Royal Canin U.S.A., Inc. v. Wullschleger
LII note: The U.S Supreme Court has now decided Royal Canin U.S.A., Inc. v. Wullschleger
Issues
Does amending a complaint to omit a federal question after removal to federal court defeat federal question jurisdiction under 28 U.S.C. § 1331? Does a post-removal amendment restrict a federal district court from exercising supplemental jurisdiction over the remaining state-law claims?
This case asks the Supreme Court to determine whether the post-removal amendment of a complaint can defeat federal-question subject matter jurisdiction and preclude a district court from exercising supplemental jurisdiction over the remaining state law claims. On one hand, Royal Canin and Purina argue both that federal-question jurisdiction cannot be extinguished by amending a complaint and also that a district court can exercise supplemental jurisdiction even after the resolution of all federal claims. On the other hand, Anna Wullschleger and Gerald Brewer contend that the amended complaint determines federal-question jurisdiction, and a federal district court should not exercise supplemental jurisdiction when no federal claim remains in the lawsuit. The outcome of this case has heavy implications for forum manipulation and federalism.
Questions as Framed for the Court by the Parties
(1) Whether a post-removal amendment of a complaint to omit federal questions defeats federal-question subject matter jurisdiction pursuant to 28 U.S.C. § 1331; and (2) whether such a post-removal amendment of a complaint precludes a district court from exercising supplemental jurisdiction over the plaintiff’s remaining state-law claims pursuant to 28 U.S.C. § 1367.
Facts
Anastasia Wullschleger and Geraldine Brewer purchased prescription pet food from Royal Canin and Purina under the impression that the companies formulated the food to treat their pets’ health and disease problems. . Wullschleger and Brewer allege that Royal Canin and Purina not only engaged in misleading marketing and advertising, but also sold “prescription” pet food that actually contained no drugs or special ingredients. Wullschleger and Brewer also claim that the only difference between Royal Canin and Purina’s prescription products and non-prescription pet food are the requirement of a prescription to purchase the food, the representation that the food contains medicine beneficial for a pet’s health, and the significant premium that must be paid for the prescription food.
On February 8, 2019, Wullschleger and Brewer filed this class action lawsuit in Missouri state court on behalf of themselves as well as other similarly situated consumers. Their petition encompassed six state-law causes of action which included: violations of Missouri antitrust law, transgressions of the Missouri Merchandising Practices Act , and additional claims for unjust enrichment . . On March 26, 2019, Royal Canin and Purina removed the action from Missouri state court to the U.S. District Court of the Western District of Missouri under 28 U.S.C. § 1331 and 28 U.S.C. § 1332(d) . These statutes outline when federal courts have subject matter jurisdiction , which is required for them to be able to hear a case. However, the district court denied that it had subject matter jurisdiction so it remanded the case to the Missouri state court. Royal Canin and Purina appealed to the Eighth Circuit Court of Appeal. . On March 13, 2020, the Eighth Circuit reversed the decision of the district court and determined that the lower court possessed subject matter jurisdiction under 28 U.S.C. § 1331 because the case gave rise to a federal question.
Upon remand to the district court, Wullschleger and Brewer amended their complaint by removing all references to federal law. . Wullschleger and Brewer also reclassified their antitrust-conspiracy claims as a civil-conspiracy claim and abandoned their unjust enrichment claims. However, Wullschleger and Brewer still maintained that Royal Canin and Purina violated the Missouri Merchandising Practices Act. Wullschleger and Brewer then moved to remand the action back to Missouri state court because they believed that the case no longer belonged in federal court. The district court denied this request and ended up dismissing the case, holding that the amended complaint failed to state a claim upon which relief could be granted. . Wullschleger and Brewer appealed this dismissal to the Eighth Circuit. and during oral arguments the court asked whether the District Court actually had subject matter jurisdiction over the case once Wullschleger and Brewer amended their complaint. The Eighth Circuit held that the amendments deprived the district court of subject matter jurisdiction, so the lower court no longer had the ability to hear the case. Royal Canin and Purina then filed an unsuccessful petition for rehearing. . Royal Canin and Purina then petitioned the Supreme Court to hear the case, and the petition was granted certiorari on April 29, 2024.
Analysis
FEDERAL SUBJECT MATTER JURISDICTION
Royal Canin argues that the district court still had federal subject matter jurisdiction over the case even after the complaint was amended because federal-question jurisdiction is retained even if a plaintiff makes a post-removal amendment to the complaint. . Royal Canin highlights how every federal court of appeal, up until the Eighth Circuit’s recent decision, has consistently held that plaintiffs cannot evade federal jurisdiction by amending their pleadings in removal cases. . Royal Canin notes that when Congress adopted 28 U.S.C. § 1367 , it codified a series of cases which “consistently held that post-removal amendments do not divest a federal court of federal question jurisdiction.” . Royal Canin also states that the District Court never lacked subject matter jurisdiction since the court had federal question jurisdiction over the complaint when it was first removed to federal court. . Additionally, Royal Canin cites the Supreme Court decision in St. Paul Mercury Indemnity Co. v. Red Cab Co. , which held that post-removal amendments do not divest a federal district court of its jurisdiction over a case. .
