Joshua Mandel v. Marathon Petroleum Company LP

• Court: District Court, C.D. California
• Decided: February 27, 2025
• Docket: 2:24-cv-09647
• Status: Unknown

Opinion

5 JS-6

8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10

11 JOSHUA MANDEL, on behalf of himself, all Case No.: 2:24-cv-09647-MEMF-SSC others similarly situated, and the general public, 12 ORDER GRANTING MOTION TO 13 Plaintiff, REMAND [ECF NO. 11] v.

14 MARATHON PETROLEUM COMPANY LP, 15 a Delaware limited partnership; TESORO 16 REFINING & MARKETING COMPANY LLC, a Delaware limited liability company; 17 TREASURE FRANCHISE COMPANY LLC, a Delaware limited liability company; and JOHN 18 DOES 1-10,

19 Defendants. 20 21

22 Before the Court is the Motion to Remand filed by Plaintiff Joshua Mandel. ECF No. 11. For 23 the reasons stated herein, the Court hereby GRANTS the Motion to Remand. 24

26 / / / 27 / / / 28 1 I. Background 2 A. Factual Allegations1 3 Plaintiff Joshua Mandel (“Mandel”) is a resident of California. FAC ¶ 15. Defendants are 4 Marathon Petroleum Company LP, Tesoro Refining & Marketing Company LLC, and Treasure 5 Franchise Company LLC (collectively, “Defendants”). Defendants are entities formed in Delaware 6 with principal places of business in Ohio. Notice of Removal ¶ 10, ECF No. 1 (“NOR”). 7 Mandel purchased gasoline at an ARCO in Woodland Hills, California in September of 2024. 8 FAC ¶ 28. He was charged an additional $0.35 on his purchase because he paid with a VISA debit 9 card. Id. The ARCO price sign showed prices when paying with cash or credit but did not show the 10 added fee for paying with a debit card. Id. 11 B. Procedural History 12 Mandel brought one cause of action under California’s Unfair Competition Law (“UCL”) in 13 Los Angeles County Superior Court on October 7, 2024. NOR ¶ 1. Mandel alleges that Defendants 14 are “violating California gasoline-pricing laws when charging a higher price for gasoline purchased 15 with PIN debit cards,” in violation of Cal. Bus. Prof. Code §§ 17200 et. seq. ECF No. 11 (“Motion” 16 or “Mot.”) at 2. Mandel seeks class certification, restitution for himself and class members, public 17 injunctive relief, and attorneys’ fees and costs. FAC at Prayer for Relief. 18 Defendants timely removed the action to this Court on November 7, 2024, on diversity 19 jurisdiction grounds pursuant to the Class Action Fairness Act (“CAFA”). See NOR ¶ 3. 20 Mandel filed this Motion on November 25, 2024. See Mot. On December 20, 2024, 21 Defendants filed their Opposition to Mandel’s Motion. See ECF No. 14 (“Opp’n”). On December 22 26, 2024, Mandel filed a Reply in support of the Motion. See ECF No. 15 (“Reply”). On February 23 26, 2025, the parties submitted to the Court’s tentative order. ECF No. 23. 24 / / / 25 / / / 26

