Patrick Garrett et al v. Bumble Bee Foods, LLC

Filing 35

ORDER by Judge Lucy H. Koh denying as moot 14 Motion to Dismiss; granting 18 Motion to Remand (lhklc3S, COURT STAFF) (Filed on 10/16/2014)

Download PDF
1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 9 United States District Court For the Northern District of California 8 NORTHERN DISTRICT OF CALIFORNIA 10 SAN JOSE DIVISION 11 12 13 14 15 16 PATRICK GARRETT, JEFF MAINS, and ) LINDA EUSTICE, individually and on behalf of ) herself of all others similarly situated, ) ) Plaintiff, ) v. ) ) BUMBLE BEE FOODS, LLC, ) ) Defendant. ) ) Case No.: 5:12-CV-02546-LHK ORDER GRANTING MOTION TO REMAND AND DENYING MOTION TO DISMISS 17 18 Before the Court is the Motion to Remand filed by Plaintiffs Patrick Garrett, Jeff Mains, 19 and Linda Eustice (“Plaintiffs”), ECF No. 18 (“Mot.”), and the Motion to Dismiss, or, 20 Alternatively, Motion to Stay filed by Defendant Bumble Bee Foods, LLC (“Bumble Bee”), ECF 21 No. 14. The Court finds these motions suitable for decision without oral argument pursuant to 22 Civil Local Rule 7-1(b) and hereby VACATES the motion hearing and the Case Management 23 Conference set for October 30, 2014, at 1:30 p.m. Having considered the submissions of the 24 parties, the relevant law, and the record in this case, the Court GRANTS Plaintiffs’ Motion to 25 Remand and DENIES as moot Bumble Bee’s Motion to Dismiss, or, Alternatively, Motion to Stay. 26 I. 27 28 BACKGROUND A. Factual Background 1 Case No.: 12-CV-02546-LHK ORDER GRANTING MOTION TO REMAND AND DENYING MOTION TO DISMISS 1 Bumble Bee, a Delaware corporation with principal place of business in San Diego, 2 California, is “a leading producer of retail seafood products” that sells “to consumers through 3 grocery and other retail stores throughout the United States and California.” Ex. A to ECF No. 1, 4 Class Action Complaint (“Compl.”) ¶ 19. Plaintiffs are California consumers who “care about the 5 nutritional content of food and seek to maintain a healthy diet.” Id. ¶¶ 16-18, 76. They claim to 6 have purchased at least $25 worth of Bumble Bee’s allegedly misbranded food products during the 7 past six years. Id. ¶¶ 16-18. 8 United States District Court For the Northern District of California 9 The challenged Bumble Bee products have labels indicating that they are an “Excellent Source of Omega 3” and endorsed by the American Heart Association. Compl. ¶¶ 22, 41. These 10 labeling claims, Plaintiffs allege, constitute unlawful, false, and misleading statements about 11 Bumble Bee products. Id. ¶¶ 6-13. The standards for evaluating Bumble Bee’s labeling claims are 12 set forth in regulations promulgated under the federal Food, Drug, and Cosmetic Act (“FDCA”), 21 13 U.S.C. § 301 et seq., which California law has adopted in toto. Id. ¶¶ 6, 10-11; see Bruton v. 14 Gerber Prods. Co., 961 F. Supp. 2d 1062, 1080 (N.D. Cal. 2013) (“Through the Sherman Law, 15 California has expressly adopted the federal labeling requirements as its own.”). Plaintiffs 16 therefore contend that Bumble Bee’s products are “misbranded” under California law. Compl. 17 ¶ 12. 18 In particular, Plaintiffs allege the following causes of action, all of which arise under 19 California law: (1) violation of the Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code 20 § 17200 et seq., for unlawful, unfair, and fraudulent business acts and practices (first, second, and 21 third counts); (2) violation of the Fair Advertising Law (“FAL”), Cal. Bus. & Prof. Code § 17500 22 et seq., for misleading, deceptive, and untrue advertising (fourth and fifth counts); (3) violation of 23 the Consumer Legal Remedies Act (“CLRA”), Cal. Civ. Code § 1750 et seq. (sixth count); (4) 24 breach of the implied warranty of merchantability (seventh count); (5) negligent misrepresentation 25 (eighth count); (6) negligence (ninth count); (7) unjust enrichment (tenth count); (8) recovery in 26 assumpsit of funds paid for misbranded products (eleventh count); and declaratory relief (twelfth 27 count). Compl. ¶¶ 98-197. 