Weaver v. Nestle USA, Inc., 2008 WL 5453734 (N.D. Cal. October 31, 2008)

In a CRUNCH® decision, the court waived its Pixie Stick®, took the Nestea® plunge, and held that Nestle could not have its Butterfingers® and eat them too . . .. 

This case, purportedly worth over 100 GRAND®, was filed in a California state court against Nestle for allegations that it was involved in an anti-trust conspiracy to fix the prices of certain chocolate products. Nestle called upon its Nerds® to save it from the Runts® of the state courts. Much like a Push-Up Pop® on a hot summer day, their time in federal court was short lived.

The plaintiffs moved to remand the case because of a lack of diversity of citizenship. The plaintiffs were California residents, and it was undisputed that Nestle is incorporated in Delaware and has a principal place of business in California. 

Under CAFA, an action is removable where “any member of a class of plaintiffs is a citizen of a state different for any defendant.” 28 U.S.C. § 1332(d)(2). For purposes of determining jurisdiction, a corporation is a considered a citizen of the state in which it is incorporated and the state in which it has a principal place of business. 28 U.S.C. § 1332(c). 

Nestle argued that minimal diversity under CAFA existed because, based on its dual citizenship in California and Delaware, its Delaware citizenship was diverse from the plaintiffs’ California citizenship.

Recognizing authority to the contrary, the court followed the reasoning of several South Carolina district court opinions and held that Nestle was a citizen of both California and Delaware; therefore, Nestle failed to demonstrate that minimal diversity existed. The court reasoned that following Nestle’s argument would essentially completely prevent corporate defendants from being sued in a class action in state court and that it would be ironic for a statute with the ostensible goal of preventing forum shopping to allow corporate defendants to completely deny plaintiffs’ access to state court class action remedies.

Hey Nestle, come down from your Toll House® – you’re going back to state court – and bring some everlasting Gobstoppers® – you’re going to be there for a while …