Hiedger et al v. The Coca-Cola Company

Filing 24

MEMORANDUM AND ORDER... IT IS HEREBY ORDERED that Plaintiff Melanie Hiedger's Motion to Remand Case to State Court, Doc. [ 10 ], is DENIED. Signed by District Judge Sarah E. Pitlyk on 2/6/2024. (NEP)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
MELANIE HIEDGER, on behalf of herself
and other members of the putative class,
v.

Plaintiff,

THE COCA-COLA COMPANY, et al.,
Defendants.

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Case No. 4:23-cv-00349-SEP

MEMORANDUM AND ORDER
Before the Court is Plaintiff Melanie Hiedger’s Motion to Remand Case to State Court.
Doc. [10]. For the reasons set forth below, the motion is denied.
BACKGROUND
Plaintiff brought this class action in state court against Defendants The Coca-Cola
Company (Coca-Cola) and Does 1 through 10, alleging breach of warranty, breach of implied
contract under Missouri law, unjust enrichment under Missouri law, and violations of the
Missouri Merchandising Practices Act (MMPA). Doc. [1-1]. Plaintiff alleges that Coca-Cola
engaged in false, misleading, and deceptive practices in marketing and selling “Topo Chico,” a
branded alcoholic beverage described as “Margarita – Hard Seltzer” (the Product). Id. ¶¶ 1-11.
According to Plaintiff, the Product’s label claims to contain “Margarita Hard Seltzer,” a “drink
universally known to contain tequila,” yet it contains no tequila. Id. Plaintiff seeks
compensatory damages, restitution, attorneys’ fees, and “such further relief as the Court deems
just, including injunctive relief” on behalf of a putative class of consumers who purchased the
Product over a five-year period in Missouri. Id. at 16. Coca-Cola removed the case to this Court
on March 20, 2023. See Doc. [1]. On March 23, 2023, Plaintiff moved to remand, Doc. [10],
arguing that jurisdiction is improper because Coca-Cola has not met the amount-in-controversy
requirement. The motion is fully briefed and ripe for disposition. See Docs. [13], [14].
LEGAL STANDARD
Removal of a civil action is proper if “the district courts of the United States have
original jurisdiction” over the action. 28 U.S.C. § 1441(a). The Class Action Fairness Act
(CAFA), 28 U.S.C. § 1332(d), provides this Court “with ‘original jurisdiction’ to hear a ‘class

action’ if the class has more than 100 members, the parties are minimally diverse, and the ‘matter
in controversy exceeds the sum or value of $5,000,000.’” Faltermeier v. FCA US LLC, 899 F.3d
617, 621 (8th Cir. 2018) (quoting Standard Fire Ins. Co. v. Knowles, 568 U.S. 588, 592 (2013)).
“The party seeking removal under CAFA bears the burden of establishing these
jurisdictional requirements by a preponderance of the evidence.” Dammann v. Progressive
Direct Ins. Co., 856 F.3d 580, 583 (8th Cir. 2017). “Under the preponderance standard, the
jurisdictional fact is not whether damages are greater than the requisite amount, but whether a
fact finder might legally conclude that they are.” Bell v. Hershey Co., 557 F.3d 953, 959 (8th
Cir. 2009) (internal quotation omitted). “There is no presumption against federal jurisdiction in
class action cases, and ‘if the notice of removal plausibly alleges,’ and the evidence shows, that
the case might be worth more than $5 million (excluding interest and costs), ‘then it belongs in
federal court.’” Brunts v. Walmart, Inc., 68 F.4th 1091, 1094 (8th Cir. 2023) (quoting Leflar v.
Target Corp., 57 F.4th 600, 603 (8th Cir. 2023) (emphasis in original)). “A removing defendant
can establish federal jurisdiction with ‘specific factual allegations . . . combined with reasonable
deductions, reasonable inferences, or other reasonable extrapolations.’” Id. (quoting Waters v.
Ferrara Candy Co., 873 F.3d 633, 636 (8th Cir. 2017)). “District courts must accept the
allegations in the notice if they are made in good faith.” Leflar, 57 F.4th at 604. If “the
removing party has established by a preponderance of the evidence that the jurisdictional
minimum is satisfied, remand is only appropriate if the plaintiff can establish to a legal certainty
that the claim is for less than the requisite amount.” Bell, 557 F.3d at 956.
DISCUSSION
I.

Defendant has shown by a preponderance of the evidence that the jurisdictional
minimum is met in this case.
Plaintiff argues that Coca-Cola “has failed to provide specific facts or evidence to

prove . . . that the amount in controversy exceeds $5 million.” Doc. [10] at 1. Specifically,
Plaintiff takes issue with the estimate of Daniel White, Coca-Cola’s Chief of New Revenue
Streams, that compliance with the injunction sought by Plaintiff would cost Coca-Cola
approximately $12,800,000. Doc [10] ¶¶ 5-6 (citing Doc. [1] ¶ 35). Coca-Cola based that
number on “what must be a nationwide recall and re-label of all Defendant’s Products,” Plaintiff
claims, but the company failed to demonstrate “why all of those acts must be done in 49 of the
50 states that would not be subject to any proposed injunction.” Id. In response, Coca-Cola filed

