Beasley v. Lucky Stores, Inc.
Beasley v. Lucky Stores, Inc.
Opinion of the Court
Before the Court is plaintiff Mark Beasley's ("Beasley") "Motion to Remand," filed December 21, 2018, whereby Beasley seeks an order remanding the instant action to the Superior Court of California, County of San Francisco. On January 16, 2019, defendants Lucky Stores, Inc. ("Lucky"), Nestlé USA, Inc. ("Nestlé"), Save Mart Super Markets ("Save Mart"), The Kroger Company ("Kroger"), and The Save Mart Companies, Inc. ("SCMI"),
Having read and considered the papers filed in connection with the motion, the Court rules as follows.
BACKGROUND
The instant case is a putative class action lawsuit brought by Beasley, a California citizen, as a purchaser and consumer of Coffee-mate, a line of coffee-creamer products. Beasley alleges that Nestlé, a Delaware corporation with its principal place of business "in California or Virginia" (see First Am. Compl. ("FAC"), filed Dec. 19, 2018, ¶ 12), "manufactures, markets, and sells Coffee-mate" (see id. ¶ 3). He also alleges that Lucky, Save Mart, and SMCI, each of which is a California corporation, *1041and Kroger, a Delaware corporation with its principal place of business in Ohio, "sold Coffee-mate at their grocery stores throughout California" (see id. ¶ 4) and that, during the class period, he purchased Coffee-mate from grocery stores owned by said four defendants.
According to Beasley, Coffee-mate, during the class period, contained partially hydrogenated oil ("PHO"), which is an "[a]rtificial" form of trans fat (see id. ¶ 20) and an "unsafe food additive" (see id. ¶ 3). In addition, Beasley alleges that, for portions of the class period, the packaging for Coffee-mate bore deceptive "nutrient content claim[s]," namely, "0g Trans Fat" and/or "IT'S GOOD TO KNOW: 0g TRANS FAT/serv LACTOSE-FREE GLUTEN-FREE." (See id. ¶ 76; see also id. ¶ 8.)
Based on the above allegations, Beasley, on October 29, 2018, filed his initial complaint in the Superior Court of California, County of San Francisco. In said complaint, Beasley asserted five Causes of Action, brought both individually and on behalf of the following two putative classes: (1) a "Class," defined as "[a]ll citizens of California who purchased in California, on or after January 1, 2010, Coffee-mate products containing [PHO]" (see Class Action Compl., Dkt. No. 1-3 (filed Nov. 26, 2018), ¶ 147); and (2) a "0g Trans Fat Claim Subclass," defined as "[a]ll citizens of California who purchased in California, on or after January 1, 2010, Coffee-mate containing the nutrient content claim '0g Trans Fat' and containing [PHO]" (see id. ). The first two Causes of Action were brought on behalf of the "Class" and asserted, respectively, "Unfair Conduct"/"Unlawful Conduct" (see id. at 27:20 & 28:5) under California's "Unfair Competition Law" ("UCL") and "Breach of Implied Warranty of Merchantability" (see id. at 29:4). The last three Causes of Action were "limited to" the "0g Trans Fat Claim Subclass" and asserted, respectively, "Unlawful Conduct"/"Fraudulent Conduct"/"Unfair Conduct" (see id. at 29:25, 32:4, & 32:16) under the UCL, violation of California's "False Advertising Law" (see id. at 33:9), and "Breach of Express Warranty" (see id. at 33:20).
Subsequently, on November 26, 2018, defendants removed the instant case to federal court, on the basis that the Court has jurisdiction pursuant to the Class Action Fairness Act of 2005 ("CAFA"),
On December 19, 2018, Beasley filed the FAC, in which he reasserts the above five Causes of Action and adds, on behalf of the "0g Trans Fat Claim Subclass," a Cause of Action under California's "Consumer Legal Remedies Act." (See FAC at 34:2.) Further, as to all Causes of Action, he asserts jurisdiction is proper in state court because, in addition to Beasley himself, "several defendants" and "all members of the proposed class" are California citizens (see
By the instant motion, Beasley seeks an order remanding the above-titled action to state court, on the basis that the "local controversy" exception to CAFA applies. (See Mot. at 2:21.)
