Breathe Dc v. Juul Labs, Inc.

• Court: District Court, District of Columbia
• Decided: July 13, 2023
• Docket: Civil Action No. 2020-0619
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

BREATHE DC,

Plaintiff, v. Civil Action No. 20-619 (JEB) JUUL LABS, INC.,

Defendant.

MEMORANDUM OPINION

In January 2020, Plaintiff Breathe DC sued Defendant JUUL Labs, Inc. in District of

Columbia Superior Court. Breathe DC alleged that Juul had violated the District of Columbia

Consumer Protection Procedures Act by advertising its electronic-cigarette cartridges in a

misleading way. Asserting federal-question and diversity jurisdiction, Defendant removed the

lawsuit to federal court. Plaintiff moved to remand. That Motion sat in limbo as this case spent

some time as part of a Multi-District Litigation. With the matter back here, the Court agrees

with Breathe DC that neither federal-question nor diversity jurisdiction applies, and it will thus

grant the Motion.

I. Background

Taking the facts alleged in the Complaint as true, the Court begins with the claims of

Breathe DC, a 501(c)(3) nonprofit organization that “works to promote clean air and healthy

breathing throughout the District.” ECF No. 1-1 (Compl.), ¶ 16. Its Complaint alleges that Juul

has engaged in deceptive marketing practices by labeling its electronic-cigarette cartridges,

called JUULpods, as either “5.0% nicotine strength” or “3.0% nicotine strength.” Id., ¶¶ 5–11,

64–65. Such marketing, Plaintiff contends, tends to mislead consumers into believing that

1 JUULpods contain relatively low concentrations of nicotine — while in fact a single “5.0%

nicotine strength” pod delivers as much or more nicotine as a pack of 20 combustible cigarettes

would. Id.

Breathe DC accordingly brought this action in D.C. Superior Court “on behalf of itself

and the general public” under the D.C. CPPA’s private-attorney-general provision, D.C. Code

§ 28-3905(k). See Compl., ¶ 11; see also id., ¶¶ 19, 67–71; Earth Island Inst. v. BlueTriton

Brands, 583 F. Supp. 3d 105, 107 (D.D.C. 2022) (discussing provision). Plaintiff seeks

declaratory and injunctive relief. See Compl. at 15 (Prayer for Relief).

Although the Complaint does not assert a federal cause of action, on March 2, 2020, Juul

nonetheless filed a Notice of Removal from Superior Court, asserting federal-question

jurisdiction under 28 U.S.C. § 1331 and diversity jurisdiction under § 1332(a). See ECF No. 1

(Notice of Removal), ¶¶ 8–15 (federal question), 16–25 (diversity). Breathe DC then moved to

remand and for attorney fees, arguing that this Court clearly lacked jurisdiction. See ECF No. 8

(Mot.). In June of that year, however, the Judicial Panel on Multidistrict Litigation directed that

this case be transferred to the U.S. District Court for the Northern District of California for

coordinated proceedings; it did not rule on Breathe DC’s jurisdictional objections. See ECF No.

16 (Transfer Order) at 2–3.

Like the prodigal son, however, this case eventually returned. On June 23, 2023, it was

transferred back to this district after other cases in the MDL settled. See ECF Nos. 19

(Conditional Remand Order) at 1, 3; 24 (June 30, 2023, Joint Status Report) at 1–2. Upon its

return, the parties reiterated their positions regarding remand and asked the Court to decide

Breathe DC’s pre-transfer remand Motion. See June 30 JSR at 2. The Court does so here.

2 II. Legal Standard

Federal courts are courts of limited subject-matter jurisdiction and “possess only that

power authorized by [the] Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of

Am., 511 U.S. 375, 377 (1994) (citations omitted). The issue of federal subject-matter

jurisdiction “goes to the foundation of the court’s power to resolve a case.” Doe ex rel. Fein v.

