HOFFMAN v. LUMINA HEALTH PRODUCTS, INC.
Filing
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OPINION. Signed by Judge Stanley R. Chesler on 10/24/13. (DD, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
HAROLD M. HOFFMAN, individually and
on behalf of those similarly situated,
Plaintiff,
v.
LUMINA HEALTH PRODUCTS, INC.,
Defendant.
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Civil Action No. 13-04936 (SRC)
OPINION
CHESLER, District Judge
This matter comes before the Court upon the motion of Plaintiff Harold M. Hoffman,
Esq. (“Plaintiff”), 1 to remand this putative class action to the Superior Court of New Jersey.
[Docket Entry 5.] Defendant Lumina Health Products, Inc. (“Defendant”) has opposed the
motion. [Docket Entry 8.] Pursuant to Federal Rule of Civil Procedure 78, the Court will rule
on the papers submitted, and without oral argument. For the reasons that follow, Plaintiff’s
motion will be denied.
I.
Background
This consumer fraud class action lawsuit involves allegedly “false and misrepresented
claims of product efficacy” made by Defendant about a dietary supplement called Cell Food.
(Compl. at 1-2.) Plaintiff is a citizen of New Jersey with residence in Bergen County. He is also
an attorney and has appointed himself as class counsel. Plaintiff alleges, essentially, that
1
This Court will use “Plaintiff” in the singular. The captioned Plaintiff is “Harold M. Hoffman,
individually and on behalf of those similarly situated.”
Defendant, a Florida corporation, made “blatant misrepresentations” regarding the effectiveness
of Cell Food, which Plaintiff alleges duped him and all nationwide purchasers of Cell Food into
buying the product with the belief that it was “effective in delivering improved energy,
endurance and health.” (See Compl. ¶ 11.) Plaintiff’s class action Complaint, originally filed in
state court, seeks treble and punitive damages for violation of the New Jersey Consumer Fraud
Act (“CFA”), N.J. Stat. Ann. 56:8-1 to -195. The proposed class consists of “all consumers
throughout the United States who purchased Cell Food.” (Compl. ¶ 35.) The Complaint,
however, expressly limits the overall “amount in controversy” to less than $5 million. (Compl. ¶
30.)
On August 15, 2013, the lawsuit was removed to this Court pursuant to the diversity
jurisdiction conferred by the Class Action Fairness Act (“CAFA”), codified at 28 U.S.C. §
1332(d). According to Defendant, the Court may exercise CAFA jurisdiction here because this
suit is a class action brought on behalf of a nationwide class, there is “minimal diversity,” and
the “aggregate value of the amount in controversy based on Plaintiff’s allegations exceeds [$5
million].” (See Notice of Removal ¶ 12.) Presently before the Court is Plaintiff’s motion to
remand the case to the Superior Court of New Jersey.
II.
Legal Standard
Pursuant to 28 U.S.C. § 1447(c), remand to state court is required where “it appears that
the district court lacks subject matter jurisdiction.” Here, the Court exercises jurisdiction
pursuant to CAFA, which vests original jurisdiction in the federal district courts to hear “class
action” lawsuits in which the proposed class has at least 100 members, “the parties are minimally
diverse,” and “the matter in controversy exceeds the sum or value of $5,000,000.” Standard Fire
2
Ins. Co. v. Knowles, 133 S. Ct. 1345, 1348 (2013) (quoting 28 U.S.C. § 1332(d)(2), (d)(5)(B)). 2
To “determine whether the matter in controversy” exceeds the $5 million jurisdictional threshold
a district court must aggregate “the claims of individual class members.” § 1332(d)(6). In other
words, CAFA “tells the District Court to determine whether it has jurisdiction by adding up the
value of the claim of each person who falls within the definition of [the] proposed class and
determine whether the resulting sum exceeds $5 million.” Knowles, 133 S. Ct. at 1348.
When a class action complaint expressly disclaims the ability to recover the $5 million
jurisdictional amount, the Third Circuit instructs that the burden is on defendant to prove “to a
legal certainty that plaintiff can recover” that amount. See Frederico v. Home Depot, 507 F.3d
188, 197 (3d Cir. 2007) (citing Morgan v. Gay, 471 F.3d at 469, 474 (3d Cir. 2006)). The
concept of legal certainty is not well defined, but falls somewhere below “absolute certainty” and
above “preponderance of the evidence.” See Stephenson v. Consol. Rail Corp., No. 13-cv-721
(RBK), 2013 WL 1740005, at *2 (D.N.J. Apr. 23, 2013) (quoting, inter alia, Nelson v. Keefer,
451 F.2d 289, 293 n.6 (3d Cir. 1971)). A court examines both “the dollar figure offered by the
plaintiff” and plaintiff’s “actual legal claims” to determine whether “the amount in controversy
exceeds the statutory threshold.” See Morgan, 471 F.3d at 474-75.
III.
Discussion
In essence, Plaintiff’s motion for remand argues that CAFA’s jurisdictional threshold
cannot be met here because this putative nationwide class action has $29.95 in controversy. It is
Plaintiff’s belief that his dual role as class counsel and class plaintiff renders the present suit
“non-class certifiable” in the Third Circuit and, as such, Plaintiff’s alleged individual damages
cannot be aggregated to satisfy CAFA’s $5 million jurisdictional threshold. (Mov. Br. at 2, 5
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The class size and minimal diversity requirements are not contested here.
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(citing Kramer v. Scientific Control Corp., 534 F.2d 1085, 1090 (3d Cir. 1976)).) Defendant
counters that whether or not Plaintiff has drafted a class-action Complaint that may at some point
in time fail a Rule 23(a) class certification analysis is irrelevant to a determination of whether
that Complaint triggers CAFA jurisdiction. (Opp. Br. at 5-6.) As such, Defendant argues that
the $5 million jurisdictional threshold is satisfied once the individual claims of proposed class
members are aggregated.
