Johnson v. Organo Gold Int'l Inc. et al
Filing
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MEMORANDUM OPINION re 7 motion to remand. Signed by Judge Leonard P. Stark on 11/20/15. (ntl)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
MARLIN JOHNSON, on behalf of himself
and all others similarly situated,
Plaintiff,
Civil Action No. 15-390-LPS
v.
ORGANO GOLD INT'L, INC. , et al. , a
Nevada Corporation, ORGANO GOLD
INT'L, INC. , a Washington Corporation,
OR GANO GOLD INTERNATIONAL,
LLC, and ORGANO GOLD
MANAGEMENT, INC.
Defendants.
Phillip T. Edwards, MURPHY & LANDON, Wilmington, DE.
John S. Spadaro, JOHN SHEEHAN SP AD ARO, LLC, Hockessin, DE.
Attorneys for Plaintiff.
Colm F. Connolly, Jody C. Barillare, MORGAN, LEWIS & BOCKIUS LLP , Wilmington, DE.
Thomas J. Sullivan, Zachary M. Johns, MORGAN, LEWIS & BOCKIUS LLP, Philadelphia, PA.
Attorneys for Defendants.
MEMORANDUM OPINION
November 20, 2015
Wilmington, Delaware
~/(h
, U.S. District Judge:
Pending before the Court is Plaintiffs Motion to Remand to the Superior Court of
Delaware. (D.I. 7) ("Motion") Briefing on the motion was completed on July 8, 2015. (D.I. 8,
12, 13) The Court heard argument on the motion on October 9, 2015 . (Oct. 9, 2015 Hearing
Transcript) (hereinafter Tr.) For the reasons set forth below, the Court will deny the Motion.
I.
BACKGROUND
On March 19, 2015, plaintiff Marlin Johnson ("Plaintiff'), a resident of Florida, filed a
civil action against defendants Organo Gold International, Inc., Organo Gold International LLC,
and Organo Gold Management Inc. (collectively, "Organo" or "Defendants"), in the Superior
Court of Delaware in and for New Castle County. (See D.I. 1 at 2) In his complaint (see D.I. 1,
Ex. A at 8-23) (hereinafter "Complaint"), Plaintiff alleges that he suffered serious complications
after undergoing gastric bypass surgery due to his consumption of Organo coffee containing
Ganoderma Lucidum. (Id. at iii! 8-9) He claims that Defendants failed to warn him of the
dangerous side effects of Ganoderma Lucidum, and further failed to label the amount of
Ganoderma Lucidum in its product. (See id. at if 13) Consequently, in Plaintiffs view,
Defendants are liable for his resulting injuries. (See, e.g ., id. at if 1) Plaintiff also purports to
bring a class action on behalf of over 100 individuals and entities "within the State of Delaware
that purchased Organo products containing Ganoderma Lucidum." (Id. at if 4) In his Complaint,
Plaintiff asserts six counts for: (i) declaratory relief; (ii) breach of express and implied
warranties; (iii) consumer fraud; (iv) negligence; (v) negligent labeling and failing to warn; and
(vi) misrepresentation. (Id. at iii! 23-43)
On May 15, 2015, Defendant filed a notice ofremoval in this Court, contending this
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Court has subject matter jurisdiction based on diversity of citizenship, 28 U.S.C . § 1332(a), and
the Class Action Fairness Act ("CAFA"), 28 U.S .C. § 1332(d). (See id. at 1, 3-7) On May 29,
2015, Plaintiff filed the Motion (D .I. 7), arguing that there is no diversity of citizenship between
the parties and that Defendants have not shown that the amount in controversy exceeds the
$75,000 jurisdictional threshold, and further that jurisdiction does not exist under CAFA because
Defendants have not made an adequate showing that the aggregated amount in controversy is in
excess of $5,000,000 (see D.I. 8 at 2).
II.
LEGAL ST AND ARDS
Pursuant to 28 U.S.C. § 1441 , a defendant in a state court proceeding may have the right
to remove such a case to federal court if, based upon the face of the filed pleadings, subject
matter jurisdiction would have existed in federal court for the plaintiffs claims. Where federal
subject matter jurisdiction is based on diversity, there must be both complete diversity of the
parties and the requisite jurisdictional amount of at least $75,000. See 28 U.S.C. § 1332(a).
Where federal subject matter jurisdiction is based on CAFA, there must be at least minimal
diversity of the parties and the requisite jurisdictional amount of greater than $5,000,000. See 28
U.S.C. § 1332(d).
