Ninth Circuit Agrees to Remand Action to State Court Based on Spokeo

The Ninth Circuit in Medellin v. IKEA U.S. West Inc. recently remanded a plaintiff’s appeal to the district court with instructions to dismiss the case after the plaintiff admitted that she lacked Article III standing to proceed in federal court.

As background, Rita Medellin’s class action complaint alleged that IKEA violated the Song-Beverly Credit Card Act by improperly collecting customer ZIP code data. Medellin originally filed her complaint in state court, and IKEA subsequently removed the matter. After more than three years of litigation, Medellin’s proposed class was certified but later decertified when a new district judge found that Medellin failed to prove predominance and superiority of a class action.

Medellin appealed the district court’s decertification of her proposed class. During the appeal, however, Medellin filed a motion to dismiss pursuant to Spokeo, asking the court to dismiss her appeal and to vacate the district court’s decertification order and judgment for lack of subject matter jurisdiction. Medellin argued that all parties agreed that she did not allege any injury in fact – rather, she only requested statutory damages on behalf of herself and the putative class members. Medellin asked the Ninth Circuit to remand the action back to state court where the action was originally filed. In a one-page Order, the Ninth Circuit granted Medellin’s request.

The Ninth Circuit’s decision in Medellin is the most recent case in a string of decisions considering the contours of standing in the wake of Spokeo. Other courts have followed similar paths by remanding a matter to state court instead of outright dismissing the case for lack of standing. Consequently, defendants must be aware of the interplay between Spokeo­-based arguments in federal court and potential remand issues.