Court Opinion

ID: 9382193
Source: CourtListenerOpinion
Date Created: 2023-03-24 21:02:34.080279+00
Date Added: 2024-06-11T17:17:37.690116
License: Public Domain

UNITED STATES DISTRICT COURT
                              FOR THE DISTRICT OF COLUMBIA

  CHEMICAL TOXIN WORKING GROUP
  INC., d/b/a HEALTHYLIVING
  FOUNDATION,

          Plaintiff,

  v.                                                         Case No. 1:22-cv-1259-RCL

  JOHNSON & JOHNSON and JOHNSON
  & JOHNSON CONSUMER INC.,

          Defendants.

                                   MEMORANDUM OPINION

         Plaintiff Chemical Toxin Working Group Inc., d/b/a HealthyLivinG Foundation ("HLF"),

moves to remand this action to the Superior Court of the District of Columbia ("Superior

Court"). Defendants Johnson & Johnson and Johnson & Johnson Consumer Inc. ("JJCI"),

oppose remand, claiming this Court has jurisdiction under the Class Action Fairness Act

("CAFA"), 28 U.S.C. § 1332(d). Upon consideration of the parties' filings, the applicable law,

and the facts of this case, the Court concludes that it has jurisdiction under CAFA. Accordingly,

HLF's motion to remand will be DENIED.

                                      I.    BACKGROUND

         Plaintiff HLF is a "non-profit public interest organization" headquartered in California. See

Compl.   ,r 13, Ex. 1 to Mot. to Remand ("Mot."), ECF No. 10-1. Defendants, Johnson & Johnson
and Johnson & Johnson Consumer Inc. (together, "JJCI"), are "New Jersey-based corporation[s]"

with their "principal place of business and headquarters" in New Jersey. Id.   ,r 25-26.
         On April 15, 2022, HLF filed a complaint in the Superior Court. See Compl. It alleges that

JJCI "deceptive[ly] label[ ed], market[ ed], ands[ old]" five different baby hygiene products ("Baby

                                                  1
 Products") as "free of ... phthalates" when they allegedly did contain phthalates of which JJCI

 "knew, or should have known." Id.      ,r,r 1-5, 66.
        HLF in this action claims to represent a putative class of "all persons in the District of

 Columbia who purchased the Baby Products at any time from [three] years preceding the date of

 the filing of [the] Complaint to the time a class is notified in this action." Id. ,r,r 141-145. HLF

 further asserts that JJCI violated the D.C. Consumer Protection Procedures Act, D.C. Code§ 28-

 3901 et seq. ("CPPA"), and breached its express and implied warranties. Id.   ,r,r 155-63, 175-79.
        Among other remedies, HLF's complaint seeks "full monetary relief available under the

law[,]" (Id.   ,r,r 8, 75), and award of"treble damages or $1,500 per [CPPA] violation, whichever is
greater, to [HLF] and all members of the Class[,]" (Compl., Prayer for Relief,r F).

        JJCI filed a Notice of Removal, pursuant to 28 U.S.C. § 1332(d), to remove the case to the

U.S. District Court for the District of Columbia on the grounds that this class action satisfies the

requisites of CAFA-minimal diversity, over 100 putative class members, and an amount in

controversy that exceeds $5 million-and therefore that this Court has original jurisdiction. See

Defs.' Notice of Removal ,r 5, ECF No. I. Subsequently, HLF filed a motion to remand the case

back to Superior Court. See Mot. JJCI oppose the remand. See Mot. to Remand Resp. ("Resp."),

ECFNo. 13.

                                  II.     LEGAL STANDARDS

       Under CAF A, a defendant may remove a class action complaint to federal court provided

the parties are minimally diverse, the class-wide amount in controversy exceeds $5 million, and

there are more than 100 putative class members. 28 U.S.C. § 1332(d)(2), (5)(8).

       In the first instance, a defendant seeking to remove a case to a federal court must file in

the federal forum a notice of removal "containing a short and plain statement of the grounds for

removal," 28 U.S.C § 1446(a), following the general pleading requirement of Fed. R. Civ. P.

