Summary
The Ninth Circuit vacated a district court order remanding a putative class action to state court and remanded for the defendant to perfect a waiver of the adequate-remedy-at-law defense. The court held that a federal district court may remand a removed case for lack of equitable jurisdiction, but that the defendant may waive the objection because equitable jurisdiction is distinct from subject-matter jurisdiction. The case involved California False Advertising Law and Unfair Competition Law claims seeking equitable restitution and removal under the Class Action Fairness Act.
Topics
Practice areas
Questions Presented
- Whether a federal district court may remand a properly removed state-court action when the plaintiff seeks only equitable relief and lacks an adequate remedy at law under federal equitable principles.
- Whether a removing defendant may waive the adequate-remedy-at-law objection and thereby prevent remand on equitable-jurisdiction grounds.
Holdings
- When a case is removed from state court and the federal district court concludes that it lacks equitable jurisdiction because the plaintiff has an adequate remedy at law, the court has authority to remand the case to state court rather than being limited to dismissal.
- The adequate-remedy-at-law objection underlying federal equitable jurisdiction is waivable. If a plaintiff files a state-court action seeking only equitable relief and the case is properly removed, the defendant may defeat remand on equitable-jurisdiction grounds by waiving that objection.
Key quotations
“We hold that in this situation, district courts are empowered to remand a removed case to state court for lack of equitable jurisdiction, but only after the removing defendant is given the opportunity to waive the adequate-remedy-at-law issue to keep the case in federal court.” (4)
“Although the district court had the authority to remand the case to state court, the court erred by ruling that Bradford could not waive the adequate-remedy-at-law impediment, which is waivable.” (16-17)
“The upshot of our decision today is the following: if a plaintiff files a lawsuit in state court seeking only equitable relief and the case is properly removed to federal court, a defendant can defeat remand on equitable jurisdiction grounds by waiving the adequate-remedy-at-law issue.” (22)
Factual background
In May 2020, Jose Ruiz purchased a collectible snow globe from Bradford's website for $40.49 and was subsequently charged eleven additional times totaling $223.67. Ruiz alleged that he had not been informed that the purchase enrolled him in a subscription for additional collectibles. He filed a putative class action under California's False Advertising Law and Unfair Competition Law, seeking only equitable restitution even though he conceded that damages were available under the Consumer Legal Remedies Act.
Procedural history
Ruiz filed a putative class action in California state court asserting claims under the California False Advertising Law and Unfair Competition Law and seeking only equitable restitution. Bradford removed under CAFA. The district court granted Ruiz's motion to remand, holding that it had authority to remand for lack of equitable jurisdiction but that Bradford could not waive the adequate-remedy-at-law defense. The Ninth Circuit vacated and remanded for Bradford to perfect a waiver if it still wished to keep the case in federal court.
Remand instructions
The district court must permit Bradford to perfect its waiver of the adequate-remedy-at-law objection, assuming Bradford still wishes to do so. If Bradford waives the objection, the case may proceed in federal court in the normal course.