Animal Legal Defense Fund v. Hormel Foods Corporation
2017 U.S. Dist. LEXIS 51629
D.D.C.2017Background
- ALDF (nonprofit) sued Hormel in D.C. Superior Court under the DCCPPA, alleging Hormel’s “Natural Choice” marketing misleads consumers and seeking declaratory relief, an injunction (including corrective advertising), and attorneys’ fees.
- Hormel removed to federal court invoking federal-question (federal issues necessarily raised), diversity (§ 1332) and CAFA jurisdiction; ALDF moved to remand for lack of subject-matter jurisdiction.
- Hormel filed a separate motion to dismiss raising preemption and federal-compliance defenses; the district court stayed resolution of that motion pending the remand ruling.
- Hormel claimed amount in controversy exceeded $75,000 based on estimated total cost to comply with the injunction (~$5.44M) and potential attorneys’ fees; it alternatively invoked CAFA’s $5M threshold.
- The district court applied the well-pleaded complaint rule and Gunn’s four-part test for “necessarily raised” federal issues, and examined D.C. Circuit precedent on measuring injunctive relief for amount-in-controversy and the non-aggregation rule.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Federal-question jurisdiction (Gunn/Grable) | Complaint raises only a D.C. law claim; federal law not on its face | Advertising claims necessarily raise federal meat-labeling/regulatory issues and conflict with USDA/FSIS guidance | No federal jurisdiction — Plaintiff’s claims do not necessarily raise a federal issue; any federal law issue would be a defense (preemption), not a basis for removal |
| Diversity jurisdiction — amount in controversy (§ 1332) | Amount in controversy not shown; pro rata measure required if injunctive-costs considered | Total cost to comply with injunction (~$5.44M) plus attorneys’ fees exceeds $75,000 | No diversity jurisdiction — court will not aggregate total compliance cost (non-aggregation principle) and attorneys’ fees estimate is speculative |
| Measure of injunctive relief for jurisdiction | If injunctive relief benefits the general public, defendant’s total compliance cost cannot be aggregated; must consider per-beneficiary/pro rata value | Total compliance cost is an appropriate measure to show amount in controversy | Court rejects aggregation of total compliance cost where plaintiff represents the general public and no class action; pro rata cost not shown to meet threshold |
| CAFA jurisdiction | Case is not a class action under Rule 23; D.C. statute authorizes representative suits without Rule 23; CAFA therefore doesn’t apply | CAFA applies because the suit effectively represents many persons and could meet the $5M threshold; Rotunda decision undermines the distinction | No CAFA jurisdiction — plaintiff did not file a Rule 23 class action and D.C. law provides a distinct representative- action vehicle; Rotunda is limited to class-wide damages claims |
Key Cases Cited
- Republic of Venezuela v. Philip Morris Inc., 287 F.3d 192 (D.C. Cir.) (remand required when district court lacks subject-matter jurisdiction)
- Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (U.S.) (removal jurisdiction must be strictly construed)
- Caterpillar Inc. v. Williams, 482 U.S. 386 (U.S.) (well-pleaded complaint rule; federal defenses do not create federal-question jurisdiction)
- Gunn v. Minton, 133 S. Ct. 1059 (U.S.) (four-part test for state claims that may "necessarily raise" a federal issue)
- Grable & Sons Metal Prods. v. Darue Eng’g & Mfg., 545 U.S. 308 (U.S.) (clarifying substantial federal interest required for "arising under" jurisdiction)
- Tatum v. Laird, 444 F.2d 947 (D.C. Cir.) (cost-to-defendant may measure value of injunctive relief for amount-in-controversy)
- Snyder v. Harris, 394 U.S. 332 (U.S.) (non-aggregation rule for separate plaintiffs)
- Zahn v. International Paper Co., 414 U.S. 291 (U.S.) (each plaintiff must independently satisfy amount-in-controversy)
- Breakman v. AOL LLC, 545 F. Supp. 2d 96 (D.D.C.) (refusing to aggregate defendant’s total compliance cost for CPPA representative actions)
- Dart Cherokee Basin Operating Co. v. Owens, 135 S. Ct. 547 (U.S.) (notice of removal need only plausibly allege amount in controversy; evidentiary showing can follow)