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CAFA Law Blog Information, cases and insights regarding the Class Action Fairness Act of 2005

“Relevant Change in Circumstances” Requirement Applies to Successive Removal of CAFA Cases

Posted in Case Summaries

Michelle Gyorke-Takatri v Nestle USA Inc., 2016 WL 5514756 (N.D. Cal. Sept. 30, 2016)

A district court in California determined that the general rule of requiring  a “relevant change of circumstances” for a successive removal attempt applies to successive removal of CAFA cases.

In Gyorke-Takatri v. Nestle USA, Inc., a group of plaintiffs filed a putative class action in California state court against the defendant Gerber Products Company (“Gerber”). The plaintiffs brought several state-law claims, alleging that Gerber used images of fruits and vegetables on the labels of one of its products to mislead its consumers into thinking that the snack was fully of healthy fruits and vegetables. The plaintiffs sought restitution as one of its damages.

When Gerber first attempted to remove the case under CAFA’s original jurisdiction, it failed to convince the court that the amount-in-controversy exceeded five million dollars.  The district court remanded the case because it found that Gerber only provided inadmissible hearsay as evidence of meeting the amount-in-controversy requirement.

After the first remand, the plaintiffs moved for class certification in state court where it proposed to measure damages as the price that consumers paid for Gerber products or by the price the retailers paid to Gerber because, at the very least, California consumers paid what retailers paid to Gerber for the product.  Gerber then attempted again to remove the case under CAFA, arguing that the second removal was proper because there is no bar on successive removals in CAFA cases and, alternatively, because the plaintiffs’ new statement of damages constituted “a relevant change in circumstances,” such that a second removal was justified.

To support its first argument, Gerber pointed to a case from the Ninth Circuit, Rea Michael Stores, Inc., 742 F.3d 1234 (9th Cir. 2014), where the court stated that when the basis for removal is CAFA’s original jurisdiction, successive removals on the same grounds are not necessarily prohibited.  However, while the Ninth Circuit noted that a different standard might apply to CAFA cases, it did not elaborate on such a standard, and instead applied the general rule, established by the court in Kirkbride v. Cont’l Cas. Co., 933 F.2d 729 (9th Cir. 1991), that a party seeking a successive removal must demonstrate a relevant change of circumstances. The district court found Gerber’s position unpersuasive and decided to apply the Kirkbride standard, requiring relevant change in circumstances in successive removals for CAFA cases.

Alternatively, Gerber argued that it met its burden under the Kirkbride standard because the plaintiffs’ measure of damages that it laid out in its class certification in state court was  not previously available.  Gerber argued that the plaintiffs revealed for the first time in their class certification petition that they were seeking the “disgorgement of Gerber’s wholesale price,”  rather than the retail price, and that this development constituted “a relevant change in circumstances,” such that removal was now proper.    The district court disagreed, stating that the “[p]laintiffs’ proposed measure of damages was not new evidence of damages exceeding the amount-in-controversy in part because it was equal to or less than the damages Gerber presumed that the plaintiffs were seeking in its first removal.”

Finding that that Gerber failed to convince the court that a different standard should apply for successive removals in CAFA cases and that Gerber did not provide new evidence to prove that the alleged damages met CAFA’s amount-in-controversy requirement, the district court remanded the action (again) to state court.

Laura Cannon