District Court Must Remand Case, Not Dismiss, Where It Lacks Jurisdiction: Ninth Circuit | Practical Law

District Court Must Remand Case, Not Dismiss, Where It Lacks Jurisdiction: Ninth Circuit | Practical Law

In Polo v. Innoventions International, LLC, the US Court of Appeals for the Ninth Circuit held that, where a plaintiff lacks Article III standing, a district court must remand the case back to state court rather than dismiss it, unless the court is absolutely certain that the state court would dismiss the remanded case.

District Court Must Remand Case, Not Dismiss, Where It Lacks Jurisdiction: Ninth Circuit

by Practical Law Litigation
Published on 23 Aug 2016 • USA (National/Federal)
In Polo v. Innoventions International, LLC, the US Court of Appeals for the Ninth Circuit held that, where a plaintiff lacks Article III standing, a district court must remand the case back to state court rather than dismiss it, unless the court is absolutely certain that the state court would dismiss the remanded case.
On August 18, 2016, in Polo v. Innoventions International, LLC, the US Court of Appeals for the Ninth Circuit held that, where a plaintiff lacks Article III standing, a district court must remand the case back to state court rather than dismiss it, unless the court is absolutely certain that the state court would dismiss the remanded case ( (9th Cir. Aug. 18, 2016)).
The plaintiff, Elsa Polo, sued the defendant, Innoventions International, LLC (Innoventions) in California state court, alleging several causes of action including a deceptive practices class claim under California's Consumers Legal Remedies Act (CLRA) (Cal. Civ. Code § 1750 et seq.). Polo alleged that Innoventions falsely marketed a product named DiabeStevia as a treatment for diabetes, which failed to perform as advertised.
Innoventions removed the case to federal court under the Class Action Fairness Act of 2005 (CAFA), based on Polo's allegations that "hundreds of customers" were potential class members affected by the faulty product, and moved for summary judgment. On summary judgment, the district court found that:
  • Polo could not have been injured in the manner she alleged because, among other findings, she did not have diabetes.
  • Regarding Polo's CLRA claim, Innoventions refunded her purchase price, tax, and shipping.
The court concluded that Polo lacked Article III standing for all her claims, granted summary judgment to Innoventions, and dismissed the case. Polo appealed the dismissal of only the CLRA deceptive practices claim.
The Ninth Circuit reversed the district court's dismissal, holding that the removed case should have been remanded back to state court under 28 U.S.C. § 1447(c) rather than dismissed. Because the district court ruled that it lacked subject matter jurisdiction, the court was required under § 1447(c) to remand the case. The Ninth Circuit rejected Innoventions' arguments that § 1447(c) did not apply to this case and found that the lack of subject matter jurisdiction only stripped the federal courts of the power to adjudicate the dispute. State courts, by contrast, are not bound by the same Article III constraints.
Innoventions also cited Bell v. City of Kellogg to argue that, despite the language of the removal statute, dismissal was appropriate because remanding Polo's case to state court would have been futile given the district court's findings on summary judgment. The court rejected this argument for two reasons:
  • Bell may no longer be good law after the US Supreme Court's decision in International Primate Protection League v. Administrators of Tulane Educational Fund, which declined a futility exception to the remand rule (500 U.S. 72, 88-89 (1991)). Several other circuits later expressly rejected the futility doctrine.
  • Even if the Bell rule were applied, the court held that it was not an "absolute certainty" that a state court would dismiss Polo's CLRA claim on remand, as required under California law.
Polo met the elements for the CLRA claim and Innoventions' attempt to remedy Polo's individual complaint by refunding her money did not disqualify her as class representative.
Because Innoventions was required to notify all class members and provide an opportunity to remedy all of their defective goods, the court found that Polo likely retained standing. It was not an absolutely certainty that remand would have been futile, so the district court should have remanded rather than dismissed the case.