Sales Data Alone Insufficient to Support CAFA Jurisdiction in Gerber’s Graduates Puffs Labeling Case

In Gyorke-Takatri v. Nestle USA, Inc., the United States District Court for the Northern District of California held that parties in a class action seeking to remove an action to federal court must provide sufficient admissible evidence supporting the jurisdictional basis for removal.
No. 15-cv-03702-YGR.[1]  Judge Yvonne Gonzalez Rogers remanded to California state court an action involving Gerber Products Co.’s Graduates Puffs as a result of insufficient admissible evidence.

Gerber removed the action to federal court under the Class Action Fairness Act (CAFA), 28 U.S.C.
§ 1332(d).  CAFA requires an amount in controversy of at least $5 million.  Gerber argued that the sales amount of Graduates Puffs in California exceeded $5 million during the alleged period and should satisfy the statutory amount.  Gerber attempted to prove this monetary amount through the affidavit of one of its employees who had reviewed sales data provided by a third party researcher tracking the sales of the product.  Gerber provided documents summarizing the third party sales data but failed to provide any documentation in regards to potential hearsay issues.

Judge Gonzales Rogers ruled that the evidence was inadmissible multiple hearsay and not subject to any exception. The affidavit constituted inadmissible multiple hearsay because it was a document presenting information from a third party resource. Geber did not submit a declaration from anyone who had knowledge regarding how the data was collected or maintained. Nor did Gerber make any offer of how it intended to cure the defects.  As a result, Gerber could not prove it satisfied CAFA’s amount in controversy requirement by a preponderance of the evidence, and the action was remanded from federal court.

 

[1] Gerber’s product, Gerber Graduates Puffs, contains labels depicting vegetables and fruits.  Plaintiffs represent a class of California consumers who allege that these images misled consumers into thinking the products were healthier than they actually are.