Organic Consumers Ass'n v. Handsome Brook Farm Grp. 2, LLC, Case No. 16–cv–01906 (CRC)

• Court: United States District Courts. United States District Court (Columbia)
• Writing for the Court: CHRISTOPHER R. COOPER, United States District Judge
• Citation: 222 F.Supp.3d 74
• Decision Date: 18 November 2016
• Docket Number: Case No. 16–cv–01906 (CRC)
• Parties: ORGANIC CONSUMERS ASSOCIATION, Plaintiff, v. HANDSOME BROOK FARM GROUP 2, LLC and Doe Corporation Nos. 1–10, Defendants.

222 F.Supp.3d 74

ORGANIC CONSUMERS ASSOCIATION, Plaintiff,
v.
HANDSOME BROOK FARM GROUP 2, LLC and Doe Corporation Nos. 1–10, Defendants.

Case No. 16–cv–01906 (CRC)

United States District Court, District of Columbia.

Signed November 18, 2016

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Kim E. Richman, Richman Law Group, Brooklyn, NY, for Plaintiff.

Ryan M. Kaiser, Sanjay Satish Karnik, Amin Talati Upadhye, LLP, Chicago, IL, for Defendants.

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OPINION AND ORDER

CHRISTOPHER R. COOPER, United States District Judge

Plaintiff Organic Consumers Association ("OCA") is a Minnesota-based, public-interest organization that strives to "educate consumers," "pressure food companies to adopt honest labeling practices," and "advocate for outdoor access and pasture standards for organic animals." Compl. ¶¶ 19–21. Defendant Handsome Brook¹ is a farm located in upstate New York that supplies "pasture raised" eggs to grocery stores nationwide, including in the District of Columbia. The term "pasture raised" typically signifies that the hens laying the eggs have ample tracts of pasture on which to roam and forage.

OCA purchased Handsome Brook's "pasture-raised" branded eggs from a D.C. supermarket in order to investigate whether the labeling on the carton honestly conveyed the hens' living conditions to consumers. Claiming it did not, OCA filed suit in the Superior Court for the District of Columbia alleging that Handsome Brook is violating the D.C. Consumer Protection Procedures Act ("DCCPPA"), D.C. Code § 28–3904 et seq. , by using false, deceptive, and misleading labels. OCA brings this action on behalf of itself and the general public, under the private attorney general provision of the statute, § 28–3905(k)(1), seeking only injunctive relief. Pl.'s Mem. Supp. Mot. Remand ("MTR") 1–2. The relief sought would require Handsome Brook to halt its "false marketing and sale of the [relevant] [p]roducts" as well as to issue a "corrective advertising campaign to inform the public of the true nature of the [p]roducts." Def.'s Opp'n 2.

Handsome Brook timely removed the action, invoking the Court's diversity jurisdiction under 28 U.S.C. § 1332(a). OCA now moves to remand the case to the Superior Court for lack of subject matter jurisdiction, and additionally requests an award of costs and fees incurred as a result of the remand litigation. While OCA does not dispute that the parties are completely diverse, it maintains that Handsome Brook cannot meet the $75,000 amount-in-controversy requirement. Handsome Brook responds by arguing, with supporting affidavits, that the amount in controversy far exceeds $75,000 if the Court were to consider either the cost of complying with a court-ordered injunction or the value of attorneys' fees recoverable under the statute. For the reasons discussed below, the Court will grant OCA's motion and remand the action.

I. Standard of Review

Removal is only proper if the case could have been brought in federal court in the first place. 28 U.S.C. § 1441(a). The party seeking removal has the burden to prove that federal jurisdiction exists. See Hood v. F. Hoffman–La Roche, Ltd. , 639 F.Supp.2d 25, 28 (D.D.C. 2009). When the amount in controversy is at issue, the parties are permitted to submit proof, and if the removing party is able to show by a preponderance of evidence that the threshold requirement has been met, the district court may exercise jurisdiction over the case. See Dart Cherokee Basin Operating Co., LLC v. Owens , ––– U.S. ––––, 135 S.Ct. 547, 553–54, 190 L.Ed.2d 495 (2014). Bearing in mind the risk of encroaching on state courts' purview, courts construe removal jurisdiction

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narrowly, Shamrock Oil & Gas Corp. v. Sheets , 313 U.S. 100, 109, 61 S.Ct. 868, 85 L.Ed. 1214 (1941), and tend to resolve factual ambiguities in favor of remand. Witte v. General Nutrition Corporation , 104 F.Supp.3d 1, 3 (D.D.C. 2015) ; Nat'l Consumers League v. Flowers Bakeries, LLC , 36 F.Supp.3d 26, 30 (D.D.C. 2014).

II. Analysis

A. Diversity Jurisdiction

"The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between—citizens of different States [.]" 28 U.S. Code § 1332(a). With complete diversity satisfied here, the Court must determine whether Handsome Brook has met its burden of demonstrating that the amount in controversy exceeds $75,000. Handsome Brook argues that the amount-in-controversy requirement is satisfied because, if OCA's suit were successful, the costs of complying with the requested injunction and the statutory assessment of attorney fees would each well exceed $75,000.

1. Costs Associated with Injunctive Relief

Handsome Brook has submitted evidence establishing that the cost of complying with OCA's requested injunction would easily surpass the $75,000 threshold. An unrebutted declaration from the farm's owner details the required compliance costs, including: destroying six weeks of inventory worth $110,000; hiring a branding and design firm to re-design labels for six product SKUs at a cost of approximately $36,000; and launching a corrective advertising campaign costing at minimum $113,000. Exhibit A Second Decl. of Bryan Babcock; cf. Wexler v. United Air Lines , 496 F.Supp.2d 150, 154 (D.D.C. 2007) (finding that a defendant's costs to comply with an injunction were too speculative because it did not "submit supporting declarations or affidavits from its employees ... nor does it provide any evidence to support its claims.").

OCA's response is twofold. It first urges the Court to wholly disregard...