1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE NORTHERN DISTRICT OF CALIFORNIA 7 8 JUNE CHRISTIAN, et al., Case No. 25-cv-02866-CRB
9 Plaintiffs,
ORDER DENYING DEFENDANT'S 10 v. MOTION TO ALTER JUDGMENT
11 LEAFFILTER NORTH, LLC, 12 Defendant.
13 Defendant moves to alter this Court’s order dismissing the case for a lack of subject 14 matter jurisdiction. While Defendant points to potential tension between the Court’s 15 decision and Ninth Circuit law regarding jurisdiction conferred by the Class Action 16 Fairness Act (“CAFA”), the Court’s decision that it lacked jurisdiction was not manifest 17 error and is in accord with both circuit precedent and CAFA. Accordingly, the Court 18 DENIES the motion.1 19 I. BACKGROUND 20 Plaintiffs brought a purported class action against Defendant arguing that its sales 21 and marketing tactics violated the Federal Trade Commission Act and California law. 22 Compl. (dkt. 1). Plaintiffs’ only basis for this Court’s jurisdiction was CAFA. Id. at ¶ 21. 23 Defendant moved to dismiss the complaint for failure to state a claim or, alternatively, to 24 strike Plaintiffs’ class allegations. MTD (dkt. 18). The Court granted Defendant’s motion 25 to strike because Plaintiffs’ claims were “inherently unsuitable for class treatment.” Order 26 (dkt. 42) at 6–7. Accordingly, after striking class allegations, the Court determined 27 1 “Plaintiffs’ jurisdictional hook no longer exist[ed]” and dismissed the case for lack of 2 subject matter jurisdiction. Id. at 7–8. Plaintiffs filed a notice of appeal on the same day. 3 Notice of Appeal (dkt. 44). Defendant now brings a motion to alter or amend judgment 4 under Federal Rule of Civil Procedure 59(e) and argues the loss of class action status does 5 not divest the Court of subject matter jurisdiction. Mot. (dkt. 50) at 5. 6 II. LEGAL STANDARD 7 Federal Rule of Civil Procedure 59(e) allows a party to move the Court to “alter or 8 amend a judgment no later than 28 days after the entry of judgment.” This rule “offers an 9 extraordinary remedy, to be used sparingly in the interests of finality and conservation of 10 judicial resources.” Kona Enters., Inc. v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 11 2000) (internal citations omitted). A Rule 59(e) motion ‘should not be granted, absent 12 highly unusual circumstances[.]” Id. Such circumstances include “four basic grounds”: 13 (1) “to correct manifest errors of law or fact upon which the judgment rests”; (2) “to 14 present newly discovered or previously unavailable evidence”; (3) “to prevent manifest 15 injustice”; or (4) “if the amendment is justified by an intervening change in controlling 16 law.” Allstate Ins. Co. v. Herron, 634 F.3d 1101, 1111 (9th Cir. 2011). The “district court 17 enjoys considerable discretion in granting or denying the motion.” Id. (citing McDowell v. 18 Calderon, 197 F.3d 1253, 1255 n.1 (9th Cir. 1999)). 19 III. DISCUSSION 20 Citing Ninth Circuit law, Defendant effectively argues the Court committed 21 manifest error in dismissing the case for lack of jurisdiction after striking the class 22 allegations. Mot. at 5. Plaintiffs contend that Defendant’s cited authority is inapplicable 23 to this case. Opp’n (dkt. 51) at 12. They also argue denying Defendant’s motion would 24 preserve judicial economy through appellate review. Id. at 17–18. The Court agrees with 25 Plaintiffs and denies the motion. 26 A. Manifest Error 27 CAFA confers subject matter jurisdiction over actions where the amount in 1 Inc., 932 F.3d 1223, 1226 (9th Cir. 2019); see also 28 U.S.C. § 1332(d)(2). The statute 2 applies “to any class action before or after the entry of a class certification order by the 3 court with respect to that action.” 