Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_09-cv-00419/USCOURTS-casd-3_09-cv-00419-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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09cv0419

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

DOUG CHAMBERS, an individual and

on behalf of the general public,

Plaintiff,

v.

CVS PHARMACY, INC., a Rhode

Island corporation, and DOES 1

through 100, inclusive,

Defendants. 

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Civil No. 09cv0419 JAH(RBB)

ORDER GRANTING

DEFENDANT’S MOTION TO

DISMISS [DOC. # 5]

INTRODUCTION

Now before the Court is the motion of defendant CVS Pharmacy, Inc.

(“defendant”) to dismiss the instant complaint. The motion has been fully briefed by the

parties. After a thorough review of the pleadings presented, and for the reasons set forth

below, this Court GRANTS defendant’s motion to dismiss for lack of subject matter

jurisdiction pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure. 

BACKGROUND

Doug Chambers (“plaintiff”), filed the instant class action complaint on

March 3, 2009, and an amended complaint, the operative pleading here, on

March 30, 2009. In his amended complaint, plaintiff alleges he purchased an eyeglass

repair kit manufactured, marketed and/or sold by defendant labeled “Made in USA”.

Doc. # 4 ¶ 10. The amended complaint alleges that the eyeglass repair kits contained

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 After this Court took the motion under submission, plaintiff filed, on June 11, 2009, a notice

regarding the status of Kwikset Corp. v. Superior Court, 171 Cal.App.4th 645 (2009), that was cited by

defendant in support of its standing argument. See Doc. # 11. Defendant filed a response to that notice

and plaintiff filed a motion to strike defendant’s response. See Docs. # 12, 13. Because this Court ultimately

finds it lacks subject matter jurisdiction, this Court does not need to address the issue of standing.

Therefore, plaintiff’s request to strike defendant’s response to plaintiff’s notice [Doc. # 13] is DENIED as

moot.

2

 Because this Court ultimately grants defendants’ motion to dismiss the complaint pursuant to

Fed.R.Civ.P. 12(b)(1), this Court does not address defendants’ standing arguments.

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component parts made in foreign countries. Id. ¶ 11. Plaintiff claims the purported

“Made in USA” label was what induced him to purchase the product. Id. ¶ 16.

Plaintiff’s class action complaint, filed on behalf of plaintiff as an individual and on

behalf of other persons similarly situated in the State of California who purchased

defendant’s eyeglass repair kits, alleges causes of action for (1) violation of the Consumer

Legal Remedies Act (“CLRA”), California Civil Code § 1750 et seq. (Count I); (2) violation

of Business and Prof. Code § 17200 et seq. (Count II); and (3) violation of Business and

Prof. Code § 17533.7 (Count III). Id. ¶¶ 25 - 63. On April 20, 2009, defendant filed the

instant motion to dismiss. Plaintiff’s opposition to the motion was filed on May 22, 2009

and defendant’s reply brief was filed June 8, 2009. This Court subsequently took the

motion under submission without oral argument. See CivLR 7.1(d.1).1

 

DISCUSSION

Defendant moves to dismiss plaintiff’s amended complaint on the grounds that (1)

this Court lacks subject matter jurisdiction over plaintiffs’ claims, and; (2) plaintiff lacks

standing to pursue his claims.2 

1. Legal Standard

The federal court is one of limited jurisdiction. See Gould v. Mutual Life Ins. Co.

of New York, 790 F.2d 769, 774 (9th Cir. 1986). As such, it cannot reach the merits of

any dispute until it confirms its own subject matter jurisdiction. Steel Co. v. Citizens for

a Better Environment, 523 U.S. 83, 93-94 (1998). “‘Without jurisdiction the court

cannot proceed at all in any cause. Jurisdiction is power to declare the law, and when it

ceases to exist, the only function remaining to the court is that of announcing the fact and

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dismissing the cause.’” Id. (quoting Ex parte McCardle, 74 U.S. (7 Wall.) 506, 514

(1868)); see In re Mooney, 841 F.2d 1003, 1006 (9th Cir. 1988) (“Nothing is to be more

jealously guarded by a court than its jurisdiction. Jurisdiction is what its power rests upon.

Without jurisdiction it is nothing.”), overruled on other grounds by Partington v. Gedan,

923 F.2d 686, 688 (9th Cir. 1991). 

Under Fed.R.Civ.P. 12(b)(1), the Court may dismiss a complaint for lack of subject

matter jurisdiction. The plaintiff bears the burden of establishing subject matter

jurisdiction. See Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377

(1994) (stating that the burden of establishing jurisdiction rests on the party asserting it).