                                                        2
 8(a). Such a statement need include only a "plausible allegation" that the requirements of 28

 U.S.C. § 1332(d) are met and does not necessitate evidentiary submissions to support that

 conclusion. Dart Cherokee Basin Operating Co., LLCv. Owens, 574 U.S. 81, 84, 89 (2014).

        Likewise, when a plaintiff seeks remand of a case removed to federal court, the court

 generally evaluates the defendant's notice of removal to determine whether its plausible factual

 allegations, accepted as true, establish federal jurisdiction. Pleznac v. Equity Residential Mgmt.,

L.L.C., No. 17-CV-2732 (CRC), 2018 WL 10196622, at *2 (D.D.C. May 8, 2018) (citing Dart

Cherokee, 574 U.S. at 87, and Fed. R. Civ. P. 8(a)).

        The defendant's amount-in-controversy allegation should be accepted "[if it is] not

contested by the plaintiff or questioned by the court[.]" Dart Cherokee, 574 U.S. at 87. If the

plaintiff contests the defendant's allegation,§ 1446(c)(2)(B) instructs: "[R]emoval ... is proper on

the basis of an amount in controversy asserted" by the defendant "if the district court finds, by

the preponderance of the evidence, that the amount in controversy exceeds" the jurisdictional

threshold." Id. at 88.

        The defendant has the burden of proof in defending the removal or overcoming the

motion to remand, Breakman v. AOL LLC, 545 F.Supp.2d 96, 100 (D.D.C. 2008), but that

burden is not "daunting." Gilmer v. Walt Disney Co., 915 F. Supp. 1001, 1006 (W.D. Ark. 1996);

Avila v. Rue21, Inc., 432 F. Supp. 3d 1175, 1185 (E.D. Cal. 2020). The defendant need not

"prove [CAFA's requirements] beyond all doubt or to banish all uncertainty about [them]."

Pretka v. Kolter City Plaza IL Inc., 608 F.3d 744, 754 (11th Cir. 2010). Nor need the defendant

prove the amount in controversy to a legal certainty. Sloan v. Soul Circus, Inc., No. CV 15-

01389 (RC), 2015 WL 9272838, at *5 (D.D.C. Dec. 18, 2015) (citing Doe v. Georgetown

Synagogue-Kesher Israel Congregation, 118 F. Supp. 3d 88, 93 (D.D.C. 2015). While the

                                                 3
 defendant has the burden of proof" ... [it] does not mean that [it] cannot ask the court to make

 common-sense inferences." Robertson v. Exxon Mobil Corp., 814 F.3d 236,240 (5th Cir. 2015);

see also Mondragon v. Capital One Auto Finance, 736 F.3d 880, 886 (9th Cir. 2013); Id.

Moreover, "no antiremoval presumption attends cases invoking CAFA, which Congress enacted

to facilitate adjudication of certain class actions in federal court." Dart Cherokee, 574 U.S. at 89.

                                     III.    DISCUSSION

        In order to resolve the motion to remand in this case, the Court must resolve three issues:

(1) whether there is minimal diversity between the parties; (2) whether JJCI has shown that the

amount in controversy exceeds $5 million, (3) and whether the putative class has at least 100

members. The Court concludes that all three requirements are met, and thus remand to Superior

Court is inappropriate.

    A. Minimal Diversity

        For class actions, CAFA replaced the normal requirement of complete diversity of

citizenship among all parties with a requirement of minimal diversity. Mississippi ex rel. Hood v.

AU Optronics Corp., 571 U.S. 161, 165 (2014). Under that requirement, federal courts may

exercise jurisdiction over a class action where "any member of a class of plaintiffs is a citizen of

a State different from any defendant[.]" 28 U.S.C. § 1332(d)(2)(A); McMullen v. Synchrony

Bank, 82 F. Supp. 3d 133, 137 (D.D.C. 2015).

