Dalton et al v. Staples, Inc. et al
Filing
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MEMORANDUM AND ORDER - IT IS HEREBY ORDERED that Plaintiffs' Motion to Remand 13 is GRANTED. The Clerk of Court shall remand this action to the Circuit Court of Phelps County, Missouri, from which is was removed. Signed by District Judge E. Richard Webber on August 2, 2013. (MCB) (Certified copy of Memorandum and Order and docket sheet sent to the Circuit Court of Phelps County, Missouri this date.
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
CHRISTIANE DALTON, et al.,
Individually and on Behalf of All
Others Similarly Situated,
Plaintiffs,
vs.
STAPLES, INC. and STAPLES THE
OFFICE SUPERSTORE EAST, INC.,
Defendants.
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Case No. 4:13CV00605
MEMORANDUM AND ORDER
This matter comes before the Court on Plaintiffs’ Motion to Remand [ECF No. 13].
I.
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiffs Christiane Dalton and Janis Gideon Peters, individually and on behalf of all
others similarly situated (“Plaintiffs”), filed a putative class action petition under Missouri Rule
of Civil Procedure 52.08 against defendants, Staples, Inc., and Staples the Office Superstore East,
Inc. (“Staples”), in the Circuit Court of Phelps County, Missouri on April 11, 2012 [ECF No. 1-1
at 4, 9-45]. Plaintiffs brought their proposed class action, seeking compensation for statutory
violations of Computer Tampering and Missouri Merchandising Practices Act statutes, and
asserting common-law claims of conversion, trespass to chattels, invasion of privacy by
unreasonable intrusion, and unjust enrichment. Plaintiffs claim the matter arises from Staples’
practice of coding its web pages to cause tracking code – its own and that of third parties – to be
downloaded to, stored on, and activated on Plaintiffs’ computers for the purpose of tracking
consumers’ internet history and activities, without detection. In this original filing, Plaintiffs
indicated that the class consisted of persons residing in Missouri who used computers in the
state, and whose computers were affected by Staples’ conduct. The petition stated that the class
period concerned practices in which Staples engaged on or after August 13, 2006.
On March 29, 2013, Plaintiffs filed a First Amended Petition in the state-court action
[ECF No. 1-2 at 40-67]. In their First Amended Petition, Plaintiffs seek compensation for
statutory violations of Computer Tampering and Missouri Merchandising Practices Act statutes,
and assert common-law claims of trespass to chattels, invasion of privacy by unreasonable
intrusion, and unjust enrichment [ECF No. 1-2 at 40-67]. Plaintiffs’ amended petition asserts
that the action arises from Staples’ practice of accessing audiovisual software on Plaintiffs’
computers, to use it to plant tracking files on Plaintiffs’ computers and harvest information about
their web-browsing, without being detected, for the purpose of tracking consumers’ internet
history and activities. Plaintiffs’ amended petition further differed from their original filing by
limiting the identified the class members to adult residents of Phelps County, Missouri.
Following receipt of Plaintiffs’ First Amended Petition, Staples filed its Notice of
Removal pursuant to 28 U.S.C. §§ 1441 and 1446, asserting federal jurisdiction under the Class
Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d), and removing Plaintiffs’ action to this
Court that same date, March 29, 2013 [ECF No. 1]. Staples acknowledged receipt of Plaintiffs’
amended petition in a footnote of its Notice, but, its Notice identified Plaintiffs’ original
Complaint as the operative pleading. Staples opined the amended pleading was filed in
anticipation of Staples’ Notice of Removal filing, and contended that the amended petition was
filed in violation of a state court order staying the action until April 15, 2013, and thus should not
be considered by this Court for removal purposes.
In its Notice of Removal, Staples alleged that the putative class action satisfies CAFA’s
minimal diversity requirement, because the named plaintiffs are citizens of Missouri, and Staples
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is not. Staples further alleged that the amount in controversy between the parties satisfies
CAFA’s jurisdictional minimum, because the value to Plaintiffs exceeds the sum of $5 million,
exclusive of interest and costs. According to Staples’ Notice: “Looking only at damages claims
in paragraph 45(a)-(b) coupled with written discovery responses served by separate plaintiff
Christiane Dalton in a companion case on February 28, 2013, however, demonstrates
conclusively that the aggregate value of $5 million or more is at issue here” [ECF No. 1 at 7-8].