With respect to diversity, a case "may not be removed if any of the parties in interest
properly joined and served as defendants is a citizen of the State in which such action is
brought." 28 U.S.C. § 144l(b). Pursuant to 28 U.S .C. § 1332(c), "a corporation shall be deemed
to be a citizen of every State and foreign state by which it has been incorporated and of the State
or foreign state where it has its principal place of business .. . ."
With respect to amount in controversy, on a motion to remand " [i]t must appear to a legal
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certainty that the claim is really for less than the jurisdictional amount to justify dismissal." St.
Paul Mercury lndem. Co. v. Red Cab Co., 303 U.S. 283, 289 (1938), superceded by statute on
other grounds, Judicial Improvements and Access to Justice Act, Pub. L. No. 100-702, tit. X,
§ 1016(c), 102 Stat. 4670 (1988). Generally, the amount in controversy is determined by the
complaint itself. See Horton v. Liberty Mut. Ins. Co., 367 U.S. 348, 353 (1961). Where the
amount in controversy is ambiguous in the pleadings, the Court must conduct its own
independent appraisal of the allegations to determine whether the value of claims exceeds the
jurisdictional amount. See Angus v. Shiley Inc., 989 F .2d 142, 146 (3d Cir. 1993). "The amount
in controversy is not measured by the low end of an open-ended claim, but rather by a reasonable
reading of the value of the rights being litigated." Id. A defendant "seeking removal [and to
defeat remand) has the burden of showing by a preponderance of the evidence that the amount in
controversy exceeds the jurisdictional amount." Rudolph v. Taylor, 2004 WL 51270, at *1 (D.
Del. Jan. 5, 2004). " In other words, it must be more likely than not that the amount in
controversy will be [satisfied)." Id.
The removal statute is "strictly construed against removal [with] all doubts ... resolved
in favor ofremand." Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990).
III.
DISCUSSION
The Court concludes that complete diversity of citizenship exists because Plaintiff is a
resident of Florida and Defendants are Nevada business entities. (See Complaint at iii! 3-4)
These facts are not disputed. (Tr. at 8) Further, although Plaintiff prays for an indeterminate
amount of compensatory and punitive damages and attorneys' fees, he alleges that he suffered
serious medical injuries, requiring him "to be resuscitated with multiple blood and platelet
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transfusions and undergo an emergency surgery." (Complaint at ~~ 1, 9) Plaintiff does not
dispute that the value of his own personal injury claim exceeds $75,000. (Tr. at 7-8) Thus, with
respect to Plaintiff's individual personal injury claim, it is more likely than not that the amount in
controversy exceeds $75,000. Accordingly, the Court has original jurisdiction over at least
Plaintiff's individual personal injury claim. 1
The Court' s analysis turns next to whether supplemental jurisdiction exists over the
claims of the absent class members . Plaintiff argues that his own personal injury cannot be used
to impart subject matter jurisdiction over the absent class members, whose injuries are unknown.
(See, e.g., D.I. 8 at 6, 8)
In taking this view, Plaintiff relies on the Third Circuit' s decision in Packard v. Provident
Nat 'l Bank, 994 F.2d 1039, 1045 (3d. Cir. 1993) (citing Zahn v. Int'l Paper Co., 414 U.S. 291 ,
301 (1973)), which to Plaintiff stands for the proposition that "in a diversity-based class action,
.. . each member of the class must claim at least the jurisdictional amount." However,
Defendant correctly points out that, as held by Exxon Mobil Corp. v. Allapattah Servs., Inc., 545
U.S. 546, 566-67 (2005), Zahn - on which the Third Circuit relied in Packard- was overruled
when Congress amended § 1367 to authorize supplemental jurisdiction in class actions "where
some, but not all, of the plaintiffs in a diversity action allege a sufficient amount in controversy."
Allapattah further provides that CAF A "does not moot the significance of our interpretation of
§ 1367, as many proposed exercises of supplemental jurisdiction, even in the class-action
'In determining whether the Court has subject matter jurisdiction over Plaintiff's
individual claims, all of Plaintiff's individual claims are considered. See generally Suber v.
Chrysler Corp., 104 F.3d 578, 588 (3d Cir. 1997) ("The general rule is that claims brought by a
single plaintiff against a single defendant can be aggregated when calculating the amount in
controversy, regardless of whether the claims are related to each other.").
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context, might not fall within the CAF A ' s ambit. " Id. at 572.
Plaintiff argues that Allapattah is inapposite because it only authorizes supplemental
jurisdiction over "the claims of other plaintiffs in the same Article III case or controversy," id. at
549, yet here "Mr. Johnson' s personal injury claim arises from different operative facts than
those that give rise to other class members ' ' failure to warn' claims," rendering Plaintiffs
individual claims a different case or controversy. (D.I. 13 at 1) Specifically, Plaintiff contends
that the operative facts for his personal injury claim consist of the complications following his
gastric bypass surgery. (See id. at 3) The Court disagrees with Plaintiff's characterization.
