Arabian v. Sony Electronics, Inc., 05cv1741 WQH (NLS) (S.D. CA September 13, 2007).
On September 13, 2007, United States District Judge William Q. Hayes handed down an opinion for the Southern District of California dismissing a single plaintiff for lack of subject matter jurisdiction.
On September 8, 2005, the plaintiffs filed an action in the Southern District of California against Sony Electronics, Inc. on behalf of two separate classes. First, a nationwide class of persons in the United States who purchased Sony Vaio GRX laptops, and second, a class of persons in the United States and Canada who purchased Sony Vaio FX laptops.
The Complaint alleged that Sony marketed, advertised, sold, and serviced its Sony Vaio GRX and FX series laptop computers through misleading information concerning the memory capacity of each of the machines. The Complaint alleged that the GRX and FX series laptops were sold with either 128 or 256 MB memories, but included a special feature allowing the memory to be expanded to 512 MB over two memory slots. The plaintiffs alleged, however, that the second memory slot on these laptops contained a manufacturing defect resulting in only one available memory slot and making only half of the advertised memory capacity available to the user.
On July 3, 2006, the Court stayed the portion of the case dealing with the GRX series laptops because of a pending state court proceeding in Superior Court of San Diego County, California, where a class had been certified regarding the GRX series laptops. The Court allowed the portion of the case regarding FX series laptops to continue as they were not included in the state court action.
On July 31, 2006, the FX series plaintiffs, Johnson and Sarac, filed a Motion for Certification requesting the Court to certify the action to proceed as a class action on behalf of persons in the United States and Canada who purchased Sony Vaio FX series laptops. The Court denied the Motion for Class Certification on February 22, 2007, concluding that plaintiffs Johnson and Sarac had failed to satisfy the typicality requirement and the predominance requirement of Rule 23(a) and 23(b) respectively.
Afterward, Sony settled and secured dismissal of Serac’s claims and moved for an order dismissing Johnson’s claims for lack of subject matter jurisdiction. Sony’s motion to dismiss was fully briefed and the Court handed down its Order on September 13, 2007 granting Sony’s motion to dismiss.
The Court began its analysis stating that CAFA’s Section 1332(d) abandoned the complete diversity rule for covered class actions. The Court recognized that CAFA broadened Federal Court jurisdiction but cited Abrego for the proposition that CAFA does not alter the rule that the party seeking the federal jurisdiction on removal bears the burden of establishing that jurisdiction. (Editors’ Note: See the CAFA Law Blog analysis of Abrego posted on May 25, 2006, and you avid readers know our position on who bears the burden of proof, but if you have forgotten or if you are new, see our law review article on the subject).
Sony argued that the denial of the Motion for Class Certification left Johnson without the ability to claim CAFA jurisdiction and, therefore, Johnson had to be dismissed for lack of subject matter jurisdiction. Without CAFA jurisdiction, Johnson could not prosecute his state law claims against Sony in federal court.
The Court outlined a handful of post-CAFA district court opinions that addressed the issue of jurisdiction under CAFA after the denial of class certification. After outlining the case law, the Court found that there was no reasonably foreseeable possibility that a class of FX laptop purchasers would be certified in the future in the action. In fact, in his brief Johnson indicated that he intended to prosecute his individual claim to final judgment without renewing the Motion for Class Certification before the Court with respect to the FX laptops. The Court noted that even if Johnson stated that he had intended to renew his Motion for Certification there was not a reasonably foreseeable possibility that he could cure the issues which caused him to fail to satisfy the typicality requirement of Rule 23(a).
Additionally, the Court cited Federal Rule of Civil Procedure 12(h)(3), which states that “whenever it appears by suggestion of the parties or otherwise that the Court lacks jurisdiction of the subject matter, the Court shall dismiss the action.” By denying class certification and subsequently finding that there was no reasonably foreseeable possibility that Johnson would be able to represent a certified class of FX purchasers, the Court found that there was not, and never was, diversity jurisdiction over Johnson’s claim pursuant to CAFA.