28 2 Case No.: 12-CV-02546-LHK ORDER GRANTING MOTION TO REMAND AND DENYING MOTION TO DISMISS 1 B. Previous Litigation: Ogden v. Bumble Bee Foods, No. 12-CV-01828-LHK 2 On April 12, 2012, Plaintiffs’ counsel, on behalf of Tricia Ogden (“Ogden”) and a putative class of nationwide consumers, filed a class action lawsuit against Bumble Bee in the United States 4 District Court for the Northern District of California. ECF No. 1, Ex. 2 to Decl. of Robert B. Bader 5 (“Ogden MSJ Order”) at 9. Before this very Court, Ogden asserted similar UCL, FAL, and CLRA 6 claims to those that Plaintiffs now bring. See id. at 8-9. In addition, Ogden alleged violations of 7 the Song-Beverly Consumer Warranty Act, Cal. Civ. Code § 1790 et seq., and the Magnuson-Moss 8 Warranty Act, 15 U.S.C. § 2301 et seq., Ogden’s sole federal claim. Ogden MSJ Order at 9. 9 United States District Court For the Northern District of California 3 Ogden moved for class certification on May 9, 2013, and Bumble Bee moved for summary 10 judgment on August 29, 2013. Id. 11 On January 2, 2014, the Court granted in part and denied in part Bumble Bee’s Motion for 12 Summary Judgment. Ogden MSJ Order at 33-34. As relevant here, the Court granted summary 13 judgment as to Ogden’s claims for damages, concluding that Ogden had failed to provide sufficient 14 evidence showing that she was entitled to restitution under the UCL, FAL, and CLRA, or 15 disgorgement under the UCL and FAL. Id. at 26-29. The Court did find, however, that Ogden was 16 entitled to pursue injunctive relief. Id. at 29-30. Furthermore, the Court granted summary 17 judgment on Ogden’s sole federal claim, holding that it “fail[ed] as a matter of law.” Id. at 30-31. 18 With no remaining federal claim to support subject matter jurisdiction, the Court noted that “it 19 retain[ed] jurisdiction under . . . the Class Action Fairness Act, 28 U.S.C. § 1332(d)(2).” Id. at 31 20 n.18. 21 Ogden subsequently withdrew her Motion for Class Certification, and both parties 22 stipulated to a voluntary dismissal with prejudice. ECF No. 26 (“Opp’n”) at 2. On March 10, 23 2014, the Court entered judgment in favor of Bumble Bee. Compl. at 2 n.1. 24 C. Current Litigation: Garrett v. Bumble Bee Foods, No. 14-CV-02546-LHK 25 On April 25, 2014, six weeks after the Ogden litigation had ended, Plaintiffs’ counsel filed 26 the instant class action lawsuit in Santa Clara County Superior Court. Compl. at 1. This time, the 27 28 3 Case No.: 12-CV-02546-LHK ORDER GRANTING MOTION TO REMAND AND DENYING MOTION TO DISMISS 1 putative class was limited to California consumers only. Id. at 2. Bumble Bee filed a notice 2 seeking to remove the case to federal court on June 3, 2014. ECF No. 1. 3 Bumble Bee filed a Motion to Dismiss, or, Alternatively, Motion to Stay on June 10, 2014. 4 ECF No. 14. Plaintiffs opposed that motion on August 1, 2014, ECF No. 24, and Bumble Bee 5 replied on September 5, 2014, ECF No. 29. 6 On June 20, 2014, Plaintiffs filed a Motion to Remand. Mot. at 10. Bumble Bee opposed 7 the Motion to Remand on August 8, 2014. Opp’n at 8. Plaintiffs replied on September 5, 2014. 8 ECF No. 28 (“Reply”) at 6. United States District Court For the Northern District of California 9 In light of the similarities between this case and Ogden, the Court granted Bumble Bee’s 10 Motion to Relate on July 9, 2014, and assumed authority over the litigation. ECF No. 21. 11 II. LEGAL STANDARD 12 A suit may be removed from state court to federal court only if the federal court would have 13 had subject matter jurisdiction over the case. 28 U.S.C. § 1441(a); see Caterpillar Inc. v. Williams, 14 482 U.S. 386, 392 (1987) (“Only state-court actions that originally could have been filed in federal 15 court may be removed to federal court by the defendant.”). If it appears at any time before final 16 judgment that the federal court lacks subject matter jurisdiction, the federal court must remand the 17 action to state court. 28 U.S.C. § 1447(c). 18 The party seeking removal bears the burden of establishing federal jurisdiction. Provincial 19 Gov’t of Marinduque v. Placer Dome, Inc., 582 F.3d 1083, 1087 (9th Cir. 2009). “The removal 20 statute is strictly construed, and any doubt about the right of removal requires resolution in favor of 21 remand.” Moore-Thomas v. Alaska Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 2009) (citing 22 Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992)). 