Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-14-55916/USCOURTS-ca9-14-55916-0/pdf.json

Parties Involved:
Innoventions International, LLC
Appellee
Elsa Polo
Appellant

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

ELSA POLO, on behalf of herself and

all others similarly situated,

Plaintiff-Appellant,

v.

INNOVENTIONS INTERNATIONAL,

LLC, a limited liability company,

Defendant-Appellee.

No. 14-55916

D.C. No.

2:13-cv-00830-

ABC-RNB

OPINION

Appeal from the United States District Court

for the Central District of California

Audrey B. Collins, District Judge, Presiding

Argued and Submitted May 4, 2016

Pasadena, California

Filed August 18, 2016

Before: RAYMOND C. FISHER, MILAN D. SMITH, JR.,

and JACQUELINE H. NGUYEN, Circuit Judges.

Opinion by Judge Milan D. Smith, Jr.

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2 POLO V. INNOVENTIONS INT’L

SUMMARY*

Remand

The panel reversed the district court’s dismissal of a

putative class action, based on lack of jurisdiction, and

remanded to the district court for the case to be remanded to

state court pursuant to 28 U.S.C. § 1447(c).

The panel held that the district court upon determining

that it lacked jurisdiction, should have remanded the case to

state court pursuant to 28 U.S.C. § 1447(c). Specifically, the

panel held that the rule – that a removed case in which the

plaintiff lacks Article III standing must be remanded to state

court under § 1447(c) – applies as well to a case removed

pursuant to the Class Action Fairness Act as to any other type

of removed case. The panel rejected appellee’s arguments

that § 1447(c) should not apply to this case. Finally, the

panel held that it could not say with “absolute certainty” that

remand would be futile, therefore, the district court should

have remanded to state court pursuant to § 1447(c).

COUNSEL

Christopher Law Rudd (argued), The C2 Law Group, P.C.,

Sherman Oaks, California, for Plaintiff-Appellant.

Thomas J. Peistrup (argued), Tantalo & Adler LLP, Los

Angeles, California, for Defendant-Appellee.

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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POLO V. INNOVENTIONS INT’L 3

OPINION

M. SMITH, Circuit Judge:

Elsa Polo appeals the district court’s grant of summary

judgment in favor of Innoventions International, LLC

(“Innoventions”). Polo originally filed suit in state court, but

Innoventions removed the case to federal court pursuant to

the Class Action Fairness Act of 2005 (CAFA), Pub. L. No.

109-2, 119 Stat. 4 (codified in scattered sections of

28 U.S.C.). After the parties engaged in some discovery,

Innoventions moved for summary judgment, arguing that

Polo lacked Article IIIstanding. The district court agreed, and

dismissed the case. We hold that upon determining that it

lacked jurisdiction, the district court should have remanded

the case to state court pursuant to 28 U.S.C. § 1447(c).

Accordingly, we reverse and remand to the district court.

FACTS AND PRIOR PROCEEDINGS

Elsa Polo sued Innoventions in California state court. She

alleged several causes of action, including four class claims.

The gravamen of her complaint was that Innoventions had

marketed a product called DiabeStevia with “grossly

misleading and exaggerated claims” concerning its use and

effectiveness—in particular, with the claim that it could be

used to treat diabetes. Based upon Polo’s allegation that the

classes included “hundreds of customers,” Innoventions

removed the case to federal court pursuant to the provisions

of CAFA, which provides for original jurisdiction in the

federal district courts over certain class actions. See 28 U.S.C.

§ 1332(d)(2), (d)(5)(B).

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4 POLO V. INNOVENTIONS INT’L

Polo went through several rounds of pleading before

settling on a Third Amended Complaint (TAC). The TAC

alleged, among other things, that Polo had been diagnosed

with Type 2 diabetes; that Innoventions marketed

DiabeStevia as a treatment for diabetes; that relying upon

Innoventions’s claims, Polo stopped taking her prescribed

diabetes medication, and instead began treating her diabetes

with DiabeStevia; and that DiabeStevia failed to perform as

advertised, causing Polo to suffer “life threatening illness.”

Based upon these and other allegations, Polo asserted nine

different causes of action in her TAC.

Of those original nine causes of action, Polo appeals the

dismissal of only one, her class-action claim for violations of

California’s Consumers Legal Remedies Act (CLRA), Cal.

Civ. Code § 1750 et seq. That claim was predicated on a

rather more limited set of allegations, i.e., that DiabeStevia

“did not have the level of safety, quality, effectiveness or

value as promised” and that she and the class members

“would not have purchased DiabeStevia on the same

terms”—that is, for a “premium price”—“had they known the

true facts.” Polo also asserted that her counsel had mailed to

Innovations the written notice and demand required by the

CLRA. See Cal. Civ. Code § 1782(a).

