People of the State of California v. Monster Beverage Corporation

Filing 47

ORDER by Judge Hamilton granting 19 Motion to Remand; denying 20 Motion for Attorney Fees; finding as moot 15 Motion to Dismiss (pjhlc2, COURT STAFF) (Filed on 9/18/2013)

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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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PEOPLE OF THE STATE OF
CALIFORNIA,

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Plaintiffs,
v.

ORDER GRANTING MOTION TO
REMAND

MONSTER BEVERAGE CORP.,

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For the Northern District of California

United States District Court

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No. C 13-2500 PJH

Defendant.
_______________________________/

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Plaintiffs’ motion for remand and defendant’s motion to dismiss, stay, or transfer

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came on for hearing before this court on September 18, 2013. Plaintiffs People of the

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State of California (“plaintiffs”) appeared through their counsel, Aileen McGrath and

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Jennifer Choi. Defendant Monster Beverage Corp. (“defendant”) appeared through its

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counsel, Dan Marmalefsky and Claudia Vetesi. Having read the papers filed in conjunction

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with the motions and carefully considered the arguments and the relevant legal authority,

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and good cause appearing, the court hereby GRANTS plaintiffs’ motion to remand as

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follows.

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Plaintiffs argue that remand is proper because their complaint was originally filed in

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state court and asserts only state law claims. Defendant makes two arguments for federal

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jurisdiction - first arguing that the Supreme Court’s opinion in Grable & Sons Metal

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Products v. Darue Engineering and Mfg. (545 U.S. 308 (2005)) provides for federal

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jurisdiction in this case, and also arguing that the “complete preemption” doctrine allows for

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removal.

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Grable allows a federal court to exercise jurisdiction over a state-law claim if (1) the

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action necessarily raises a federal issue that is (2) disputed and (3) substantial, and if (4) a

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federal court may entertain the case without disturbing the congressionally approved

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balance of federal and state judicial responsibilities. 545 U.S. at 314. The court agrees

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that the first element of the test is met, as the relevant state law incorporates federal food

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safety standards. However, the court finds that the Supreme Court’s opinion in Merrell

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Dow Pharmaceuticals v. Thompson directly controls on factor (3), and precludes federal

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jurisdiction over this case. 478 U.S. 804 (1986). In Merrell Dow, which also involved the

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assertion of a state law claim predicated on the violation of the federal Food, Drug, and

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Cosmetics Act (“FDCA”) (for which there is no private right of action), the Court held that

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“the congressional determination that there should be no federal remedy for the violation of
this federal statute is tantamount to a congressional conclusion that the presence of a

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For the Northern District of California

United States District Court

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claimed violation of the statute as an element of a state cause of action is insufficiently

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‘substantial’ to confer federal-question jurisdiction.” Id. at 814. Although the Grable Court

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later clarified that “the absence of a federal private right of action” is “relevant to, but not

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dispositive of” the jurisdictional issue, defendant has provided no reason why the federal

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issue in this case is more substantial than that in Merrell Dow.1 Moreover, exercising

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federal jurisdiction over this case would allow parties to end-run around the FDCA’s lack of

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a private right of action, and would encourage parties to cloak FDCA claims in the guise of

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state law claims in order to sneak into federal court. This diversion of state court cases into

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federal court would disturb the “congressionally approved balance of federal and state

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judicial responsibilities,” and would thus run afoul of the Court’s holding in Grable. Thus,

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the court finds that Grable does not provide for federal jurisdiction over this case.

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Defendant also argues that the “complete preemption” doctrine allows removal of

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this case, though this argument was addressed only briefly in defendant’s papers and at

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the hearing. Defendant does not provide any authority holding that the FDCA completely

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The court further notes that both cases involve allegations of misbranding based on
a failure to adequately warn customers of the risks of using the product. See 478 U.S. at
805-06. Thus, the nature of the federal question, as pled, is the same in this case as it was
in Merrell Dow.
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preempts any state law claims, and the only case that defendant does cite (Perez v. Nidek,

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711 F.3d 1109 (9th Cir. 2013)) relates to implied preemption, not to complete preemption.

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Thus, the court finds that plaintiffs’ claims are not completely preempted by the FDCA.

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Accordingly, defendant has not identified any basis for federal jurisdiction over this

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case, and plaintiffs’ motion to remand is GRANTED. However, because defendant had an

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objectively reasonable basis for seeking removal (at least with respect to Grable), the court

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DENIES plaintiffs’ motion for attorneys’ fees and costs. Because the court finds that it

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lacks jurisdiction, it does not reach the merits of defendant’s motion to dismiss, stay, or

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transfer.

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For the Northern District of California

United States District Court

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The Clerk shall remand this matter to the Superior Court for the City and County of
San Francisco.

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IT IS SO ORDERED.

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Dated: September 18, 2013
______________________________
PHYLLIS J. HAMILTON
United States District Judge

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