       Here, the putative class is comprised of District of Columbia consumers, see Comp 1. ,r

141, while JJCI are "New Jersey-based corporation[s]" with their "principal place of business

and headquarters" in New Jersey, id.   ,r 25-26, and incorporated in Delaware, see Defs.'
Corporate Disclosure Statement, ECF No. 2.

       Accordingly, the Court accepts these facts as presented by the parties that neither shares

common citizenship that would lend to extinguish diversity between them. See Johnson v.

                                                 4
 Advance America, 549 F.3d 932, 935 (4th Cir. 2008); Roberts v. Mars Petcare US, Inc., 874 F.3d

 953, 956 (6th Cir. 2017) (holding that a corporation is a citizen of a state where its incorporated
                                                        I

 and/or which is their principal place of business. Therefore, there is minimal diversity between

 the parties.

     B. Amount in Controversy

         In order to apply CAFA, the amount in controversy must exceed the sum or value of $5

million. 28 U.S.C. § 1332(d)(2). When determining the amount in controversy in a CAFA case,

"the claims of all named and unnamed members of the proposed class are aggregated."

Georgetown Synagogue, 118 F. Supp. 3d at 93; Standard Fire Ins. Co. v. Knowles, 133 S. Ct.

1345, 1347 (2013).

         The amount in controversy is an estimate of the total amount in dispute; not a prospective~

assessment of a defendant's liability. Lewis v. Verizon Commc'ns, Inc., 627 F.3d 395, 400 (9th

Cir. 2010); see, e.g., Breathe DC v. Santa Fe Nat. Tobacco Co., 232 F. Supp. 3d 163, 170

(D.D.C. 2017) (rejecting the legal certainty standard). Accordingly, the defendant has some

latitude in estimating the amount in controversy in the early stages of litigation. Jauregui v.

Roadrunner Transp. Servs., 28 F.4th 989, 993-994 (9th Cir. 2022); see also Oshana v. Coca-

Cola Co., 472 F.3d 506, 511 (7th Cir. 2006) (accepting a defendant's estimate of the amount in

controversy, provided it was made in good faith and supported by evidence).

        ''A removing party ... [need] only ... establish the amount in controversy by a good faith

estimate that is plausible and adequately supported by the evidence." Roppo v. Travelers Comm.

Ins. Co., 869 F.3d 568, 579 (7th Cir. 2017); see also Pretka, 608 F.3d at 754; Sloan, 2015 WL

9272838, at *5. The defendant's claim "must be able to rely on a chain ofreasoning that includes

                                                 5
 assumptions ... , as long as·the reasoning and underlying assumptions are reasonable." Jauregui,

 28 F.4th at 993; see also Pretka, 608 F.3d at 754; Robertson, 814 F.3d at 240.

        On these principles, JJCI prevails in demonstrating that the amount in controversy

exceeds CAFA's $5 million requirement based on HLF's prayer for statutory damages alone.

        Among other remedies sought, HLF seeks an award of "treble damages or $1,500 per

[CPPA] violation, whichever is greater, to [HLF] and all members of the Class." Compl., Prayer

for Relief ,r F. Under the CPP A, a "violation" of the statute occurs each time a customer

purchases an allegedly mislabeled product. See Sloan, 2015 WL 9272838, at *8 ("CCPA

statutory damages ... flow from ... each purchase [class members] made").

        As JJCI does not directly sell the Baby Products to consumers, it has estimated that

27,551 units of the Baby Products were sold in the District of Columbia during the class period,

or approximately 0.2% of JJCI's 13,775,447 wholesale sales in the United States from April 1,

2019, to present. See Deel. of Kirsten Hurley ("Hurley Deel.") ,r,r 5, 10, ECF No. 13. This

estimate is relative to the size of the population of the District of Columbia compared with the

total population of the United States. Resp. 15.

       CPPA entitles plaintiffs and class members to statutory damages ofup to "$1,500 per

violation[,]" D.C. Code§ 28-3905(k)(2)(A)(I), and each sale of the Baby Products in the District

during the class period would constitute a "violation" of the CCPA as the Complaint alleges.