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an additional declaration from White attesting that, for a variety of reasons, it would be
“infeasible for units of the Products with one label to be sold in Missouri, but with a different
label in every other U.S. state,” and thus the injunction sought by the Plaintiff would necessitate
a nationwide recall and relabel of the Products. Doc. [13-1] at 2-3. Based on the notice of
removal and its accompanying declarations, Coca-Cola maintains that the relief demanded in the
Complaint would cost it substantially more than $5 million. Doc. [13] at 2.
By Coca-Cola’s own estimation, sales of the Product during the relevant period would
total approximately $642,000. See Doc. [1] at 7. Attorneys’ fees are also included in the
jurisdictional amount, Faltermeier v. FCA US LLC, 899 F.3d 617, 622 (8th Cir. 2018), and
Defendant notes that fees of around 33% are often awarded in MMPA cases. Id. at 8. Damages
in the amount of $642,000 plus 33% in attorneys’ fees would total approximately $853,000—far
below the jurisdictional amount. See Doc. [1] at 7-8. Thus, whether Coca-Cola has met the
CAFA amount-in-controversy requirement turns on whether the value of the injunctive relief
sought by Plaintiff exceeds approximately $4,147,000. See American Tiger Firearms, LLC v.
Facebook Inc., 2019 WL 7833951, at *1 (E.D. Ark. 2019). And that depends on the answer to
another question, which the Eighth Circuit has yet to answer: In the CAFA context, must a court
evaluate the amount in controversy from the plaintiff’s perspective, or may it consider what the
requested relief will cost a defendant? See Waters v. Ferrara Candy Co., 873 F.3d 633, 636 (8th
Cir. 2017) (“We need not resolve the issue of whether courts should apply the plaintiffs’
viewpoint rule or the either viewpoint rule when determining the amount in controversy under
CAFA . . ..”); see also Helterbrand v. Procter & Gamble Co., 2021 WL 8202680, at *3 (E.D.
Mo. Sept. 22, 2021) (“[I]n non-CAFA cases, the Eighth Circuit has adopted the plaintiff’s
viewpoint rule,” but “it is not clear what rule applies in CAFA cases.”).
Although this Court has never taken a position on the issue, it has noted elsewhere the
“strong arguments in favor of adopting the either-party-viewpoint rule in assessing the value of
injunctive relief in a CAFA case,” and it will not rehearse them here. McKinnon v. Restoration
Hardware, Inc., No. 4:21-CV-00605-SEP, 2022 WL 970882, at *3-*4 (E.D. Mo. Mar. 31, 2022).
Since that analysis, the Eighth Circuit still has not taken a position, but certain sister district
courts have taken prospective costs to defendants of nationwide relabeling and product recalls
into account when determining amounts in controversy under CAFA. See, e.g., Bell v.
Walgreens Boots All., Inc., 2022 WL 17987039, at *3 (E.D. Mo. Dec. 29, 2022) (“Given the

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nature of his claims, Plaintiff's request for injunctive relief would necessarily involve a
nationwide relabeling campaign and product recall . . . .”); Dedloff v. Target Corp., 2022 WL
5241807, at *3 (E.D. Mo. Oct. 6, 2022) (accepting Defendant’s argument that Plaintiff’s
injunctive relief would require a nationwide product recall and relabeling claim, “which alone
would far exceed the $5 million jurisdictional minimum.”); see also Toller v. Sagamore Ins. Co.,
558 F.Supp.2d 924, 930-31 (E.D. Ark. 2008) (noting the controversy around the either-partyviewpoint rule, and concluding that “the value of injunctive relief should probably be considered
from either the plaintiffs’ or the defendant’s point of view,” and holding that CAFA’s amount-incontroversy requirement was met when calculated “from the vantage point of the defendant”).
Additionally, though the Eighth Circuit did not explicitly adopt the either-partyviewpoint rule in Leflar v. Target, it implicitly approved considering a defendant’s perspective
regarding its potential aggregate compliance costs if plaintiffs were to prevail. Leflar, 57 F.4th at
605. In Leflar, the Eighth Circuit reviewed a remand order where the central issue on appeal was
whether the district court erred by failing to consider a declaration submitted by Target alleging
that the CAFA amount-in-controversy threshold was met because the corporation would have to
spend over $7.5 million in compliance costs if the plaintiff won. Id. The Eighth Circuit reversed
and remanded, holding that the district court erroneously refused to consider evidence of
Target’s compliance-cost estimates, noting that the declaration constituted post-removal
evidence that “shed[] light” on the amount in controversy, and that it should have been
considered by the court. Id. Considering Leflar, the Court is persuaded that the Eighth Circuit is
at least open to district courts utilizing the “either viewpoint” rule. In light of that, and for the
reasons articulated in McKinnon, the Court joins its sister courts in adopting the “either
viewpoint” rule and will consider the costs to Coca-Cola of complying with the injunction sought
by Plaintiff, provided those costs are sufficiently substantiated.
Coca-Cola’s estimated costs of compliance are sufficiently substantiated here. This case
is unlike Waters v. Ferrara Candy Company, where the Eighth Circuit found that the defendant’s
affidavits were insufficiently specific to establish the amounts claimed by a preponderance of the
evidence. See 873 F.3d at 636 (noting that the defendant’s affidavits failed to articulate what
injunctive relief would require of the company). Here, Coca-Cola’s representative stated that if
the Court granted injunctive relief, Coca-Cola would be forced to recall and destroy existing
inventory of the Products, remove or substantially modify references to the challenged

