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Mario Aliano v. Timothy Ferriss

June 1, 2011

MARIO ALIANO, PLAINTIFF,
v.
TIMOTHY FERRISS, AND RANDOM HOUSE, INC., DEFENDANTS.



The opinion of the court was delivered by: Samuel Der-yeghiayan, District Judge

MEMORANDUM OPINION

This matter is before the court on Plaintiff Mario Aliano's (Aliano) motion to remand. For the reasons stated below, the motion to remand is granted.

BACKGROUND

Aliano brought an action in Illinois state court on behalf of himself and others who purchased a book (Book) written by Defendant Timothy Ferriss (Ferriss) and published and distributed by Defendant Random House, Inc. Ferriss allegedly represented on his website (Website) that purchasers of the Book could learn certain skills, such as how to increase fat-loss by 300% with a few bags of ice. In addition, both the Book and the Website allegedly indicated that there is bonus material (Bonus Material) that is included with the purchase of the Book and that purchasers could access the Bonus Material on the internet by finding hidden passwords in the Book. Aliano contends however, that the Bonus Material did not actually exist and that the links provided to access the supposed Bonus Material did not work. Aliano contends that purchasers of the Book bought the Book relying on misrepresentations by Defendants that the Bonus Material would be made available with the purchase of the Book. Aliano includes in his complaint class allegations, a breach of express warranty claim (Count I), claims alleging violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS § 505/1 et seq., and comparable acts in other states (Count II), claims alleging violations of the Illinois Deceptive Trade Practices Act, 815 ILCS 510/1 et seq. (Count III), and an unjust enrichment claim (Count IV). Defendants removed the instant action to federal court under Class Action Fairness Act (CAFA), 28 U.S.C. § 1332(d)(2). Aliano now moves to remand the instant action back to state court.

LEGAL STANDARD

A party can file a motion to remand an action back to state court based on lack of subject matter jurisdiction. See Chase v. Shop "N Save Warehouse Foods, Inc.,110 F.3d 424, 427 (7th Cir. 1997). Pursuant to 28 U.S.C. § 1447(c), after a case has been removed to federal court, "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." Id.

The party that removed the action bears the burden of showing that the federal court has subject matter jurisdiction. See Spivey v. Vertrue, Inc. 528 F.3d 982, 986 (7th Cir. 2008)(stating in action removed under CAFA, that "[t]he removing party, as the proponent of federal jurisdiction, bears the burden of describing how the controversy exceeds $5 million"); Shop "N Save, 110 F.3d at 427 (stating that "[a]s the party seeking to invoke federal diversity jurisdiction, [the defendant] bears the burden of demonstrating that the complete diversity and amount in controversy requirements are met"). The removing party must show that the amount in controversy requirement was satisfied at the time of removal. See Tylka v. Gerber Products Co., 211 F.3d 445, 448 (7th Cir. 2000)(stating that "as the party seeking to invoke federal diversity jurisdiction, [the defendant] bears the burden of demonstrating that the complete diversity and amount in controversy requirements were met at the time of removal").

DISCUSSION

I. Filing of Proposed Amended Complaint

Defendants argue that the court should not consider the proposed amended complaint filed by Aliano after this case was removed since the pertinent inquiry is whether the amount in controversy requirement was met at the time of removal. The instant action was removed on March 1, 2011. On March 2, 2011, Defendants filed a motion to dismiss arguing that Aliano had failed to state a valid claim for relief and on March 23, 2011, Aliano filed a proposed amended complaint. Aliano then filed the instant motion to remand and the court struck as moot the proposed amended complaint and the motion to dismiss.

The Seventh Circuit has indicated that the general rule is that post-removal amendments to complaints are not considered when assessing whether a court has subject matter jurisdiction. See, e.g., Rising-Moore v. Red Roof Inns, Inc., 435 F.3d 813, 816 (7th Cir. 2006)(stating that "post-removal events-even an irrevocable promise not to accept more than the jurisdictional minimum-do not authorize remand of a suit that was within federal jurisdiction when removed"); Tropp v. Western-Southern Life Ins. Co., 381 F.3d 591, 595 (7th Cir. 2004)(stating that "[t]here [was]. . .a reasonable probability that the amount in controversy at the time of removal exceeded $75,000" and the plaintiff's "original complaint, filed at the time of removal (not the subsequent amended complaint), is considered for jurisdictional purposes"); In re Shell Oil Co., 970 F.2d 355, 356 (7th Cir. 1992)(indicating that "a post-removal amendment to the complaint limiting the plaintiff's claim does not authorize a remand" and "[b]ecause jurisdiction is determined as of the instant of removal, a post-removal affidavit or stipulation is no more effective than a post-removal amendment of the complaint").

However, the Seventh Circuit has indicated that there are certain exceptions to the general rule that the amount in controversy is not assessed by considering an amended complaint filed after a case begins in federal court. In Cunningham Charter Corp. v. Learjet, Inc., 592 F.3d 805 (7th Cir. 2010), the Seventh Circuit explained that "[t]here are . . . exceptions to the principle that once jurisdiction, always jurisdiction, notably where a case becomes moot in the course of the litigation." Id. at 807. Defendants argue that Aliano cannot simply amend his complaint to maneuver this action back to state court. However, it was Defendants' actions that reduced the amount in controversy in this case. It is not disputed that after the filing of the original complaint by Aliano, and prior to the removal of this case by Defendants, Defendants made the Bonus Material available for free to the public. Such actions by Defendants rendered moot a significant portion of the request by Aliano for injunctive relief. The request in the original complaint to make available the Bonus Material was rendered moot. In addition, since the Bonus Material is now available, the purchasers of the Book are able to obtain all of the product that their purchase price covered and there is no justification to seek a recall of the Book. Thus, the proposed amended complaint is properly considered for the amount in controversy assessment since the proposed amended complaint merely reflects the injunctive relief that has not been rendered moot by Defendants' actions.

II. Amount in Controversy

Aliano contends that the CAFA $5,000,000 amount in controversy requirement is not met in this case. ...


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