The written discovery responses to which Staples refers were served in another case filed in state
court, and subsequently removed to this Court, Christiane Dalton, Individually and on behalf of
all others similarly situated v. Target Corp. (“Dalton v. Target”), Circuit Court of Phelps
County, Missouri, Case No. 12PH-CV00559.
Staples filed its Answer to Plaintiffs’ amended petition, generally denying Plaintiffs’
allegations and asserting various defenses, with this Court on April 5, 2013 [ECF No. 9]. On
April 25, 2013, Plaintiffs filed their Motion to Remand, contending that Staples’ Notice of
Removal is improper [ECF No. 13].
II.
LEGAL STANDARD
Federal courts must “resolve all doubts about federal jurisdiction in favor of remand” and
are to construe legislation permitting removal strictly. Dahl v. R.J. Reynolds Tobacco Co., 478
F.3d 965, 968 (8th Cir. 2007). Jurisdiction under CAFA must be supported by three
requirements: 1) minimal diversity among the parties; 2) a class of 100 or more members; and 3)
amount in controversy exceeds $5 million-dollar jurisdictional threshold. 28 U.S.C. §
1332(d)(2); Bell v. Hershey Co., 557 F.3d 953, 955 (8th Cir. 2009). “[A] party seeking to
remove under CAFA must establish the amount in controversy by a preponderance of the
evidence regardless of whether the complaint alleges an amount below the jurisdictional
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minimum.” Bell, 557 F.3d at 958. “Under the preponderance standard, ‘[t]he jurisdictional fact .
. . is not whether the damages are greater than the requisite amount, but whether a fact finder
might legally conclude that they are . . ..’” Id. at 959 (emphasis in original; quoting Kopp v.
Kopp, 280 F.3d 883, 885 (8th Cir. 2002)).
The federal removal statute, 28 U.S.C. § 1446, requires civil defendants to file a notice of
removal within thirty days after receipt of a copy of the initial state court pleading. 28 U.S.C. §
1446(b); Dahl, 478 F.3d at 968. However, if the case is not removable as originally filed, but
the defendant later receives a copy of an amended pleading, motion, or other paper from which it
may first be ascertained that the matter is one that is or has become removable, the thirty-day
time period restarts upon receipt of that document. Id.
II.
DISCUSSION
In their “Memorandum in Support of Motion to Remand,” Plaintiffs cite to a
Memorandum and Order of Remand issued in this District by the Honorable Rodney W. Sippel
in Crystal Watson, individually and on behalf of all others similarly situated, vs. Kohl’s Dep’t
Stores, Inc., Case No. 4:13CV600 RWS (E.D. Mo. April 16, 2013), a case involving nearly
identical allegations and the same counsel as representing plaintiffs in the present action, and
they argue that the same result should follow in this matter [ECF Nos. 14, 14-1]. Plaintiffs
contend Staples’ removal is improper because: 1) Staples’ removal is based on discovery answers
from a different lawsuit against a different defendant; 2) Staples’ attempt to establish the amount
in controversy ultimately depends entirely on a conclusory, unsubstantiated “estimate” as to the
size of the class by an affidavit from a third party; and 3) the removal is untimely, because
Staples had actual notice of the facts they claim support removal when the case was filed in April
2012.
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In Watson, Plaintiffs filed their putative class action in state court on June 25, 2012 [ECF
No. 14-1 at 2]. The defendant, Kohl’s Department Stores, Inc. (“Kohl”), removed the case to this
Court on April 1, 2013, asserting federal jurisdiction under CAFA. Kohl further asserted that the
action was not initially removable, “but became so based solely upon discovery responses filed in
a different case, by a different plaintiff, against a different defendant” [ECF No. 14-1 at 2].
During his review of the petition, Judge Sippel found that the sole “evidence” offered by
Kohl in support of its assertion that the amount in controversy requirement for federal
jurisdiction under CAFA had been satisfied were the discovery responses, and he opined: “Yet
this ‘evidence’ is not really evidence of anything, as the discovery responses were not
propounded by this plaintiff in this case” [ECF No. 14-1 at 4]. Judge Sippel found Kohl’s
amount-in-controversy evidence to be speculative and determined it was insufficient to satisfy
Kohl’s jurisdictional burden. [ECF No. 14-1 at 6]. In a footnote, Judge Sippel indicated that he
had ignored the plaintiff’s purported stipulation of damages in the state-court petition in reaching
his determination. [ECF No. 14-1 at 5]. He concluded that he lacked subject matter jurisdiction
over the Watson action and remanded it to state court1 [ECF No. 14-1 at 6].
