Hackman v. One Brands, LLC

Citation. No. CV 18-2101 (CKK) (D.D.C. APR. 1, 2019)

Brief Fact Summary.

Plaintiff sued Defendant in D.C. Superior Court under D.C.’s consumer protection statute, claiming One Bars contained much more sugar than its labeling and advertising said. Defendant removed the case to federal court, asserting class action and diversity jurisdiction. Plaintiff requested remand.

Synopsis of Rule of Law.

The non-aggregation principle prevents adding together claims brought on behalf of multiple people to meet the minimum amount-in-controversy required for diversity jurisdiction.

Plaintiff sued Defendant in D.C. Superior Court under D.C.’s consumer protection statute, claiming One Bars contained much more sugar than its labeling and advertising said. Defendant removed the case to federal court, asserting class action and diversity jurisdiction. Plaintiff requested remand because she had not asserted class action claims or an amount in controversy over the $75,000 minimum for diversity jurisdiction. Instead, Plaintiff had requested an injunction on behalf of the public prohibiting the sale of One Bars in D.C. until Defendant either recalled and relabeled its product or reformulated it to contain less sugar. Defendant countered that compliance would cost far more than $75,000 either way. Defendant also contended that Plaintiff’s requests for attorneys’ fees, punitive damages, and statutory damages could also exceed the $75,000 threshold.

Issue.

Does the non-aggregation principle prevent adding together claims brought on behalf of multiple people to meet the minimum amount-in-controversy required for diversity jurisdiction?

Held.

Yes. The court remanded back to the D.C. Superior Court for lack of removal jurisdiction, holding that the anticipated costs of compliance when divided across Plaintiffs did not meet the jurisdictional amount.

Discussion.

The non-aggregation principle prevents adding together claims brought on behalf of multiple people to meet the minimum amount-in-controversy required for diversity jurisdiction. Federal courts have diversity jurisdiction under 28 U.S.C. § 1332(a) only if the amount in controversy exceeds $75,000. The amount in controversy includes attorneys’ fee awards only if the relevant statute or contract provides for them. The DCCPPA provides for recovery of attorneys’ fees, but aggregating the total fees in actions brought on behalf of the public conflicts with the non-aggregation principle. Under Supreme Court case law, that principle prohibits adding together the claims of multiple claimants to satisfy jurisdictional minimums. The D.C. Circuit recognizes that non-aggregation potentially conflicts with allowing litigants to base jurisdictional amounts on the cost of relief requested. However, in cases seeking injunctive relief on behalf of the public under the DCCPPA, allowing aggregation of the cost of injunctive relief would increase the risks of claimants without damages meeting the threshold requirement simply requesting only injunctive relief to get lawsuits that do not merit federal jurisdiction into federal court. Similarly, claimants could sue individually to recover duplicative punitive damages if the court allowed the aggregation of punitive damages or attorney’s fees.

Here, Defendant estimates that recalling and relabeling its product would cost $1.08 million, and reformulating it $130,000. Apportioned among the 100 consumers in D.C. that Plaintiff claimed bought One Bars, those costs are $10,825 or $1,300 respectively, well below the minimum threshold. Assuming that punitive damages could reach $900,000, divided among 100 those damages are again below the threshold at $90,000. Finally, Defendant’s estimate that attorneys’ fees may total $500,000 reflects only $50,000 for each consumer, again below the minimum. The court accordingly remanded back to the D.C. Superior Court for lack of removal jurisdiction.