Court Opinion

ID: 9939891
Source: CourtListenerOpinion
Date Created: 2024-02-13 01:00:33.730007+00
Date Added: 2024-06-11T13:42:05.745214
License: Public Domain

Case: 23-50112        Document: 00517062889             Page: 1      Date Filed: 02/12/2024

             United States Court of Appeals
                  for the Fifth Circuit
                                                                                     United States Court of Appeals
                                                                                              Fifth Circuit

                                     ____________                                           FILED
                                                                                     February 12, 2024
                                       No. 23-50112                                    Lyle W. Cayce
                                     ____________                                           Clerk

   Kenneth Bell, Fire Marshal, on behalf of himself and all others
   similarly situated; Sherry Dabbs-Laury, on behalf of herself and all
   others similarly situated; Charlene Dirks, on behalf of herself and all
   others similarly situated; Wendy Brown, on behalf of herself and all others
   similarly situated; Tonnie Walker-Beck, on behalf of herself and all
   others similarly situated,

                                                                  Plaintiffs—Appellants,

                                            versus

   Cal-Maine Foods, Incorporated; Trillium Farm
   Holdings, L.L.C.; Centrum Valley Farms, L.P.; Lucerne
   Foods, Incorporated,

                                              Defendants—Appellees.
                     ______________________________

                     Appeal from the United States District Court
                          for the Western District of Texas
                               USDC No. 1:22-CV-246
                     ______________________________

   Before Stewart, Clement, and Ho, Circuit Judges.
   Per Curiam:*

         _____________________
         *
             This opinion is not designated for publication. See 5th Cir. R. 47.5.
Case: 23-50112       Document: 00517062889          Page: 2     Date Filed: 02/12/2024

                                     No. 23-50112

          The Class Action Fairness Act grants federal jurisdiction over class
   actions that meet several requirements, including an amount of controversy
   exceeding $5 million. See 28 U.S.C. § 1332(d)(2); Miss. ex rel. Hood v. AU
   Optronics Corp., 571 U.S. 161, 166 (2014). Claims against multiple defendants
   may be aggregated to satisfy the $5 million threshold if the defendants were
   jointly liable to the plaintiff. Id. Because we agree with the district court that
   Plaintiffs failed to plead sufficient facts to establish the necessary controversy
   amount, we affirm.
          This class action is brought by consumers in Texas who purchased
   eggs after Texas Governor Abbott’s COVID-19 emergency declaration on
   March 13, 2020, through March 30, 2020. Defendants Cal-Maine Foods,
   Trillium Farm Holdings, Centrum Valley Farms, and Lucerne Foods are egg
   wholesalers that “sold, distributed, produced, or handled” the eggs available
   for purchase at the retailers where Plaintiffs bought eggs. Plaintiffs allege
   that, during this period, Defendants “nearly tripled” the price of eggs in
   Texas. Plaintiffs argue that the price increase violated the Texas Deceptive
   Trade Practices Act, which prohibits Defendants from “taking advantage of
   a disaster declared by the governor” by “demanding [] exorbitant or exces-
   sive price[s]” for food and other necessities. Tex. Bus. & Com. Code
   § 17.46(b)(27).
          This isn’t Plaintiffs’ first rodeo in court. At the onset of the COVID-
   19 pandemic, Plaintiffs initially sued both the wholesalers that distributed
   eggs and the retailers from whom Plaintiffs purchased eggs, but the district
   court dismissed the case without prejudice for lack of subject matter jurisdic-
   tion. The district court held that Plaintiffs failed to show that any single De-
   fendant would be liable for damages exceeding $5 million, or that all Defend-
   ants could be found jointly liable for the price increase. Plaintiffs filed a Rule
   59 motion to amend the judgment to file a second amended complaint and
   brought the instant lawsuit while the motion was pending. Defendants

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Case: 23-50112      Document: 00517062889           Page: 3    Date Filed: 02/12/2024