Wullschleger argues that the district court did not maintain federal subject matter jurisdiction over the case once the plaintiffs amended their complaint because an amended pleading supersedes a previous one and “relates back to the date of the original pleading.” . In this regard, Wullschleger asserts that the original pleading no longer serves a purpose, and the amended pleading should be used for determinations of jurisdiction. Furthermore, since the amendment would also relate back to the date of the original pleading, Wullschleger argues that the removed claim should also be treated as if it were never in the action. Therefore, Wullschleger concludes that if federal subject matter jurisdiction depends on an issue in the original complaint, and that issue is removed through an amendment, then the court should treat the case as if it never had jurisdiction. Moreover, Wullschleger also believes that courts should use a different standard for making determinations about federal question jurisdiction. . Wullschleger notes that Grable , the current standard for determining whether federal question jurisdiction exists, is confusing, indeterminate, and difficult to apply. . Nonetheless, Wullschleger argues that the Court should replace the current standard with the Holmes Rule , which would make questions of jurisdiction completely based on the law that created the cause of action. . Under this standard, federal question jurisdiction would never exist for a claim that only encompasses state-law causes of action.
SUPPLEMENTAL JURISDICTION
Royal Canin argues that the district court maintained supplemental jurisdiction over the remaining state law claims that existed within Wullschleger’s amended complaint because the text and structure of 28 U.S.C. § 1367 indicates that a federal court should be allowed to exercise supplemental jurisdiction even if a complaint is amended to remove all federal questions. . In support of this assertion, Royal Canin makes five observations about the statute. First, Royal Canin notes that 28 U.S.C. § 1367 is worded to confer broad supplemental jurisdiction; this indicates that Congress intended to expand, rather than diminish, the authority of federal courts to hear supplemental claims. . Second, Royal Canin highlights that Congress already specified a limited number of exceptions within the statute; this demonstrates that Congress did not intend for courts to impose other limitations that were not already enumerated within the statute itself. . Third, Royal Canin outlines that the statute gives courts the ability to decline to exercise supplemental jurisdiction; this suggests that district courts have considerable leeway in determining when to exercise this power. . Fourth, Royal Canin reviews the legislative history surrounding the statute to illustrate that Congress meant to codify Supreme Court precedent that came before the 1990s: these cases consistently stood for the notion that a district court does not lose supplemental jurisdiction over state law claims even if a plaintiff amends their complaint. . Finally, Royal Canin notes that the statute uses the words “shall have” to show that once a court has determined that it has supplemental jurisdiction over an action, it will continue to have it, regardless of whether a plaintiff decides to amend the complaint. . Royal Canin also asserts that amendments to a complaint should not be able to defeat supplemental jurisdiction in cases removed to federal court because it would allow for gamesmanship in the form of judge and forum shopping. . Royal Canin highlights how the Eighth Circuit’s ruling would allow for plaintiffs to force a remand back to state court in cases where they did not like their assigned judge, were about to receive an adverse ruling, or wanted to evade federal precedent that adversely affected them. . Royal Canin also argues that amended complaints should not be able to divest a federal court of its jurisdiction because allowing this to happen would frustrate a defendant’s statutory right to remove cases to federal court. .
Wullschleger argues that post-removal amendments of a complaint, which eliminate any reference to federal law, preclude a district court from exercising supplemental jurisdiction over any remaining state law claims because “an amended complaint supersedes the original complaint for all purposes.” . Wullschleger explains that supplemental jurisdiction works by tethering supplemental claims to another claim that establishes a jurisdictional foothold; and, that under a plain text analysis of 28 U.S.C. § 1367(a), supplemental jurisdiction depends on “claims in the action within such original jurisdiction” and a claim is only “in the action” if it is in the operative complaint. . Thus, Wullschleger concludes that if a claim was originally pleaded but eventually dropped, a court no longer has original jurisdiction over that claim and any other supplemental claims that may have depended on it to establish a jurisdictional foothold. Wullschleger further argues that since the statute is worded in the present tense, the exercise of supplemental jurisdiction over remaining state law claims would be improper if all references to any federal claim were removed from the complaint. Additionally, Wullschleger contends that Congress makes it clear that the operative complaint should be used to determine if there is supplemental jurisdiction because Congress expresses when it would rather have the initial complaint control. Wullschleger cites 28 U.S.C. § 1446(c)(2) as an example, since that statute explicitly states that the initial pleading must be used to determine the amount in controversy. To further support this argument, Wullschleger highlights how 28 U.S.C. § 1331 uses the phrase “arising under” which is also in the present tense. . In this regard, Wullschleger claims that it is not enough to show that the action originally arose under federal law, instead, the action must still be currently arising under federal law. Similarly, Wullschleger also draws a parallel to 28 U.S.C. § 1332 and argues that federal diversity jurisdiction is destroyed under that statute when a party amends their citizenship allegations to eliminate complete diversity of the parties regardless of what the initial complaint stated. Furthermore, Wullschleger also argues that there is an important distinction between amending a complaint to remove federal questions and a court dismissing those claims, namely that the former redefines the scope of the case or controversy whereas the latter is still part of the case or controversy. . Because of this, Wullschleger claims that only a court’s dismissal of federal claims can supply statutory discretion to consider the remaining state-law claims.