District of Columbia, 93 F.3d 861, 871 (D.C. Cir. 1996) (citing Bender v. Williamsport Area

School Dist., 475 U.S. 534, 541 (1986)).

“Ordinarily, the plaintiff is entitled to select the forum in which he wishes to proceed.”

Araya v. JPMorgan Chase Bank, N.A., 775 F.3d 409, 413 (D.C. Cir. 2014). A defendant may,

however, remove “any civil action brought in a State court of which the district courts of the

United States have original jurisdiction.” 28 U.S.C. § 1441(a). Removal is thus appropriate

when the case raises a cognizable question “arising under the Constitution, laws, or treaties of

the United States,” 28 U.S.C. § 1331, or when the case involves citizens of different states and

the amount in controversy exceeds $75,000. Id. § 1332(a). “The removing party bears the

burden of showing that removal is proper.” Toxin Free USA v. J.M. Smucker Co., 507 F. Supp.

3d 40, 43 (D.D.C. 2020). “If the removing party fails to make such a showing, the court must

remand the case.” Id. (citing Animal Legal Def. Fund v. Hormel Foods Corp., 249 F. Supp. 3d

53, 56 (D.D.C. 2017)); see Republic of Venezuela v. Philip Morris Inc., 287 F.3d 192, 196 (D.C.

Cir. 2002) (“When it appears that a district court lacks subject matter jurisdiction over a case that

has been removed from a state court, the district court must remand the case.”).

III. Analysis

Breathe DC contends that the Court must remand the case because it cannot exercise

either federal-question or diversity jurisdiction over this action. See Mot. at 3–8 (federal-

3 question), 8–11 (diversity). Plaintiff also seeks to recover attorney fees associated with this

Motion. Id. at 11–12. The Court considers each issue in turn.

A. Federal-Question Jurisdiction

Defendant first seeks to justify removal by invoking federal-question jurisdiction under

28 U.S.C. § 1331. This statute grants district courts “original jurisdiction of all civil actions

arising under the Constitution, laws, or treaties of the United States.” Importantly, however,

“federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's

properly pleaded complaint” — a principle known as the well-pled-complaint rule. Caterpillar

Inc. v. Williams, 482 U.S. 386, 392 (1987). Merely having a federal defense is not a basis for

federal jurisdiction. Id. at 392–93.

Here, no federal issue appears on the face of Plaintiff's Complaint: Breathe DC does not

assert a federal cause of action, nor does its lawsuit otherwise rely on federal law in any way.

Not to worry, insists Juul; it asserts that two exceptions to the well-pled-complaint rule exist

here.

Substantial Question of Federal Law

First, Defendant points to a doctrine under which cases brought under state law may be

heard in federal court if they necessarily raise substantial questions of federal law. See ECF No.

11 (Opp.) at 7–10. In Gunn v. Minton, 568 U.S. 251 (2013), the Supreme Court explained that

“even where a claim finds its origins in state rather than federal law,” there exists “a ‘special and

small category’ of cases in which arising under jurisdiction still lies.” Id. at 258. This category

comprises cases where “a federal issue is: (1) necessarily raised, (2) actually disputed, (3)

substantial, and (4) capable of resolution in federal court without disrupting the federal-state

balance approved by Congress.” Id. (citing Grable & Sons Metal Prod., Inc. v. Darue Eng'g &

4 Mfg., 545 U.S. 308, 313–14 (2005)). Under Gunn’s first prong, however, a federal issue that

may be raised in defending against a claim is not “necessarily raised.” Organic Consumers Ass’n

v. Gen. Mills, Inc., 235 F. Supp. 3d 226, 230 (D.D.C. 2017); Beneficial Nat’l Bank v. Anderson,

539 U.S. 1, 6 (2003) (“[A] defense that relies on . . . the pre-emptive effect of a federal statute

will not provide a basis for removal.”); see also Clean Label Project Found. v. NOW Health Grp.,

Inc., No. 21-11, 2021 WL 2809106, at *7 (D.D.C. July 6, 2021).

