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Waters v. Ferrara Candy Co.

United States District Court, E.D. Missouri, Eastern Division

June 16, 2017

JACLYN WATERS, individually and on behalf of all others similarly-situated, Plaintiff,
v.
FERRARA CANDY CO., Defendant.

          MEMORANDUM AND ORDER

          NOELLE C. COLLINS UNITED STATES MAGISTRATE JUDGE.

         This matter is before the Court on Plaintiff Jaclyn Waters' Motion to Remand (Doc. 12). The Motion is fully briefed and ready for disposition. The parties have consented to the jurisdiction of the undersigned United States Magistrate Judge pursuant to 28 U.S.C. 636(c) (Doc. 19). For the following reasons, Plaintiff's Motion will be GRANTED.

         I. Background

         On December 8, 2016, Plaintiff filed a petition in the Circuit Court for the City of St. Louis, Missouri against Defendant (Doc. 1-1). In the Petition, Plaintiff alleges that Defendant, an Illinois corporation with its headquarters in Oakbrook Terrace, is leaving too much empty space (“slack-fill”) in the cardboard boxes of its “Chewy Red Hots” candy product. Specifically, Plaintiff alleges that the amount of slack-fill misrepresents how much candy is in each box despite the weight of the product being printed on the packaging.

         In Count I of the Petition, Plaintiff alleges that this constitutes an unfair, fraudulent or deceptive practice under the Missouri Merchandising Practices Act (“MMPA”), Mo. Rev. Stat. §407.010 et seq. In Count II, Plaintiff alleges that the proceeds from Defendant's sales of the products due to deception of consumers constitute unjust enrichment.

         Plaintiff requests that the case be certified as a class action, the putative class being “[a]ll Missouri citizens who purchased the Products in the five years preceding the filing of this Petition[.]” In her Prayer for Relief, Plaintiff asks for compensatory damages or restitution, pre-and post-judgment interest, and attorneys' fees. Although it is not set forth in the Prayer for Relief, in Paragraph 44 of the Petition, Plaintiff also requests that the Court grant injunctive relief pursuant to Mo. Rev. Stat. § 407.025.2.

         On January 11, 2017, Defendant removed the case to federal court under 28 U.S.C. §1441 (Doc. 1). In its Notice of Removal, Defendant invokes the diversity jurisdiction of the Court as provided under 28 U.S.C. §1332(d) (as amended by the Class Action Fairness Act of 2005 (“CAFA”), Pub. L. No. 109-2, 119 Stat. 4), stating that it is an Illinois company being sued by a Missouri plaintiff and putative class, there are at least 100 members of the putative class, and that the value of the matter in controversy exceeded $5 million exclusive of interest and costs. For the “amount in controversy” requirement, Defendant gives a summary of the factors which it contends add up to exceed the jurisdictional minimum. First, Defendant asserts that the compensatory damages in this matter could be up to $779, 296, the sales total for Red Hots products in Missouri for the five years preceding the suit. Defendant then calculates that attorneys' fees, which are recoverable under the MMPA, could reach as high as 40 percent of the compensatory damages. This would add $311, 718 to the amount in controversy. Third, Defendant asserts that punitive damages, if awarded pursuant to the MMPA, could be as high as five times the amount of the judgment of actual damages and attorneys' fees. It thus calculates potential punitive damages at $5, 455, 070. Finally, Defendant states “changes in production processes and/or capital equipment that would be necessitated by an injunction requiring an increase in the percentage fill in the product packages at issue could possibly cost Ferrara in excess of $6, 000, 000.” As such, Defendant asserts that the value of the matter in controversy could possibly reach $11, 455, 070.

         On January 23, 2017, Plaintiff filed a Motion to Remand (Doc. 12). Plaintiff requests that this Court remand the case to state court, challenging only Defendant's assertion that the matter in controversy was more than $5 million exclusive of interest and fees.

         II. Analysis

         Federal courts have original jurisdiction in proposed class actions in which the matter in controversy exceeds the sum or value of $5 million (exclusive of interest and costs), any member of a class of plaintiffs is a citizen of a state different from any defendant, and there are at least 100 class members. 28 U.S.C. §1332(d) (as amended by CAFA).

         Under CAFA, a party who seeks to invoke the jurisdiction of the federal court bears the burden of proving by a preponderance of the evidence that the amount in controversy exceeds the minimum jurisdictional amount. Rasmussen v. State Farm Mut. Auto. Ins. Co., 410 F.3d 1029, 1031 (8th Cir. 2005). “This standard applies regardless of whether ‘the complaint alleges no specific amount of damages or an amount under the jurisdictional minimum.'” Bell v. Hershey Co., 557 F.3d 953, 956 (8th Cir. 2009) (quoting In re Minn. Mut. Life Ins. Co. Sales Practices Litig., 346 F.3d 830, 834 (8th Cir. 2003)). “Once the removing party has established by a preponderance of the evidence that the jurisdictional minimum is satisfied, remand is only appropriate if the plaintiff can establish to a legal certainty that the claim is for less than the requisite amount.” Id.

         Plaintiff alleges that the $5 million jurisdictional minimum is not satisfied in this case, pointing to, among other things, statements in the Petition that the aggregated amount in controversy will not exceed $4, 999, 999 for the entire class. Unlike in traditional cases, however, stipulated disclaimers of recovery are not effective when determining the value of a putative class action prior to certification of the class. See Standard Fire Ins. Co. v. Knowles, 568 U.S. 558 (2013) (holding that a plaintiff's stipulation prior to certification that the class will not seek relief exceeding $5, 000, 000 is not binding on the putative class members, raising the legal possibility that relief could exceed that total).

         As stated above, Defendant asserts that there are multiple categories of award which, singly or stacked, add up to more than $5 million. In support of these assertions, Defendant submitted two affidavits with their Opposition to the Motion to Remand. The first is from Defendant's Vice President of Iconic Brands, Mark Riegel (Doc. 15). Mr. Riegel states that the total retail sales of all Red Hots products (regardless of packaging type) in the St. Louis and Kansas City metropolitan areas was $779, 296 from 2012 through 2016.[1] He further states that the majority of sales of Red Hots are in the “Theatre” or “Changemaker” cardboard boxes, and that estimated sales of those products were approximately $464, 903 in St. Louis and Kansas City during the 2012-2016 timeframe.

         The second affidavit submitted by Defendant in support of its assertion of the amount in controversy is from Michael Murray, Chief Operating Officer (Doc. 16). Mr. Murray asserts that if Defendant were compelled by injunction to change its packaging processes to eliminate slack-fill, [2] it would cost approximately $3, 595, 000 to ...


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