Kaufman v. Marsh And McLennan Companies, Inc.

Background

Lakeysha Kaufman filed a putative class action in the Superior Court for the State of California, County of Santa Clara. Her complaint alleged that Marsh And McLennan Companies, Inc. and other defendants violated the Fair Credit Reporting Act by obtaining or using a consumer report without the required disclosure under 15 U.S.C. § 1681b(b)(2)(A). The defendants removed the case to federal court based on federal-question jurisdiction.

Kaufman later moved to remand, arguing that she had alleged no concrete injury and therefore lacked standing under Article III of the United States Constitution. The defendants agreed that she lacked Article III standing but filed a motion for judgment on the pleadings, arguing that the federal court should dismiss the case instead of remanding it because remand would be futile.

Analysis

Article III standing requires an injury in fact, a connection between the injury and the challenged conduct, and a likelihood that a favorable court decision would remedy the injury. Because Kaufman conceded that she lacked a concrete injury, the court concluded that she lacked federal standing and that the federal court lacked subject-matter jurisdiction.

The court explained that the usual result when a removed case lacks federal subject-matter jurisdiction is remand to state court. The defendants relied on a limited exception allowing dismissal when it is certain that the case would fail after remand. The court noted that later Ninth Circuit authority had questioned whether that exception remained valid.

The court also rejected the defendants’ argument that Kaufman’s lack of federal standing necessarily made her Fair Credit Reporting Act claim futile in state court. Article III limits federal courts, but state courts are not bound by Article III’s case-or-controversy requirements when deciding federal-law claims. The court determined that state-court standing rules could differ and that it could not say with certainty that Kaufman’s claim would fail in state court. The court did not decide whether the Fair Credit Reporting Act claim ultimately has merit.

Disposition

Judge Edward J. Davila GRANTED Kaufman’s Motion to Remand and DENIED the defendants’ Motion for Judgment on the Pleadings. The order sent the case back to state court and did not dismiss the claim.