On summary judgment, the district court found

undisputed that Polo does not have diabetes, and that she had

stopped taking her diabetes medication at least five months

before she purchased and used DiabeStevia. Thus, the district

court reasoned, Polo “cannot have been injured in the manner

in which she alleges—that she became severely ill with

diabetes symptoms in response to discontinuing her

prescriptions in reliance on DiabeStevia.” With respect to

Polo’s CLRA claim, the district court found that Innoventions

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POLO V. INNOVENTIONS INT’L 5

had undisputedly refunded Polo her entire purchase price,

including tax and shipping. As a result, the district court held

that Polo lacked Article III standing for all of her claims,

granted summary judgment in favor of Innoventions, and

dismissed the case. This appeal followed.

JURISDICTION AND STANDARD OF REVIEW

We have jurisdiction pursuant to 28 U.S.C. § 1291. We

review the district court’s decision not to remand de novo.

See ARCO Envtl. Remediation, L.L.C. v. Dep’t of Health &

Envtl. Quality, 213 F.3d 1108, 1111 (9th Cir. 2000); see also

Ah Quin v. Cty. of Kauai Dep’t of Transp., 733 F.3d 267, 270

(9th Cir. 2013) (reviewing grant of summary judgment). 

ANALYSIS

On appeal, Polo does not dispute that she lacked Article

III standing. Instead, she argues that upon making that

determination, the district court was required to remand the

case to state court, pursuant to 28 U.S.C. § 1447(c).

Innoventions disagrees. Its primary argument is that

§ 1447(c) does not apply in the context of this case. Even if

it does, Innoventions insists, the district court was permitted

to dismiss this case because remand to the California courts

would have been “futile.” See Bell v. City of Kellogg,

922 F.2d 1418, 1425 (9th Cir. 1991). We address each of

Innoventions’ arguments in turn. 

I. Removal without Jurisdiction

It is axiomatic that federal courts are courts of limited

jurisdiction. Kokkonen v. Guardian Life Ins. Co. of Am.,

511 U.S. 375, 377 (1994). We are limited, by Congress and

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6 POLO V. INNOVENTIONS INT’L

by the Constitution, in the subject matter of cases we may

adjudicate. Id. State courts, by contrast, are not so limited.

See Tafflin v. Levitt, 493 U.S. 455, 458–60 (1990). As a

result, federal and state courts frequently have concurrent

jurisdiction over a given case. See, e.g., id. (concerning

federal claims); Colo. River Water Conservation Dist. v.

United States, 424 U.S. 800, 809 (1976) (concerning statelaw claims with diverse parties). When this is so, a plaintiff

may choose the court system in which she files suit—she is,

as the old maxim declares, “master of [her] case.” See, e.g.,

Emrich v. Touche Ross & Co., 846 F.2d 1190, 1196 (9th Cir.

1988).

The availability of removal is an important check on the

plaintiff’s mastery. Removal permits a defendant to bring to

federal court a suit initially filed in state court—if the federal

court could have exercised original jurisdiction in the first

instance. 28 U.S.C. § 1441(a), (b).1 Removal is a powerful

tool: It operates largely automatically in that once a defendant

has filed the appropriate notice of removal in the federal

district court removal is a fait accompli. §§ 1446(a), 1447(a),

(b). If the removal suffers from procedural defects, the

plaintiff is responsible for bringing those defects to the

attention of the district court in a timely motion to remand.

§ 1447(c); Kelton Arms Condo. Owners Ass’n, Inc. v.

Homestead Ins. Co., 346 F.3d 1190, 1192 (9th Cir. 2003).

Generally, procedural defects not so raised are waived. See

Lively v. Wild Oats Mkts., Inc., 456 F.3d 933, 942 (9th Cir.

2006).

Defects of subject-matter jurisdiction, however, are

another matter. In an ordinary removal case, “[i]f at any time

 

1 But see 28 U.S.C. § 1441(b)(2).

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POLO V. INNOVENTIONS INT’L 7

before final judgment it appears that the district court lacks

subject matter jurisdiction, the case shall be remanded.”

§ 1447(c) (emphasis added). No motion, timely or otherwise,

is necessary: ultimate responsibility to ensure jurisdiction lies

with the district court. Kelton Arms, 346 F.3d at 1192.