28 U.S.C. § 1332(d)(8). Circuit courts have interpreted 4 the statutory text to mean “post-filing developments do not defeat jurisdiction if 5 jurisdiction was properly invoked as of the time of filing.” United Steel, Paper & Forestry, 6 Rubber, Mfg., Energy, Allied Indus. & Serv. Workers Int’l Union, AFL-CIO, CLC v. Shell 7 Oil Co., 602 F.3d 1087, 1091–92 (9th Cir. 2010) (denial of certification does not divest 8 jurisdiction); see also Kress Stores of Puerto Rico, Inc. v. Wal-Mart Puerto Rico, Inc., 121 9 F.4th 228, 234 (1st Cir. 2024) (“The statutory text instead signals clearly that CAFA 10 jurisdiction, when properly invoked, continues to apply regardless whether the court grants 11 or denies class certification”); Coba v. Ford Motor Co., 932 F.3d 114, 119 (3d Cir. 2019) 12 (same). 13 Defendant argues this “uniform rule among the circuits” involving denial of class 14 certification also applies here, where the Court struck class allegations from the pleadings. 15 Mot. at 6. Plaintiffs dispute such an application. They point out that Shell Oil does not 16 apply when class action status was improper from the beginning. Opp’n at 12. The Court 17 agrees. 18 The Ninth Circuit was clear that district courts retain jurisdiction only when it was 19 “properly invoked as of the time of filing.” Shell Oil, 602 F.3d at 1226. Because the 20 Court concluded Plaintiffs’ claims were “inherently unsuitable for class treatment,” CAFA 21 jurisdiction was not properly invoked when Plaintiffs filed their action. Order at 7. To 22 circumvent this conclusion, Defendant asserts this Court actually found jurisdiction was 23 properly invoked, since the Court noted “federal jurisdiction was proper while this case 24 was a purported class action.” Reply (dkt. 52) at 3 (citing Order at 7). But Defendant’s 25 interpretation is incorrect. The Court did not find that jurisdiction was properly invoked— 26 indeed, the Court determined it was not. Rather, the Court merely explained how the only 27 “jurisdictional hook” for the “purported class action” no longer existed. Order at 7 1 analyze the proper invocation of subject matter jurisdiction after Plaintiffs filed their case. 2 And, after striking the class allegations as inherently unsuitable, the Court concluded that 3 jurisdiction was lacking ab initio. 4 Case law is in accord. The Shell Oil court explicitly recognized exceptions to the 5 general rule of “once jurisdiction, always jurisdiction,” such as “when there was no 6 jurisdiction to begin with because the jurisdictional allegations were frivolous from the 7 start.” Shell Oil, 602 F.3d at 1092 n.3. The Ninth Circuit further clarified Shell Oil when 8 it noted the case only applied to post-filing developments, such as “a failure of Rule 23 9 class certification that might defeat CAFA eligibility.” Polo v. Innoventions Int’l, LLC, 10 833 F.3d 1193, 1197 (9th Cir. 2016). It is a different story “when federal jurisdiction is 11 absent from the commencement of a case,” as here. Id. Other courts have also limited 12 Shell Oil to removal cases, since the concern about “shuffling between state and federal 13 systems” is not present in cases—such as this one—initially filed in federal court. See, 14 e.g., Archer v. Carnival Corp.
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1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE NORTHERN DISTRICT OF CALIFORNIA 7 8 JUNE CHRISTIAN, et al., Case No. 25-cv-02866-CRB
