Opinion
Civil Action 2:22-cv-1495
12-27-2022
CARA ROWLAND, individually and on behalf of all others similarly situated, Plaintiff v. HELEN OF TROY LTD. also known as HELEN OF TROY L.P. doing business as HOT TOOLS PROFESSIONAL, Defendant.
REPORT AND RECOMMENDATION
PATRICIA L. DODGE UNITED STATES MAGISTRATE JUDGE
I. Recommendation
It is respectfully recommended that Plaintiff Cara Rowland's Motion to Remand (ECF No. 13) be granted and that Defendant Helen of Troy Ltd.'s (“Helen of Troy”) Motion to Dismiss (ECF No. 9) be denied as moot.
II. Report
A. Relevant Procedural History
On September 16, 2022, Rowland filed a class action against Defendant Helen of Troy (Docket Number GD-22-011653) in the Court of Common Pleas of Allegheny County, Pennsylvania. (ECF No. 1 ¶ 1; ECF No. 1-1.) Rowland alleges that the warranty for Helen of Troy's Hot Tools 24K Gold One-Step Hair Dryer and Volumizer (the “Warranty”) violated the Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301, et seq. (“MMWA”).
Helen of Troy timely removed, invoking the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. §§ 1332, 1453, 1711-15. (See ECF No. 1 ¶ 2.) Helen of Troy then moved to dismiss Rowland's Complaint pursuant to Rule 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure arguing that Rowland lacks standing due to a lack of damages and that the Warranty does not violate the MMWA. (ECF Nos. 9 & 10.) Rowland timely moved to remand arguing that the case does not meet the MMWA's jurisdictional requirements and that CAFA does not provide an alternative basis for jurisdiction. (ECF Nos. 13 & 14.) Both motions are fully briefed and ready for disposition.
“Because ‘the district court must be certain that federal subject-matter jurisdiction is proper before entertaining a defendant's motion under Federal Civil Rule 12 to dismiss the plaintiff's complaint for failure to state a claim upon which relief can be granted,' district courts should usually turn first to a motion to remand.” Abdullah v. Small Bus. Banking Dep't of Bank of Am., 628 Fed.Appx. 83, 84 n.1 (3d Cir. 2016) (citations omitted) (emphasis added); but see Wolstenholme v. Bartels, 511 Fed.Appx. 215, 217 (3d Cir. 2013) (finding no abuse of discretion where district court ruled on motion to dismiss based on the lack of personal jurisdiction before motion to remand).
Here, the Court will turn to Rowland's Motion for Remand first, and, for the reasons set forth below, respectfully recommends that Rowland's Motion for Remand (ECF No. 13) be granted. Thus, it is further recommended that Helen of Troy's Motion to Dismiss (ECF No. 9) be denied as moot.
B. Rowland's Motion for Remand
1. MMWA's Jurisdictional Provisions
Under the MMWA, a consumer may bring suit for damages and other legal and equitable relief “(A) in any court of competent jurisdiction in any State or the District of Columbia; or (B) in an appropriate district court of the United States, subject to [the three conditions listed in § 2310(d)(3)].” 15 U.S.C. § 2310(d)(1). As for the three conditions, the MMWA specifies that “[n]o claim shall be cognizable in a suit brought under [§ 2310(d)(1)(B)]-(A) if the amount in controversy of any individual claim is less than the sum or value of $25; (B) if the amount in controversy is less than the sum or value of $50,000 (exclusive of interests and costs) computed on the basis of all claims to be determined in this suit; or (C) if the action is brought as a class action, and the number of named plaintiffs is less than one hundred.” 15 U.S.C. § 2310(d)(3).
2. CAFA's Jurisdictional Provisions
Under CAFA, a defendant may remove a class action to a federal district court so long as the action satisfies the statute's special diversity and procedural requirements. Federal district courts have original jurisdiction over such cases when (1) there are at least 100 members of the class; (2) there is minimal diversity, i.e., any member of the class of plaintiffs is a citizen of a different state from any defendant; and (3) the amount in controversy, as aggregated across all individual claims, exceeds the sum or value of $5 million (exclusive of interest and costs). 28 U.S.C. §§ 1332(d)(2)(A), (d)(5)(B), (d)(6).
