Sharpe et al v. Puritan's Pride, Inc. et al

Filing 34

ORDER RE REMAND. Signed by Judge James Donato on 2/6/2017. (jdlc3S, COURT STAFF) (Filed on 2/6/2017)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 DARCEY L. SHARPE, et al., Plaintiffs, 8 PURITAN’S PRIDE, INC., et al., Re: Dkt. No. 19 Defendants. 11 United States District Court Northern District of California ORDER RE REMAND v. 9 10 Case No. 3:16-cv-06717-JD 12 13 In this putative class action, the named plaintiffs allege deceptive practices and other 14 consumer claims against defendant Puritan’s Pride in the marketing and sale of nutritional 15 supplements. Plaintiffs sue mainly under the laws of California and New York, and originally 16 filed this action in Mendocino County Superior Court. Puritan’s Pride removed to federal court 17 under the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. § 1332(d). Dkt. No. 1. 18 Plaintiffs contend that the $5 million amount-in-controversy requirement for CAFA jurisdiction is 19 not met and that the case should be returned to California state court. Dkt. No. 19. The motion is 20 denied. 21 22 BACKGROUND The gist of the complaint is straightforward. Named plaintiffs Darcey L. Sharpe, Mary 23 Ludolph-Aliaga, Jay D. Werner, and Eva Krueger allege that Puritan’s Pride and its parent entity, 24 NBTY, Inc. (together, “Puritan’s Pride”), manipulated the use of free promotions to induce 25 “unsuspecting consumers” into buying “billions of dollars’ worth” of Puritan’s Pride vitamins and 26 other products. Dkt. No. 1-1 ¶ 2. Plaintiffs seek to represent a nationwide class along with 27 subclasses for New York and California residents. Id. ¶ 66. The complaint also alleges that 28 Puritan’s Pride has violated the consumer protection laws of forty different states and the District 1 of Columbia. Id. ¶ 125. On behalf of themselves and all members of the putative classes, 2 plaintiffs seek an order requiring Puritan’s Pride to pay restitution and “to restore to Plaintiffs and 3 members of the Classes all funds acquired by means of any act or practice” declared to be 4 unlawful, id. at 38 ¶ (B), as well as “all damages allowed by governing statutes,” id. at 38 ¶ (E). 5 Puritan’s Pride filed a notice of removal on November 21, 2016. Dkt. No. 1. The sole ground for removal was CAFA jurisdiction under 28 U.S.C. § 1332(d), and the notice stated that 7 “[t]he collective amount of the total sales of Puritan’s Pride branded products under ‘free’ 8 promotions in the United States from October 14, 2013 to October 14, 2016 exceeds $5 million 9 and is sufficient for purposes of 28 U.S.C. §§ 1332(d) and 1441(a).” Id. ¶ 11. Joseph Looney, a 10 Vice President at Puritan’s Pride, submitted a declaration stating that the total revenue from sales 11 United States District Court Northern District of California 6 of Puritan’s Pride branded products sold under free promotions during the relevant time period 12 exceeded $5 million. Dkt. 1-1 at 44. 13 On December 21, 2016, plaintiffs filed a motion to remand that challenges whether the 14 case meets the CAFA jurisdictional minimum. Dkt. No. 19. Plaintiffs did not proffer any 15 evidence of their own about the amount in controversy, and based their argument solely on the 16 contention that Puritan’s Pride had failed to carry its burden of establishing jurisdiction. Id. 17 In response, Puritan’s Pride filed three supplemental declarations from Looney, including 18 one averring that more than 100,000 New York residents purchased Puritan’s Pride products in 19 New York under free promotions during the relevant time period -- a fact that will drive the 20 removal analysis here. Dkt. No. 25-3 ¶¶ 3-4. Plaintiffs criticized the sufficiency of Puritan’s 21 Pride’s evidence in reply but again did not proffer their own declaration, competing evidence, or 22 any estimate of the amount in controversy. See Dkt. No. 26. 