27 1 The following factual allegations are derived from the allegations in Mandel’s First Amended Complaint, 28 ECF No. 4 (“FAC”), except where otherwise indicated. The Court makes no finding on the truth of these 1 II. Applicable Law 2 Federal courts are “courts of limited jurisdiction” and “possess only that power authorized by 3 Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). 4 “Except as otherwise expressly provided by Act of Congress, any civil action brought in a State 5 court over which the district courts of the United States have original jurisdiction, may be removed 6 by the defendant.” 28 U.S.C. § 1441(a). The Class Action Fairness Act (“CAFA”) gives federal 7 courts original jurisdiction over certain class actions when: (1) the aggregate number of members in 8 the proposed class is 100 or more; (2) the amount in controversy exceeds the sum or value of $5 9 million; and (3) the parties are minimally diverse. 28 U.S.C. §§ 1332(d)(2), (5)(b). Congress 10 enacted CAFA to “provid[e] for Federal court consideration of interstate cases of national 11 importance under diversity jurisdiction.” Jauregui v. Roadrunner Transp. Servs., Inc., 28 F.4th 989, 12 992 (9th Cir. 2022) (citing Class Action Fairness Act, Pub. L. No. 109-2, § 2, 119 Stat. 4 (2005)). 13 Thus “no antiremoval presumption attends cases invoking CAFA.” Dart Cherokee Basin Operating 14 Co., LLC v. Owens, 574 U.S. 81, 89 (2014). 15 III. Discussion 16 The parties do not appear to dispute that subject matter jurisdiction under CAFA is proper in 17 this case.2 See Mot., Reply. Instead, they dispute whether this Court possesses Article III jurisdiction 18 or equitable jurisdiction, and whether, if the Court lacks jurisdiction, the Court should remand rather 19 than dismiss Mandel’s claims. Mandel advances two arguments in support of the Motion. First, he 20 argues this Court lacks Article III jurisdiction over his claims because he “does not allege that [he] 21 faces an actual or imminent threat of future harm.” Mot. 2. Second, Mandel asserts that this Court 22 lacks federal equitable jurisdiction to award restitution because he fails to allege he lacks an 23 24 25 2 The removed action is a class action. NOR ¶ 6. CAFA’s minimal diversity requirement is met, as Mandel is a resident of California, members of the putative class are likely residents and citizens of California, and 26 Defendants are Delaware entities with principle places of business in Ohio. Id. ¶¶ 9-10. Finally, Defendants contend the amount in controversy exceeds CAFA’s requirement, as Mandel seeks restitution of the ATM fee 27 on each transaction made with a debit card and Defendants operate 775 ARCO stations in Southern California. Id. ¶¶ 15-19. Defendants allege, “[g]iven the high number of locations, the high-volume nature of 28 gasoline sales, and the relevant time period for the alleged claims, the amount in controversy clearly exceeds 1 adequate remedy at law. Id. Mandel argues that both jurisdictional defects require that this Court 2 remand this case to the district court, rather than retain jurisdiction and dismiss on the merits. Id. 3 For the reasons stated herein, the Court finds it lacks both Article III jurisdiction over 4 Mandel’s claim for a public injunction and equitable jurisdiction over his claim for restitution. The 5 Court also finds that remand is appropriate given the jurisdictional defects at issue. 6 A. Mandel Lacks Article III Standing 7 Mandel asserts he lacks Article III standing because he has not alleged risk of imminent harm 8 and, as a result, this Court does not have jurisdiction over his claim for injunctive relief. Mot. 2. 9 Defendants respond that CAFA jurisdiction is proper and “remand for lack of subject matter 10 jurisdiction is not warranted.” Opp’n 3. For the following reasons, the Court finds Mandel lacks 11 Article III standing to pursue his claim for injunctive relief in this Court. 12 “The Constitution limits Article III federal courts’ jurisdiction to deciding ‘cases’ or 13 ‘controversies.’” Oklevueha Native Am. Church of Haw., Inc. v. Holder, 676 F.3d 829, 835 (9th Cir. 14 2012) (quoting U.S. Const. art. III, § 2). The standing doctrine is “an essential and unchanging part 15 of the case-or-controversy requirement of Article III.” Lujan v. Defs. Of Wildlife, 504 U.S. 555, 560 16 (1992). To establish Article III standing, “a plaintiff must demonstrate (i) that she has suffered or 17 will likely suffer an injury in fact, (ii) that the injury likely was caused or will be caused by the 18 defendant, and (iii) that the injury likely would be redressed by the requested judicial relief.” Food 19 and Drug Admin. v. All. for Hippocratic Med., 602 U.S. 367, 380 (2024). “For injunctive relief, 20 which is a prospective remedy, the threat of injury must be ‘actual and imminent, not conjectural or 21 hypothetical.’” Davidson v. Kimberly-Clark Corp., 889 F.3d 956, 967 ((9th Cir. 2018) (quoting 22 Summers v. Earth Island Inst., 555 U.S. 488 at 493 (2009)). “Where standing is premised entirely on 23 the threat of repeated injury, a plaintiff must show ‘a sufficient likelihood that he will again be 24 wronged in a similar way.’” Id. (quoting City of Los Angeles v. Lyons, 461 U.S. 95 at 111). 