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CAFA Law Blog Information, cases and insights regarding the Class Action Fairness Act of 2005

Sworn Declaration Itself Serves As Factual Evidence Supporting The Amount-In-Controversy

Posted in Case Summaries

Pattison v. Omnitrition International, Inc. No. 2:17-cv-01454 (W. D. Wa. Jan. 5, 2018).

In this action, while granting the defendants’ motion for reconsideration of the order remanding the matter to state court, a District Court in Washington found that the defendants’ declarant was not required to attach underlying documentation to support her statements, as her sworn declaration itself served as factual evidence supporting the amount-in-controversy.

The plaintiff brought a putative class action in the Superior Court of King County, Washington, alleging that the defendants engaged in an illegal and deceptive practice of manufacturing, promoting, marketing, selling, and distributing over-the-counter, homeopathic, weight-loss products containing or purporting to contain Human Chorionic Gonadotropin (HCG). The plaintiff’s claims were generally based on the labelling, marketing, and sales of the “Omni Drops” product sold by the defendants Roger M. Daley and Barbara Daley’s (collectively, “the Daleys”) company, the defendant Omnitrition International, Inc.

The plaintiff alleged that the FDA had labelled the HCG-based products “an economic fraud” because there was no scientific evidence that they were effective for weight loss. As a consequence, the plaintiff alleged that the defendants reaped substantial profits, and caused the plaintiff to spend money on products that she otherwise would not have purchased.

After the Daleys removed the action to the federal court, the District Court remanded the action to the state court. The Daleys moved for reconsideration of the remand order, which the District Court granted.

The Daleys contended that the District Court had jurisdiction over this action pursuant to CAFA, and the various relief sought by the plaintiff independently met the amount-in-controversy requirement.

The plaintiff argued that the Daleys had provided no evidence whatsoever in establishing the amount-in-controversy. The District Court, however, found that the Daleys offered the sworn declaration of Cindy Jordan, the Vice President of Operations for Omnitrition, who had personal knowledge of the company’s sales.  Ms. Jordan testified that during the class period, Omnitrition’s sales of Omni Drops to customers in Washington exceeded $5,000,000, over $5,000,000 of Omnitrition’s revenue was attributable to its sales of Omni Drops, and removing Omni Drops from the market would cause Omnitrition to lose more than $5,000,000 in expected revenue in the following year.  The District Court thus concluded that Ms. Jordan’s statements, based upon her personal knowledge and Omnitrition’s business records, constituted sufficient factual evidence to establish the required amount-in-controversy by a preponderance of the evidence.

The plaintiff further argued that Ms. Jordan’s statements were “unsupported and speculative,” as in her first declaration, Ms. Jordan stated that Omnitrition’s sales in Washington exceeded $1,000,000 but in her second declaration, she stated that the relevant sales exceeded $5,000,000. The District Court, however, found that Ms. Jordan’s second declaration did not contradict her first as sales exceeding $5,000,000 also exceeded $1,000,000.  The District Court further found that while Ms. Jordan could have attached underlying documentation to support her statements, she was not required to, as her sworn declaration itself served as factual evidence supporting the amount-in-controversy.

The plaintiff also argued that pursuant to 28 U.S.C. § 1332(d)(11)(B)(i) governing mass actions, the Daleys must present evidence that at least one plaintiff’s damages exceeded $75,000. The District Court, however, found that the plaintiff confused a mass action with a class action.  The District Court noted that a class action is any civil action filed under Fed. R. Civ. P. 23 or similar State statute or rule of judicial procedure, whereas a mass action is any civil action in which monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact.  The District Court opined that while the plaintiff was correct that at least one plaintiff must seek damages in excess of $75,000 to trigger federal jurisdiction over a mass action, that requirement did not apply to class actions.  The District Court thus ruled that because the plaintiff brought a traditional class action suit and sought certification under Rule 23, the Daleys did not have to show that at least one plaintiff’s damages exceeded $75,000.

The District Court therefore concluded that the Daleys had established the requisite amount-in-controversy, and accordingly granted their motion for reconsideration.

-Melissa M. Grand