Thus, the 27,551 sales and "violations" could lead to approximately $41,326,500 in statutory

damages, more than exceeding the threshold for jurisdiction under CAFA.

       HLF argues this estimation by JJCI is speculative and does not accurately give rise to the

necessary amount in controversy on the preponderance of the evidence standard outlined in Dart

Cherokee. Mot. 8. This Court disagrees.

                                                   6
        The Court has discretion to make "common-sense inferences" when determining whether

 jurisdiction exists, Robertson, 814 F.3d at 240, and can accept logical assumptions such as that

 consumers in a particular state purchase in proportion to consumers nationwide unless those

 assumptions prove untrue by a preponderance of the evidence. See Allred v. Kellogg Co., No. 17-

 cv-1354-AJB-BLM, 2018 WL 1158885, at *2 (S.D. Cal. Jan. 9, 2018) (finding "reasonable"

defendant's estimate of California sales figures that took its "nationwide sales figures" and

multiplied them by 12.5%, since "California has 12.5% of the nation's population").

        JJCI has offered an estimate of the amount in controversy and its theory in developing

that conclusion. Hurley Deel. ,n[ 5, 10. Given the early stage of this litigation and the fact that

JJCI does not possess direct evidence (i.e., state-specific sales records), JJCI has some legal

latitude in estimating the amount in controversy. Jauregui, 28 F.4th at 993-994.

        The Court emphasizes that JJCI's amount in controversy estimate is not supposed to be a

prospective assessment of its liability, Lewis, 627 F.3d at 400, but merely a reflection of

the maximum amount HLF could reasonably recover. Arias, 936 F.3d at 927. Therefore, JJCI

does not have to "prove [CAFA's requirements] beyond all doubt[,]" Pretka, 608 F.3d at 754, or

to a legal certainty. Sloan, 2015 WL 9272838, at *5. As long as such amount is determined by

the Court to be a reasonable assessment made in good faith, Roppo, 869 F.3d at 579; Jauregui,

28 F.4th at 993, the Court will accept the amount in controversy allegation without requiring

evidentiary submissions to validate it and decide, by the preponderance of the evidence, if it

exceeds the jurisdictional threshold, Dart Cherokee, 574 U.S. at 84, 87, 89.

       Hence, this Court finds JJCis' amount in controversy allegation, based on a 0.2%

proportion of nationwide wholesale sales figures relative to the population of the District of

Columbia compared with the nation's total population, was reached in good faith and is

                                                  7
    reasonable as sustained by foregoing reasons consistent with§ 1446(c)(2)(B). Therefore, the

    Court agrees with JJCI and finds the amount in controversy, in this case, does exceed the

    jurisdictional threshold by the preponderance of the evidence. 1

        C. Putative Class Size

           For an action to be removable under CAFA, the proposed plaintiff class must consist of

    100 or more people. 28 U.S.C. § 1332(d)(5)(B). CAFA defines "class members" as "the persons

    (named or unnamed) who fall within the definition of the proposed or certified class." Id.

    § 1332(d)(l)(D).

           HLF' s Complaint alleges that the putative class "consists of at le~st hundreds, if not

thousands, of consumers." Comp!.           ,r 145. By making that statement in a filing in Superior Court,
HLF "certifies that to the best of [its] knowledge, information, and belief, formed after an inquiry

reasonable under the circumstances[,]" this "factual contention" about the class size "has

evidentiary support." D.C. Civ. R 11.

           Nevertheless, HLF argues that it is JJCI's burden to discover the putative class size to

ascertain the amount in controversy and that JJCI cannot carry that burden simply by relying on

the allegations in HLF's complaint, citing Wexler v. United Airlines, 496 F. Supp. 2d 150, 155-

157 (D.D.C. 2007), for the proposition that "[the removing party] bears the burden of

establishing jurisdiction, and facts necessary for a more precise estimate of the class size are

uniquely within its knowledge." See Mot. at 13. This Court disagrees.