25 Because Mandel seeks a public injunction, there must be a “sufficient likelihood” he will 26 “again be wronged in a similar way” in order to establish Article III standing. Id. Mandel and 27 Defendants disagree on the holding of a Ninth Circuit precedent regarding this issue. In Davidson v. 28 Kimberly-Clark Corp., the Ninth Circuit resolved an open question in this Circuit as to “what extent 1 a previously deceived consumer who brings a false advertising claim can allege that her inability to 2 rely on the advertising in the future is an injury sufficient to grant her Article III standing to seek 3 injunctive relief.” 889 F.3d at 967. In that case, the plaintiff purchased Scott brand wipes that were 4 marketed as “flushable” on the package. Id. at 961. She later discovered these flushable wipes 5 caused widespread damage to plumbing systems. Id. at 962. She alleged that she desired to purchase 6 the wipes again and would do so “if it were possible to determine prior to purchase if the wipes were 7 suitable to be flushed.” Id. at 962. As in the instant case, she sought class certification and brought 8 her claims under the UCL, seeking restitution and injunctive relief. Id. The district court granted the 9 defendant’s motion to dismiss the injunctive relief claims, finding the plaintiff “lacked standing to 10 seek injunctive relief because she was unlikely to purchase Kimberly-Clark’s flushable wipes in the 11 future.” Id. at 963. 12 On appeal, the Ninth Circuit resolved the district court split “in favor of plaintiffs seeking 13 injunctive relief.” Id. at 969. The Court held “a previously deceived consumer may have standing to 14 seek an injunction against false advertising or labeling, even though the consumer now knows or 15 suspects that the advertising was false at the time of the original purchase.” Id. (emphasis added). 16 The Court reasoned, “[in] some cases, the threat of future harm may be the consumer’s plausible 17 allegations that she will be unable to rely on the product’s advertising or labeling in the future, and 18 so will not purchase the product although she would like to.” Id. at 969-70 (emphasis added). The 19 Court found the plaintiff plausibly alleged a likelihood of imminent injury sufficient to establish 20 Article III standing to assert a claim for injunctive relief, based upon the specific allegations the 21 plaintiff made, namely “that she ‘continues to desire to purchase wipes’; ‘would purchase truly 22 flushable wipes manufactured by [the defendants] again’; ‘regularly visits stores . . . where [the 23 defendants] ‘flushable’ wipes are sold’; and is continually presented with [the defendant’s] flushable 24 wipes packaging but has ‘no way of determining whether the representation ‘flushable’ is in fact 25 true.’” Id. at 971–72. 26 Mandel has failed to set forth adequate allegations that he “faces an imminent or actual threat 27 of future harm caused by [Defendants’] allegedly false advertising.” Id. at 970. He has not alleged 28 that he desires to purchase Defendants’ gas again nor has he alleged he regularly visits Defendants’ 1 gas stations or that he would purchase gas from Defendants if he could determine whether their 2 representations about their pricing were true. Defendants point to Mandel’s claims that he is a 3 California resident and “Californians who are potential customers of Defendants are susceptible to 4 future harm,” but it is plain under Davidson that this is not enough. Opp’n 4 (citing FAC ¶¶ 15, 39). 5 As the “master of the complaint,” Mandel may plead that he does not face a threat of future injury 6 because “he is now aware of the defendant’s unfair and unlawful business practices.” Caterpillar 7 Inc. v. Williams, 482 U.S. 386, 398-99; Mot. 3. Therefore, under Davidson, Mandel does not have 8 Article III standing. 9 Having determined that Mandel does not have Article III standing to pursue his claim for a 10 public injunction under the UCL in federal court, this Court then turns to the question of whether 11 remand is appropriate or whether this standing issue is more properly handled on a motion to 12 dismiss. The Ninth Circuit answered this question in Polo v. Innoventions International, LLC: even 13 where a matter is properly removed to federal court under CAFA, where a plaintiff lacks Article III 14 standing, the removed case must be remanded. 833 F.3d 1193, 1196. Dismissing a case under these 15 circumstances is error. Id. (“[R]emand is the correct remedy because a failure of federal subject- 16 matter jurisdiction means only that the federal courts have no power to adjudicate the matter. State 17 courts are not bound by the constraints of Article III.”) 18 B. This Court Lacks Equitable Jurisdiction 19 Mandel next argues this Court lacks federal equitable jurisdiction over his claims for 20 restitution because he does not allege he lacks an adequate remedy at law. See Mot. 4. Mandel 21 further contends California law permits him to seek equitable relief under the UCL without meeting 22 the adequate-remedy-at-law requirement necessary for equitable relief in federal court. Mot. 4. 