3. The Parties' Arguments
Rowland argues that the Court should remand this case because the three conditions that are required under §2310(d)(3) to satisfy federal question jurisdiction under the MMWA are not met. (ECF No. 14 at 2-5.) Rowland also argues that CAFA cannot be used to circumvent the MMWA's jurisdictional requirements, but even if it could, CAFA's amount in controversy is not met in this case and diversity jurisdiction does not exist. (Id. at 5-10.) Helen of Troy argues that the “majority rule” is that CAFA can provide jurisdiction when the three MMWA conditions are not met, because this Court is a “court of competent jurisdiction” pursuant to § 2310(d)(1)(A). (ECF No. 20 at 3-6.) Helen of Troy further suggests that the amount in controversy exceeds $5,000,000 even though Rowland is not seeking monetary damages (id. at 6-9) and provides a sworn declaration from a Finance Director detailing sales in Pennsylvania for the 2020-2023 fiscal years (ECF No. 20-1).
In her Reply, Rowland asserts that the MMWA reference to a “court of competent jurisdiction” in § 2310(d)(1)(A) applies only to state courts. (ECF No. 24 at 3-4.) Rowland further argues that the case law cited by Helen of Troy is distinguishable, because, in those cases, there were other claims over which the court had subject matter jurisdiction and thus the court could also exercise supplementary jurisdiction over the MMWA claims. (Id. at 2-3.) Finally, Rowland contends that Helen of Troy has failed to provide sufficient proof to establish the amount in controversy. (Id. at 4-5.)
4. Interaction between the MMWA's and CAFA's Jurisdictional Provisions
The United States Court of Appeals for the Third Circuit has not directly resolved the question of whether a court may exercise jurisdiction over an MMWA claim when a complaint does not name 100 plaintiffs but the court may otherwise have jurisdiction to hear the case under CAFA. Kavon v. BMW of N.A., LLC, Civ. No. 20-1547, 2022 WL 1830797, at *4 (D.N.J. June 3, 2022). The two Courts of Appeals that have addressed the interplay between the MMWA and CAFA have reached different results, and only the United States Court of Appeals for the Ninth Circuit has addressed the question in a precedential opinion. Compare Floyd v. Am. Honda Motor Co., Inc., 966 F.3d 1027, 1035 (9th Cir. 2020) (“CAFA may not be used to evade or override the MMWA's specific numerosity requirement”) with Kuns v. Ford Motor Co., 543 Fed.Appx. 572, 574 (6th Cir. 2013) (agreeing with the district courts that have generally “held that the CAFA effectively super[s]edes the MMWA's more stringent jurisdictional requirements”); see also Ware v. Best Buy Stores, L.P., 6 F.4th 726, 733 n.2 (7th Cir. 2021) (acknowledging the “split in authority about the interaction between the class requirements under CAFA and the [MMWA]” but declining to resolve issue because outcome would be unaffected).
Because, as explained below, the Court agrees that CAFA may not be used to circumvent the jurisdictional requirements of the MMWA, the Court need not decide whether the amount of controversy is met.
Helen of Troy's argument-that the “majority rule” is that CAFA may provide subject matter jurisdiction even when the three conditions in 15 U.S.C. § 2310(d)(3) are not met-ignores recent caselaw since Floyd. Indeed, all but two of the cases that Helen of Troy cites to support its position predate the Ninth Circuit's Floyd decision, and those that postdate Floyd are outside the Third Circuit. (See ECF No. 20 at 3 n.1; id. at 4-7 (citing Barclay v. ICON Health & Fitness, Inc., Civ. No. 19-CV-2970, 2020 WL 6083704, at *7 (D. Minn. Oct. 15, 2020) and In re Gen. Motors Air Conditioning Mktg. & Sales Pracs. Litig., 568 F.Supp.3d 837, 844 (E.D. Mich. 2021)).)
Further, many cases predating Floyd cited by Helen of Troy are from district courts within the Ninth Circuit. (ECF No. 20 at 3 n.1.)
This footnote is erroneously numbed as footnote “8” instead of “1” in Helen of Troy's brief.
Before Floyd, the districts courts within the Third Circuit that considered the issue “[i]n the absence of [Third Circuit] guidance,” “routinely used to hold that CAFA could provide ‘a way around the MMWA's 100-named-plaintiff requirement.'” Kavon, 2022 WL 1830797, at *4; Opheim v. Aktiengesellschaft, Civ. No. 20-02483, 2021 WL 2621689, at *12 (D.N.J. June 25, 2021) (collecting cases); see McGee v. Contl. Tire N.A., Inc., Civ. No. 06-6234, 2007 WL 2462624, at *3-4 (D.N.J. Aug. 27, 2007) (noting the “firmly embedded principle of statutory construction requires courts to presume that Congress enacts legislation with knowledge of the existing law and, consequently, that the newly-enacted statute is harmonious with the existing law,” and agreeing with the interpretation that “the MMWA expressly contemplates alternative jurisdiction ‘in any court of competent jurisdiction' and the Congress intended for CAFA to expand federal court jurisdiction over class actions.” (citing Chavis v. Fid. Warranty Services, Inc., 415 F.Supp.2d 620 (D.S.C. 2006) and Brothers v. Hewlett-Packard Co., Civ. No. 06-02254, 2007 WL 485979 (N.D. Cal. Feb. 12, 2007).)
