ELLEN SEGAL HUVELLE, United States District Judge.
On September 28, 2013, the National Consumers League ("NCL") filed suit on
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.
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.
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)).
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. OKI 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.
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 statute should be construed narrowly in favor of remand and that separate and distinct claims should not be aggregated. On these bases, the Court concludes that the jurisdictional amount in controversy has not been satisfied.
In its Notice of Removal, defendant argues that "[p]laintiff alleges a minimum of $1,500 in statutory damages for each alleged violation of the [DC]CPPA... [and] more than 300,000 units of the Subject Products were sold within the District of Columbia ... [resulting in the potential for] hundreds of millions of dollars [in statutory damages]." (See Not. at 4.) In so arguing, defendant contends that because its total potential liability far exceeds the statutory threshold of $75,000, it has satisfied the amount in controversy requirement for purposes of establishing
Next, defendant argues that because at least one consumer purchased more than fifty loaves, it has satisfied the amount in controversy requirement.
While defendant is correct that the Court may aggregate the damages to which a single individual would be entitled when calculating the amount in controversy, this consumer must also be a party to the lawsuit in order for the Court to have diversity jurisdiction. As Judge Bates explained in Zuckman v. Monster Beverage Corp., another DCCPPA case, "only the damages to which [the plaintiff] would be personally entitled—rather than those on behalf of the public—will count toward satisfying the $75,000 jurisdictional threshold." 958 F.Supp.2d 293, 297-98 (D.D.C. 2013) (emphasis added); see also Breakman, 545 F.Supp.2d at 104 ("[B]ecause a
Defendant's final argument regarding the amount in controversy is based on the settlement demand letter sent to it by the plaintiff on November 9, 2013. (Opp. at 9-10.) In this letter, plaintiff agreed to settle the case for a payment of an amount greater than $75,000, as well as several substantive concessions. Based on this demand, defendant argues that "NCL has demonstrated that it values the litigation at an amount greater than $75,000 ... [and] this Court is entitled to use that information to determine that the amount in controversy exceeds $75,000, and jurisdiction is appropriate." (Id. at 10.) Plaintiff argues in response that the Court may not consider the details of a settlement demand because Fed. R. Evid. 408 prohibits the use of a settlement offer to "prove or disprove the validity or amount of a disputed claim." That said, as plaintiff concedes, several federal courts of appeal have expressly permitted the use of such evidence for the purpose of establishing the amount in controversy. Yet, "[p]laintiff believes the D.C. Circuit would reach a contrary result...." (Reply at 10.)
Whether the D.C. Circuit would choose to depart from the well-reasoned conclusions of other circuit courts that have held that settlement demands may be used as evidence in calculating the amount in controversy need not be decided.
Applying this rationale, the Court does not view the settlement demand for an amount greater than $75,000 as a "reflect[ion of] a reasonable estimate" of plaintiff's potential recovery. See McPhail, 529 F.3d at 956. The express terms of the statute state that "[a]ny claim under this chapter ... may recover or obtain ... treble damages, or $1,500 per violation, whichever is greater, payable to the consumer." D.C. Code § 28-3905(k)(2)(A) (emphasis added); see also Nat'l Consumers League, 680 F.Supp.2d at 139-40 (DCCPPA provides that damages in a private attorney general action are "payable to the consumer"). Plaintiff's complaint mirrors this requirement demanding damages for "Plaintiff and the General Public of the District of Columbia." (Compl. at Prayer for Relief.) Assuming NCL were to prevail at trial, it is the consumers who would be entitled to more than $75,000, not NCL. NCL would only be entitled to attorney's fees and any damages owed to it for products that it purchased. The Court therefore concludes that a settlement demand of more than $75,000 is not a reasonable calculation of the amount in controversy. Moreover, holding otherwise would effectively permit an unwarranted end-around the non-aggregation principle and unduly discourage settlements in DCCPPA cases.
In addition to defendant's argument that there is diversity jurisdiction, it also argues that removal is appropriate under two provisions of the Class Action Fairness Act. 28 U.S.C. § 1332(d). The first provision extends federal jurisdiction to class actions "in which the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs," even where only minimal diversity exists. Id. at 1332(d)(2). The second extends federal jurisdiction to mass actions "in which monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs' claims involve common questions of law or fact...." Id. at § 1332(d)(11)(B)(i). As explained below, neither of these statutory provisions is applicable to this case.
Under CAFA's "class action" provision, federal courts have original jurisdiction over cases where minimal diversity is satisfied (that is, where at least one plaintiff is diverse from at least one defendant), the number of putative class members is greater than one hundred, and the total amount in controversy as to all plaintiffs is greater than $5 million. Id. at 1332(d)(2). Defendant argues that removal is appropriate on this basis because plaintiff filed its action "under a state statute authorizing an action to be brought by one or more representative persons as a class action," the total amount in controversy is greater than $5 million, and there is complete diversity. (Opp. at 11). Plaintiff responds that private attorney general actions are not class actions under the removal statute as they represent a "separate and distinct procedural vehicle from a class action." (Reply at 11 (citing Breakman, 545 F.Supp.2d at 101).)
Defendant attempts to distinguish Breakman and Zuckman based on the fact that those cases were brought by individuals, whereas the present case was brought by a non-profit, public interest organization. (Opp. at 12.) The difference, defendant argues, is that under D.C. Code § 28-3905(k)(1)(D), a "public interest organization" is only permitted to bring a DCCPPA action "on behalf of the interests of a consumer or a class of consumers...." and "[b]ecause NCL brought this suit on behalf of `the General Public'," defendant contends, "it must necessarily be bringing the suit on behalf of a class of consumers" under CAFA. (Id.) (emphasis in original.)
The Court disagrees with this analysis for two reasons. First, plaintiff's complaint expressly relies on all four private attorney general standing provisions, not just subsection (D).
Second, even if the Court were to construe plaintiff's complaint as one brought solely pursuant to subsection (D), it would not follow that the statute's use of the term "class" would automatically permit removal under CAFA's class action
Defendant next argues that this Court has original jurisdiction under CAFA's "mass action" provision. 28 U.S.C. § 1332(d)(11)(B)(i). This provision provides for federal jurisdiction in "any civil action ... in which monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs' claims involve common questions of law or fact...." Id. At the time plaintiff's motion was filed, the federal courts of appeal were divided on whether actions brought on behalf of the public satisfied the "100 or more persons" requirement. However, the Supreme Court has recently resolved this debate holding that actions brought on behalf of the public, albeit in the context of parens patriae suits filed by states' attorneys general, do not satisfy the "100 or more persons" requirement of CAFA. Mississippi ex rel. Hood, 134 S.Ct. at 744. In that case, the Supreme Court reasoned that "interpreting [the term] `plaintiffs' in accordance with its usual meaning—to refer to the actual named parties who bring an action—leads to a straightforward, easy to administer rule under which a court would examine whether the plaintiffs have pleaded in good faith the requisite amount." Id. That holding is equally applicable here. NCL is the only named plaintiff and therefore defendant is precluded from removing the case under CAFA's mass action provision.
Accordingly, the motion for remand will be granted. A separate order accompanies this Memorandum Opinion.