Manual for Complex Litigation 3d § 31.131, p.252 (3d ed. 1995); see also Villarreal v. Chrysler Corp., 1996 U.S. Dist. LEXIS 3159, No. C-95-4414, 1996, WL 116832, at *1 (N.D. Cal. Mar. 12, 1996) ("a stay is improper. Judicial economy will be best served by addressing the remand issue [as it] will facilitate litigation in the appropriate forum.").
Here, a motion has been filed with this Court seeking a determination of the appropriate forum in which to litigate this matter. "The appropriate forum, moreover, is a threshold issue to class certification and defendant's petition to the Panel does not affect scheduled pretrial proceedings." Villarreal, supra at *1. This Court, as transferor Court, "retains exclusive jurisdiction until the § 1407 transfer becomes effective and as such, motions to remand should be resolved before the panel acts on the motion to transfer." Spitzfaden v. Dow Corning Corp., 1995 U.S. Dist. LEXIS 16787, No. 95-2578, 1995 WL 662663, *4 n.1 (E.D. La. Nov. 8, 1995) (citing Manual for Complex Litigation, 3d § 31.131.). Accordingly, defendants' motion for stay of proceedings pending a decision by the Panel is hereby DENIED, and the Court addresses the merits of plaintiff's remand motion.
2. Plaintiff's Motion for Remand.
Plaintiff seeks to represent all similarly situated California businesses which indirectly purchased commercial sanitary paper products from any of the defendants. All of the named defendants are corporations with their principal places of business in states other than California. Defendants removed this action to federal court on grounds that there was original diversity jurisdiction pursuant to 28 U.S.C. § 1332(a)(1). Although the complaint expressly states that "neither the plaintiff nor any member of the class has damages exceeding $ 50,000," defendants assert in their notice of removal that the actual amount in controversy exceeds $ 75,000.
The issue presented by this motion is whether the undisputed fact that the named plaintiff does not allege damages in excess of the jurisdictional amount is sufficient grounds to grant plaintiff's motion for remand, where defendants assert that other, unnamed members of the potential class have claims large enough to satisfy the jurisdictional minimum.
Plaintiff contends that in order for this Court to exercise diversity jurisdiction upon removal, defendants must establish complete diversity of citizenship and an amount in controversy in excess of $ 75,000 for the named plaintiff and each member of the proposed class. Plaintiff cites the Supreme Court decisions in Zahn v. International Paper Co., 414 U.S. 291, 38 L. Ed. 2d 511, 94 S. Ct. 505 (1973), and Snyder v. Harris, 394 U.S. 332, 22 L. Ed. 2d 319, 89 S. Ct. 1053 (1969), in support of this contention.
Plaintiff alleges that defendants have made a bald assertion that the amount in controversy exceeds the jurisdictional minimum without showing how they have computed the amount in controversy or upon what grounds defendants base their speculation. Plaintiff provides a declaration which asserts that for the period in question, Tortola Restaurants purchased $ 4,340 per year in commercial sanitary paper. See Scarpulla Decl. P2. Plaintiff contends that even if one hundred percent of that amount is included in plaintiff's damages and trebled as provided for under California's Cartwright Act, the amount would still not exceed the jurisdictional minimum. Defendants do not dispute this assertion.
Defendants contend that the Judicial Improvements Act of 1990, 28 U.S.C. § 1367(a), impliedly overruled Zahn, and that it is no longer required that each class member separately satisfy the federal jurisdictional minimum. Defendants argue that as long as any class member -- representative or absent -- meets the $ 75,000 threshold, the Court can exercise supplemental jurisdiction over the claims of class members whose claims do not meet the jurisdictional minimum. Defendants further argue that named plaintiff Tortola cannot limit the claims of the other class members without some "binding assurance" that class members will not seek recoveries in state court which would place them within this Court's jurisdiction.
In light of the legislative history
, and the ensuing case law relevant to the issue, this Court agrees with those courts that have found that the Judicial Improvements Act did not overrule the Supreme Court decision in Zahn. See e.g., Snider v. Stimson Lumber Co., 914 F. Supp. 388, 392 (E.D. Cal. 1996) ("Congress did not intend to overrule Zahn"); Waters v. Grosfeld, 904 F. Supp. 616 (E.D. Mich. 1995) ("mandate of Zahn. . . remains good law"); Borgeson v. Archer-Daniels Midland Co., 909 F. Supp. 709 (C.D. Cal. 1995).
b. Named Plaintiff's Amount in Controversy.
Even those courts which have found implied repeal of Zahn have still required the named plaintiff to meet the federal jurisdiction requirements. The case law indicates a general consensus across the various courts that if there is no federal jurisdiction over the named class member, there cannot be jurisdiction over the claims of absent members of a proposed class.
Thus, unless the named plaintiff satisfies the jurisdictional minimum amount in controversy, a federal court cannot exercise jurisdiction over the class. See In re High Fructose Corn Syrup Antitrust Litig., 936 F. Supp. 530, 532 (C.D. Cal. 1996) (citing In re Agent Orange Prod. Liab. Litig., 818 F.2d 145, 162 (2d. Cir. 1987); In re Brand Name Prescription Drugs Antitrust Litig., 123 F.3d 599, 607 (7th Cir. 1997) ("At least one named plaintiff must satisfy the jurisdictional minimum.").
Here, while defendants argue that it is sufficient that the claims of some absent members of the putative class may exceed the jurisdictional minimum, defendants do not dispute that Tortola--the only named plaintiff -- does not satisfy that requirement. Accordingly, this Court cannot exercise diversity jurisdiction over this class action and the matter must be remanded to state court. Plaintiff's motion to remand is therefore GRANTED. Plaintiff's motion for attorney's fees and costs is DENIED.
For the above reasons and for good cause shown, defendants' motion for stay is DENIED; plaintiff's motion to remand is GRANTED; plaintiff's motion for attorney's fees and costs is DENIED; and this matter is remanded to the San Francisco Superior Court.
IT IS SO ORDERED.
Dated: August 29, 1997.
United States District Judge