Polo v. Innoventions_International, LLC, 833 F.3d 1193 (9th Cir. 2016)
The United States Court of Appeals for the Ninth Circuit (the “Ninth Circuit”) held the District Court should remand a Class Action Fairness Act (“CAFA”) suit rather than dismiss it under the removal statute, and even if dismissal rather than remand was permitted under the remand rule, it was not clear that remand would be futile in this instance.
The Polo suit originally consisted of nine causes of action, but, only one remained after pleading challenges, alleging violations of California’s Consumer Legal Remedies Act (“CLRA”). The District Court in Polo dismissed the action finding Plaintiff Elsa Polo (“Plaintiff”) lacked standing because she was not actually a diabetic, and she could not have suffered the harm that she alleged. The District Court remarked that although 28 U.S.C. § 1447(c) instructs the courts to remand, and not dismiss, the state court suits that fail after removal to federal courts, may be dismissed as this rule does not apply to cases removed under CAFA.
The Ninth Circuit reversed the District Court finding CAFA suits, like any other type of removed case, must go back to state court if the federal jurisdiction failed for lack of standing. The Ninth Circuit remarked Article III limited federal jurisdiction to cases that presented a live case or controversy, such as lawsuits claiming an actual or imminent injury that was fairly traceable to the defendant and that a court ruling would remedy.
Defendant Innoventions International, LLC (“Innoventions”) argued even if remand would normally be appropriate under similar circumstances, dismissal was proper anyway under Bell v. City of Kellogg, 922 F.2d 1418 (9th Cir. 1991), where the Ninth Circuit held that judges can dismiss removed cases altogether when remand would be futile.
The Ninth Circuit disagreed finding it was uncertain whether Bell remained a good law after the United States Supreme Court declined to adopt a futility exception to the Section 1447(c) remand rule in International Primate Protection League v. Administrators of Tulane Educational Fund, 500 U.S. 72, 111 S.Ct. 1700, 114 L.Ed.2d 134 (1991).
The Ninth Circuit observed the International Primate decision also did not categorically reject the futility rule, leaving its status uncertain. The Ninth Circuit, however, remarked that even if the Bell standard was the proper one, Innoventions failed to prove Plaintiff’s claims fell under the exception; stating the futility rule requires a court to have absolute certainty a state court would immediately dismiss the case.
Because the CLRA confers standing on anyone who buys a product based on deceptive marketing, regardless of whether the false advertising caused any additional injury, it was not clear to the Ninth Circuit that the designated State of California Superior Court would dismiss Plaintiff’s CLRA claim.
Thus, the Ninth Circuit found Plaintiff’s standing to bring her CLRA claim did not depend upon her allegation that taking Innoventions’ DiabeStevia product made her diabetes worse, or it was irrelevant as to when she ceased taking her diabetes medication, or whether she had diabetes at all. The Ninth Circuit pointed out that what mattered were her allegations she thought she had diabetes, that Innoventions marketed DiabeStevia as a treatment for diabetes, and that but for that marketing, she would not have bought DiabeStevia.
Based thereon, the District Court’s judgment dismissing the case was reversed and remanded by the Ninth Circuit.