Discussion
MANIPULATION OF THE JUDICIAL SYSTEM
In support of Royal Canin, The Center for Litigation & Courts (“CLC”) argues that Rule 15 ’s purpose is to allow litigants to amend their complaints throughout the litigation process, so a decision in favor of Wullschleger would frustrate the purpose of Rule 15 and would thus waste the court’s resources as a result. . Dri-Center for Law and Public Policy (“DCLPP”), in support of Royal Canin, further expounds that a ruling in favor of Wullschleger would allow plaintiffs to deprive federal courts of jurisdiction by strategically amending a complaint on the heels of a potentially adverse decision. , . The Chamber of Commerce of the United States of America (“CCUSA”), writing in support of Royal Canin, stresses that companies value predictability in judicial decision-making in their business and investment decisions. , . Therefore, because a ruling in Wullschleger’s favor would cause instability, CCUSA warns that that businesses will lose time and money.
Thomas Fuller Ogden (“Ogden”), in support of Wullschleger, argues that a ruling in Royal Canin’s favor would perpetuate a false assumption that defeating removal by amending a complaint is consistently a voluntary act by plaintiffs to avoid federal jurisdiction. Ogden asserts that, in reality, amending a complaint to avoid a “coercive predicament” indicates involuntariness. (“Tennessee”), in support of Wullschleger, states that ruling in favor of Royal Canin would not prevent plaintiffs from “gamesmanship” as Royal Canin insists, because plaintiffs are permitted to amend their complaints to remove jurisdiction to state court within a tight deadline, outside of which the court can deny plaintiffs’ request to remove. Tennessee asserts it would be a “waste” of limited federal judicial resources to allow federal court jurisdiction over amended complaints containing no federal components.
RISK OF HARM
State Chambers of Commerce (“SCC”), in support of Royal Canin, argue that the decision to divest federal courts of jurisdiction would harm businesses that depend on the right-of-removal Rule to obtain a favorable ruling. , SCC further argues that federal rules provide stability that protects businesses against abuse by plaintiffs, which means that ruling in favor of Wullschleger would rid businesses of this protection. Litigation, SCC asserts, would become burdensome for businesses because they face a higher bar in state court. SCC further asserts that class certification standards are more lenient in state courts, which increases plaintiffs’ likelihood of achieving class certification—this is disadvantageous for businesses because 89% of class action lawsuits result in court-approved settlements. The SCC warns that litigation in state courts would be disastrous for businesses because state courts tend to allow plaintiffs to request exceptionally high jury awards for noneconomic damages that surpass the reasonable amount. SCC contends that these “nuclear verdicts” in state court would increase, causing harm to businesses of varying sizes-even small businesses.
Tennessee and Twenty-One Other States, in support of Wullschleger, assert states are the “expositors” of state law; therefore, ruling in favor of Royal Canin would harm states’ privilege to interpret their own laws because federal courts refer to state interpretation. . Tennessee further asserts that citizens would be best served by local governments that can be held more accountable than the federal government. Tennessee argues that it is unlikely that matters which are traditionally state law disputes, such as divorce, child custody, and probate, would “threaten the peace and unity of the Nation” to warrant litigation in federal court. Tennessee posits that the Royal Canin’s Rule would irrevocably extend federal jurisdiction in matters of state law which would then facilitate continued federal intervention over purely state law cases– conflicting with Article III federal limitations. Tennessee warns that allowing state court matters to be litigated in federal courts would upset the constitutional balance between state and federal courts.
Conclusion
Authors
Written by Cauolyn Baptiste and Brian Kam
Edited by Eric Yang
Acknowledgments
The authors would like to thank Professor Maggie Gardner for her guidance and insights into this case.
Additional Resources
- Kimberly Strawbridge Robinson, Dog Food Suit Location Dispute to Get US Supreme Court Review , Bloomberg (April 29, 2024).
- Richard S. Davis, Master of Its Choice of Forum?: Supreme Court to Decide if a Plaintiff May Compel Remand of a Removed Case by Voluntarily Dismissing Its Federal Claims , Foley & Lardner, LLP (May 22, 2024).