Juul rejoins that this first prong is satisfied here because “[p]laintiff’s case necessarily

turns on factual determinations that would require the Court to wade into” the federal Tobacco

Control Act and “make determinations about federal law and [Juul’s] compliance with federal

law.” Opp. at 8. The Court disagrees. While the FDA does set certain standards relating to

marketing electronic-cigarette products, see Opp. at 3–7, the issue of whether Juul complies with

these standards is not “necessarily raised” by Breathe DC’s CPPA claim. Plaintiff alleges that

Juul violated the CPPA not because its products fail to comply with any FDA labeling standards,

but rather because Juul misleadingly suggests its products contain less nicotine than they do. Id.

The only respect in which FDA regulations are set to make an appearance in this litigation is as a

potential defense. But “a ‘federal defense, including the defense of preemption,’ does not suffice

to create federal question jurisdiction.” Gen. Mills, 235 F. Supp. 3d at 230 (quoting Caterpillar,

482 U.S. at 392); Beneficial Nat’l Bank, 539 U.S. at 6, 10.

Numerous courts in our district have reasoned similarly about challenges under the

CPPA. See, e.g., Clean Label Project Found., 2021 WL 2809106, at *8 (noting that “nearly

every CPPA claim for which removal to federal court has been challenged has been remanded to

D.C. Superior Court”); Organic Consumers Ass’n v. R.C. Bigelow, Inc., 314 F. Supp. 3d 344,

355–57 (D.D.C. 2018) (holding federal-preemption defense not necessarily raised by CPPA);

5 Animal Legal Def. Fund, 249 F. Supp. 3d at 58 (same); Gen. Mills, 235 F. Supp. 3d at 230–31

(same). Indeed, a federal district court recently concluded that the Tobacco Control Act did not

preempt a state-law unfair-and-deceptive-trade-practices claim because that claim did not

necessarily raise a federal question. See North Carolina ex rel. Stein v. Eonsmoke, LLC, 423 F.

Supp. 3d 162, 168 (M.D.N.C. 2019). Juul has thus not shown that the action can be removed as

presenting a substantial federal question on this basis.

Complete Preemption

Defendant also suggests that the doctrine of complete preemption applies here, thus

giving rise to federal-question jurisdiction. Juul offered this argument in its Notice of Removal

but appears to drop it in its Opposition to Breathe DC’s Motion to Remand. See Notice of

Removal, ¶¶ 13–14; see also ECF No. 13 (Reply) at 4–5 (noting that Juul’s Opposition “does not

attempt to argue that the [Act] provides complete preemption”). This argument goes nowhere in

any event.

Complete preemption exists when a federal provision has “such extraordinary pre-

emptive power that it converts an ordinary state common law complaint into one stating a federal

claim for purposes of the well-pleaded complaint rule.” Aetna Health Inc. v. Davila, 542 U.S.

200, 209 (2004) (internal quotation marks omitted). “In concluding that a claim is completely

preempted, a federal court finds that Congress desired not just to provide a federal defense to a

state law claim but also to replace the state law claim with a federal law claim and thereby give

the defendant the ability to seek adjudication of the claim in federal court.” 14B Charles Alan

Wright et al., Federal Practice and Procedure § 3722.2, at 418–19 (4th ed. 2009); accord Castro

v. Molecular Sys. Inc., 963 F. Supp. 2d 3, 5 (D.D.C. 2013). The Supreme Court has found

complete preemption in respect to only three federal statutes: § 301 of the Labor Management

6 Relations Act, § 502(a) of ERISA, and §§ 85–86 of the National Bank Act. See Beneficial Nat’l

Bank, 539 U.S. at 6–11.

