In Royal Canin v. Wullschleger, the Supreme Court will determine whether a plaintiff, whose state court action has been removed by the defendant to federal court, may seek to have the case remanded to state court by amending the complaint to remove all references to federal law.
Anastasia Wullschleger and Geraldine Brewer filed a class-action in state court against Royal Canin and Nestlé Purina, alleging that the defendants misled plaintiffs to believe that certain specialized pet foods required a prescription, causing them to pay premium prices. Plaintiffs raised several issues that seemed to invoke federal law, such as allegations of violating the Food and Drug Administration’s (FDA) labeling requirements for “prescription” designations and violations of the Federal Food, Drug, and Cosmetic Act (FDCA). Nevertheless, the complaint asserts that the allegations arise under state law for violations of state statutes and common-law unjust enrichment.
The defendants removed the case to federal court based on federal question jurisdiction, but the court remanded the case, concluding that the complaint was based on state—not federal—claims. The defendants then appealed to the Eighth Circuit U.S. Court of Appeals, which reversed, determining that the claims raised critical federal issues as “plaintiffs rel[ied] explicitly on federal law throughout their pleadings” and “Plaintiffs’ dependence on federal law permeates the allegations.”
Upon returning to federal court, plaintiffs amended their complaint to remove the allegations referencing federal law, such as the FDA regulatory guidance. This time, the federal court declined to remand the lawsuit, concluding that it still raised substantial federal issues, and later granted the defendants’ motion to dismiss for failure to state a claim. On plaintiffs’ appeal, the Eighth Circuit reasoned that eliminating only the federal allegations destroyed subject-matter jurisdiction and supplemental jurisdiction.
During oral argument, the Justices weighed whether a federal court’s jurisdiction, once vested, can be divested by subsequent events. Justice Kagan suggested that she finds it difficult to conclude that 28 U.S.C. § 1367, which provides supplemental jurisdiction in federal court for related state claims, imposes a distinction between cases originally filed in federal court and those removed there. Similarly, Justice Jackson noted that if a case with both federal and state claims was brought in state court and the federal claims were dismissed, the case could not be subsequently removed to federal court. Justices Sotomayor and Thomas questioned why a federal court would retain jurisdiction of a case if the court dismissed all of the federal issues but not if the plaintiff so did by amending his complaint.
The Justices, including Justice Barrett, also focused on the fact that many courts of appeals have followed the precedent of retaining jurisdiction when federal claims have been dismissed. Justice Kavanaugh explored a comparison of this case to a False Claims Act case decided by the Court in 2007, Rockwell International Corp. v. United States, 549 U.S. 457. In Rockwell, which implicated forum-shopping concerns, the Supreme Court held that a plaintiff who originally files a lawsuit in federal court can amend the complaint to strip jurisdiction away from the federal judge hearing the case. However, in a footnote, Justice Scalia said that the holding did not apply to cases originally filed in state court because when a plaintiff chooses a federal forum and then pleads away jurisdiction, forum manipulation is not a concern. Accordingly, Chief Justice Roberts seemed to lean toward the view that forum manipulation does not exist here because this case began in state court.
The case was argued on October 7, 2024. A decision is expected by the end of the term. Stay tuned for Dykema’s follow-up post discussing the Court’s opinion.
For more information, please contact Chantel Febus, James Azadian, Susan Feibus, Mark Magyar, Kyle Asher, Christopher Sakauye, Monika Harris, or Ryan VanOver.