Martin v. Chattem, Inc.

          ORDER GRANTING MOTION TO REMAND [11] AND DENYING MOTION TO DISMISS AS MOOT [21]

          OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE.

         I. INTRODUCTION

         On May 16, 2019, Plaintiff Ruthie Martin (“Martin”) filed this putative class action in Los Angeles Superior Court against Chattem, Inc. (“Chattem”) and Sanofi, Inc. (“Sanofi”) (collectively, “Defendants”). (Not. of Removal, Ex. A (“Compl.”), ECF No. 1-1.) On July 25, 2019, Chattem removed the action pursuant to the Class Action Fairness Act, 28 U.S.C. § 1332(d) (“CAFA”). (Notice of Removal (“Removal”) 1, ECF No. 1.) Martin moved to remand this action for lack of subject matter jurisdiction (“Motion”). (Mot. to Remand (“Mot.”), ECF No. 11.) Chattem subsequently filed a motion to dismiss. (Mot. to Dismiss, ECF No. 21.) For the reasons discussed below, the Court finds that Chattem has not met its evidentiary burden to establish that the amount in controversy exceeds $5 million. Accordingly, the Court GRANTS Martin's Motion to Remand and DENIES Chattem's Motion to Dismiss as moot.^[1]

         II. FACTUAL BACKGROUND

         Martin brings this class action against Defendants individually and on behalf of all others similarly situated (collectively “putative class”) for pain, burns, and inflammation from use of the product, “Icy Hot Applicator.” The putative class consists of “all citizens of California who purchased the [d]effective [p]roduct [but not] the Court and its personnel, Defendants and their employees, and persons who purchased the [d]effective [p]roduct for resale.” (Compl. ¶ 27.) Martin is a citizen of California. (Compl. ¶ 11.) Chattem is incorporated and has its principal place of business in Tennessee. (Compl. ¶ 12.) Martin alleges eight causes of action: (1) Consumer Legal Remedies Act (“CLRA”); (2) False Advertising Law (“FAL”); (3) Unfair Competition Law (“UCL”); (4) Breach of Express Warranty; (5) Breach of Implied Warranty of Merchantability; (6) Unjust Enrichment; (7) Strict Products Liability; and (8) Negligence. (Compl. ¶¶ 33-130.) Martin does not allege a specific damages amount. (See Compl. at 23.)

         Chattem removed the action to this Court on July 25, 2019, pursuant to the CAFA. (Removal 2.) On August 26, 2019, Martin moved to remand arguing that Chattem's removal relies on speculative violation rates to calculate the amount in controversy. (Mot. 1.) Martin contends that, as a result, Chattem has not established that the amount in controversy is met and, thus, the Court lacks subject matter jurisdiction. (Mot. 1.) Chattem opposes the Motion and argues that the amount in controversy is satisfied because Chattem calculated the alleged violation rates based on reasonable assumptions derived from the Complaint. (Opp'n to Mot. (“Opp'n”) 1, ECF No. 14.)

         III. LEGAL STANDARD

         CAFA allows for federal jurisdiction over a purported class action when (1) the amount in controversy exceeds $5 million (2) at least one putative class member is a citizen of a state different from any defendant, and (3) the putative class exceeds 100 members. 28 U.S.C. §§ 1332(d)(2), (5). “[T]he burden of establishing removal jurisdiction remains . . . on the proponent of federal jurisdiction.” Abrego Abrego v. Dow Chem. Co., 443 F.3d 676, 685 (9th Cir. 2006). Generally, removal statutes are strictly construed against removal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). However, “no antiremoval presumption attends cases invoking CAFA.” Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. 81, 89 (2014).

         “[A] defendant's notice of removal need include only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold. Id. If the plaintiff disputes the alleged amount in controversy, “both sides submit proof and the court decides, by a preponderance of the evidence, whether the amount-in-controversy requirement has been satisfied.” Id. at 88. The parties may submit evidence, “including affidavits or declarations, or other summary-judgment-type evidence relevant to the amount in controversy at the time of removal.” Ibarra v. Manheim Investments, Inc., 775 F.3d 1197 (9th Cir. 2015) (quoting Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997)). “[A] defendant cannot establish removal jurisdiction by mere speculation and conjecture, with unreasonable assumptions.” Ibarra, 775 F.3d at 1197.

         IV. DISCUSSION

         Chattem asserts that removal is proper because there are more than 100 putative class members, minimal diversity is satisfied, and the amount in controversy exceeds $5 million. (Removal 3.) Martin does not dispute that the class is over 100 members or that the parties are minimally diverse; instead, he argues that Chattem has not established the amount in controversy. (Mot. 3-4.)

         Chattem contends that the restitution damages alone exceeds $5 million. (Removal 4.) Alternatively, Chattem indicates that the potential personal injury claims for class members would exceed $5 million. (Opp'n to Mot. 10-11.) Martin counters that Chattem has not provided sufficient evidence and relies on speculation in its amount in controversy calculation. (See Mot.)

         A. Restitution Damages

         Determining whether the amount in controversy exceeds $5 million is contingent upon whether Chattem's calculations are reasonable. See Ibarra, 775 F.3d at 1197 (finding assumptions of damages “cannot be pulled from thin air but need some reasonable ground underlying them.”) Chattem, as the removing party, bears the burden to establish that its asserted amount in controversy relies on reasonable assumptions. Id. at 1199. “Where the complaint contains generalized allegations of illegal behavior, a removing defendant must supply ‘real evidence' grounding its ...