In its “Memorandum in Opposition to Plaintiffs’ Motion to Remand,” Staples claims that
Plaintiffs’ Motion ignores three key aspects of its Notice of Removal [ECF No. 19]. Staples
contends that the Motion: 1) makes no mention that one of the plaintiffs here was the individual
who served the discovery response triggering removal; 2) sidesteps entirely Plaintiffs’ stipulation
on behalf of the putative class that they seek an amount less than that required for federal
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On May 20, 2013, the Eighth Circuit denied a Notice for Petition for Permission to
Appeal Pursuant to the Class Action Fairness Act, 28 U.S.C. § 1453, filed by Kohl’s; Kohl’s
Petition for Rehearing was denied on June 26, 2013 [Case No. 413CV600 RWS; ECF Nos. 1821].
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jurisdiction and a recent Supreme Court holding that such stipulations do not defeat federal
jurisdiction2; and 3) fails to address an Eighth Circuit decision that rejected the subjectiveknowledge standard upon which Plaintiffs’ Motion improperly relies.3 Staples argues that the
Court should deny Plaintiffs’ Motion to Remand, asserting that it properly removed Plaintiffs’
case within thirty days of its receipt of Plaintiffs’ discovery responses in a companion case that
demonstrated for the first time that more than $5 million was at issue in this matter.
In their Reply, Plaintiffs contend that Staples fails to establish the key requirements for
removal because the discovery responses, from a separate lawsuit against a separate defendant,
do not constitute the type of document necessary to restart the running of the thirty-day removal
period within the meaning of 28 U.S.C. § 1446(b)(3) [ECF No. 22]. They further argue that
Staples has not provided competent proof regarding the number of class members, claiming that
two declarations submitted by Staples exaggerate the class size, are based on undisclosed thirdparty hearsay data, and rely on speculation. Plaintiffs again contend that, at the time when the
case was filed, Staples had actual knowledge of the facts on which they based removal, and
Plaintiffs assert that the stipulations they filed with the state court did not prevent Staples from
removing in a timely fashion.
On July 12, 2013, Plaintiff filed Notice of Supplemental and Binding Eighth Circuit
Authority, notifying the Court of an opinion in which the Eighth Circuit affirmed Judge Sippel’s
Order remanding to state court another case involving Plaintiff Dalton, Christiane Dalton, et al.,
v. Walgreen Co. (“Dalton v. Walgreen”), No. 13-2047, 2013 WL 3480930 (8th Cir. July 12,
2013) [ECF No. 23]. In Dalton v. Walgreen, the Eighth Circuit held that discovery responses,
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Standard Fire Ins. Co. v. Knowles, 133 S. Ct. 1345 (2013).
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In re Willis, 228 F.3d 896, 897 (8th Cir. 2000).
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received by defense counsel in a separate case against a different defendant and involving only
one of two named plaintiffs, “were not ‘other paper’ under section 1446(b)(3) as a matter of
law.” Id. at *2. The Eighth Circuit concluded that Walgreen Company had no statutory basis to
remove the case at that time, and it affirmed Judge Sipple’s Order remanding the case to state
court. Id.
Factually and procedurally, the case before the Court is almost identical to Dalton v.
Walgreen. Dalton is a named plaintiff in both cases; however, in the case presently before the
Court, Janis Gideon Peters is the second named plaintiff in this proceeding against Staples, while
William Aaron, Jr. is the second named plaintiff in the action brought against defendant
Walgreen Company. In both cases, the named defendant bases its contention that its counsels’
receipt, on February 28, 2013, of written discovery responses from Dalton in the related case,
Dalton v. Target, constituted receipt of “other papers” and consequently began a new thirty-day
period in which the defendant could file a notice of removal.
This Court rejects Staples’ argument, and finds that the responses were not “other paper”
under section 1446(b)(3) as a matter of law, and that Staples had no statutory basis to remove the
case to this Court. The Court lacks subject matter jurisdiction over the action and must remand it
to state court.4
III. CONCLUSION
Accordingly,
IT IS HEREBY ORDERED that Plaintiffs’ Motion to Remand [ECF No. 13] is
GRANTED. The Clerk of Court shall remand this action to the Circuit Court of Phelps County,
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The Court notes that Plaintiffs filed a “Notice that Defendant Does Not Oppose
Remand” on August 1, 2013 [ECF No. 24].
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Missouri, from which it was removed.
Dated this
2nd
day of August, 2013.
E. RICHARD WEBBER
SENIOR UNITED STATES DISTRICT JUDGE
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