23 Defendants respond that failure to allege an inadequate remedy does not deprive this Court of 24 subject matter jurisdiction over Mandel’s claims for equitable relief. See Opp’n 5. For the following 25 reasons, the Court holds it does not have federal equitable jurisdiction to grant Mandel’s claim for 26 restitution under California’s UCL. 27 “In order to entertain a request for equitable relief, a district court must have equitable 28 jurisdiction, which can only exist under federal common law if the plaintiff has no adequate legal 1 remedy.” Guzman v. Polaris Indus. Inc., 49 F.4th 1308, 1313 (9th Cir. 2022); Guaranty Trust Co. of 2 N.Y. v. York, 326 U.S 99, 105 (“Equitable relief in a federal court is of course subject to 3 restrictions . . . a plain, adequate, and complete remedy at law must be wanting.”). Equitable 4 jurisdiction and subject matter jurisdiction are two distinct inquiries. “Subject matter jurisdiction 5 regards ‘whether the claim falls within the limited jurisdiction conferred on the federal courts’ by 6 Congress, while equitable jurisdiction regards ‘whether consistently with the principles governing 7 equitable relief the court may exercise its remedial powers.’” Guzman, 49 F.4th at 1314 (citing 8 Schlesinger v. Councilman, 420 U.S. 738, 754 (1975)). 9 Defendants insist Mandel misreads the closest Ninth Circuit precedent on this issue. In 10 Sonner v. Premier Nutrition Corp., the plaintiff sought injunctive relief and restitution under 11 California’s UCL and damages under the Consumer Legal Remedies Act (“CLRA”). 971 F.3d 834, 12 838 (9th Cir. 2020). When the plaintiff dismissed her damages claim on the eve of her jury trial, the 13 district court granted the defendant’s motion to dismiss on the grounds that an adequate remedy at 14 law – her initial claim for damages – was available. Id. at 837. The Ninth Circuit affirmed the district 15 court’s dismissal, holding that “a federal court must apply traditional equitable principles before 16 awarding restitution under the UCL and CLRA.” Id. at 841. The Court reasoned that the plaintiff had 17 an adequate legal remedy in her CLRA claims. Id. Referencing the Supreme Court’s decision in 18 Guaranty Trust Co. of N.Y. v. York, the Court affirmed the limited role of federal courts sitting in 19 equity: “[E]ven if a state authorizes its courts to provide equitable relief when an adequate legal 20 remedy exists, such relief may be unavailable in federal court because equitable remedies are subject 21 to traditional equitable principles unaffected by state law.” Id. 22 Recent Ninth Circuit authority affirms this principle. In Guzman v. Polaris Indus. Inc., the 23 Court held the plaintiff’s claim for equitable relief under the UCL was precluded because he had an 24 adequate remedy at law for damages. 49 F.4th at 1308. In that case, the plaintiff alleged violations of 25 California’s UCL, False Advertising Law (“FAL”) and CLRA against the defendant for using an 26 allegedly false and misleading label on its vehicles. Id. at 1311. The district court granted summary 27 judgment to the plaintiff, concluding that he could only seek an equitable remedy under the UCL if 28 he lacked an adequate legal remedy. Id. Because he had an adequate legal remedy through his CLRA 1 claim for damages (even though that claim was ultimately dismissed as time-barred), the district 2 court held that he did not lack an adequate remedy at law. Id. The Ninth Circuit affirmed, holding 3 that because the plaintiff “had an adequate legal remedy . . . the district court lacked equitable 4 jurisdiction to hear [his] UCL claim.” Id. 5 Guzman and Sonner make clear that district courts have equitable jurisdiction to grant 6 restitution under the UCL only where plaintiffs lack an adequate remedy at law. However, neither 7 case is on all fours with the instant case because unlike the plaintiffs in those cases, Mandel chooses 8 not to bring damages claims pursuant to the CLRA or FAL. Id. He specifically alleges he does not 9 lack an adequate remedy at law. Mot. 4. There appears to be no precedent governing this precise 10 issue: if a federal court cannot grant equitable relief where adequate remedies at law exist, is the 11 same true where a plaintiff affirmatively pleads that they do have adequate remedies at law they 12 simply choose not to bring?3 13 “In federal courts, as in others, a plaintiff has a right to choose whether he will seek to 14 enforce a legal or an equitable cause of action and whether he will seek legal or equitable relief. He 15 makes his election and proceeds at law or in equity at his peril.” Twist v. Prairie Oil & Gas Co., 274 16 U.S. 684, 689 (1927). Mandel pursues his claims under California’s UCL, which “provides only for 17 equitable remedies.” Hodge v. Super. Ct., 145 Cal.App.4th 278, 284 (2006). The UCL “does not 18 itself authorize an award of damages or attorney’s fees.” Cal. Med. Assn. v. Aetna Health of Cal., 19 Inc., 14 Cal.5th 1075, 1085 (2023); see also Cal. Bus. & Prof. Code § 17203. While a “complete 20 remedy at law must be wanting” to seek equitable relief in federal court, that would not be so if 21 Mandel were pursuing his UCL claims in a California state court. Guaranty Trust Co., 326 U.S. at 22 105. This is because the equitable remedies of the UCL are not exclusive; they “are cumulative to 23 each other and to the remedies or penalties available under all other laws of this state.” Cal. Bus. & 24 Prof. Code § 17205; see also Cal. Med. Assn., 14 Cal. 5th at 1085. That is to say, in California, 25 restitution is itself an adequate remedy under the UCL. Therefore, this Court does not have equitable 26 27