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statements from packaging and labels and redesign the packages and labels, and remove
challenged statements from media sources and other advertising. See Docs. [1-2], [13-1]. He
provided detailed information explaining how he determined that the potential costs of such an
injunction would be between $12 and $13 million. Id. For example, White described how the
Products are sold in bulk to regional and national distributors, who in turn sell the Products
throughout the country. Doc. [13-1] at 2. Because the distributors sell the Products across
multiple states, White explained, Defendant would be unable to ensure that any particular state
would not receive any Products with pre-injunction labels. Id. In light of that, an injunction
would cause the recall and destruction of the approximately 593,000 cases of existing inventory
with pre-injunction labels, which he estimates would cost approximately $11,907,589. Id. He
further indicates that at any given time retailers hold between $1,000,000 and $2,122,519 worth
of the Products, which would also need to be recalled and destroyed. Id. at 4. And he states that
because the Products are marketed nationally, Defendant would need to design and create new
labels and review and revise its national marketing plan, which he estimates would cost
approximately $150,000. Id.
The Court concludes that White’s sworn declarations are sufficient to establish by a
preponderance of the evidence that the cost of injunctive relief, and thus the amount in
controversy, exceeds $5 million. See Brunts, 68 F.4th at 1094 (“A removing defendant can
establish federal jurisdiction with ‘specific factual allegations . . . combined with reasonable
deductions, reasonable inferences, or other reasonable extrapolations.’”) (quoting Waters, 873
F.3d at 636).
This conclusion is only bolstered when the likely costs of injunctive relief are considered
in combination with compensatory damages and attorneys’ fees. See Faltermeier, 899 F.3d at
621-22 (affirming “that it was more likely than not that attorneys’ fees” would be substantial,
“considering the expected length of the litigation, the risk and complexity involved in
prosecuting class actions, and the hourly rates charged”); see also Diesel v. Procter & Gamble
Co., 2022 WL 16948290, at *2 (E.D. Mo. Nov. 15, 2022); Bell, 2022 WL 17987039, at *3 (E.D.
Mo. Dec. 29, 2022); Muller v. GlaxoSmithKline Consumer Healthcare Holdings (US) LLC, 2022
WL 17718628, at *3 (E.D. Mo. Dec. 15, 2022); Heidger v. Bayer Corp., 2023 WL 2951620, at
*3 (E.D. Mo. Apr. 14, 2023).

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II.

Plaintiff has not shown to a legal certainty that the claims are for less than the
requisite jurisdictional amount.
Because Coca-Cola has shown that this case meets CAFA’s jurisdictional minimum

amount in controversary, the case belongs in federal court unless Plaintiff “can establish to a
legal certainty that the claim is for less than the requisite amount.” Bell, 557 F.3d at 956; see
also Raskas, 719 F.3d at 888 (“Once the proponent of federal jurisdiction has explained plausibly
how the stakes exceed $5 million . . . then the case belongs in federal court unless it is legally
impossible for the plaintiff to recover that much.”) (internal quotation omitted). “Even if it is
highly improbable that [Plaintiff] will recover the amounts [Coca-Cola has] put into controversy,
this does not meet the legally impossible standard.” Raskas, 719 F.3d at 888.
Plaintiff attempts to carry her burden by criticizing Defendant’s injunctive relief
calculations and claiming that she “never requested any sort of . . . injunctive relief granted on a
nationwide basis.” Doc. [14] at 1. But Plaintiff fails to submit any countervailing evidence to
support her challenge. See Waters v. Home Depot USA, Inc., 446 F. Supp. 3d 484, 492 (E.D.
Mo. 2020) (“plaintiff's challenge [must] have a supportive evidentiary basis for which to
challenge [Defendant’s] allegations; simply second-guessing a removing defendant's allegations
is insufficient.”) Accordingly, Plaintiff has not shown that it is legally impossible for the
putative class to recover more than $5 million.
CONCLUSION
Because Coca-Cola has shown by a preponderance of the evidence that the amount in
controversy exceeds CAFA’s jurisdictional minimum, the Court has jurisdiction over this case
under 28 U.S.C. § 1332(d), and remand must be denied. See Holbein v. TAW Enters., Inc., 983
F.3d 1049, 1060 (8th Cir. 2020) (“Once a federal court determines it has jurisdiction over a case
properly before it, it has a virtually unflagging obligation to exercise it.”)
Accordingly,
IT IS HEREBY ORDERED that Plaintiff Melanie Hiedger’s Motion to Remand Case to
State Court, Doc. [10], is DENIED.
Dated this 6th day of February, 2024.

SARAH E. PITLYK
UNITED STATES DISTRICT JUDGE
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