LEGAL STANDARD
Pursuant to
There are exceptions to CAFA, however, including, as relevant here, the "local controversy" exception, see Serrano v. 180 Connect, Inc.,
(i)(I) greater than two-thirds of the members of all proposed plaintiff classes in the aggregate are citizens of the State in which the action was originally filed;
(i)(II) at least 1 defendant is a defendant-
(aa) from whom significant relief is sought by members of the plaintiff class;
(bb) whose alleged conduct forms a significant basis for the claims asserted by the proposed plaintiff class; and
(cc) who is a citizen of the State in which the action was originally filed; and
(i)(III) principal injuries resulting from the alleged conduct or any related conduct of each defendant were incurred in the State in which the action was originally filed; and
(ii) during the 3-year period preceding the filing of that class action, no other class action has been filed asserting the same or similar factual allegations against any of the defendants on behalf of the same or other persons[.]
DISCUSSION
As noted, Beasley, relying on the "local controversy" exception, seeks an order remanding the instant action to state court. See Serrano,
A. Original Jurisdiction under CAFA
"[I]t is the proponent's burden to establish a prima facie case of removal jurisdiction." See Serrano,
Beasley does not dispute the sufficiency of defendants' showing, and, given the above-referenced allegations, the Court agrees defendants have established a prima facie case of removal jurisdiction under CAFA. See Serrano,
B. Local Controversy Exception to CAFA
"[T]he party seeking remand bears the burden to prove an exception to *1043CAFA's jurisdiction." See Serrano,
Beasley argues CAFA's "principal injuries" requirement is met because "the injury alleged by [p]laintiff-the sale of an unlawful product in violation of California law-occurred entirely and wholly within California." (See Mot. at 16:9-11 (emphasis in original).) In response, defendants argue, "class actions that challenge conduct that occurred nationwide and, therefore, injures consumers nationwide-like the nationwide sale of Coffee-mate-are not 'local' regardless [of] the presence of a local defendant and a narrowly defined putative class." (See Opp'n at 2:3-5 (emphasis in original).)
As set forth above, subsection (i)(III) requires that "principal injuries resulting from the alleged conduct or any related conduct of each defendant were incurred in the State in which the action was originally filed." See
Consequently, given the absence of adequate guidance from the statutory language or case law, the Court turns to CAFA's legislative history. See
In that regard, defendants point to, and the Court has considered, a report by the Senate Judiciary Committee, which explains the "principal injuries" provision as follows:
By this criterion, the Committee means that all or almost all of the damage caused by defendants' alleged conduct occurred in the state where the suit was brought. The purpose of this criterion is to ensure that this exception is used only where the impact of the misconduct alleged by the purported class is localized.... [I]f the defendants engaged in conduct that could be alleged to have injured consumers throughout the country or broadly throughout several states, the case would not qualify for this exception, *1044even if it were brought only as a single-state class action.
S. Rep. No. 109-14, at *40-41 (2005) (further explaining principal injuries provision "looks at where the principal injuries were suffered by everyone who was affected by the alleged conduct-not just where the proposed class members were injured").
Here, Beasley alleges Coffee-mate "was placed into interstate commerce by [d]efendants and sold throughout the country and throughout California." (See FAC ¶ 189.) He also alleges the PHO in Coffee-mate "cause[s]" a variety of medical conditions in the United States and the world more broadly. (See, e.g.,
The above-referenced allegations show Coffee-mate was distributed and sold nationwide, not only or even principally in California, and, consequently, that any damage caused by the conduct of one or more of the defendants occurred nationwide. Under such circumstances, defendants' conduct "could be alleged to have injured consumers throughout the country," see S. Rep. 109-14, at *40, and Beasley's limitation of the putative class and subclass to California citizens does not defeat CAFA jurisdiction, see id. at 41 (stating, as to hypothetical class action brought on behalf of citizens of single state against manufacturer and dealers of allegedly defective product sold in all fifty states, "[t]he fact that the suit was brought as a single-state class action does not mean that the principal injuries were local"); see also Phillips v. Kaiser Found. Health Plan, Inc.,
Beasley's reliance on his inclusion of claims under the UCL, which he asserts "offers consumers protections not available in other states and unique to California" (see Reply at 5:3-4) likewise is unavailing, as Beasley's choice of statute does not alter the fact, whether or not alleged in the FAC, that the harm he attributes to Coffee-mate occurred nationwide.