28 3 Both parties point to a district court split on this issue and cite a plethora of opinions in support of their 1 jurisdiction to adjudicate Mandel’s claim for restitution because he does not lack an adequate 2 remedy at law, and he pleads as much. 3 Defendants appear to concede this Court lacks equitable jurisdiction, emphasizing instead 4 that “the Ninth Circuit has never held that a failure to allege an inadequate legal remedy deprives a 5 court of subject matter jurisdiction over claims for equitable relief.” Opp’n 5. However, the Ninth 6 Circuit has directly instructed that, while subject matter jurisdiction and equitable jurisdiction are 7 separate inquiries, “both are required for a federal court to hear the merits of an equitable claim.” 8 Guzman, 49 F.4th at 1314. Thus, the Court finds it lacks equitable jurisdiction, even where subject 9 matter jurisdiction is present. 10 The only issue remaining before the Court, then, is whether dismissal or remand is the proper 11 course of action given the deficiency in equitable jurisdiction. In Twist v. Prairie Oil & Gas Co., the 12 Supreme Court explained that a “suit[] removed from a state court . . . is remanded to the state court 13 where the equitable relief sought, although beyond the equitable jurisdiction of the federal court, 14 may be granted by the state court.” 274 U.S. at 690–91. In this case, Mandel’s requested relief can 15 be granted in state court. Indeed, as noted above, California has expressly provided for only 16 equitable relief under the state’s UCL. See Cal. Bus. & Prof. Code § 17203. 17 While not determinative in its decision in Davidson, the Ninth Circuit noted that “[a]llowing 18 a defendant to undermine California’s consumer protection statutes . . . simply by removing a case 19 from state court is an unnecessary affront to federal and state comity.” Davidson, 889 F.3d at 970 20 (internal quotation marks omitted) (citing Machlan v. Procter & Gamble Co., 77 F.Supp.3d 954, 961 21 (N.D. Cal. 2015)). This seems especially true where, as here, equitable remedies are “the primary 22 form of relief available under the UCL to protect consumers from unfair business practices.” In re 23 Tobacco II Cases, 46 Cal. 4th 298, 319 (2009); see also McGill v. Citibank, N.A., 2 Cal. 5th 945, 951 24 (2017) (noting public injunctive relief under the UCL “has the primary purpose and effect of 25 prohibiting unlawful acts that threaten future injury to the general public”). Dismissal of Mandel’s 26 claim for restitution effectively bars him from pursuing just the type of relief California has 27 expressly authorized. It would be an “unwarranted intrusion into California’s interests and laws” to 28 prevent plaintiffs from pursuing equitable remedies to which they are entitled under California law. 1 | Davidson, 889 F.3d at 970. “[W]here federal law bars us from considering the merits of state-law 2 | claims, we also lack authority to prevent state courts from doing so.” Guzman, 49 F.4th at 1308. 3 | Thus, remand is most appropriate for Mandel’s claim for restitution under California’s UCL. 4 IV. Conclusion 5 For the foregoing reasons, the Court hereby GRANTS Mandel’s Motion and remands the 6 || case back to the Superior Court for the County of Los Angeles. 7 8 IT IS SO ORDERED. 9 if ——— 10 Dated: February 27, 2025 11 MAAME EWUSI-MENSAH FRIMPONG 12 United States District Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28