Oshana v. Coca-Cola Co.

• Decision Date: 29 December 2006
• Docket Number: No. 05-3640.,05-3640.
• Citation: 472 F.3d 506
• Parties: Carol B. OSHANA, Plaintiff-Appellant, v. COCA-COLA COMPANY, a Delaware corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

472 F.3d 506

Carol B. OSHANA, Plaintiff-Appellant, v. COCA-COLA COMPANY, a Delaware corporation, Defendant-Appellee.

No. 05-3640.

United States Court of Appeals, Seventh Circuit.

Argued March 29, 2006.

Decided December 29, 2006.

COPYRIGHT MATERIAL OMITTED

Robert J. Stein, III (argued), Stein Bogot, Chicago, IL, for Plaintiff-Appellant.

Christopher M. Murphy (argued), McDermott, Will & Emery, Chicago, IL, for Defendant-Appellee.

Before BAUER, KANNE, and SYKES, Circuit Judges.

SYKES, Circuit Judge.

This putative class action alleges the Coca-Cola Company ("Coke") deceived Diet Coke® consumers in Illinois by failing to disclose that fountain Diet Coke and bottled Diet Coke are not the same product. Fountain Diet Coke contains a blend of the sweeteners aspartame and saccharin; bottled Diet Coke is sweetened only with aspartame. The plaintiff's lawyers, on behalf of a prior named class representative and a class of all Illinois purchasers of fountain Diet Coke from March 12, 1999 forward, initially filed the lawsuit in Illinois state court alleging that Coke violated the Illinois Consumer Fraud and Deceptive Practices Act ("ICFA") and was unjustly enriched. Coke removed the lawsuit to federal court, defeated class certification, and eventually offered a substituted named plaintiff, Carol Oshana, a judgment of $650, which she accepted. Oshana reserved the right to challenge on appeal the district court's jurisdiction and the order denying class certification. We affirm.

I. Background

Oshana filed this lawsuit in Illinois state court alleging Coke tricked consumers into believing that fountain Diet Coke and bottled Diet Coke have the same ingredients.¹ In fact, bottled Diet Coke is sweetened with aspartame, while fountain Diet Coke is sweetened with a mixture of aspartame and saccharin. The additional ingredient in fountain Diet Coke apparently addresses concerns about the staying power of aspartame as a sweetener in fountain syrup. Oshana complained, in relevant part, that Coke began advertising in 1984 that Diet Coke would be sweetened with 100% NutraSweet® brand aspartame, leading consumers to believe that all forms of Diet Coke would follow that formula, even though fountain Diet Coke continued to use saccharin.

Consistent with Illinois practice, Oshana did not claim an amount of damages in her complaint. She did, however, disclaim individual damages over $75,000. She sought compensatory damages, disgorgement of Coke's profits from the sale of fountain Diet Coke in Illinois, attorneys' fees and costs, and any other relief the court saw fit to grant.

Coke thought that Oshana's disclaimer of individual damages was unclear. It asked her to formally admit that in the event a class was not certified, Oshana would not individually seek disgorgement of all Coke profits from the sale of fountain Diet Coke in Illinois. Coke also asked Oshana to admit she would not individually seek an award of attorneys' fees over $75,000; punitive damages over $75,000; a combined award of compensatory and punitive damages and attorneys' fees over $75,000; or a combined award of disgorgement, attorneys' fees, and punitive damages over $75,000. Oshana refused to do so.

Coke removed the case to federal court invoking diversity jurisdiction and claiming a good-faith belief that the amount in controversy in fact exceeded the $75,000 threshold. See 28 U.S.C. § 1332. Oshana moved to remand; she argued the complaint unambiguously disclaimed individual damages in excess of $75,000 so that federal jurisdiction could not exist. The district court denied Oshana's motion to remand, concluding that Coke had established Oshana's damages could plausibly exceed $75,000. Oshana's refusal to admit otherwise reinforced the district court's conclusion. Defeated, Oshana filed an amended complaint in federal court praying for about $1000 in actual damages and, either as a class or individually, disgorgement of millions in Coke profits from the sale of fountain Diet Coke in Illinois.

The district court denied class certification, holding that Oshana could not satisfy the requirements of Federal Rule of Civil Procedure 23(a) or Rule 23(b). The district court held that Oshana's proposed class — "All individuals who purchased for consumption and not resale fountain Diet Coke in . . . Illinois from March 12, 1999, through the date of entry of an order certifying the class" — was not sufficiently ascertainable. The class could potentially include millions of customers, some (if not many) of whom may not have been deceived by Coke's marketing because at least some of Coke's ads contained a disclaimer. The court also held that Oshana could not show her claims to be typical of the class. See FED.R.CIV.P. 23(a)(3). Oshana claimed she was deceived by Coke's marketing, but Coke's marketing may have been only a minor factor in the purchasing decisions of other class members. Moreover, some putative class members may have known about the presence of saccharin and bought fountain Diet Coke anyway. Finally, the district court concluded that Oshana could not satisfy any of the requirements of Rule 23(b).

