Kennedy v. Natural Balance Pet Foods, Inc., No. 08-56378, 2010 U.S. App. LEXIS 248 (9th Cir. Cal. Jan. 6, 2010).

In this case, the Ninth Circuit recently reversed a district court’s ruling that the dismissal of a case was warranted when it lost the subject matter jurisdiction over a removed action as a result of denial of class certification. 

Robert Kennedy brought a proposed class action in San Diego Superior Court on behalf of himself and all individuals in the United States who purchased allegedly mislabeled pet food products sold by Natural Balance Pet Foods. He alleged violations of California Unfair Competition Law and California Consumer Legal Remedies Act. 

Asserting jurisdiction under 28 U.S.C. § 1332(d) of CAFA, the defendant removed the action to federal court. 

Once the case was in federal court, Kennedy filed a Fed. R. Civ. P. 23 motion for a nationwide class certification.  The district court denied the class certification motion and then ruled that the denial meant that there was no longer subject matter jurisdiction. Then, the court dismissed the case. Kennedy filed a petition for appeal to the Ninth Circuit.

In reversing the district court’s dismissal order, the Ninth Circuit found that the district court erred in dismissing the case rather than remanding the action to state court.  The Ninth Circuit maintained that once the district court denied class certification, it no longer had subject matter jurisdiction over the action.  The Ninth Circuit, however, observed that 28 U.S.C. § 1447(c) mandates district courts to remand the removed action to state court when any time before a final judgment it appears that the district court lacks subject matter jurisdiction.

Accordingly, the Ninth Circuit directed the district court to remand the action to San Diego Superior Court.

As a result, Kennedy had a ray of hope of fetching properly labeled food for his pet, individually, in the state court.