ROSENWALD et al., v. KIMBERLY-CLARK CORP.

---

Before MILAN D. SMITH, JR. and N. RANDY SMITH, Circuit Judges, and DOUGLAS L. RAYES, District Judge. 

The Bottom Line

The court remanded the case with instructions to dismiss due to lack of subject matter jurisdiction. Plaintiffs initially did not show citizenship as required under 28 U.S.C. § 1332(a) or § 1332(d)(2). After amending the complaint to demonstrate citizenship, they were still unable to satisfy either of the amount in controversy requirements. 

Class Action Takeaway

The Ninth Circuit’s decision in Rosenwald v. Kimberly-Clark Corp. reinforces that class action plaintiffs must clearly plead both citizenship and the full amount in controversy to prove federal jurisdiction. Attorney's fees must be attributed pro rata throughout the class and cannot be consolidated upon certain class members to satisfy the amount in controversy requirements.

Background

Plaintiffs brought forth several California causes of action against the defendant alleging diversity jurisdiction. Plaintiffs claim that Kleenex Wet Wipes, manufactured by Kimberly Clark Corp., were mislabeled, allowing consumers to believe the wipes would kill germs not just wipe them off. Plaintiff's second amended complaint did not show Kimberly Clark Corp's citizenship or state the damages amount. The court found that district courts cannot establish citizenship through judicial notice, it must be clearly laid out within the complaint. On appeal, plaintiffs brough a third amended complaint that did establish Kimberly Clark Corp's citizenship but conceded that they were unable to reach the $5 million collectively in damages needed under 28 U.S.C. § 1332(d)(2). Plaintiffs claimed they were able to reach the $75,000 individual threshold needed under § 1332(a), which would satisfy the jurisdictional requirements. 

Opinion

The sole issue at hand in the appeal is whether the plaintiffs sufficiently pleaded jurisdiction pursuant to 28 U.S.C. § 1332(a) or § 1332(d)(2). Both require citizenship to be established as well as monetary controversy at or exceeding $75,000 or $5 million respectively. In the plaintiff's third amended complaint, they established Kimberly Clark Corp's citizenship and that the company does not share citizenship with any named plaintiffs which afforded them complete diversity. Plaintiffs clarified that they are the amount in controversy does not exceed $5 million and were required to demonstrate claims exceeding $75,000 separate and distinct to at least one class member (only one plaintiff is required to satisfy the requirement, the others will fall under supplemental jurisdiction even if their personal claims do not meet the requirement). The court found that plaintiff's attempt to reach the $75,000 through attorney's fees fell short because they must be counted pro rata to each class member. The court rejected the argument that attorney's fees be associated with the named plaintiffs only and additionally found that the fees cannot be linked to the entire class as a common fund. Ultimately, the court directed the case to be dismissed without prejudice for lack of jurisdiction.