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deeming the costs associated with complying with a requested injunction as "incidental" damages and therefore not part of the amount in controversy calculation
Summary of this case from Ramirez v. HMS Host USA, Inc.Opinion
No. C 11-511 MMC.
July 20, 2011
ORDER GRANTING PLAINTIFF'S MOTION TO REMAND
Before the Court is plaintiff Monet Parham's ("Parham") motion to remand, filed April 21, 2011. Defendants McDonald's Corporation and McDonald's USA, LLC (collectively, "McDonald's") have filed opposition, to which Parham has replied. The matter came on regularly for hearing on July 15, 2011. Stephen H. Gardner of the Center for Science in the Public Interest appeared on behalf of Parham; Scott A. Elder and Randall L. Allen of Alston and Bird LLP appeared on behalf of McDonald's. The Court, having considered the papers filed in support of and in opposition to the motion, as well as the arguments of counsel, and for the reasons stated on the record at the hearing, hereby rules as follows.
1. Contrary to Parham's assertion, the declarations of Peter Sterling are not inadmissible on grounds of perjury, hearsay, or any other asserted basis.
2. Given the questionable applicability of the "legal certainty" standard to a case removed on the basis of a defendant's costs rather than a plaintiff's recovery, see Guglielmino v. McKee Foods Corp., 506 F.3d 696, 699 (9th Cir. 2007) (discussing applicability of "legal certainty" and "preponderance of the evidence" standards to removal under Class Action Fairness Act ("CAFA")), the Court has considered the sufficiency of McDonald's showing under both the "legal certainty" standard and the "preponderance of the evidence" standard.
3. The Court finds, under either standard, McDonald's has failed to meet its burden of showing the amount in controversy meets CAFA's jurisdictional threshold. In particular, although McDonald's has made a sufficient evidentiary showing to support its calculation of costs associated with advertising Happy Meals "on a local and regional basis rather than a nationwide basis" (see Opp. 9:5-10), the Court finds such costs are "incidental" to, rather than "directly produce[d]" by, the requested injunction. See In re Ford Motor Co., 264 F.3d 952, 958 (9th Cir. 2001) (holding, where injunctive relief sought, "amount in controversy is the pecuniary result to either party which the judgment would directly produce"); Tompkins v. Basis Research LL, No. CIV. S-08-244 LKK/DAD, 2008 WL 1808316, at *4 (E.D. Cal. Apr. 22, 2008) (excluding from amount in controversy costs "incidental" to injunction). Contrary to McDonald's argument, an alteration in a defendant's business practice is not cognizable for purposes of removal unless such alteration is "require[d]" by the requested relief. See In re Brand Name Prescription Drugs Antitrust Litig., 123 F.3d 599, 609 (7th Cir. 1997) (noting "amount in controversy would be present if the injunction sought by the plaintiffs would require some alteration in the defendant's method of doing business that would cost the defendant at least the statutory minimum amount") (citingMcCarthy v. Amoco Pipeline Co., 595 F.2d 389, 391 (7th Cir. 1979) (holding, where plaintiff sought injunction enjoining defendant from using plaintiff's land for pipeline and requiring defendant to remove pipeline, defendant's cost of removal and value to defendant in maintaining pipeline properly considered in determining amount in controversy)).
4. Accordingly, Parham's motion to remand is hereby GRANTED and the action is hereby REMANDED to the Superior Court of California in and for San Francisco County.