23 III. 24 DISCUSSION Plaintiffs argue in their Motion to Remand that removal was improper because the Court 25 lacks subject matter jurisdiction over their lawsuit. Mot. at 5-9. According to Plaintiffs, they have 26 “pleaded no claims under federal law, and Plaintiffs’ proposed class consists of California residents 27 only.” Id. at 3. Plaintiffs also argue that they are entitled to attorney’s fees or costs under 28 4 28 Case No.: 12-CV-02546-LHK ORDER GRANTING MOTION TO REMAND AND DENYING MOTION TO DISMISS 1 U.S.C. § 1447(c) because Bumble Bee’s attempt at removal was objectively unreasonable. Id. at 9- 2 10. For the reasons stated below, the Court GRANTS Plaintiffs’ motion and orders the case 3 remanded to Santa Clara County Superior Court. 4 A. Federal Question Jurisdiction 5 “Absent diversity of citizenship,1 federal-question jurisdiction is required.” Caterpillar, 482 U.S. at 392. Under 28 U.S.C. § 1331, federal courts have original jurisdiction over civil 7 actions “arising under the Constitution, laws, or treaties of the United States.” Federal question 8 jurisdiction “is determined (and must exist) as of the time the complaint is filed and removal is 9 United States District Court For the Northern District of California 6 effected.” Strotek Corp. v. Air Transp. Ass’n of Am., 300 F.3d 1129, 1131 (9th Cir. 2002). 10 Removal pursuant to section 1331 is governed by the “well-pleaded complaint rule,” which 11 provides that federal question jurisdiction exists only when “a federal question is presented on the 12 face of plaintiff’s properly pleaded complaint.” Caterpillar, 482 U.S. at 392. 13 “[I]n certain cases,” the Supreme Court has explained, “federal-question jurisdiction will lie 14 over state-law claims that implicate significant federal issues.” Grable & Sons Metal Prods., Inc. 15 v. Darue Eng’g & Mfg., 545 U.S. 308, 312 (2005). Under Grable, a federal court may exercise 16 jurisdiction over a state-law claim only if (1) the action necessarily raises a federal issue that is 17 (2) disputed and (3) substantial, and if (4) the court may entertain the case without disturbing the 18 congressionally approved balance of federal and state judicial responsibilities. Id. at 314. The 19 party seeking to establish jurisdiction must justify a need for “the experience, solicitude, and hope 20 of uniformity that a federal forum offers on federal issues.” Id. at 312. 21 22 23 24 25 26 27 28 1 Neither party disputes the lack of diversity in this case. As Plaintiffs are California residents and Bumble Bee’s principal place of business is in San Diego, see Compl. ¶¶ 16-19, both parties are California citizens for purposes of diversity jurisdiction, see 28 U.S.C. § 1332(a), (c). The Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d), also provides no basis for jurisdiction. Here, unlike in Ogden, the putative class is limited to California consumers only. Compl. at 2. Because no member of the putative class is diverse from Bumble Bee, the sole defendant, CAFA cannot confer subject matter jurisdiction. See 28 U.S.C. § 1332(d)(2)(A) (providing subject matter jurisdiction where “any member of a class of plaintiffs is a citizen of a State different from any defendant”). 5 Case No.: 12-CV-02546-LHK ORDER GRANTING MOTION TO REMAND AND DENYING MOTION TO DISMISS 1 In this case, Bumble Bee has satisfied Grable’s first two prongs. Plaintiffs do not contend otherwise. Plaintiffs acknowledge that California law has “adopted in toto federal labeling rules 3 and regulations.” Mot. at 6 n.1. Moreover, Plaintiffs’ complaint alleges violations of California 4 law on the basis that Bumble Bee’s products fail to satisfy the FDCA and regulations promulgated 5 thereunder. Compl. ¶¶ 10-11 (discussing “FDCA section 403(a)”); id. ¶¶ 23, 26-28, 32-35 6 (discussing “21 C.F.R. § 101.54” and “21 C.F.R. § 101.13”). Because the federal food labeling 7 standards set forth under the FDCA provide the basis for evaluating Plaintiffs’ state law claims, 8 this lawsuit “necessarily raise[s]” issues of federal law. Grable, 545 U.S. at 314. These federal 9 United States District Court For the Northern District of California 2 issues are