23 24 DISCUSSION A defendant’s notice of removal under CAFA need include only “a plausible allegation 25 that the amount in controversy exceeds the jurisdictional threshold,” and not evidentiary 26 submissions. Ibarra v. Manheim Investments, Inc., 775 F.3d 1193, 1197 (9th Cir. 2015) (quoting 27 Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S. Ct. 547, 554 (2014)). If, as here, a 28 defendant’s assertion of the amount in controversy is challenged, “both sides submit proof” and 2 1 “the court decides, by a preponderance of the evidence, whether the amount-in-controversy 2 requirement has been satisfied.” Chin v. Cole Haan, LLC, No. 16-cv-02154-JD, 2016 WL 3 7211841, at *1 (N.D. Cal. Dec. 13, 2016) (quoting LaCross v. Knight Transportation Inc., 775 4 F.3d 1200, 1202 (9th Cir. 2015)). 5 When removal is based on CAFA jurisdiction, there is “no antiremoval presumption.” 6 Dart Cherokee, 135 S. Ct. at 554. But the removing party bears the burden of proving that 7 jurisdiction is proper and of “persuad[ing] the court that the estimate of damages in controversy is 8 a reasonable one.” Chin, 2016 WL 7211841, at *1 (quoting Ibarra, 775 F.3d at 1197). CAFA’s 9 requirements are tested by “real evidence” under procedures entrusted to the district court’s discretion. Ibarra, 775 F.3d at 1199-1200. Whether a plaintiff can “simply say nothing and offer 11 United States District Court Northern District of California 10 no evidence of amount in controversy at all” to challenge removal is an open question in our 12 circuit, but the procedural minimum is that both parties should have “a fair opportunity to submit 13 proof.” Id. 14 That opportunity has been provided here, and Puritan’s Pride has proffered uncontroverted 15 evidence to establish, using a “reasonable chain of logic,” that the amount in controversy in this 16 case exceeds $5 million. LaCross, 775 F.3d at 1201. Looney’s first supplemental declaration 17 states that more than 100,000 New York residents purchased Puritan’s Pride branded products in 18 New York under free promotions from October 14, 2013 through the date of his declaration. Dkt. 19 No. 25-3 ¶¶ 3-4. This is an important averment because plaintiffs allege a New York subclass for 20 violations of New York’s Deceptive Acts and Practices Act, N.Y. Gen. Bus. Law § 349. Dkt. No. 21 1-1 ¶¶ 113-23. That statute gives a private right of action under a three-year statute of limitations, 22 see In re HSBC Bank, USA, N.A., Debit Card Overdraft Fee Litig., 14 F. Supp. 3d 99, 103 23 (E.D.N.Y. 2014), and provides for the greater of actual damages or $50 in statutory damages per 24 person. N.Y. Gen. Bus. Law § 349(h). It also allows the court to increase an award up to $1,000 25 for willful and intentional misconduct. Id. Consequently, the New York subclass, on just the 26 basic damages award for the Section 349 claim, stands to recover at least $5 million if plaintiffs 27 are successful because the minimum amount to be awarded is $50 per claimant. That is enough to 28 meet the CAFA jurisdictional minimum for removal of this case. 3 1 Plaintiffs offer nothing that points to a different conclusion. They do not tender any 2 declarations, affidavits, expert reports, or other “real evidence” undermining Puritan’s Pride’s 3 showing. Ibarra, 775 F.3d at 1198. They say only that they seek actual damages under Section 4 349, with the unstated implication that actual damages will be under $50 and that they will forego 5 a $50 per person minimum award. Dkt. No. 26 at 1 n.1. But that position is belied by the 6 complaint, which expressly seeks “relief including, but not limited to, actual damages” under New 7 York law, Dkt. No. 1-1 ¶ 123, and prays for “all damages allowed by governing statutes,” id. at 38 8 ¶ (E). In addition, plaintiffs’ counsel lacks the authority to legally bind a putative class with a 9 damages limitation. Standard Fire Ins. Co. v. Knowles, 133 S. Ct. 1345, 1349 (2013). The full measure of damages under Section 349 is plainly sought in the complaint, and that alone -- 11 United States District Court Northern District of California 10 without reliance on plaintiffs’ nationwide restitutionary claims or claims to damages, both actual 12 and statutory, under dozens of other allegedly violated state consumer protection laws -- provides 13 the basis for CAFA jurisdiction here. CONCLUSION 14 15 Plaintiffs’ motion to remand is denied. The Court will issue a scheduling order. 16 IT IS SO ORDERED. 17 Dated: February 6, 2017 18 19 JAMES DONATO United States District Judge 20 21 22 23 24 25 26 27 28 4

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