However, since Floyd, every district court in the Third Circuit that has addressed the issue has found that CAFA does not allow plaintiffs to pursue a MMWA claim where the three conditions under § 2310(d)(3) are not met. See Kavon, 2022 WL 1830797, at *4 (noting that every court in the District of New Jersey has followed Floyd since it was decided); Talley v. GM, LLC, Civ. No. 1:20-cv-01137, 2021 WL 7209448, at *5-7 (D. Del. Nov. 26, 2021) (finding that plaintiffs' cause of action stems from the MMWA, therefore plaintiffs “cannot rely on CAFA for a cause of action because that law gives only jurisdiction.”).
“[W]ith no binding authority and a shifting landscape of non-binding authority,” this Court proceeds to analyze the MMWA and CAFA provisions and is guided in doing so by the district courts within the Third Circuit who have addressed this issue. See Opheim, 2021 WL 2621689, at *12.
“It is a well-established canon of statutory construction that ‘provisions in different statutes should, if possible, be interpreted so as to effectuate both provisions.'” Udell v. United States (In re Udell), 454 F.3d 180, 184-85 (3d Cir. 2006) (quoting Cutaiar v. Marshall, 590 F.2d 523, 530 (3d Cir. 1979)) (collecting cases). The Court turns to the plain language of both the MMWA and CAFA to determine whether these provisions can be harmonized. Id. at 185. “It is the cardinal canon of statutory interpretation that a court must begin with the statutory language.'” Nunez v. Subaru of Am., Inc., Civ. No. 1:19-cv-18303, 2021 WL 9667930, at *7 (D.N.J. Feb. 23, 2021) (citing In re Philadelphia Newspapers, LLC, 599 F.3d 298, 304 (3d Cir. 2010), as amended (May 7, 2010)). “When the words of a statute are unambiguous, then, this first canon is also the last: judicial inquiry is complete.” Id. (citations and quotations omitted).
Here, “[t]he language of the MMWA is not ambiguous, and ‘the 100-named plaintiff jurisdictional requirement applies to Plaintiffs' MMWA claims.'” Id. (quoting Powell v. Subaru of Am., Inc., 502 F.Supp.3d 856, 885 (D.N.J. 2020)); see also Floyd, 966 F.3d at 1034 (“The text is clear that a requirement for an MMWA class action in federal court is at least one hundred named plaintiffs.”); see also Talley, 2021 WL 7209448, at *6 (“Start with [MMWA's] text. It says buyers can sue warrantors in federal district court ‘subject to' paragraph (3) . . . ‘Subject to' means ‘only if.' . . . Thus, the [MMWA] lets [plaintiffs] sue in federal court, but only if they comply with paragraph (3).” (internal citations omitted)).
In assessing the language of the MMWA as well as recent case law, the Court is not convinced that § 2310(d)(1)(A), which allows a consumer to bring suit “in any court of competent jurisdiction in any State or the District of Columbia,” is meant to include district courts when CAFA jurisdiction is met. District courts are specifically targeted by § 2310(d)(1)(B). Indeed, as district courts within the Third Circuit have concluded, to interpret § 2310(d)(1)(A) as such would “violate the ‘anti-surplusage' canon, under which ‘[i]t is our duty to give effect, if possible, to every clause and word of a statute.'” Powell, 502 F.Supp.3d at 885 (quoting United States v. Jackson, 964 F.3d 197, 203 (3d Cir. 2020)). Further, as explained by a district court in the District of New Jersey, “pulling federal courts into subsection (A) would nullify the limits on federal jurisdiction which Congress sought to impose via [the three conditions in] paragraph 3.” Opheim, 2021 WL 2621689, at *12; Powell, 502 F.Supp.3d at 885 (“Construing CAFA to provide jurisdiction over MMWA claims despite Plaintiffs' failure to satisfy the plain-language requirement of at least one hundred named plaintiffs would have the effect of overriding a part of the MMWA” despite no “‘clear and manifest' showing of Congress's intent to do so.” (quoting Floyd, 966 F.3d at 1035)); Wesley v. Samsung Elecs. Am., Inc., Civ. No. 20-18629, 2021 WL 5771738, at *9 (D.N.J. Dec. 3, 2021).