Nor is Beasley's reliance on Kaufman v. Allstate N.J. Ins. Co.,
Moreover, contrary to Beasley's contention, the Ninth Circuit has not "adopted [the Kaufman ] standard." (See Mot. at 13:27; Reply at 2:19.) Indeed, the cases Beasley cites neither mention Kaufman nor address the principal injuries element beyond a passing acknowledgement of its inclusion among the requirements for the local controversy exception. See Kendrick v. Conduent State and Local Sols., Inc.,
Further, a number of district courts within the Ninth Circuit, presented with similar circumstances, in which plaintiffs alleged a single-state class with state-law claims but with respect to products sold nationwide, have concluded the principal injuries requirement was not met. See, e.g., Winn,
Lastly, the Court notes the policies animating CAFA's enactment, as well as the local controversy exception, is consistent with retention of federal jurisdiction over *1046the instant action. See, e.g., Brinkley,
Accordingly, in light of the foregoing, the Court finds Beasley has failed to show the instant action meets all of the requirements for the local controversy exception, and, consequently, the instant action is not subject to remand. See, e.g., Winn,
C. Leave to Amend
In his motion to remand, Beasley, without providing any explanation as to how he could amend his complaint in order to qualify for the local controversy exception, requests leave to amend.
"[P]laintiffs should be permitted to amend a complaint after removal to clarify issues pertaining to federal jurisdiction under CAFA." See Benko,
Here, as noted, Beasley has already amended his complaint to explain why he does not believe federal jurisdiction exists over the instant action. In particular, following removal, Beasley alleged jurisdiction is proper in state court because he, as well as "several defendants" and "all members of the proposed class," are California citizens (see FAC ¶ 1), "all claims are asserted under the laws of California" (see
Accordingly, amendment being futile, leave to amend is denied. See Dougherty v. City of Covina,
CONCLUSION
For the reasons stated above, the Motion to Remand is hereby DENIED.
IT IS SO ORDERED.
Although defendants, in their opposition, state three of said entities should be treated as one defendant (see Defs.' Opp'n to Pl.'s Mot. to Remand ("Opp'n") at 3 n.4), the Court finds any such distinction has no bearing on the instant analysis.
By order filed February 7, 2019, the Court took the motion under submission.
Given the above allegations, the Court has not considered three documents filed by defendants, namely, a table titled "Recent (2009 to 2019) Trans Fat Cases Filed by Attorney Gregory Westen" (see Opp'n App'x A), a declaration by Daniel Nugent (see Nugent Decl., filed Jan. 16, 2019), and a declaration by Steve Gaines (see Gaines Decl., filed Jan. 16, 2019), and, consequently, the Court does not address herein plaintiffs' objections to their admission.
Indeed, counsel for plaintiff previously filed against Nestlé, on behalf of a nationwide class and subclass, a related case based on essentially the same conduct as that alleged in the instant case. (See First Am. Compl. ¶¶ 1, 150, Backus v. Nestlé USA, Inc., No. 15-1963-MMC (N.D. Cal. Jun. 26, 2015) (alleging federal jurisdiction over action pursuant to CAFA; identifying two nationwide classes, namely, a "PHO Class" of "[a]ll persons who purchased in the United States, on or after January 1, 2006, Coffee-mate products containing [PHO]" and a "0g Trans Fat Claim Subclass" of "[a]ll persons who purchased in the United States, on or after January 1, 2006, Coffee-mate containing the front labeling claim '0g Trans Fat' and containing [PHO]").)
Reference
- Full Case Name
- Mark BEASLEY v. LUCKY STORES, INC.
- Cited By
- 5 cases
- Status
- Published