9 Plaintiffs,
ORDER DENYING DEFENDANT'S 10 v. MOTION TO ALTER JUDGMENT
11 LEAFFILTER NORTH, LLC, 12 Defendant.
13 Defendant moves to alter this Court’s order dismissing the case for a lack of subject 14 matter jurisdiction. While Defendant points to potential tension between the Court’s 15 decision and Ninth Circuit law regarding jurisdiction conferred by the Class Action 16 Fairness Act (“CAFA”), the Court’s decision that it lacked jurisdiction was not manifest 17 error and is in accord with both circuit precedent and CAFA. Accordingly, the Court 18 DENIES the motion.1 19 I. BACKGROUND 20 Plaintiffs brought a purported class action against Defendant arguing that its sales 21 and marketing tactics violated the Federal Trade Commission Act and California law. 22 Compl. (dkt. 1). Plaintiffs’ only basis for this Court’s jurisdiction was CAFA. Id. at ¶ 21. 23 Defendant moved to dismiss the complaint for failure to state a claim or, alternatively, to 24 strike Plaintiffs’ class allegations. MTD (dkt. 18). The Court granted Defendant’s motion 25 to strike because Plaintiffs’ claims were “inherently unsuitable for class treatment.” Order 26 (dkt. 42) at 6–7. Accordingly, after striking class allegations, the Court determined 27 1 “Plaintiffs’ jurisdictional hook no longer exist[ed]” and dismissed the case for lack of 2 subject matter jurisdiction. Id. at 7–8. Plaintiffs filed a notice of appeal on the same day. 3 Notice of Appeal (dkt. 44). Defendant now brings a motion to alter or amend judgment 4 under Federal Rule of Civil Procedure 59(e) and argues the loss of class action status does 5 not divest the Court of subject matter jurisdiction. Mot. (dkt. 50) at 5. 6 II. LEGAL STANDARD 7 Federal Rule of Civil Procedure 59(e) allows a party to move the Court to “alter or 8 amend a judgment no later than 28 days after the entry of judgment.” This rule “offers an 9 extraordinary remedy, to be used sparingly in the interests of finality and conservation of 10 judicial resources.” Kona Enters., Inc. v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 11 2000) (internal citations omitted). A Rule 59(e) motion ‘should not be granted, absent 12 highly unusual circumstances[.]” Id. Such circumstances include “four basic grounds”: 13 (1) “to correct manifest errors of law or fact upon which the judgment rests”; (2) “to 14 present newly discovered or previously unavailable evidence”; (3) “to prevent manifest 15 injustice”; or (4) “if the amendment is justified by an intervening change in controlling 16 law.” Allstate Ins. Co. v. Herron, 634 F.3d 1101, 1111 (9th Cir. 2011). The “district court 17 enjoys considerable discretion in granting or denying the motion.” Id. (citing McDowell v. 18 Calderon, 197 F.3d 1253, 1255 n.1 (9th Cir. 1999)). 19 III. DISCUSSION 20 Citing Ninth Circuit law, Defendant effectively argues the Court committed 21 manifest error in dismissing the case for lack of jurisdiction after striking the class 22 allegations. Mot. at 5. Plaintiffs contend that Defendant’s cited authority is inapplicable 23 to this case. Opp’n (dkt. 51) at 12. They also argue denying Defendant’s motion would 24 preserve judicial economy through appellate review. Id. at 17–18. The Court agrees with 25 Plaintiffs and denies the motion. 26 A. Manifest Error 27 CAFA confers subject matter jurisdiction over actions where the amount in 1 Inc., 932 F.3d 1223, 1226 (9th Cir. 2019); see also 28 U.S.C. § 1332(d)(2). The statute 2 applies “to any class action before or after the entry of a class certification order by the 3 court with respect to that action.” 28 U.S.C. § 1332(d)(8). Circuit courts have interpreted 4 the statutory text to mean “post-filing developments do not defeat jurisdiction if 5 jurisdiction was properly invoked as of the time of filing.” United Steel, Paper & Forestry, 6 Rubber, Mfg., Energy, Allied Indus. & Serv. Workers Int’l Union, AFL-CIO, CLC v. Shell 7 Oil Co., 602 F.3d 1087, 1091–92 (9th Cir. 2010) (denial of certification does not divest 8 jurisdiction); see also Kress Stores of Puerto Rico, Inc. v. Wal-Mart Puerto Rico, Inc., 121 9 F.4th 228, 234 (1st Cir. 2024) (“The statutory text instead signals clearly that CAFA 10 jurisdiction, when properly invoked, continues to apply regardless whether the court grants 11 or denies class certification”); Coba v. Ford Motor Co., 932 F.3d 114, 119 (3d Cir. 2019) 12 (same). 13 Defendant argues this “uniform rule among the circuits” involving denial of class 14 certification also applies here, where the Court struck class allegations from the pleadings. 15 Mot. at 6. Plaintiffs dispute such an application. They point out that Shell Oil does not 16 apply when class action status was improper from the beginning. Opp’n at 12. The Court 17 agrees. 