The opinion of the court was delivered by: Mihm, Chief Judge.
Over the course of the last nine months, the Judicial Panel on
Multidistrict Litigation transferred a number of cases to this
Court pursuant to 28 U.S.C. § 1407. In each of these cases the
Plaintiffs allege that they have been the victims of a price
fixing scheme perpetrated by Defendants Archer Daniels Midland
Co., Inc. ("ADM"), CPC International, Inc., A.E. Staley
Manufacturing, Co., Cargill, Inc., and American Maize Company.
Many of these cases were originally filed in state courts
alleging only violations of state law. The Defendants removed
these state court cases to federal court based on diversity
jurisdiction, 28 U.S.C. § 1332. Pursuant to Fed.R.Civ.P. 23, on
May 29, 1996, this Court certified a class of Plaintiffs who
were direct purchasers of high fructose corn syrup. The class
Plaintiffs have alleged that the Defendants' actions violated
the Sherman Act, 15 U.S.C. § 1.
There are twelve cases in which the Plaintiffs have filed
Motions to Remand. During oral argument on the Motions to
Remand on August 1, 1996, counsel for the parties informed this
Court that in ten of the cases the parties had stipulated that
the Plaintiffs neither directly purchased HFCS nor satisfied
the amount in controversy requirements set forth in § 1332.
Therefore, this Court GRANTS the following Motions to Remand:
Abbott v. ADM, et al., Case No. 96-1337; Batson v. ADM, et al.,
Case No. 96-1333; Guzman v. ADM, et al., Case No. 96-1336; MCFH
v. ADM, et al., Case No. 96-1282; Noldin v. ADM, et al., Case
No. 96-1335; NuLaid Foods v. ADM, et al., Case No. 96-1334;
Patane v. ADM, et al., Case No. 96-1287; Rainbow Acres v. ADM,
et al., Case No. 96-1286; Ricci v. ADM, et al., Case No.
96-1283; and St. Stan's Brewing v. ADM, et al., Case No.
96-1206. Each of these cases is hereby REMANDED to state court.
Additionally, counsel for Kagome Foods informed this Court that
its Motion to Remand was withdrawn.
This leaves only one case with a Motion to Remand pending,
Freda's v. ADM, et al., Case No. 96-1204. Freda's filed suit in
West Virginia State Court alleging violations of the West
Virginia Antitrust Act ("the Act"), W.Va.Code § 47-18-1, et.
seq. Defendant Cargill, Inc. ("Cargill") removed the case to
the United States District Court for the Southern District of
West Virginia alleging diversity jurisdiction under 28 U.S.C. § 1332.
This Court has thoroughly reviewed the pleadings and
heard oral argument from counsel. For the reasons set forth
herein, this Court GRANTS the Motion to Remand.
Under 28 U.S.C. § 1441, "any civil action brought in a state
court of which the district courts of the United States have
original jurisdiction, may be removed by the defendant . . . to
the district court of the United States for the district and
division embracing the place where such action is pending." As
noted, Cargill removed this action pursuant to § 1332. Section
1332 requires diverse citizenship of the parties and an amount
in controversy in excess of $50,000, exclusive of interest and
costs. 28 U.S.C. § 1332. As a federal court sitting in
diversity jurisdiction, this Court will apply the substantive
law of the forum state, West Virginia. Erie R. Co. v.
Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938);
see also S.A. Healy Co. v. Milwaukee Metropolitan Sewerage
Dist., 60 F.3d 305, 309-10 (7th Cir. 1995).
Freda's concedes that its matter satisfies the diversity of
citizenship provision of § 1332. However, it contends that
Cargill has failed to demonstrate that it meets the amount in
controversy requirement of § 1332. The removing party bears the
burden of establishing the district court's jurisdiction by a
preponderance of evidence. See Shaw v. Dow Brands, Inc.,
994 F.2d 364, 366 (7th Cir. 1993) (citing Wilson v. Republic Iron &
Steel Co., 257 U.S. 92, 97, 42 S.Ct. 35, 37, 66 L.Ed. 144
(1921)). Defendants may bear this burden by presenting "proof
to a reasonable probability that jurisdiction exists." Id.
Two Supreme Court cases stand for the proposition that members
of a class action must each have the jurisdictional amount,
$50,000, in dispute. See Snyder v. Harris, 394 U.S. 332, 340,
89 S.Ct. 1053, 1059, 22 L.Ed.2d 319 (1969); Zahn v.
International Paper Co., 414 U.S. 291, 301, 94 S.Ct. 505, 512,
38 L.Ed.2d 511 (1973). Cargill argues that the 1990 amendments
to Title 28 implicitly overrule the holdings in Snyder and
Zahn. Specifically, it relies upon the new supplemental
jurisdiction statute which provides:
[I]n any civil action in which the district courts have
original jurisdiction, the district courts shall have
supplemental jurisdiction over all other claims that are so
related to claims in the action within such original
jurisdiction that they form part of the same case or
controversy under Article III of the United States
28 U.S.C. § 1367(a). Cargill asserts that only one class member
must have the requisite amount in controversy for this Court to
have supplemental jurisdiction over the remainder of the
claims. In support of this proposition, Cargill cites
Stromberg Metal Works, Inc. v. Press Mechanical, Inc.,
77 F.3d 928 (7th Cir. 1996).
In Stromberg, two sub-contractors filed suit against a
general HVAC contractor because it did not pay the subs. 77
F.3d at 930. The subs sued the general under the Maryland
Construction Trust Fund Statute. Id. The Seventh Circuit
first noted that sub-contractor # 1 had a claim in excess of
$50,000 but that sub-contractor # 2 did not. Id. Writing for
the court, Judge Easterbrook found that § 1367 allowed the
district court to exercise jurisdiction over the pendant claim
of sub-contractor # 2. Id. at 931. In the course of the
opinion, the court noted that, unlike Zahn, Stromberg was not
a class action but that the Supreme Court's opinions in
Snyder and Zahn did not distinguish between class actions
and other forms of suit. Stromberg, 77 F.3d at 931. Thus, the
Seventh Circuit concluded that § 1367 had altered the previous
rule established in Zahn that each class member must have the
requisite amount in controversy at issue. Id. at 931-32.
The Stromberg decision relied heavily upon the Fifth Circuit
decision of In re Abbott Laboratories, 51 F.3d 524, 527-29
(5th Cir. 1995). Stromberg, 77 F.3d at 931 ("we are reluctant
to create a conflict among the circuits on a jurisdictional
issue"). Interestingly, at issue in Abbott were the
plaintiffs' allegation that the defendants had conspired to fix
the price of infant formula. Abbott, 51 F.3d at 525. The
Fifth Circuit directly addressed the issue of whether § 1367
abrogated Snyder and Zahn as to Rule 23 class actions and
held that the district courts could exercise supplemental
jurisdiction over the class members. Id. at 525, 529.
Although the court did not find that the named plaintiffs must
satisfy the statutory amount in controversy, it is noteworthy
that the class representatives in Abbott had over $50,000 at
issue. Id. at 529.
The Honorable Milton Shadur has addressed this very issue in
the In re Lysine Antitrust cases. Judge Shadur held that the
named plaintiffs must have the requisite dollar amount at issue
before § 1367 would affect the court's jurisdiction over the
"pendant claims" of the other class members. In so doing, he
relied on Supreme Tribe of Ben Hur v. Cauble, 255 U.S. 356,
41 S.Ct. 338, 65 L.Ed. 673 (1921) and In ...