The Supreme Court agreed this week to decide whether changes made to a state-level legal complaint about allegedly overpriced dog food prevent the federal court system from hearing a proposed class action brought by consumers.
The pet food manufacturers who are appealing say that federal courts of appeal are divided over whether changes made to a state-level complaint, after its transfer to federal court, negate federal subject-matter jurisdiction. Pet owners in Missouri allege that the pet food manufacturers deceived them into believing that certain products were available only with a prescription.
The companies named in the lawsuit “have created and enforced on retailers and consumers a requirement that certain dog and cat foods be sold only with a ‘prescription’ from a veterinarian, even though no law requires such a prescription,” the pet owners said in court papers.
Petitioner Royal Canin, headquartered in St. Charles, Missouri, manufactures food for dogs and cats. Royal Canin is a wholly owned subsidiary of Mars Inc., based in McLean, Virginia.
Co-petitioner Nestle Purina PetCare Co., in the same industry, is based in St. Louis.
Respondents Anastasia Wullschleger, who owns a dog named Clinton, and Geraldine Brewer, who owns a cat named Cassie, filed a putative class action in the Circuit Court of Jackson County, Missouri, in 2019.
“Both purchased the food under the belief that it was designed to treat their pets’ specific disease and health problems, that it contained medicine of some sort, and that the food was an actual prescription product,” the pet owners said in court papers.
“Neither would have paid the ‘prescription’ premium had she known that none of this was true.”
In the antitrust lawsuit, they alleged that they overpaid for the pet food. The lawsuit made allegations related to federal food and drug laws and regulations about claims arising under state law, including unjust enrichment and violations of the Missouri Antitrust Law and the Missouri Merchandising Practices Act.
Since the lawsuit dealt with issues of federal concern, the companies had the case removed to the U.S. District Court for the Western District of Missouri. The pet owners then made a motion to return the case to Missouri state court, which the companies opposed. The federal district court granted the motion and remanded the lawsuit to state court for want of federal subject-matter jurisdiction.
However, the U.S. Court of Appeals for the Eighth Circuit then granted a petition for review under a provision of the federal Class Action Fairness Act and reversed the federal district court.
Applying the framework the Supreme Court articulated in Gunn v. Minton (2013), the circuit court found that the federal district court “did possess federal-question subject-matter jurisdiction over [the pet owners’] state-law claims because they necessarily raised disputed, substantial federal issues,” according to the petition filed by the companies.
The circuit court determined that the pet owners “rely explicitly on federal law throughout their pleadings” and that this “dependence on federal law permeates the allegations.” As to the antitrust conspiracy claims, the court found that the pet owners explicitly claimed that the companies violated the Federal Food, Drug, and Cosmetic Act, “were non-compliant with FDA guidance, and that their refusal to submit the prescription pet food to FDA review was improper.”
The legal complaint invokes federal jurisdiction because it seeks injunctive and declaratory relief “that necessarily requires the interpretation and application of federal law,” the court found.
The circuit court rejected the pet owners’ arguments against federal-question jurisdiction, saying their “isolated focus on their alleged state law claims is nothing more than an apparent veil to avoid federal jurisdiction.”
Intentional Deception Alleged
In a reply brief filed by the Public Citizen Litigation Group, the pet owners said that the two companies acted together to intentionally mislead and deceive them into believing that their products could be obtained only with a prescription.As a result of these misleading statements, the owners “paid a substantial premium for the food, which contained the same or similar ingredients as cheaper products sold by [the companies], contained no medicine, and was not a prescription product.”
The owners said they did not assert “any federal claims,” but the companies had the lawsuit transferred to federal court, the brief states.
After reviewing the original state-level complaint, the Eighth Circuit held “incorrectly” that the pleading’s references to federal law brought the case into a “special and small category of cases” that deal with the “substantial federal question” doctrine recognized by the Supreme Court in Grable and Sons Metal Products Inc. v. Darue Engineering and Manufacturing (2005).
After that decision, and before any other proceedings in the federal district court, the pet owners amended their legal complaint to eliminate “any allegations that could conceivably give rise to federal jurisdiction.” But in a subsequent appeal, the circuit court determined that there was nothing in the amended complaint that provided a basis for the exercise of federal jurisdiction and held “that remand was required in light of the widely accepted principle that once an amended complaint is filed, the earlier complaint is a dead letter.”
The court is expected to hear the case of Royal Canin U.S.A. Inc. v. Wullschleger during its new term beginning in October.