Moreover, the district court generally must remand the case

to state court, rather than dismiss it. Bruns v. Nat’l Credit

Union Admin., 122 F.3d 1251, 1257 (9th Cir. 1997). Remand

is the correct remedy because a failure of federal subjectmatter jurisdiction means only that the federal courts have no

power to adjudicate the matter. State courts are not bound by

the constraints of Article III. ASARCO Inc. v. Kadish,

490 U.S. 605, 617 (1989). 

The rule that a removed case in which the plaintiff lacks

Article III standing must be remanded to state court under

§ 1447(c) applies as well to a case removed pursuant to

CAFA as to any other type of removed case. § 1453(c)(1)

(“Section 1447 shall apply to any removal of a case under

[CAFA], except . . . section 1447(d) . . . .”); see also Me.

Ass’n of Interdependent Neighborhoods v. Comm’r, Me.

Dep’t of Human Servs., 876 F.2d 1051, 1053–54 (1st Cir.

1989). Despite this straightforward proposition, Innoventions

argues that § 1447(c) should not apply to this case for three

reasons. 

First, Innoventions relies on general maxims in our

precedents, such as “a putative class action, once properly

removed, stays removed.” See United Steel, Paper &

Forestry, Rubber, Mfg., Energy, Allied Indus. & Serv.

Workers Int’l Union v. Shell Oil Co., 602 F.3d 1087, 1091

(9th Cir. 2010). Taken at face value, the stated maxim proves

too much: It squarely contradicts the statutory language,

which provides for remand of CAFA actions on (mostly) the

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8 POLO V. INNOVENTIONS INT’L

same terms as any other case removed to federal court. See

§ 1453(c)(1). In context, the quoted statement in United Steel

applies only to “post-filing developments,” such as a failure

of Rule 23 class certification that might defeat CAFA

eligibility. See 602 F.3d at 1091–92 & n.3. Our primary

concern in that case was thwarting “jurisdictional ping-pong

game[s]” in which parties lob a case back and forth between

federal and state courts as post-filing developments occur.

See id. at 1090. But when federal jurisdiction is absent from

the commencement of a case, a putative class action is not

“properly removed”—and therefore need not “stay[]

removed.” See id. at 1091, 1092 n.3. This case lacked a

named plaintiff with Article III standing, and therefore was

not properly removed. Moreover, after remand of this appeal,

Polo’s lack of Article III standing will be law of the case.

2

Thus, there is no danger of a jurisdictional ping-pong game

in this case: this rally has concluded.

Second, Innoventions argues that the failure of a claim on

the merits does not divest a court of jurisdiction. While this

is generally true, see Bell v. Hood, 327 U.S. 678, 682 (1946),

the point is irrelevant here. The district court expressly

determined that Polo’s claims failed for lack of standing. The

district court’s factual determinations—that Polo did not have

diabetes and that Innoventions did not cause her to stop

taking her diabetes medication—could have served as a basis

for judgment on the merits of some of her other claims, such

as her claim for personal injury. However, as we shall

presentlyexplain, Polo’s CLRA claim is independent of those

facts. See infra Part II. According to the district court, that

2

See Morris v. Am. Nat’l Can Corp., 988 F.2d 50, 52 (8th Cir. 1993)

(holding that the law-of-the-case doctrine applies just as readily to an issue

that was waived as to an issue that was formally presented to the court).

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POLO V. INNOVENTIONS INT’L 9

claim was rendered “moot” when Innoventions refunded Polo

the money she spent on DiabeStevia. It rendered no judgment

on the merits of that claim.

Finally, Innoventions argues that because Polo’s lack of

injury was established as part of the summary-judgment

process, it was established at final judgment, rather than

“before final judgment” as required by § 1447(c). What the

statute requires is remand “[i]f at any time before final

judgment it appears that the district court lacks subject matter

jurisdiction”—and the district court necessarily must have

determined that it lacked subject-matter jurisdiction before

entering judgment to that effect.3 Therefore, this case falls

within the purview of § 1447(c).

II. The Futility Doctrine and the CLRA

Innoventions also argues that despite the literal words of

§ 1447(c), a district court may dismiss a removed case

without remanding it back to state court if remand would be

futile. This argument finds some support in our precedents.

See Bell v. City of Kellogg, 922 F.2d 1418, 1425 (9th Cir.

1991). However, the Bell rule has been questioned, and may

no longer be good law. Importantly here, even if it remains

good law, remand would not be futile under the Bellstandard.

In International Primate Protection League v.

Administrators of Tulane Educational Fund, decided a few

months after we decided Bell, the Supreme Court declined to

apply a futility exception to the remand rule. 500 U.S. 72,

3

Indeed, the record shows that the district court made its determination

on May 1, 2014, but entered judgment almost two weeks later on May 12,

2014.