Finally, “[t]here is a way to harmonize the two statutes.” Opheim, 2021 WL 2621689, at *13. Thus, the inquiry begins and ends with their plain language. In re Udell, 454 F.3d at 184. As outlined in Judge McNulty in Opheim:
Decisions prior to Floyd discussing the CAFA and MMWA considered CAFA's legislative history, which was “intended to expand substantially federal court jurisdiction over class actions.” See McGee, 2007 WL 2462624, at *4 (“Because the MMWA expressly contemplates alternative jurisdiction ‘in any court of competent jurisdiction' and the Congress intended for CAFA to expand federal court jurisdiction over class actions, the Court finds that CAFA provides an alternate basis of jurisdiction for MMWA claims.”); S. Rep. No. 109-14 at 42 (2005) (noting that CAFA “is intended to expand substantially federal court jurisdiction over class actions ... [and] its provisions should be read broadly, with a strong preference that interstate class actions should be heard in a federal court if properly removed by any defendant.”). However, “the legislative history would be pertinent only to the extent that Congress clearly expressed an intent to interpret [the statutes] contrary to the plain language of the statutes.” In re Udell, 454 F.3d at 186-87. That being said, a postFloyd opinion by a district court in the District of New Jersey found, when analyzing CAFA's legislative history, that “there is nothing in CAFA's legislative history indicating that Congress sought to modify class-action requirements for class actions pressing federal claims.” Opheim, 2021 WL 2621689, at *13 (citing Floyd, 966 F.3d at 1036).
CAFA does not modify the MMWA's requirements because CAFA applies to suits brought under diversity jurisdiction, which MMWA suits are not. The MMWA creates a federal cause of action, so federal courts hearing MMWA claims are exercising their federal-question jurisdiction. See Mims v. Arrow Fin. Servs., LLC, 565 U.S. 368, 377, 380, 132 S.Ct. 740, 181 L.Ed.2d 881 (2012) (when a statute creates a federal cause of action, the statute furnishes federal-question jurisdiction, even if it also provides that claims can be brought in state court). In contrast, CAFA modifies jurisdictional requirements in diversity-jurisdiction cases so that more class actions based only on state law can be brought in federal court. Miss. ex rel. Hood v. AU Optronics Corp., 571 U.S. 161, 165, 134 S.Ct. 736, 187 L.Ed.2d 654 (2014); see also S. Rep. No. 109-14, at 10 (2005). Because an MMWA claim creates a federal-question case, CAFA does not apply to that claim.2021 WL 2621689, at *13; see also Floyd, 966 F.3d 1035 (“CAFA allows certain claims to proceed under diversity jurisdiction, while the MMWA provides for a distinct claim to be brought in federal court for certain state-law warranty violations.”); Kavon, 2022 WL 1830797, at *4-5.
Having analyzed the statutes and recent case law, the Court agrees with the Ninth Circuit's analysis that “[c]onstruing CAFA to provide jurisdiction over MMWA claims despite [plaintiff's] failure to satisfy the plain-language requirement of at least one hundred named plaintiffs would have the effect of overriding a part of the MMWA” and that “CAFA may not be used to evade or override the MMWA's specific numerosity requirement.” Floyd, 966 F.3d at 1035; see also Hillman Cohen v. Subaru of Am., Inc., Civ. No. 20-08442, 2022 WL 721307, at *9 (D.N.J. Mar. 10, 2022); Simner v. LG Elecs. U.S.A., Inc., Civ. No. 21-13322, 2022 WL 3152707, at *10 (D.N.J. Aug. 8, 2022); In re Subaru Battery Drain Prod. Liab. Litig., Civ. No. 20-3095, 2021 WL 1207791, at *19-20 (D.N.J. Mar. 31, 2021).
Because Rowland's Complaint fails to meet the criteria set forth in § 2310(d)(3) and Defendants may not use CAFA to circumvent the MMWA's requirements, the Court lacks subject matter jurisdiction.
C. Conclusion
For these reasons, it is respectfully recommended that Rowland's Motion for Remand (ECF No. 13) be granted and that Helen of Troy's Motion to Dismiss (ECF No. 9) be denied as moot.
D. Notice
In accordance with the Federal Magistrates Act, 28 U.S.C. § 636(b)(1), and Fed.R.Civ.P. 72(b)(2), the parties are allowed fourteen (14) days from the date of service of this Report and Recommendation to file written objections thereto. Any party opposing the objections shall have fourteen (14) days from the date of service of objections to respond thereto. Failure to file objections will waive the right to appeal. Brightwell v. Lehman, 637 F.3d 187, 193 n.7 (3d Cir. 2011).