169 F. Supp. 3d 598
D.N.J.2016Background
- Plaintiff Jillian Gallagher filed a putative New Jersey class action under the New Jersey Consumer Fraud Act alleging Johnson & Johnson deceptively labeled BEDTIME® baby products as "clinically proven" to help babies sleep.
- Plaintiff defined the putative class as "all New Jersey citizens who purchased the Bedtime Products within New Jersey, not for resale or assignment."
- Defendant removed to federal court under CAFA and moved to transfer to the Central District of California; Plaintiff moved to remand to state court.
- Central dispute: whether CAFA’s minimal diversity requirement is satisfied by counting non‑New Jersey purchasers (real parties in interest) who might benefit from relief, or whether only the plaintiff’s proposed class members control the citizenship inquiry.
- The Court found CAFA jurisdiction lacking (and that the home‑state exception applied), granted remand to New Jersey state court, and dismissed the transfer motion as moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CAFA minimal diversity exists | Gallagher defined class as New Jersey citizens only; no minimal diversity | Count out‑of‑state purchasers who bought in NJ or otherwise benefit as "real parties in interest" to establish minimal diversity | Held for Plaintiff: only persons within the proposed class definition count; minimal diversity not shown |
| Whether courts may count real parties in interest outside the proposed class for CAFA | Only proposed class members control citizenship analysis | Real parties in interest who would benefit (nationwide consumers) should be included | Held for Plaintiff: statutory text limits "class members" to persons in the proposed or certified class; real parties outside that definition are excluded |
| Whether the CAFA home‑state exception applies | Class limited to New Jersey citizens, and defendant is a New Jersey citizen; thus >2/3 are NJ citizens | Argued insufficient evidence that two‑thirds threshold met | Held for Plaintiff: home‑state exception applies because the class definition itself ensures >2/3 NJ citizenship |
| Whether removal was objectively unreasonable (attorneys’ fees) | Sought fees under §1447(c) | Removal was reasonable given ambiguous allegations and circuit split on counting real parties in interest | Held for Defendant on fees: denial of attorneys’ fees because removal was objectively reasonable |
Key Cases Cited
- Caterpillar Inc. v. Williams, 482 U.S. 386 (1987) (federal removal is proper only for suits within original federal jurisdiction)
- Hertz Corp. v. Friend, 559 U.S. 77 (2010) (party asserting jurisdiction bears burden to establish it)
- Lowery v. Alabama Power Co., 483 F.3d 1184 (11th Cir. 2007) (CAFA minimal‑diversity discussion and interpretation)
- Judon v. Travelers Prop. Cas. Co. of Am., 773 F.3d 495 (3d Cir. 2014) (consider complaint and notice of removal when assessing CAFA jurisdiction)
- Frederico v. Home Depot, 507 F.3d 188 (3d Cir. 2007) (burden and proof standard for removal jurisdictional facts)
- Kaufman v. Allstate N.J. Ins. Co., 561 F.3d 144 (3d Cir. 2009) (plaintiff may limit class to avoid federal jurisdiction; burden shifts on remand issues)
- Mississippi ex rel. Hood v. AU Optronics Corp., 134 S. Ct. 736 (2014) (interpretation of CAFA provisions and limits on counting unnamed real parties in related contexts)