When considering a motion to dismiss under Fed.R.Civ.P. 12(b)(1), the district court “is

free to hear evidence regarding jurisdiction and to rule on that issue prior to trial, resolving

factual disputes where necessary.” Augustine v. United States, 704 F.2d 1074, 1077

(9th Cir. 1983). “In such circumstances, ‘[n]o presumptive truthfulness attaches to

plaintiff’s allegations, and the existence of disputed facts will not preclude the trial court

from evaluating for itself the merits of jurisdictional claims.’” Id. (quoting Thornhill

Publishing Co. v. General Telephone & Electronic Corp., 594 F.2d 730, 733 (9th

Cir. 1979)). 

2. Analysis

Defendant contends that subject matter jurisdiction is lacking in this case because

plaintiff cannot reach the amount in controversy required for diversity jurisdiction.

Jurisdiction in this case is based solely on diversity. See Doc. # 4 ¶ 7. For diversity

jurisdiction to exist, the named plaintiff must meet the minimum amount in controversy

($75,000) and complete diversity must exist among all plaintiffs and defendants.

See Exxon Mobil Corp. v. Allapattah Servs., 545 U.S. 546 (U.S. 2005). Alternatively, a

federal court has subject matter jurisdiction under the Class Action Fairness Act of 2005

(“CAFA”), when the class comprises of more than 100 members, minimal diversity of

citizenship is present, and where the aggregate amount of all class members’ claims exceeds

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In the instant case, it is not alleged that the named plaintiff will meet the minimum amount in

controversy, nor is it alleged that complete diversity exists among all plaintiffs and defendants. Plaintiff’s

do, however, allege that the class comprises of more than 100 members, minimal diversity exists and an

aggregate amount in cotroversy that exceeds $5,000,000.

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$5,000,000 (exclusive of costs or attorneys’ fees).3 28 U.S.C. § 1332(d). Where a

statutory authority provides for attorneys' fees, the fees are included in the amount in

controversy to reach CAFA's $5,000,000 minimum. Lowdermilk v. United States Bank

National Ass’n, 479 F.3d 994, 1000 (9th Cir. 2007).

In its motion to dismiss, defendant alleges that plaintiff fails to set forth facts

establishing that this Court has subject matter jurisdiction because the jurisdictional

amount required for diversity jurisdiction cannot be met on the facts plead. Doc. # 5-3

at 2. Defendant explains that CVS sold 17,207 kits between January 2007 and December

2008, for an average retail price of $2.45. Doc. # 5-4 at 4-7. Defendant argues that, even

if the number of actual kits sold was doubled, at an average price of $2.45, the gross sales

combined with punitive damages would total $843,140, a figure that falls short of the

required jurisdictional minimum. Doc. # 5-3 at 6. In opposition, plaintiff points out that

defendant fails to take into consideration the scope of the class. Doc. # 7 at 5. Plaintiff

argues that the putative class extends to any CVS customer who purchased any eyeglass

repair kit containing a false “Made in USA” designation. Id. Plaintiff contends that there

could be six such kits that violate the California “Made in USA” statute and, using this

number combined with attorney’s fees and costs, the amount in controversy would surpass

the jurisdictional minimum. Id.

However, this Court finds that plaintiff has identified only one product which

offends the “Made in USA” statute. Therefore, this Court cannot assume the existence

of other such products and must base its calculations solely on the identified product and

the figures provided. Based on the figures provided by defendant, and not disputed by

plaintiff, see Doc. # 7 at 5, defendant sold 17,207 kits between January 2007 and

December 2008, for an average retail price of $2.45. Doc. # 5-4 at 4-7. Even adding an

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Punitive damages awards exceeding nine times the restitution amount are not usually constitutional.

 A single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due

process. State Farm Mut. Auto Ins. Co. v. Campbell, 538 U.S. 408, 425 (2003). 

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award of punitive damages amounting to nine times the restitution amount,4 and attorneys

fees to the restitution amount above or even double the provided figures, the sum does not

exceed $5,000,000. 

Therefore, this Court finds that the instant complaint cannot meet the minimum

amount in controversy required for diversity jurisdiction because the evidence before the

Court suggests that the amount in controversy is far less than $5,000,000. 

CONCLUSION AND ORDER

 Based on the foregoing, IT IS HEREBY ORDERED that defendant’s motion to

dismiss is GRANTED, and the action DISMISSED without prejudice, for lack of subject

matter jurisdiction. 

DATED: August 19, 2009

JOHN A. HOUSTON

United States District Judge

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