California claims for injunctive relief can’t be remanded after CAFA removal

Mezzadri v. Medical Depot, Inc., 113 F. Supp. 3d 1061 (S.D.
Cal. 2015)
The rule against claim-splitting clashes with the injustice
of the ability of a defendant to destroy a form of relief by removing a
complaint from state to federal court, and the rule against claim-splitting
wins.  Mezzadri filed a class action
claim against Medical Depot for allegedly falsely marketing full-body patient
slings, asserting the usual California claims in state court.  Mezzadri sought injunctive as well as
monetary relief; Medical Depot removed under CAFA.  Mezzadri sought remand on the injunctive
relief claims, because federal courts often (not always) hold that they lack
Article III jurisdiction over injunctive relief in consumer protection claims,
where the named plaintiff’s knowledge of the untruth makes future injury to the
named plaintiff unlikely.
California allows injunctive relief if there is a likelihood
that the harm will reoccur, even if the harm will not reoccur to the particular
named plaintiff. In re Tobacco II Cases, 207 P.3d 20 (Cal. 2009) (“An
injunction would not serve the purpose of prevention of future harm if only
those who had already been injured by the practice were entitled to that
relief.”).  In Lee v. American Nat’l Ins. Co., 260 F.3d 997 (9th Cir. 2001), the 9th
Circuit held that, in a diversity action removed from state court, the entire
case does not need to be remanded if the plaintiff lacks Article III standing
as to one of several defendants. However, the court stated in dicta that a case
that is “properly removed in its entirety may 
nonetheless be effectively split up when it is subsequently determined
that some claims cannot be adjudicated in federal court” and that a partial
remand might be appropriate where dismissal would require the plaintiff to
forfeit an otherwise viable state-law claim.  Machlan
v. Procter & Gamble Co.
, 77 F. Supp. 3d 954 (N.D. Cal. 2015), made just
such a partial remand for injunctive relief on similar California consumer
protection claims.  Machlan relied on Carnegie–Mellon
University v. Cohill
, 484 U.S. 343 (1988), which allowed a federal court to
remand to state court a removed case upon a proper determination that retaining
jurisdiction over the case would be inappropriate.  Otherwise, the case could get stuck in a
perpetual loop of costly re-filing in state court, then removal, then dismissal
by the federal court, preventing adjudication on the merits.  Machlan
concluded that “[a]llowing a defendant to undermine California’s consumer
protection statutes and defeat injunctive relief simply by removing a case from
state court is an unnecessary affront to federal and state comity.”
The court sided with Medical Depot. The case was properly
removed under CAFA, and the court had subject matter jurisdiction over the California
claims.  “CAFA’s policy in favor of
litigating interstate class actions in federal court trumps the general
presumption against removal jurisdiction,” even if the federal court lacks
power to decide on injunctive relief. Moreover, under California’s primary
rights theory, a cause of action is comprised of a primary right of the
plaintiff, a corresponding primary duty of the defendant, and a wrongful act by
the defendant constituting a breach of that duty.  A single violation of a primary right gives
rise to a single cause of action; injunctive relief is not a separate cause of
action.  (Fair enough, but have
California courts made this holding when, because of federal law, injunctive
relief is not available in federal court but would be in state court?)  Primary right doctrine prevents
claim-splitting except in extraordinary cases. 
(Which I’d say this is.)
Medical Depot argued that a partial remand would require
both the federal and state courts to simultaneously adjudicate the same causes
of action based on the same underlying acts. 
Mezzadri responded that the remanded case would be stayed pending the
resolution of the federal case, and res judicata would apply to any issues
adjudicated on the merits.
The court concluded that splitting the cause of action from
the remedy was different than splitting causes of action from a case.   “This
effectively distinguishes much of the authority cited, including Lee, which discussed the possibility of
splitting claims in the context of all claims against one defendant being sent
to state court while all claims against the other defendant remained in federal
court.”  Without subject matter
jurisdiction over injunctive relief, the court couldn’t remand and “direct the
state court’s actions regarding that relief.” 
While Machlan was on all
fours, it was “unworkable once a federal court has determined that subject
matter jurisdiction does not exist.”  Instead, the request for injunctive relief
must simply be dismissed.  Ses Lee, 260 F.3d at 1001–02 (“[A]
plaintiff whose cause of action is perfectly viable in state court under state
law may nonetheless be foreclosed from litigating the same cause of action in
federal court, if he cannot demonstrate the requisite injury.”).  Mezzadri might well be able to refile in state
court, but that claim-splitting result wasn’t the federal court’s problem.

from Blogger

This entry was posted in Uncategorized and tagged , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s