Ruthie Martin v. Chattem, Inc. et al, No. 2:2019cv06464 - Document 25 (C.D. Cal. 2019)
Court Description: ORDER GRANTING PLAINTIFF'S MOTION TO REMAND 11 AND DENYING DEFENDANTS' MOTION TO DISMISS AS MOOT 21 by Judge Otis D. Wright, II: Case remanded to Los Angeles County Superior Court, Case No. 19STCV03843. (MD JS-6. Case Terminated. (lc) Modified on 12/10/2019 (lc).
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Ruthie Martin v. Chattem, Inc. et al Doc. 25 JS-6 O 1 2 3 4 5 6 7 United States District Court Central District of California 8 9 10 11 Plaintiff, 12 13 14 Case No. 2:19-cv-06464-ODW(PJWx) RUTHIE MARTIN, ORDER GRANTING MOTION TO REMAND [11] AND DENYING MOTION TO DISMISS AS MOOT [21] v. CHATTEM, INC. et al., 15 16 17 Defendants. I. INTRODUCTION 18 On May 16, 2019, Plaintiff Ruthie Martin (“Martin”) filed this putative class 19 action in Los Angeles Superior Court against Chattem, Inc. (“Chattem”) and Sanofi, 20 Inc. (“Sanofi”) (collectively, “Defendants”). (Not. of Removal, Ex. A (“Compl.”), 21 ECF No. 1-1.) On July 25, 2019, Chattem removed the action pursuant to the Class 22 Action Fairness Act, 28 U.S.C. § 1332(d) (“CAFA”). 23 (“Removal”) 1, ECF No. 1.) Martin moved to remand this action for lack of subject 24 matter jurisdiction (“Motion”). (Mot. to Remand (“Mot.”), ECF No. 11.) Chattem 25 subsequently filed a motion to dismiss. (Mot. to Dismiss, ECF No. 21.) For the 26 reasons discussed below, the Court finds that Chattem has not met its evidentiary 27 burden to establish that the amount in controversy exceeds $5 million. Accordingly, (Notice of Removal 28 Dockets.Justia.com 1 the Court GRANTS Martin’s Motion to Remand and DENIES Chattem’s Motion to 2 Dismiss as moot.1 II. 3 FACTUAL BACKGROUND 4 Martin brings this class action against Defendants individually and on behalf of 5 all others similarly situated (collectively “putative class”) for pain, burns, and 6 inflammation from use of the product, “Icy Hot Applicator.” The putative class 7 consists of “all citizens of California who purchased the [d]effective [p]roduct [but 8 not] the Court and its personnel, Defendants and their employees, and persons who 9 purchased the [d]effective [p]roduct for resale.” (Compl. ¶ 27.) Martin is a citizen of 10 California. (Compl. ¶ 11.) Chattem is incorporated and has its principal place of 11 business in Tennessee. 12 (1) Consumer Legal Remedies Act (“CLRA”); (2) False Advertising Law (“FAL”); 13 (3) Unfair Competition Law (“UCL”); (4) Breach of Express Warranty; (5) Breach of 14 Implied Warranty of Merchantability; (6) Unjust Enrichment; (7) Strict Products 15 Liability; and (8) Negligence. (Compl. ¶¶ 33–130.) Martin does not allege a specific 16 damages amount. (See Compl. at 23.) (Compl. ¶ 12.) Martin alleges eight causes of action: 17 Chattem removed the action to this Court on July 25, 2019, pursuant to the 18 CAFA. (Removal 2.) On August 26, 2019, Martin moved to remand arguing that 19 Chattem’s removal relies on speculative violation rates to calculate the amount in 20 controversy. (Mot. 1.) Martin contends that, as a result, Chattem has not established 21 that the amount in controversy is met and, thus, the Court lacks subject matter 22 jurisdiction. (Mot. 1.) Chattem opposes the Motion and argues that the amount in 23 controversy is satisfied because Chattem calculated the alleged violation rates based 24 on reasonable assumptions derived from the Complaint. (Opp’n to Mot. (“Opp’n”) 1, 25 ECF No. 14.) 26 27 28 1 After carefully considering the papers filed in support of and in opposition to these motions, the Court deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; L.R. 715. 2 III. 1 LEGAL STANDARD 2 CAFA allows for federal jurisdiction over a purported class action when (1) the 3 amount in controversy exceeds $5 million (2) at least one putative class member is a 4 citizen of a state different from any defendant, and (3) the putative class exceeds 100 5 members. 6 jurisdiction remains . . . on the proponent of federal jurisdiction.” Abrego Abrego v. 7 Dow Chem. Co., 443 F.3d 676, 685 (9th Cir. 2006). Generally, removal statutes are 8 strictly construed against removal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566 9 (9th Cir. 1992). 10 28 U.S.C. §§ 1332(d)(2), (5). “[T]he burden of establishing removal However, “no antiremoval presumption attends cases invoking CAFA.” Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. 81, 89 (2014). 11 “[A] defendant’s notice of removal need include only a plausible allegation that 12 the amount in controversy exceeds the jurisdictional threshold. Id. If the plaintiff 13 disputes the alleged amount in controversy, “both sides submit proof and the court 14 decides, by a preponderance of the evidence, whether the amount-in-controversy 15 requirement has been satisfied.” 16 “including affidavits or declarations, or other summary-judgment-type evidence 17 relevant to the amount in controversy at the time of removal.” Ibarra v. Manheim 18 Investments, Inc., 775 F.3d 1197 (9th Cir. 2015) (quoting Singer v. State Farm Mut. 19 Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997)). “[A] defendant cannot establish 20 removal jurisdiction by mere speculation and conjecture, with unreasonable 21 assumptions.” Ibarra, 775 F.3d at 1197. 