CAFA can't prevent remand to state court where consumer protection claims are all equitable

Haver v. General Mills, Inc., 2024 WL 4492052, No.: 3:24-cv-01269-CAB-MMP (S.D. Cal. Oct. 11, 2024)

Interesting remand to state court. Haver sued under the UCL and FAL, alleging that GM deceptively marketed “Fruit Snacks” to contain “Real Fruit Juice,” when the snacks in question were allegedly sweetened entirely with added sugars. GM removed under CAFA, but the court held that it lacked jurisdiction over Haver’s claims, which were all equitable, and therefore remanded, ruling that CAFA didn’t trump the rule regarding remand when the claims were only cognizable in state court. “[N]o antiremoval presumption attends cases invoking CAFA, which Congress enacted to facilitate adjudication of certain class actions in federal court.” Nonetheless, under 28 U.S.C. § 1447(c), remand is available if the court lacks subject matter jurisdiction.

Although removal was proper, the court continued on to Article III standing, which requires traceable injury and redressability. A plaintiff’s intention to purchase a product in the future is necessary for Article III standing when seeking injunctive relief. “As a general rule, if the district court is confronted with an Article III standing problem in a removed case—whether the claims at issue are state or federal—the proper course is to remand for adjudication in state court.”

The relevant part of the complaint said: “Plaintiff and Class Members are likely to continue to be damaged by General Mills’ deceptive trade practices, because General Mills continues to disseminate misleading information.” But Haver didn’t plead any concrete intention to buy the snacks in the future, meaning she didn’t have Article III standing for injunctive relief.

And Haver’s remaining claims sounded in equity: restitution and disgorgement. Equitable jurisdiction asks whether the “principles governing equitable relief” allow a district court to “exercise its remedial powers.” In that sense, equitable jurisdiction is a “threshold jurisdictional question.” Sonner v. Premier Nutrition Corp., 971 F.3d 834 (9th Cir. 2020). (I did wonder whether defendants’ victory in Sonner could be taken back by plaintiffs, and here we are.)

“Federal courts sitting in diversity can only award equitable relief under state law if there is no adequate legal remedy.” But Haver didn’t plead that she lacked an adequate remedy at law. “[N]othing in the complaint suggests that a damages award for the alleged false advertising type claims would fail to make class members whole.” Thus, the court lacked equitable jurisdiction; the court couldn’t provide the only relief Haver sought.

Numerous abstention doctrines guide courts on remand decision, as well as “longstanding Supreme Court precedent which informs that when a federal court lacks equitable jurisdiction, a case may be remanded.” Cates v. Allen, 149 U.S. 451 (1893); Twist v. Prairie Oil & Gas Co., 274 U.S. 684 (1927). These precedents are binding.

GM argued that they weren’t, because those cases predated the merger of law and equity, and CAFA superseded any discretionary remand decision. “But none of these advancements have altered a federal court’s authority to remand cases ‘where the relief being sought is equitable or otherwise discretionary.’” “Although the Court shares Defendant’s concern for ‘end-runs’ around federal statutes, the principles of federalism and proper judicial administration point to remand where this Court cannot offer Plaintiff any relief under purely state causes of action.” This wasn’t a case where remand would have resulted in piecemeal adjudication—it would be an inevitable loss on the whole claim. (Speaking of end-runs around statutes ….)