggregated in order to satisfy the jurisdictional amount requirement.” Snyder v. Harris, 394 U.S. 332, 335, 89 S.Ct. 1053, 22 L.Ed.2d 319 (1969) ; Georgiades v. Martin–Trigona, 729 F.2d 831, 833 (D.C.Cir.1984) (“Separate and distinct claims, regardless of whether they share a community of interest or originate in a single transaction or event, may not be aggregated to satisfy the jurisdictional amount-in-controversy requirement”). The so-called “non-aggregation principle [is] derived from the statutory phrase matter in controversy. Hence, the 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) (internal citations and quotation marks omitted).

Based on the representations of the parties the Court is satisfied that there is complete diversity of citizenship. Plaintiff is a citizen of Washington, D.C. (Compl. at ¶ 34.) Defendant is a citizen of Georgia. (See Flowers Resp. at ¶ 2.) Where there is disagreement, however, is whether defendant has established that the amount in controversy exceeds $75,000. Defendant identifies three independent bases in support of its argument that it has cleared the jurisdictional threshold. First, defendant argues that because more than 300,000 loaves of the subject products were sold to consumers in D.C. and each violation carries with it a minimum statutory penalty of $1,500 per product under the DCCPPA, the total potential damages would easily eclipse $75,000. Second, defendant argues that because there is at least one retailer who bought over fifty loaves, the amount in controversy requirement is met. Third, defendant relies on plaintiff's settlement demand for an amount in excess of $75,000 to satisfy the amount in controversy requirement.

As explained below, the Court is not persuaded by these arguments. This type of case is often referred to as a private attorney general suit brought to enforce the rights of the general public. While the D.C. Circuit has yet to address the question of how to calculate the amount in controversy for purposes of determining diversity in such suits, this Court is guided by the principal that the removal st...