           The defendant indeed bears the burden of showing that CAFA's requirements, including

numerosity, are met. See Breakman, 545 F.Supp.2d at 100. But it does not follow that a

1
 HLF also argues that JJCI cannot carry its burden of establishing the amount in controversy by aggregating attorneys'
fees. See Mot. at 16-17. However, since JJCI easily carries that burden by relying on statutory damages alone, the
Court need not consider that question.

                                                          8
 defendant may not rely on the plaintiffs allegations to do so. Such reliance comports with the

 general principle recognized in this Circuit that "factual allegations in operative pleadings are

judicial admissions of fact." El Paso Nat. Gas Co. v. United States, 750 F.3d 863, 876 (D.C. Cir.

 2014). And for that reason, while the D.C. Circuit has not yet addressed the question, numerous

 circuits have held that a plaintiff is bound by allegations in a state-court complaint that go to

CAFA'sjurisdictional requirements. See Roppo, 869 F.3d at 575-82; Hammondv. Stamps.com,

Inc., 844 F.3d 909, 911 (10th Cir. 2016); Judon v. Travelers Property Casualty Co. ofAm., 773

F.3d 495,505 (3d Cir. 2014); Kuxhausen v. BMW Fin. Servs. NA LLC, 707 F.3d 1136, 1140 (9th

Cir. 2013); Law Offices ofKC. Okoli, P.C. v. BNB Bank, NA., 481 Fed. App'x 622,625 (2d Cir.

2012); Moffitt v. Residential Funding Co., LLC, 604 F.3d 156, 158-59 (4th Cir. 2010). This

Court agrees.

        The Court recognizes that in so holding, it must necessarily break with Wexler, a case

decided by another court in this District. But in the intervening years since Wexler was decided,

the Supreme Court's decision in Dart Cherokee severely undermined its reasoning. The Supreme

Court clarified in that case that "no antiremoval presumption attends cases invoking CAPA,

which Congress enacted to facilitate adjudication of certain class actions in federal court." Dart

Cherokee, 574 U.S. at 89. Wexler relied on just such a presumption. In that case, the defendant

relied on estimates of the amount in controversy and class size in the complaint, even though the

defendant apparently could have looked to its figures to estimate those amounts. Wexler, 496 F.

Supp. 2d at 155. The court reasoned that the defendant in that case could not simply rely on the

plaintiffs allegations in the complaint because "the size of the class is very unclear," "the

amount in controversy is uncertain, and ambiguities are to be resolved in favor ofremand." Id. at

155-56. This Court declines to take that same approach, both because it respectfully disagrees

                                                  9
 with Wexler's disregard for the principle that plaintiffs are bound by their own factual

 allegations, and because a key assumption underlying Wexler's reasoning was abrogated by Dart

 Cherokee.

        Moreover, even if the Court were to rely on Wexler, that would only mean that reliance

on the allegation that the putative class "consists of at least hundreds, if not thousands, of

consumers[]" would not suffice if JJCI were aware of facts that could establish a more precise

estimate of the putative class size. Id. But that principle is inapplicable here because JJCI has no

such direct evidence, as previously explained. Rather, JJCI relies on the same wholesale figures

it uses to establish the amount in controversy, based on a proportion of nationwide wholesale

sales relative to the population of the District of Columbia compared with the population of the

United States, which credibly suggest that there are more than 100 members in this putative

class. Hurley Deel. ,r,r 5, 10; Resp. 15. Use of those figures is equally reasonable in the context of

class size.

        Therefore, this Court concludes that the putative class size in this action meets the

numerosity requirement of CAFA.

                                    IV.    CONCLUSION

        For the reasons explained above, the Court will DENY HLF's motion to remand this case

to Superior Court. A separate Order shall issue on this date.

 Date: March 1-'f, 2023
                                                                    Royce C. Lamberth
                                                                    United States District Judge