Plaintiff’s argument is perplexing. To read his Complaint, this case concerns the
fraudulent marketing and distribution of Defendant’s Cell Food product to “thousands of
consumers throughout the United States” (Compl. ¶ 31); Plaintiff, who himself has allegedly
suffered at least $29.95 in damages from his purchase of Cell Food, just happens to be one of
those consumers. According to the Complaint, at least, this is exactly the type of case CAFA is
intended to address. See Knowles, 133 S. Ct. at 1350 (“CAFA’s primary objective” is “ensuring
. . . [f]ederal court consideration of interstate cases of national importance.”). But to read
Plaintiff’s motion papers, this case is no more than an individual consumer fraud action with $30
(or trebled, $90) at stake, (Mov. Br. at 1), a damages figure that is substantially less than what it
costs to file a civil complaint in New Jersey Superior Court. See State of New Jersey, Court
Fees, available at http://www.judiciary.state.nj.us/forms/courtfees.pdf. Something does not
compute.
The confusion appears to arise from a fallacy in Plaintiff’s argument. According to
Plaintiff, the nature of a putative class action lawsuit somehow changes the moment the suit is
removed from state court to federal court. (See Mov. Br. at 3 (“Upon removal, class certification
was rendered dead on arrival in the [D]istrict of New Jersey.”).) An essential part of this
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argument is the supposition that the CAFA jurisdictional inquiry takes into account events that
occur after the initial filing in state court – e.g., removal and class certification. But the actual
inquiry is the exact opposite. See Knowles, 133 S. Ct. at 1349 (“For jurisdictional purposes, our
inquiry is limited to examining the case ‘as of the time it was filed in state court.’” (quoting Wis.
Dep’t of Corrs. v. Schacht, 524 U.S. 381, 390 (1998))). The act of removing the lawsuit to this
Court is of no moment to the Court’s jurisdictional analysis.
Plaintiff’s argument also fails for a more basic reason. CAFA itself expressly defines
“class members” for purposes of the jurisdictional calculation to include those persons “who fall
within the definition of the proposed or certified class.” 28 U.S.C. § 1332(d)(1)(D). It would
thus run contrary to the plain language of the statute to only aggregate, as Plaintiff suggests, the
claims of the members who might end up in the as-of-yet certified (or not certified) class,
whatever that class may end up being (or not being). In short, Plaintiff’s argument reads
“proposed” out of § 1332(d)(1)(D). This Court, as the Supreme Court did in Knowles, interprets
§ 1332(d)(1)(D) to mean what it says: a “District Court” applying the statute before a motion for
class certification is filed “aggregate[s] proposed class members’ claims.” See 133 S. Ct. 1345 at
1350. Whatever may come out of a motion for class certification is another question for another
day. At present, however, remand is inappropriate if Defendant can show “to a legal certainty”
that the individual claims of all proposed class members aggregate to more than $5 million. 3
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Plaintiff cites to some authority from the District of New Jersey that he asserts supports his
position. To the extent that any of the cases cited state that a District Court cannot exercise
CAFA jurisdiction where the class is not certified, those cases contemplate a situation where the
Court has already denied a motion for class certification. See, e.g., Rivera v. Wa. Mut. Bank,
637 F. Supp. 2d 256, 263 (D.N.J. 2009) (‘in the event that no class is certified and the Court
must dismiss the case for lack of jurisdiction”); Atlass v. Mercedes-Benz USA, LLC, No. 072720 (DRD), 2007 WL 2892803, at *1 n.1 (D.N.J. Sept. 25, 2007) (exercising CAFA jurisdiction
in deciding motion to dismiss but noting jurisdiction will be lost “if a class cannot be certified”).
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The Court finds that Defendant has made the requisite showing. Estimating the actual
aggregate losses of the individuals in the proposed class is a “relatively straightforward” process
where, as is the case here, Plaintiff brings suit requesting treble damages under the CFA. See
Hoffman v. Natural Factors Nutritional Prods., No. 12-7244 (ES), 2013 WL 5467106, at *6
(D.N.J. Sept. 30, 2013). Plaintiff proposes a class that consists of “all nationwide purchasers of
Cell Food for the two-year period preceding” July 11, 2013, the date the suit was filed. (Compl.
¶ 30.) Plaintiff further alleges damages in the form of the “substantial difference between the
price paid by consumers, including plaintiff, for the Defendant’s product” and the actual value of
the Cell Food, which Plaintiff alleges is negligible. (Compl. at ¶¶ 26, 29.) Defendant submits
affidavit evidence that in the two-year period covered by the Complaint, Defendant sold at least
$5 million of its Cell Food nationwide. (Notice of Removal, Ex. B., at 2.) In other words,
Plaintiff pleads that the actual loss suffered by the proposed nationwide class is the money
forked over to purchase Cell Food, and Defendant submits evidence that gross nationwide sales
of the product are at least $5 million. Combined with Plaintiff’s demand for treble damages, (see
Compl. ¶¶ 42-44), which are recoverable under the CFA, see N.J. Stat. Ann. 56:8-19, this
evidence is sufficient to prove “to a legal certainty” that the claims of the proposed class exceed
$5 million in the aggregate. Frederico, 507 F.3d at 197. As such, this Court may properly
exercise CAFA jurisdiction, and Plaintiff’s motion to remand is denied.
IV.
Conclusion
For the foregoing reasons, the Court denies Plaintiff’s motion to remand [Docket Entry
5]. An appropriate Order accompanies this Opinion.
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s/ Stanley R. Chesler
STANLEY R. CHESLER
United States District Judge
Dated: October 24, 2013
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