                                     No. 23-50112

   moved to dismiss this case for lack of subject matter jurisdiction and for fail-
   ure to state a claim under Rules 12(b)(1) and 12(b)(6). The district court dis-
   missed this case on similar grounds as the first case, noting that the factual
   allegations about the Texas egg market did not show that Defendants worked
   together to increase the price of eggs and that they were jointly liable.
          We review a dismissal under Rule 12(b)(1) de novo and apply the same
   standard used by the district court. Ramming v. United States, 281 F.3d 158,
   161 (5th Cir. 2001) (citing Hebert v. United States, 53 F.3d 720, 722 (5th Cir.
   1995)).
          The sole issue before us is whether the amount in controversy exceeds
   $5 million. Plaintiffs argue that the amount in controversy plausibly does,
   because the requirement could be satisfied against Defendant Cal-Maine
   alone. In the operative complaint, Plaintiffs note that while only some De-
   fendants participated in the distribution of eggs sold by each retailer, Cal-
   Maine was involved with all the retailers where the class members shopped
   at. And since Cal-Maine worked closely with the other Defendants to dis-
   tribute eggs, Plaintiffs suggest that the amount in controversy may be aggre-
   gated between them.
          Plaintiffs also offer several alleged facts about the general Texas egg
   market. Using state population data, per capita egg consumption statistics,
   and information regarding the retailers’ market share in Texas, Plaintiffs es-
   timate that the class purchased approximately two-thirds of the 56 million
   dozen eggs purchased by Texans in March 2020. Combined with a conserva-
   tive average price increase of one dollar per dozen, Plaintiffs estimate at least
   $37.5 million in controversy can be attributed to Cal-Maine. Given these al-
   legations, Plaintiffs urge the court to infer Cal-Maine’s share of the market,
   and in turn, find that the alleged amount in controversy is reasonable.

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Case: 23-50112      Document: 00517062889          Page: 4      Date Filed: 02/12/2024

                                    No. 23-50112

          The district court rejected these allegations, finding them insufficient.
   We agree. The Supreme Court has long held that to survive a motion to dis-
   miss, the plaintiff’s “[f]actual allegations must be enough to raise a right to
   relief above the speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S.
   544, 555 (1955). And when a defendant files a motion to dismiss for lack of
   subject matter jurisdiction, “the trial court is required merely to look to the
   sufficiency of the allegations in the complaint because they are presumed to
   be true,” and only if the “allegations are sufficient the complaint stands.”
   Paterson v. Weinberger, 644 F.2d 521, 523 (5th Cir. 1981).
          Guided by these principles, we find Plaintiffs’ factual allegations to be
   much too speculative. It would require us to make unreasonable inferences
   about the amount in controversy against Cal-Maine and about joint liability
   among Defendants.
          First, and perhaps most fatally, Plaintiffs do not provide any facts that
   connect Defendants’ participation in production, packing and distribution of
   eggs, to the price increase of eggs. It’s unclear who in the chain of produc-
   tion, distribution, and sales was responsible for the alleged price spike, and
   how that responsibility may have been distributed. The district court notes
   that “these allegations do not show that the Defendants are related entities,
   worked together, or conspired to increase the price of eggs during the state
   of emergency.”
          Next, Plaintiffs omit any facts as to Defendants’ market share as dis-
   tributors and instead focus only on the retailers’ share in the egg market.
   While they indicate that Cal-Maine is a “main supplier” that participates in
   production, packing, and distribution of eggs across the relevant retailers,
   they provide no facts as to how Cal-Maine’s market share compared to the
   other Texas egg wholesalers that the retailers worked with. Instead, Plaintiffs
   contend that Cal-Maine is responsible or involved with all eggs sold by these

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Case: 23-50112      Document: 00517062889            Page: 5    Date Filed: 02/12/2024

                                      No. 23-50112

   retailers. Furthermore, Plaintiffs’ mathematic inferences fail to exclude cat-
   egories of eggs (i.e., non-generic brand eggs) and consumers (e.g., restaurant
   purchasers), unreasonably skewing the calculations.
          While the plausibility standard provides a low bar for factual allega-
   tions at this stage in the litigation, Plaintiffs’ broad factual claims are too ge-
   neric and remote “to raise a right to relief above the speculative level.” See
   Twombly, 550 U.S. at 555.
          For these reasons, we affirm.

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