Perez v. GoMacro

Background

Sergio Perez filed a putative class action in Monterey County Superior Court against GoMacro, LLC. The complaint asserted California claims for unfair competition, false advertising, violations of the Consumers Legal Remedies Act, and unjust enrichment. Perez alleged that GoMacro misleadingly marketed its plant-based MacroBars as “high protein” snacks or “protein” bars even though they mostly contained carbohydrates and fats.

Perez sought restitution for the price premium allegedly paid by him and other purchasers, an injunction governing future advertising and product descriptions, and attorney fees and costs. The proposed class included people who bought GoMacro’s allegedly misbranded products in California during the longest applicable limitations period.

GoMacro removed the case to federal court under the Class Action Fairness Act, or CAFA. Perez moved to remand, meaning to return the case to state court, arguing that the federal court lacked jurisdiction. GoMacro separately moved to dismiss the complaint for failure to state a claim.

CAFA jurisdiction

CAFA provides federal jurisdiction over qualifying class actions when there are at least 100 class members, at least one plaintiff is a citizen of a different state from a defendant, and the amount in controversy exceeds $5 million. The removing defendant bears the burden of establishing those jurisdictional requirements.

The court found that two requirements were uncontested: Perez was a California citizen and GoMacro was a Wisconsin citizen, creating the required “minimal diversity,” and the proposed class exceeded 100 people. The dispute concerned whether the amount in controversy exceeded $5 million.

Because Perez’s complaint did not specify the amount of monetary relief sought, GoMacro initially needed to allege in its removal notice that the amount in controversy met the threshold. The court held that GoMacro’s notice contained only conclusory allegations. It asserted that the price premium exceeded $5 million, that complying with an injunction could be significant, and that attorney fees would increase the amount, but it supplied no adequate factual support for those assertions.

The court considered GoMacro’s more detailed arguments in its opposition to remand and treated that opposition as an amendment seeking to cure the removal notice. GoMacro submitted a declaration stating that its California sales of the relevant products totaled $34.7 million. But GoMacro did not explain why the alleged price premium would exceed 15 percent of the products’ cost, which would have been necessary to exceed $5 million based on that sales figure. The court found that assumption unsupported.

The court also rejected GoMacro’s estimate of the cost of complying with possible injunctive relief because GoMacro provided no specific estimate. Finally, the court found that GoMacro’s proposed attorney-fee estimate was implausible because it relied on fee awards from two materially different class actions without explaining why fees in this case would be comparable.

Disposition

The court concluded that neither GoMacro’s removal notice nor its opposition plausibly alleged that the amount in controversy exceeded $5 million. GoMacro therefore failed to establish federal jurisdiction under CAFA.

The court granted Perez’s motion to remand and remanded the action to Monterey County Superior Court. Because the federal court lacked jurisdiction, it denied GoMacro’s motion to dismiss without prejudice to GoMacro’s reassertion of those arguments in state court.

The court declined Perez’s request for attorney fees incurred because of the removal. Judge P. Casey Pitts found that GoMacro’s jurisdictional arguments, although unsuccessful, were not objectively unreasonable and that the record did not show bad faith.