Borchardt v. Mako Marine Int’l, Inc., No. 08–61199–CIV, 2011 WL 4636799 (S.D. Fla. Oct. 6, 2011).

With the verdant shores of federal court in sight, the plaintiffs’ class action sinks before making land. In this action, a District Court in Florida observed that while CAFA requires at least 100 “class members” to maintain a state law class action in federal court, the Magnuson–Moss Warranty Act requires 100 “named plaintiffs” to maintain a class action directly under Magnuson–Moss.

Three plaintiffs brought an action in the federal court seeking relief under the Florida Deceptive and Unfair Trade Practices Act, state contract law, and the Magnuson–Moss Warranty Act, 15 U.S.C. § 2301 (“Magnuson–Moss”).

The Complaint alleged a putative nationwide class and an alternative Florida statewide sub-class, but did not indicate the estimated number of persons in either class other than to aver generally as to both that the “claims are so numerous that joinder of all individual members is impractical”.

Initially, the plaintiffs sought to certify a nationwide class consisting of all current owners of Mako 272 boats; however, later the plaintiffs narrowed this request, seeking certification of a statewide class consisting of all current owners of Mako 272 boats who purchased their boats in the State of Florida.

As a result, the number of potential statewide class members identified by plaintiffs was approximately eighty-three. 

The plaintiffs thus did not seek to certify a class under Magnuson–Moss because it imposes a one hundred named plaintiff requirement for maintaining class actions. Instead, the plaintiffs alleged jurisdiction under CAFA, 28 U.S.C. § 1332(d), contending simply that the aggregate amount of the matter in controversy exceeded $5 million. Because CAFA imposes a minimum one-hundred class member threshold, and in light of the plaintiffs’ voluntary refinement of the putative class to a Florida class consisting of an estimated 83 Florida consumers, the District Court issued an order to show cause why the plaintiffs’ class action complaint should not be dismissed for lack of subject matter jurisdiction in light of this numerical deficiency in the newly refined putative class. 

After both parties filed their responses, the Court dismissed the putative statewide class action for lack of subject matter jurisdiction.

In their response, the plaintiffs did not address the jurisdictional bar created by the CAFA’s minimum 100–class member threshold as it applied to the newly defined putative class in this case. Instead, the plaintiffs sought to assert subject matter jurisdiction for their state law-based class action by appending it to their individual Magnuson–Moss claims under the supplemental jurisdiction, 28 U.S.C. § 1367 and sought permission to amend the jurisdictional allegations in their complaint accordingly.  

The Court noted that it had federal question subject matter jurisdiction over the named plaintiffs’ individual claims under Magnuson–Moss. However, the plaintiffs clearly could not maintain a class action directly under Magnuson–Moss because they could not satisfy the requirements of 15 U.S.C. § 2310(d)(3)(C) that the number of named plaintiffs equal or exceed one hundred. And the one-hundred plaintiff requirement for maintenance of a class action under Magnuson–Moss is in addition to the requirements of Fed. R. Civ. P. 23. The Court remarked that this specific statutory limitation cannot be avoided by attempting to append state law class action claims as supplemental claims to an individual Magnuson–Moss claim simply because the requirements for original diversity jurisdiction under 28 U.S.C. § 1332 are also satisfied.

The Court noted that the named plaintiffs invoked Magnuson–Moss to pursue individual state warranty claims in federal court. Magnuson–Moss gives plaintiffs the right to pursue these claims in the federal court, where they have satisfied the statute’s express jurisdictional prerequisites set out in 15 U.S.C. § 2310(d) for doing so. They may also present their state law statutory and common law claims under the supplemental jurisdiction statute, 28 U.S.C. § 1367.

The Court, however, stated that invocation of supplemental jurisdiction is only proper when not “expressly provided otherwise by Federal Statute.” Here, a federal statute, specifically Magnuson Moss, does “expressly provide otherwise.” Specifically, it expressly provides that class actions with named plaintiffs numbering less than one hundred are not cognizable in the district courts. The Court observed that because the number of named plaintiffs was three, and the plaintiffs did not assert that there were at least one hundred Florida consumers that they could conceivably join as named plaintiffs in this action, the purported class action was not cognizable in the federal court under Magnuson–Moss and consequently was not cognizable under 28 U.S.C. § 1367.

Finally, the Court stated that even if the supplemental jurisdiction statute was potentially applicable here, it would decline to exercise its discretionary jurisdiction under 28 U.S.C. § 1367(c)(4) on the ground that the one hundred-plaintiff jurisdictional bar to maintaining class actions under Magnuson–Moss constituted “exceptional circumstances” and the expression of Congressional intent which provides a sufficiently “compelling reason” to decline jurisdiction over the state law claims of the putative class.

The plaintiffs, however, cited Allapattah Services, Inc. v. Exxon Corp., 333 F.3d 1248 (11th Cir. 2003), aff’d 545 U.S. 546 (2005)—a pre-CAFA case—for the proposition that the supplemental jurisdiction statute permits exercise of jurisdiction over state law claims of putative class members who do not meet the minimum amount in controversy, as long as the district court has original diversity jurisdiction over the claims of at least one of the named class representatives. The plaintiffs also relied on Shah v. Hyatt Corporation, 425 Fed. Appx. 121 (3d Cir. 2011) as an example of a post-CAFA case recognizing discretionary supplemental jurisdiction under § 1367 as an alternative class action jurisdictional hook where jurisdiction is otherwise lacking under the CAFA. 

The defendants argued that the passage of CAFA in 2005 controlled over the holding in Allapattah, essentially suggesting that the holding in Allapattah had been abrogated by statute. 

The court did not reach the merits of the defense’s contention because it concluded that Magnuson–Moss plaintiffs suing in federal court cannot, under the express terms of the supplemental jurisdiction statute, rely solely on 28 U.S.C. § 1367 to support a putative class action asserting exclusively state claims.

Accordingly, the Court dismissed the plaintiffs’ putative statewide class action for lack of subject matter jurisdiction, and permitted the named plaintiffs to proceed with their individual claims under the Magnuson–Moss Act, along with their state law claims.