Claims are part of the same case or controversy when they derive from a "common
nucleus of operative facts. " United Min e Workers ofAm. v. Gibbs, 383 U.S. 715, 725 (1966) ; see
also Lyon v. Whisman, 45 F.3d 758, 760 (3d. Cir. 1995), superceded by statute on other grounds,
28 U.S .C. § 1367(c)(3) (citing Gibbs) . Although Plaintiff concedes that his personal injury claim
shares common operative facts with the claims of the absent class members, he maintains that
these shared facts do not form the nucleus of the case. (See Tr. at 34-36) Again, the Court
disagrees. Plaintiffs personal injury claim as well as the claims of the absent class members are
based on a common nucleus of operative facts: Organo ' s failure to adequately label its product
and warn class members about the risks of consuming Ganoderma Lucidum. 2
(See Complaint at~ 25 (Count I: "Defendants are liable for, among other things, failing
to provide warning to [their] customers of the dangerous side effects of [their] products and for
failing to provide accurate information about the amount of Ganoderma Lucidum in [their]
products."); id. at~~ 29-30 (Count II: Defendants breached an express warranty ... created
through advertising, promotion and product labeling, ... [and] Defendants breached the implied
warranties . .. that Organo Gold products containing Ganoderma Lucidum w[ ere] ... reasonably
safe and suited for the purposes and uses of which Organo Gold products were represented and
sold"); id. at~~ 32-24 (Count III: Consumer Fraud); id. at~ 36 (Count IV: "Defendants breached
their duty to provide adequate warning to [their] customers of the dangerous side effects of
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Nothing in the Complaint distinguishes Plaintiffs injuries from those of the absent class
members. To the contrary, the Complaint essentially links the injuries to Plaintiff and to the
class members by alleging "Defendants ' negligence in failing to give adequate warnings,
instructions or ingredient content information to consumers ... caused and will continue to cause
injury to Plaintiff Marlin Johnson and others similarly situated." (Complaint
at~
39) Elsewhere,
the Complaint similarly alleges : "The breach of these warranties caused serious bodily injuries to
Marlin Johnson, on behalf of himself and all others similarly situated." (Id.
at~
31 ) Moreover,
paragraph 18 of the Complaint expressly provides:
18. Existence and Predominance of Common Questions of Law
and Fact (Super. Ct. Civ. R. 23(a)(2), 23(b)(3)). Common
questions of law and fact affect the right of each Class member and
common relief by way of damages is sought for Plaintiff and Class
members. The harm that Defendants have caused or could cause
is substantially uniform with respect to Class members. Common
questions of law and fact that affect the Class members include,
but are not limited to:
(a) Whether Defendants sold [their] products with
false or misleading statements concerning the safety
and lack of dangerous side effects;
(b) Whether Defendants failed to prevent damages
by failing to warn its customers about the dangerous
side effects of its products;
(c) Whether Defendants knowingly provided false
information to Plaintiff and the Class members ;
(d) Whether Defendants omitted material
information when it sold its products;
[their] products containing Ganoderma Lucidum and the amount of Ganoderma Lucidum
contained in [their] products."); id. at~~ 37-39 (Count V: Negligent Labeling/Failure to Warn);
id. at~~ 40-43 (Count VI: Misrepresentation))
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(e) Whether the members of the Class have
sustained damages and, if so, the proper measure of
such damages.
(Id. at~ 18) (second emphasis added) The allegation that "[t]he harm that Defendants have
caused or could cause is substantially uniform with respect to Class members" is one that the
Court takes as true at this stage of the proceedings.
Plaintiff concedes that he "ha[ s] not pled a physical injury claim that is unrelated to or not
dependent on an underlying misrepresentation." (Tr. at 35) Hence, the Court agrees with
Defendants that the factual basis for all of the claims is that Organo ' s products do not warn about
the purported health risks of Ganoderma Lucidum or disclose how much Ganoderma Lucidum is
in each product. Because the claims share a common nucleus of operative fact, they are all part
of the same case or controversy, and Plaintiff cannot escape Allapattah' s holding that § 1367
authorizes supplemental jurisdiction over class actions "where some, but not all, of the plaintiffs
... allege a sufficient amount in controversy." 545 U. S. at 566.
Accordingly, the Court finds that original jurisdiction based on diversity exists over all of
the claims in this case, and it has been properly removed to federal court. Having reached this
conclusion, the Court need not further decide whether jurisdiction exists based on CAF A.
IV.
CONCLUSION
An appropriate order will be entered.
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