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

Plaintiff Cannot Maintain CAFA Jurisdiction Where Amount Stated In Controversy Isn’t Really in Controversy

Posted in Uncategorized

Reilly v. Amy’s Kitchen, Inc., 2014 WL 905419 (S.D. Fla. March 7, 2014).

A District Court in Florida dismissed the plaintiff’s complaint finding that the general rule for CAFA jurisdiction that the amount-in-controversy is determined at the time a complaint is filed does not apply to cases where the plaintiff doesn’t have standing to pursue those claims in the first instance.

The plaintiff Leslie Reilly filed a purported class action in the federal court against Amy’s Kitchen, Inc. alleging that the defendant misrepresented to its consumers that its products contained evaporated cane juice (“ECJ”) even though ECJ is actually sugar, not juice.  According to the plaintiff, ECJ was not the common or usual name of any type of sweetener or juice and that use of this name was “false and misleading.”  Specifically, the plaintiff alleged that the defendant used the term ECJ to make its product appear healthier than a product that contains ‘sugar’ as an ingredient and to increase sales and charge a premium.  The plaintiff filed this action after she purchased three products from the defendant.  In all, the plaintiff identified 60 products sold by the defendant, and sought to represent a class of all persons from the state of Florida, who purchased any or all of those 60 products.

The defendant originally moved to dismiss the complaint.  The District Court granted the motion for any products that the plaintiff did not actually purchase, but denied the motion in all other respects.  The defendant yet again moved to dismiss alleging lack of subject matter jurisdiction because the plaintiff could not establish that the amount-in-controversy exceeded $5 million as required under CAFA.

The defendant primarily contended that, based on the District Court’s previous ruling dismissing all claims against products that the plaintiff did not actually purchase, the plaintiff only had standing regarding the three products that she bought, and therefore, the damages for the proposed class fell short of the $5 million requirement for CAFA jurisdiction.  According to the defendant, sales of the three products that the plaintiff bought during the class period in the state of Florida totalled only $1,045,993.  The plaintiff argued that the amount-in-controversy requirement was established at the time of filing the complaint and that the post-filing developments did not divest the court of the subject matter jurisdiction.  The plaintiff contended that because the good faith allegations of the complaint satisfied the amount-in-controversy requirement, the District Court continued to have jurisdiction over the action.  The plaintiff also argued that the defendant could not establish that it would be impossible for the plaintiff to recover $5 million or more by pointing out that in addition to the monetary damages, she also sought injunctive relief and attorneys’ fees and costs.

The District Court, nevertheless, agreed with the defendant’s argument and held that plaintiff had standing to bring claims related only to the three products that she actually purchased.  Therefore, the District Court held that the jurisdictional allegations of the complaint did not support that it having subject matter jurisdiction.  The District Court explained that, because the plaintiff lacked standing for the other 57 products listed in the complaint, the required $5 million were never really in controversy at the time the complaint was filed.

Because the Court found that the plaintiff had improperly included those 57 products, and because the value of the injunctive relief remained a mere speculation, the District Court granted the defendant’s motion to dismiss.