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10 POLO V. INNOVENTIONS INT’L

88–89 (1991). Although the Court did not reject the futility

doctrine outright, it did take note of “the literal words of

§ 1447(c), which, on their face, give no discretion to dismiss

rather than remand an action.” Id. at 89 (quotation marks and

alteration omitted). In the wake of International Primate, a

number of other circuits have expressly rejected the futility

doctrine. See Hill v. Vanderbilt Capital Advisors, LLC,

702 F.3d 1220, 1225–26 (10th Cir. 2012) (collecting cases).

But Polo has not argued that Bell is no longer controlling law,

and we decline to so hold sua sponte. Cf. Miller v. Gammie,

335 F.3d 889, 899 (9th Cir. 2003) (considering when a panel

may overrule prior circuit authority).

Even applying the Bellrule, however, a district court must

have “absolute certainty” that a state court would “simply

dismiss[] the action on remand.” 922 F.2d at 1425 (quotation

marks omitted). In other words, only when the eventual

outcome of a case after remand is so clear as to be

foreordained have we held that a district court may dismiss

it—to “prevent[] any further waste of valuable judicial time

and resources.” Id. It is far from clear that a state court would

dismiss Polo’s CLRA claim.

A plaintiff who purchased goods in light of deceptive

practices has standing to sue pursuant to the CLRA if she

alleges (a) that she purchased a product from the defendant,

and (b) that “the purchase would not have been made but for

the misrepresentation.” Kwikset Corp. v. Superior Court,

246 P.3d 877, 890 (Cal. 2011); see also Hinojos v. Kohl’s

Corp., 718 F.3d 1098, 1108 (9th Cir. 2013). The injury Polo

asserts with respect to her CLRA claim fits these

requirements:

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POLO V. INNOVENTIONS INT’L 11

Plaintiff and California Class members

suffered injuries caused by Defendants’

misrepresentations about DiabeStevia

because: (a) Plaintiff and the California Class

members would not have purchased

DiabeStevia on the same terms had they

known the true facts; (b) Plaintiff and the

California Class paid a premium price due to

the false and misleading advertising of 

DiabeStevia; and (c) DiabeStevia did not have

the level of safety, quality, effectiveness or 

value as promised.

Polo’s standing to bring her CLRA claim does not depend

upon her allegation that takingDiabeStevia made her diabetes

worse. Indeed, with respect to Polo’s CLRA claim, when

Polo ceased taking her diabetes medication—or whether she

had diabetes at all4—is irrelevant. What matters are her

allegations that she thought she had diabetes; that

Innoventions marketed DiabeStevia as a treatment for

diabetes; and that but for that marketing, she would not have

bought DiabeStevia.

Were that the end of the allegations, Polo would likely

have standing under Article III. See Hinojos, 718 F.3d at

1104 n.3. But the district court held that because Innoventions

fully compensated Polo for “her entire purchase price,” her

4 Whether or not Polo actually had or has diabetes is unclear. Polo was

at one point in time diagnosed with diabetes and prescribed diabetes

medication. Some time later—the timeline is vague—she was told either

that her symptoms had been brought under control or that she was no

longer diabetic.

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12 POLO V. INNOVENTIONS INT’L

CLRA claim is moot.5 Under California law, however, that

sort of “picking off” of class plaintiffs is ineffective: “[O]nce

a person has been the victim of a proscribed practice under

the CLRA and makes a demand on behalf of a class,

remedying the plaintiff’s individual complaint does not

disqualify her as class representative.” Meyer v. Sprint

Spectrum, L.P., 200 P.3d 295, 300 (Cal. 2009). Instead, to

defeat a class action based on practices proscribed under the

CLRA, the defendant “must adequately notify the members

of the class and provide an opportunity for an appropriate

remedy for the defective goods or services.” Id. (citing Cal.

Civ. Code § 1782(c)). 

Polo made a demand on behalf of a class on April 6,

2012. Innoventions refunded Polo’s purchase price on May

11, 2012, but does not contend that it provided the notice and

remedy to class members required by the CLRA. See Cal.

Civ. Code § 1782(c); Meyer, 200 P.3d at 300. Thus, Polo

likely retains standing under California law. At a minimum,

we cannot saywith “absolute certainty” that remand would be

futile. Therefore, the district court should have remanded this

case to state court pursuant to 28 U.S.C. § 1447(c).

CONCLUSION

The district court’s judgment dismissing this case is

REVERSED and REMANDED.

5 This conclusion is questionable, see Chen v. Allstate Ins. Co., 819 F.3d

1136, 1141–43 (2016), but Polo expressly waived any argument to the

contrary on appeal. See supra note 2 and accompanying text.

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