Nothing in Defendant’s filings suggests that the Tobacco Control Act should join their

ranks. Defendant has pointed to no indications that the Act has such “unusually powerful pre-

emptive force.” Beneficial Nat’l Bank, 539 U.S. at 7 (formatting modified). Indeed, a federal

district court recently concluded otherwise about precisely this statutory scheme — a case

Defendant fails to address. See Eonsmoke, 423 F. Supp. 3d at 168–69 (emphasizing that Act

“specifically preserves a state role in regulating tobacco products and in enforcement,” citing 21

U.S.C. § 387(p)(a)(1)).

All told, removal based on federal-question jurisdiction cannot stand.

B. Diversity Jurisdiction

Juul fares no better with its contention that the Court may exercise diversity jurisdiction.

As referenced above, under 28 U.S.C. § 1332(a), district courts “have original jurisdiction of all

civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of

interest and costs, and is between . . . citizens of different States.” Here, the parties agree that

there is complete diversity between them. See Notice of Removal, ¶¶ 17–19; Opp. at 11. The

lone jurisdictional issue for the Court to decide is whether the amount in controversy is met.

Breathe DC argues that, even assuming that Juul’s total cost of complying with the

sought-after injunctive relief would exceed $75,000, the amount-in-controversy requirement

would still not be satisfied because under the non-aggregation principle that cost must be

apportioned among all consumers in this city on behalf of whom Plaintiff brings this challenge.

The Court agrees.

7 The non-aggregation principle provides that “separate and distinct claims of two or more

plaintiffs cannot be aggregated in order to satisfy the jurisdictional amount requirement.” Snyder

v. Harris, 394 U.S. 332, 335 (1969); see also Zahn v. Int’l Paper Co., 414 U.S. 291, 294 (1973).

“Although the D.C. Circuit has not spoken to the application of the non-aggregation principle to

[CPPA] suits such as this one, courts in this district routinely apply this rule when considering

the amount in controversy in cases that seek injunctive relief” by organizations on behalf of D.C.

consumers under D.C. Code § 28-3905(k)(1), the provision Plaintiff invokes here. See Inst. for

Truth in Mktg. v. Total Health Network Corp., 321 F. Supp. 3d 76, 91 (D.D.C. 2018). Indeed,

“[c]ourts in this district have consistently held that defendants removing DCCPPA actions

‘cannot rely on the total cost of compliance with the plaintiff’s requested injunction to establish

the amount-in-controversy’ requirement of § 1332(a).” Toxin Free USA, 507 F. Supp. 3d at 45–

46 (quoting Organic Consumers Ass’n, 314 F. Supp. 3d at 350). Rather, a chorus of courts has

consistently held over the past dozen years that “the cost of the injunction must be divided pro

rata among District of Columbia consumers.” Id. at 46 (quoting Food & Water Watch, Inc. v.

Tyson Foods, Inc., No. 19-2811, 2020 WL 1065553, at *5 (D.D.C. Mar. 5, 2020)); see also, e.g.,

Pesticides v. Exxon Mobil Corp., No. 20-1815, 2021 WL 1092167, at *2 (D.D.C. Mar. 22,

2021); Hackman v. One Brands, LLC, No. 18-2101, 2019 WL 1440202, at *5 (D.D.C. Apr. 1,

2019); Inst. for Truth in Mktg., 321 F. Supp. 3d at 91; Animal Legal Def. Fund, 249 F. Supp. 3d

at 59–60; Breathe DC v. Santa Fe Nat. Tobacco Co., 232 F. Supp. 3d 163, 170–71 (D.D.C.

2017); Organic Consumers Ass’n v. Handsome Brook Farm Grp. 2, LLC, 222 F. Supp. 3d 74, 78

(D.D.C. 2016); Witte v. Gen. Nutrition Corp., 104 F. Supp. 3d 1, 6 (D.D.C. 2015); Breakman v.

AOL LLC, 545 F. Supp. 2d 96, 103–05 (D.D.C. 2008). Just last year, this Court joined their

8 ranks and held that the non-aggregation principle applies to CPPA actions. Earth Island Inst. v.