22 IV. Id. at 88. The parties may submit evidence, DISCUSSION 23 Chattem asserts that removal is proper because there are more than 100 putative 24 class members, minimal diversity is satisfied, and the amount in controversy exceeds 25 $5 million. (Removal 3.) Martin does not dispute that the class is over 100 members 26 or that the parties are minimally diverse; instead, he argues that Chattem has not 27 established the amount in controversy. (Mot. 3–4.) 28 3 Chattem contends that the restitution damages alone exceeds $5 million. 1 2 (Removal 4.) 3 claims for class members would exceed $5 million. (Opp’n to Mot. 10–11.) Martin 4 counters that Chattem has not provided sufficient evidence and relies on speculation in 5 its amount in controversy calculation. (See Mot.) 6 A. 7 Alternatively, Chattem indicates that the potential personal injury Restitution Damages Determining whether the amount in controversy exceeds $5 million is 8 contingent upon whether Chattem’s calculations are reasonable. See 9 Ibarra, 775 F.3d at 1197 (finding assumptions of damages “cannot be pulled from thin 10 air but need some reasonable ground underlying them.”) Chattem, as the removing 11 party, bears the burden to establish that its asserted amount in controversy relies on 12 reasonable assumptions. Id. at 1199. “Where the complaint contains generalized 13 allegations of illegal behavior, a removing defendant must supply ‘real evidence’ 14 grounding its calculations of the amount in controversy.” Dobbs v. Wood Group PSN, 15 Inc., 201 F. Supp. 3d 1184, 1188 (E.D. Cal. 2016) (citing Ibarra, 775 F.3d at 1199). 16 Chattem contends that the restitution damages alone exceeds $5 million. 17 (Removal 4.) Chattem proffers as evidence the declaration of Brian Nutter, the Senior 18 Manager of Revenue and Working Capital at Chattem, who stated that its sales to 19 California retailers “from May 2015 to July 2019 exceeds $5 million.” (Decl. of Brian 20 Nutter (“Nutter Decl.”) ¶¶ 1, 5, ECF No. 14-1.) Martin disputes that she does not seek 21 restitution, nevertheless, any restitution the class seeks would be the amount class 22 members paid to Chattem to purchase its product. 23 purchasers with the intent to resale Chattem’s product do not fall within the class as 24 defined by the Complaint. (Compl. ¶ 27.) Therefore, without more, the value of sales 25 Chattem earned from its California retailers is irrelevant to the damages Martin and 26 the putative class seek in this suit. (Mot. 5.) As Martin notes, 27 Chattem argues that the year to year sales to the retailers indicate that 28 individuals in California are purchasing its product, and if the retailers collectively 4 1 paid over $5 million surely the individual customers collectively paid over $5 million. 2 (Opp’n 12.) The Court finds Chattem has ventured far from its evidence and the 3 allegations in the Complaint. Unwilling to join the journey, the Court finds that 4 Chattem has not satisfied its burden. 5 assumptions of damages “cannot be pulled from thin air but need some reasonable 6 ground underlying them.”) 7 B. Compensatory Personal Injury Damages Chattem alternatively asserts that the amount in controversy is met by the 8 9 See Ibarra, 775 F.3d at 1197 (finding personal injury damages of class members. (Opp’n 10–11.) In its calculation, 10 Chattem extrapolates from Martin’s allegations of “hundreds of thousands” of class 11 members that there are at least 200,000 class members. (Compl. ¶ 28; Opp’n 10.) 12 Chattem further speculates that if each class member was injured in the amount of 13 $25, this cause of action would satisfy the amount in controversy requirement. 14 (Opp’n 10–11.) As Chattem provides no evidence to assume that every class member 15 will be physically injured from the use of its product and the Complaint makes no 16 such allegations, the Court declines to accept Chattem’s speculations and does not 17 find the amount in controversy satisfied. 18 assumptions of damages “cannot be pulled from thin air but need some reasonable 19 ground underlying them.”) 20 C. See Ibarra, 775 F.3d at 1197 (finding Other Damages and Attorney’s Fees 21 Finally, Chattem asserts that the injunctive relief would be a “substantial” cost, 22 attorney’s fees would be 25% of the compensatory damages ($1.2 million), and 23 punitive damages would equal the compensatory damages ($5 million). (Opp’n 13– 24 15.) 25 compensatory damages. Accordingly, the Court does not consider these estimates in 26 the amount in controversy calculation. 27 assumptions of damages “cannot be pulled from thin air but need some reasonable 28 ground underlying them.”) However, these estimates are based on the unsubstantiated $5 million See Ibarra, 775 F.3d at 1197 (finding 5 1 Finding that Chattem has not provided a sound basis to determine that the 2 amount in controversy exceeds $5 million, the Court lacks jurisdiction over this case. 3 Accordingly, the Court GRANTS the motion to remand and DENIES as moot the 4 motion to dismiss. V. 5 CONCLUSION 6 For the reasons discussed above, the Court GRANTS Martin’s Motion, and 7 REMANDS this case to the Superior Court of California for the County of Los 8 Angeles, Case No. 19STCV03843 located at 111 North Hill Street, Los Angeles, 9 California 90012. (ECF No. 11.) 10 11 IT IS SO ORDERED. 12 13 December 9, 2019 14 15 16 ____________________________________ OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE 17 18 19 20 21 22 23 24 25 26 27 28 6
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