Polo v. Innoventions International, LLC

When, on a summary judgment motion in a case removed from state court, a federal court determines it lacks subject matter jurisdiction because the plaintiff lacks Article III standing, the federal court should remand the case to state court, not dismiss it.  Plaintiff filed this putative class action against defendant in state court.  Defendant removed under CAFA.  After doing so, defendant successfully moved for summary judgment on the ground that plaintiff lacked Article III standing having suffered no injury from her buying defendant’s product which she said was falsely hyped as a cure for diabetes.  It turned out plaintiff didn’t have diabetes, and defendant refunded the purchase price with taxes and shipping costs, so she suffered no harm from her purchase.  This decision holds that the district court erred in dismissing rather than remanding the case to state court.  Under 28 USC 1447(c), a federal court must remand a removed case to state court if before entry of judgment it determines it lacks subject matter jurisdiction—at least if jurisdiction was lacking from the beginning, as here.  The fact that the district court determined its lack of jurisdiction at the summary judgment stage made no difference.  Assuming that (but casting doubt on whether) there remains a futility exception to 1447(c)’s command, it did not apply here because simply buying a product based on false advertising is sufficient to confer standing in state court under the CLRA, a claim plaintiff alleged.  Also, in state court it is at least arguable that defendant’s paying off the individual plaintiff would not avoid her class claims.  See Meyer v. Sprint Spectrum, L.P. (2009) 45 Cal.4th 634.

Ninth Circuit Court of Appeals (Smith, M., J.); August 18, 2016; 2016 WL 4394586


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