BlueTriton Brands, 583 F. Supp. 3d 105, 110 (D.D.C. 2022).

Standing by its prior holding, and persuaded by the thoughtful opinions penned by its

numerous colleagues who have tackled this issue, the Court again “concludes that the appropriate

measure of the requested injunctive relief is not the amount that [Defendant] must spend to

comply with the injunction, but that amount divided by the number of members of the public on

whose behalf Plaintiff brings the action.” Inst. for Truth in Mktg., 321 F. Supp. 3d at 91; Earth

Island Inst., 583 F. Supp. 3d at 110. Applying that rubric, Juul in its Opposition does not even

try to demonstrate that its cost of complying with Breathe DC’s requested injunctive relief would

exceed $75,000 per D.C. consumer. See Opp. at 11–16; Reply at 15 (noting Juul does not argue

that it could prevail with costs so apportioned). Because “[t]he removing party bears the burden

of showing that removal is proper,” Juul’s failure to provide evidence justifying such

astronomical compliance costs is enough for the Court to conclude that Defendant has “not

demonstrated ‘that the cost of the injunction divided pro rata among the members of the general

public of Washington, D.C. would exceed the jurisdictional threshold.’” Toxin Free USA, 507

F. Supp. 3d at 43, 46 (quoting Animal Legal Def. Fund, 249 F. Supp. 3d at 60–61).

The Court therefore concludes that it does not have subject-matter jurisdiction over this

matter and accordingly must remand it to Superior Court.

C. Attorney Fees

Finally, the Court turns to Breathe DC’s request to recoup its fees and costs associated

with this remand. Under 28 U.S.C. § 1447(c), a court remanding a case after removal “may

require payment of just costs and any actual expenses, including attorney fees, incurred as a

result of the removal.” The Supreme Court has held that “the standard for awarding fees should

9 turn on the reasonableness of the removal.” Martin v. Franklin Cap. Corp., 546 U.S. 132, 141

(2005). “Absent unusual circumstances, courts may award attorney’s fees under § 1447(c) only

where the removing party lacked an objectively reasonable basis for seeking removal.” Id.

Courts in this district have further explained that “[a] basis for removal is objectively reasonable

when it ‘has at least some logical and precedential force.’” Organic Consumers Ass’n, Inc., 314

F. Supp. 3d at 358 (quoting Knop v. Mackall, 645 F.3d 381, 383 (D.C. Cir. 2011) (internal

quotation marks and citation omitted)).

The Court concludes that Plaintiff is not entitled to recover its fees and costs. Although

Defendant’s position flies in the face of numerous opinions of courts in this district, this Court

and others have concluded that such jurisdictional arguments in CPPA suits are not “objectively

unreasonable because there is ‘no clear, controlling case law from the D.C. Circuit.’” Earth

Island Inst., 583 F. Supp. 3d at 112; accord Toxin Free USA, 507 F. Supp. 3d at 47 (quoting

Breakman, 545 F. Supp. 2d at 108); see also Breathe DC, 232 F. Supp. 3d at 172 (“Given the

lack of controlling precedent in this Circuit . . . and notwithstanding the thrust of the opinions of

the district courts in this Circuit, defendants did not lack an ‘objectively reasonable basis for

removal.’”); Food & Water Watch, Inc., 2020 WL 1065553, at *5 (“Here, though the decisions

of the district courts in this jurisdiction overwhelmingly favored Plaintiffs’ position,” given the

lack of “recent, controlling authority from the D.C. Circuit[,] . . . the court cannot say that

Defendant lacked an objectively reasonable and good-faith basis for attempting removal.”). The

Court sees no reason to depart from its prior conclusion here.

10 IV. Conclusion

For the foregoing reasons, the Court will grant Plaintiff’s Motion to Remand and deny its

request for fees and costs. A separate Order so stating will issue this day.

/s/ James E. Boasberg JAMES E. BOASBERG Chief Judge Date: July 13, 2023