plainly “disputed.” Id.; see Compl. ¶¶ 192, 194 (seeking relief declaring Bumble Bee’s 10 11 products mislabeled and misbranded under both federal and state law). Bumble Bee, however, has failed to show that the federal issue in this case is sufficiently 12 “substantial” to warrant the exercise of federal jurisdiction. The Supreme Court’s decision in 13 Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U.S. 804 (1986), largely settles the issue. In 14 Merrell Dow, as here, the plaintiffs asserted state law claims based on the defendant’s alleged 15 misbranding of a product, in violation of the FDCA. Id. at 805. Specifically, Plaintiffs there 16 argued that the drug Bendectin, which had allegedly caused birth defects, was “misbranded” in 17 contravention of the FDCA. Id. That misbranding, plaintiffs alleged, created “a rebuttable 18 presumption of negligence” for purposes of state law. Id. at 806. 19 On these facts, the Supreme Court found no federal question jurisdiction. After 20 determining that the FDCA provided “no federal private cause of action,” Merrell Dow, 478 U.S. 21 at 811-12, the Court held that “the congressional determination that there should be no federal 22 remedy for the violation of this federal statute is tantamount to a congressional conclusion that the 23 presence of a claimed violation of the statute as an element of a state cause of action is 24 insufficiently ‘substantial’ to confer federal-question jurisdiction,” id. at 814. This holding, the 25 Grable Court later clarified, does not “make a federal right of action mandatory” for the exercise of 26 federal question jurisdiction. Grable, 545 U.S. at 317. Rather, “the absence of a federal private 27 28 6 Case No.: 12-CV-02546-LHK ORDER GRANTING MOTION TO REMAND AND DENYING MOTION TO DISMISS 1 right of action . . . [is] relevant to, but not dispositive of, the sensitive judgments about 2 congressional intent that § 1331 requires.” Id. at 318 (internal quotation marks omitted). 3 Notwithstanding Grable’s clarification, Bumble Bee offers no reason why the issue of FDCA misbranding is more “substantial” here than it was in Merrell Dow. Indeed, the only 5 distinction Bumble Bee can muster is that the claims in Merrell Dow, unlike here, “truly sound in 6 tort.” Opp’n at 6 n.5. But as Plaintiffs correctly observe, see Reply at 1, the Merrell Dow Court 7 never suggested that its ruling hinged on whether the federal issues sounded in tort or concerned 8 physical harm. Instead, the Supreme Court’s ruling turned on its assessment that Congress had 9 United States District Court For the Northern District of California 4 determined “there should be no federal remedy for the violation of [the FDCA].” Merrell Dow, 10 478 U.S. at 814. Allowing jurisdiction would therefore “flout, or at least undermine, congressional 11 intent.” Id. at 812. As the Grable Court explained: “Expressing concern over the ‘increased 12 volume of federal litigation,’ and noting the importance of adhering to ‘legislative intent,’ Merrell 13 Dow thought it improbable that the Congress, having made no provision for a federal cause of 14 action, would have meant to welcome any state-law tort case implicating federal law ‘solely 15 because the violation of the federal statute is said to [create] a rebuttable presumption [of 16 negligence] . . . under state law.” Grable, 545 U.S. at 319 (alterations in original) (quoting Merrell 17 Dow, 478 U.S. at 811-12). Whether Plaintiffs’ claims “truly sound in tort” is of no moment. 18 In finding no federal question jurisdiction, the Court notes its agreement with Judge 19 Hamilton in a similar case, People v. Monster Beverage Corp., No. C 13-2500 PJH, 2013 WL 20 5273000 (N.D. Cal. Sept. 18, 2013). There, the People of the State of California (the “People”), 21 acting through the San Francisco City Attorney, brought suit in state court against Monster 22 Beverage Corporation (“Monster”). The People in that case argued that Monster’s energy drinks 23 were mislabeled and misbranded in part because their level of caffeine was not “generally 24 recognized as safe” under federal standards promulgated by the Food and Drug Administration. 