Weiner v. Snapple Beverages Corp., No. 07 Civ. 8742 (DLC), 2011 U.S. Dist. LEXIS 6094 (S.D.N.Y. Jan. 21, 2011) (sorry, at publication time the decision was not available on PACER).
Deciding that Weiner is a weiner, the court held that the denial of class certification does not divest the federal court of subject matter jurisdiction over the case, a district court in New York, relying on the Second Circuit decision in LeBlanc, stated that federal jurisdiction is determined at the outset of the litigation because the questions of fact, such as how much money is actually at stake and where each party lives, are determined with reference to the date on which the relevant complaint was filed.
The plaintiffs brought a class action against Snapple Beverage Corporation, alleging that the defendant’s labeling of its teas and juice drinks as ‘All Natural’ was misleading to consumers because the beverages were sweetened with high fructose corn syrup (“HFCS”).
Although Snapple disclosed the use of HCFS on its beverages’ ingredient lists, the plaintiffs alleged that they paid a premium for Snapple beverages as a result of the ‘All Natural’ labeling. The plaintiffs asserted claims for violation of N.Y. Gen. Bus. L. § 349 (deceptive acts or practices in the conduct of any business), unjust enrichment, and breach of express and implied warranty premising jurisdiction on the CAFA, 28 U.S.C. §1332(d).
Because the District Court denied the plaintiffs’ motion for class certification, the amount in controversy was pushed below $5 million as required by CAFA. Snapple then moved for summary judgment against the two named plaintiffs. Before turning to the merits of Snapple’s motion, the Court addressed the question of whether the denial of class certification divested the Court of subject matter jurisdiction over the case.
The Court noted that CAFA does not speak directly to the issue of whether class certification is a prerequisite to federal jurisdiction, and the Second Circuit has not addressed the issue. The circuits that have considered the issue–Cunningham Charter Corp. v. Learjet, Inc., 592 F.3d 805, 806 (7th Cir. 2010); United Steel, Paper & Forestry, Rubber, Mfg., Energy, Allied Indus. & Serv. Workers Int’l Union, AFL-CIO, CLC v. Shell Oil Co., 602 F.3d 1087, 1092 (9th Cir. 2010); Vega v. T-Mobile USA, Inc., 564 F.3d 1256, 1268 n.12 (11th Cir. 2009), however, have uniformly concluded that federal jurisdiction under CAFA does not depend on class certification. (Editors’ Note: See the CAFA Law Blog analysis of Cunningham Charter posted on February 3, 2010 , the analysis of United Steel posted on August 13, 2010 , and the analysis of Vega posted on May 19, 2011 ).
The Court observed that this conclusion accords with the general proposition, endorsed by the Second Circuit in LeBlanc v. Cleveland, 248 F.3d 95, 100 (2d Cir. 2001), that federal jurisdiction is determined at the outset of the litigation. Specifically, LeBlanc held that “questions of fact, such as how much money is actually at stake and where each party lives, will also be determined with reference to the date on which the relevant complaint was filed”. Accordingly, the Court retained jurisdiction over this case under CAFA despite the denial of class certification.
The Court, however, granted Snapple summary judgment on plaintiffs individual claims. The Court observed that because the plaintiffs had not offered evidence showing either the price they paid for Snapple or the prices charged by competitors for comparable beverages, they could not demonstrate that they paid a premium for the ‘All Natural’ Snapple product and thus could not show harm stemming from the allegedly misleading label.