18 The Ninth Circuit was clear that district courts retain jurisdiction only when it was 19 “properly invoked as of the time of filing.” Shell Oil, 602 F.3d at 1226. Because the 20 Court concluded Plaintiffs’ claims were “inherently unsuitable for class treatment,” CAFA 21 jurisdiction was not properly invoked when Plaintiffs filed their action. Order at 7. To 22 circumvent this conclusion, Defendant asserts this Court actually found jurisdiction was 23 properly invoked, since the Court noted “federal jurisdiction was proper while this case 24 was a purported class action.” Reply (dkt. 52) at 3 (citing Order at 7). But Defendant’s 25 interpretation is incorrect. The Court did not find that jurisdiction was properly invoked— 26 indeed, the Court determined it was not. Rather, the Court merely explained how the only 27 “jurisdictional hook” for the “purported class action” no longer existed. Order at 7 1 analyze the proper invocation of subject matter jurisdiction after Plaintiffs filed their case. 2 And, after striking the class allegations as inherently unsuitable, the Court concluded that 3 jurisdiction was lacking ab initio. 4 Case law is in accord. The Shell Oil court explicitly recognized exceptions to the 5 general rule of “once jurisdiction, always jurisdiction,” such as “when there was no 6 jurisdiction to begin with because the jurisdictional allegations were frivolous from the 7 start.” Shell Oil, 602 F.3d at 1092 n.3. The Ninth Circuit further clarified Shell Oil when 8 it noted the case only applied to post-filing developments, such as “a failure of Rule 23 9 class certification that might defeat CAFA eligibility.” Polo v. Innoventions Int’l, LLC, 10 833 F.3d 1193, 1197 (9th Cir. 2016). It is a different story “when federal jurisdiction is 11 absent from the commencement of a case,” as here. Id. Other courts have also limited 12 Shell Oil to removal cases, since the concern about “shuffling between state and federal 13 systems” is not present in cases—such as this one—initially filed in federal court. See, 14 e.g., Archer v. Carnival Corp. & PLC, 2021 WL 4798695, at *3 (C.D. Cal. May 14, 2021); 15 Do v. First Fin. Sec., Inc., 2017 WL 11634363, at *5 (C.D. Cal. Nov. 2, 2017) 16 (distinguishing Shell Oil as only applying to removal). 17 The Court’s conclusion also coheres with CAFA’s purpose. The whole point of the 18 statute was to curb forum shopping and manipulation. Singh v. Am. Honda Fin. Corp., 19 925 F.3d 1053, 1067 (9th Cir. 2019) (“Congress enacted CAFA to curb perceived abuses 20 of the class action device which, in the view of CAFA’s proponents, had often been used 21 to litigate multi-state or even national class actions in state courts.”). But under 22 Defendant’s interpretation of CAFA jurisdiction, enterprising plaintiffs could then abuse 23 CAFA to guarantee a federal forum. Sham class allegations would become the key to 24 unlocking federal subject matter jurisdiction—regardless of the amount in controversy. As 25 “[f]ederal courts are courts of limited jurisdiction,” Congress could not have intended for 26 CAFA to open up the federal forum in such a manner. See Kokkonen v. Guardian Life 27 Ins. Co. of Am., 511 U.S. 375, 377, 114 S. Ct. 1673, 1675, 128 L. Ed. 2d 391 (1994). 1 || dismissal for lack of subject matter jurisdiction was manifest error. 2 B. Judicial Economy 3 Because the Court did not commit manifest error, it would be more efficient for 4 || Plaintiffs to continue seeking appellate review. As Plaintiffs note, the key question on 5 || appeal is whether their class allegations were inherently unsuitable—which 1s antecedent 6 || to subject matter jurisdiction. Opp’n at 18. That Plaintiffs state the “main issues on appeal 7 || will be whether the district court erred by striking the class allegations .. . and then 8 || compounded that error by dismissing Plaintiff's individual claims for lack of jurisdiction” 9 || is of no consequence. Ninth Circuit Mediation Questionnaire (dkt. 52-2) at 2 (emphasis 10 || added). Based on this language, Defendant asserts that amending or altering the judgment 11 || for lack of jurisdiction “will avoid the need for any appeal” by the parties. Reply at 5. But 12 || as discussed above, without proper class allegations, the Court lacks jurisdiction and 13 appellate review is the only way the Court could regain jurisdiction. Consequently, 14 || judicial economy favors denial of Defendant’s motion. 15 | 1v. CONCLUSION 16 For the foregoing reasons, the Court DENIES Defendant’s motion. 5 17 IT IS SO ORDERED. 18 Dated: November 6, 2025 K yo CHARLES R. BREYER 19 United States District Judge 20 21 22 23 24 25 26 27 28