The district court then partially granted Coke's summary judgment motion, limiting Oshana's claims because of the statute of limitations and holding that Oshana could not personally collect all of Coke's disgorged profits from the sale of fountain Diet Coke in Illinois if she prevailed on the merits. Instead, the court held she could recover only the $650 in damages she personally incurred. Coke made an offer of judgment for $650 plus reasonable attorneys' fees and costs (to be determined by the district court), see FED.R.CIV.P. 68, and Oshana accepted, reserving the right to appeal the issues of jurisdiction and the denial of class certification.

II. Discussion

A. Jurisdiction

Oshana's first argument is that her case never belonged in federal court. She maintains that $75,000 was never in controversy because she disclaimed damages in excess of the federal jurisdictional amount in her state-court complaint. Although the amended complaint sought millions in individual damages (by way of Coke's disgorged profits), Oshana argues that the amount in controversy was not satisfied because it is measured only at the time of removal and is not affected by later amendments. We need not concern ourselves with the effect of the amended complaint in this case because removal was proper.

We review the propriety of removal de novo. Boyd v. Phoenix Funding Corp., 366 F.3d 524, 529 (7th Cir.2004). A defendant has the right to remove a case from state to federal court when the federal court could exercise jurisdiction in the first instance. 28 U.S.C. § 1441. In this case, subject-matter jurisdiction could be based only on diversity of citizenship. 28 U.S.C. § 1332. There is no question that the parties are diverse — Oshana is an Illinois citizen (as was her predecessor) and Coke is a Delaware corporation with its principal place of business in Georgia. The only question for us is whether the amount in controversy exceeded $75,000.

The amount in controversy is the amount required to satisfy the plaintiff's demands in full on the day the suit begins, Hart v. Schering-Plough Corp., 253 F.3d 272, 273 (7th Cir.2001), or in the event of removal, on the day the suit was removed, BEM I, L.L.C. v. Anthropologie, Inc., 301 F.3d 548, 552 (7th Cir.2002). Because Coke is the proponent of jurisdiction, it has the burden of showing by a preponderance of the evidence facts that suggest the amount-in-controversy requirement is met. Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 543 (7th Cir.2006). That is easier said than done when the plaintiff, the master of the complaint, does not want to be in federal court and provides little information about the value of her claims. In such a case, a good-faith estimate of the stakes is acceptable if it is plausible and supported by a preponderance of the evidence. See, e.g., Rubel v. Pfizer, Inc., 361 F.3d 1016, 1020 (7th Cir.2004). Once the defendant in a removal case has established the requisite amount in controversy, the plaintiff can defeat jurisdiction only if "it appears to a legal certainty that the claim is really for less than the jurisdictional amount." St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289, 58 S.Ct. 586, 82 L.Ed. 845 (1938); Meridian Sec., 441 F.3d at 541.

In a class action, the amount in controversy must be satisfied by one of the named plaintiffs; aggregating claims is not allowed for purposes of determining the jurisdictional amount.² Del Vecchio v. Conseco, Inc., 230 F.3d 974, 977 (7th Cir. 2000); Garbie v. DaimlerChrysler Corp., 211 F.3d 407, 409 (7th Cir.2000); In re Brand Name Prescription Drugs Antitrust Litig., 123 F.3d 599, 607 (7th Cir. 1997). Once one plaintiff satisfies the amount-in-controversy requirement for diversity jurisdiction, the other plaintiffs come in under the court's supplemental jurisdiction regardless of whether their individual claims satisfy the requirements of § 1332. 28 U.S.C. § 1367; Exxon Mobil v. Allapattah Servs., Inc., 545 U.S. 546, 125 S.Ct. 2611, 2615, 162 L.Ed.2d 502 (2005); In re Brand Name Prescription Drugs, 123 F.3d at 607; Stromberg Metal Works, Inc. v. Press Mach., Inc., 77 F.3d 928, 930-33 (7th Cir.1996). So Coke must establish that at the time of removal Oshana personally had placed over $75,000 in controversy.

On the face of Oshana's state-court complaint, she did not. She expressly disclaimed individual damages over $75,000: "Plaintiff seeks no relief, cause of action, remedy or damages that would confer federal jurisdiction upon the claims asserted herein, and expressly disclaims individual damages in excess of $75,000." Such disclaimers have been long approved as a way of staying out of federal court, see St. Paul Mercury, 303 U.S. at 294, 58 S.Ct. 586, but only when the disclaimer is binding. BEM I, L.L.C., 301 F.3d at 552; The Barbers, Hairstyling for...