Jovine v. Abbott Laboratories, No. 11-CV-80111-COHN/SELTZER, 2011 WL 1337204 (S.D. Fla. April 7, 2011). 

A District Court in Florida held that principles of judicial estoppel do not apply in the evaluation of federal jurisdiction because no action of the parties can confer subject matter jurisdiction upon a federal court.

The plaintiff filed an eight count class action complaint in Florida state court alleging that the plaintiff’s infant child ingested a Similac product manufactured by Abbott Laboratories and became ill as a result. 

Abbott manufactures, markets, distributes, and sells Similac-brand infant formula products. On September 16, 2010, during an internal quality review at a manufacturing plant in Sturgis, Michigan, Abbott discovered the possible presence of “a common warehouse beetle” in containers of certain finished Similac products. The United States Food and Drug Administration determined that any product that contained beetles posed no immediate health risk and no long-term health concern. Nonetheless, on September 22, 2010, Abbott recalled 5,000,000 cans of Similac-brand infant formula products.

Abbott removed the case to the federal court pursuant to CAFA. The plaintiff moved to remand the case to state court arguing that Abbott failed to establish that the amount in controversy exceeded $5 million. 

The District Court, however, denied the motion.

The plaintiff first contended that Abbott should be judicially estopped from contesting jurisdiction in this matter. According to the plaintiff, in direct contradiction of its arguments here, Abbott successfully argued for the dismissal of another case (represented by the plaintiff Kiely) based on the same recall in the Northern District of Illinois. The Kiely court held a status conference because the judge was concerned about the amount in controversy, and ultimately, the parties agreed to have the district court dismiss the case without prejudice because the court was unconvinced that the plaintiff had established the requisite amount in controversy. 

This Court reviewed the hearing transcript in Kiely and found that counsel for Abbott made representations about the facts, rather than the allegations in the plaintiff’s complaint. Abbott, therefore, did not take a position contrary to its position here.

Regardless of the above, the Court maintained that principles of judicial estoppel do not apply in the evaluation of federal jurisdiction because no action of the parties can confer subject matter jurisdiction upon a federal court.

Further, the Court remarked that application of judicial estoppel was inappropriate here. Because federal subject matter jurisdiction in this case was predicated solely on diversity jurisdiction, the application of the doctrine of judicial estoppel was governed by state law; thus, the Court looked to Florida’s law of judicial estoppel. 

Under Florida law, for estoppel to work, the position assumed in the former trial must have been successfully maintained. In proceedings terminating in a judgment, the positions must be clearly inconsistent, the parties must be the same and the same questions must be involved. So, the party claiming the estoppel must have been misled and have changed his position; and an estoppel is not raised by conduct of one party to a suit, unless by reason thereof the other party has been so placed as to make it to act in reliance upon it unjust to him to allow that first party to subsequently change his position. There can be no estoppel when both parties are equally in possession of all the facts pertaining to the matter relied on as an estoppel; when the conduct relied on to create the estoppel was caused by the act of the party claiming the estoppel, or when the positions taken involved solely a question of law.

First, the Court found that Abbott’s position in Kiely was not clearly inconsistent with its position here, for the transcript from the hearing in Illinois reflected that Abbott’s counsel’s representations were based not on allegations from a complaint, but from the facts as Abbott believed them. Indeed, Abbott’s argument here was predicated largely on the evidence submitted in the declaration of its Vice-President, which was not before the court in Kiely.

Moreover, here, the plaintiff obviously was not misled by the position that Abbott purportedly took in Kiely, nor did the plaintiff change his position, nor had the plaintiff relied on Abbott’s position so that it would be unjust to allow Abbott to change its position. Similarly, Abbott did not persuade the court in Kiely to do anything; rather, the judge, acting sua sponte, called a hearing to discuss the amount in controversy because he doubted that it had been met. Consequently, the plaintiff in Kiely agreed to dismissal without prejudice. The Court found that because the Kiely court dismissed the action without prejudice, the case did not result in a judgment; the plaintiff, therefore, could not invoke judicial estoppel to prevent Abbott from challenging the Court’s subject matter jurisdiction in this matter.

Next, regarding the amount in controversy, the Court noted that the complaint alleged that Abbott recalled more than 2000 lot numbers, and in excess of five million tubs. The declaration of Abbott’s Vice-President also stated that Abbott recalled approximately five million containers of certain Similac-brand infant formula products, and that the purchase price for each unit of recalled product for which a refund had been sought, ranged from $3.00 to $29.99.

Deducing from the complaint allegations that the amount in controversy was at least the total purchase price of all the recalled Similac products purchased by consumers, the Court multiplied $3 sales price by the five million containers of product subject to the recall, and concluded that the amount in controversy tripled the jurisdictional requirement. In addition, reasonable value of medical monitoring for children (at least $50 per child x 100,000 households that submitted claims directly to Abbott) helped exceed the required amount in controversy.

Accordingly, the Court concluded that Abbott established CAFA jurisdiction by a preponderance of the evidence, and thus declined to remand the action to state court.