25 Relying on Merrell Dow, Judge Hamilton granted the People’s motion to remand the case to state 26 court. Id. at *1. Monster, the court held, “provided no reason why the federal issue in this case is 27 more substantial than that in Merrell Dow.” Id. In addition, the court in Monster found that 7 28 Case No.: 12-CV-02546-LHK ORDER GRANTING MOTION TO REMAND AND DENYING MOTION TO DISMISS 1 “exercising federal jurisdiction over this case would allow parties to end-run around the FDCA’s 2 lack of a private right of action.” Id. Judge Hamilton concluded that keeping such cases in federal 3 court “would disturb the congressionally approved balance of federal and state judicial 4 responsibilities, and would thus run afoul of the [Supreme] Court’s holding in Grable.” Id. 5 The same is true here. Not only are the federal issues insufficiently substantial under Merrell Dow, but exercising jurisdiction over this California class action would circumvent the 7 FDCA’s lack of a private cause of action. Although the Court recognizes that it has already 8 evaluated some of the substantive state law issues involved in this case, see Ogden MSJ Order,2 the 9 United States District Court For the Northern District of California 6 Court did so only because it had jurisdiction under CAFA, see supra note 2. With no federal 10 statutory hook to maintain jurisdiction here, the Court finds that the “congressionally approved 11 balance of federal and state judicial responsibilities” tips in favor of remanding. Grable, 545 U.S. 12 at 314. As a result, the Court GRANTS Plaintiffs’ Motion to Remand.3 13 B. Attorney’s Fees or Costs 14 Under 28 U.S.C. § 1447(c), “[a]n order remanding the case may require payment of just 15 costs and any actual expenses, including attorney fees, incurred as a result of the removal.” The 16 Supreme Court has explained that “courts may award attorney’s fees under § 1447(c) only where 17 the removing party lacked an objectively reasonable basis for seeking removal.” Martin v. 18 Franklin Capital Corp., 546 U.S. 132, 141 (2005). “Conversely,” the Court continued, “when an 19 objectively reasonable basis exists, fees should be denied.” Id. 20 21 22 23 24 25 26 27 28 2 Upon remand to Santa Clara County Superior Court, Bumble Bee may well argue that the Court’s January 2, 2014, summary judgment order in Ogden warrants some preclusive effect in the instant litigation. The Court defers to the state court in making that determination. 3 The Court need not address Bumble Bee’s argument concerning supplemental jurisdiction under 28 U.S.C. § 1367. As Bumble Bee acknowledges, section 1367 cannot provide independent grounds for removal jurisdiction. Opp’n at 3 n.3; see also Sato v. Wachovia Mortgage, No. FSB, 5:11-CV-00810 EJD, 2011 WL 2784567, at *12 (N.D. Cal. July 13, 2011) (“The supplementaljurisdiction statute is not a source of original subject-matter jurisdiction, and a removal petition therefore may not base subject-matter jurisdiction on the supplemental jurisdiction statute . . . .” (internal quotation marks omitted)). 8 Case No.: 12-CV-02546-LHK ORDER GRANTING MOTION TO REMAND AND DENYING MOTION TO DISMISS 1 The Court finds that, in light of Grable’s clarification of Merrell Dow, Bumble Bee had an 2 objectively reasonable basis for seeking removal. See Monster, 2013 WL 5273000, at *2 (denying 3 plaintiff attorney’s fees or costs because “defendant had an objectively reasonable basis for seeking 4 removal (at least with respect to Grable)”). Accordingly, the Court DENIES Plaintiffs’ request for 5 attorney’s fees or costs. 6 IV. CONCLUSION For the foregoing reasons, the Court GRANTS Plaintiffs’ Motion to Remand the case to 8 Santa Clara County Superior Court and DENIES as moot Bumble Bee’s Motion to Dismiss, or, 9 United States District Court For the Northern District of California 7 Alternatively, Motion to Stay. The Court also DENIES Plaintiffs’ request for attorney’s fees or 10 costs. 11 IT IS SO ORDERED. 12 13 Dated: October 16, 2014 _________________________________ LUCY H. KOH United States District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 Case No.: 12-CV-02546-LHK ORDER GRANTING MOTION TO REMAND AND DENYING MOTION TO DISMISS

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?