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Federal Court Remands Case to State Court for Failure to Prove Amount in Controversy Under CAFA

In a recent case filed in the Northern District of California, Gyorke-Takatri v. Nestle USA, Inc., the court concluded that a party to a class action case who seeks removal to a federal court must offer sufficient admissible evidence to show that there is an adequate jurisdictional basis for removal. The underlying case involved a plaintiff’s allegations about the defendant’s Gerber Graduates Puffs product, which bears a label depicting a variety of fruit and vegetables. The plaintiffs sought to represent a class of in-state consumers who claim that these images were misleading by leading consumers to believe the products were healthier than they actually are. Ultimately, based on its conclusion, the Northern District of California granted the plaintiff’s motion to remand.

In their motion for remand, the plaintiffs alleged that the defendant failed to meet its burden, which required it to show by a preponderance of the evidence that the amount in controversy in the case exceeded five million dollars. This requirement is part of the federal Class Action Fairness Act (“CAFA”), 28 U.S.C. 1332(d). In order to prove that the amount in controversy requirement under CAFA has been satisfied, the party must show that the total amount of damages sought in the lawsuit, exclusive of attorneys’ fees, costs, and interest, exceeds five million dollars.

The court rejected the defendant’s argument that the restitution theory of damages provided in several of the plaintiffs’ causes of action could result in the plaintiffs receiving an award reflecting the total retail sales of the disputed product in California during the specific class period. As a result, the defendant urged the court to use the total retail sales for its Puffs product as the amount in controversy, and it provided an affidavit from its Director of Consumer Analytics in support.

The plaintiffs disputed the defendant’s argument, claiming that the data and information contained in the affidavit constituted inadmissible hearsay under Federal Rules of Evidence 801 and 802. According to these rules, hearsay is not admissible unless it meets one of the enumerated exceptions.

The court agreed with the plaintiffs, noting that the data provided in the document attached to the affidavit was collected by a third party. Since the defendant did not provide an affidavit from a person at the third-party company who had knowledge about the data, how it was maintained, or how it was collected, it constituted inadmissible hearsay evidence. Moreover, the individual who executed the affidavit did not provide any information about his independent analysis of the data or knowledge about the third party’s practices.

As a result, the court concluded that the defendant lacked sufficient evidence to establish the amount in controversy required for removal by CAFA and remanded the action to state court.

If you or someone you love has suffered injuries as the result of a company’s fraudulent, deceptive, or unfair practices, you may be entitled to compensation. The aggressive, dedicated, and experienced product liability lawyers at Moll Law Group know what it takes to bring a successful claim against the company that caused your injuries, and we are ready to help you obtain the compensation you deserve. We proudly serve clients across the country, including in Florida, New York, California, and Illinois. Call us now at 312-462-1700 or contact us online to set up your free consultation.

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