Unreported / Non-Citable
Background
Devon Olson filed a putative class action against Albertsons Companies, Inc., alleging that the company installs third-party trackers on individuals' internet browsers when they visit the website https://www.safeway.com. The complaint asserted violations of the Electronic Communications Privacy Act, 18 U.S.C. § 2511, and various California laws. Olson initially filed the complaint in the Alameda County Superior Court, but Albertsons removed the action to the Northern District of California based on federal question jurisdiction and under the Class Action Fairness Act, 28 U.S.C. § 1332(d).
After reviewing the complaint, the district court raised concerns about its subject matter jurisdiction. The court ordered the parties to address whether Olson had Article III standing, specifically focusing on whether she had alleged facts supporting an inference that she suffered a concrete injury. The court also ordered Albertsons to explain why the action should not be remanded to the Alameda County Superior Court. Both parties timely submitted their responses. Olson contended that the existing complaint established Article III standing, while Albertsons conceded that Olson lacked Article III standing. Separately, Albertsons requested that the court dismiss the action rather than remand it to state court.
The Court’s Holding
The district court found that the action lacked Article III standing. Having considered the parties' submissions and legal authority, the court concluded that Olson had not alleged facts sufficient to establish a concrete injury as required for Article III standing. This finding meant the court lacked subject matter jurisdiction over the removed action.
The court then addressed whether it should dismiss the action or remand it to state court. Under 28 U.S.C. § 1447(c), if at any time before final judgment it appears that the district court lacks subject matter jurisdiction over a case removed from state court, the case shall be remanded. The court emphasized that the statute's literal words give no discretion to dismiss rather than remand, citing International Primate Protection League v. Administrators of Tulane Educational Fund, 500 U.S. 72, 89 (1991). The court acknowledged a narrow futility exception that permits dismissal rather than remand, but only where there is absolute certainty that the state court would dismiss the action following remand, citing Sauk-Suiattle Indian Tribe v. City of Seattle, 56 F.4th 1179, 1189 (9th Cir. 2022).
The court found that Albertsons had not shown dismissal was an absolute certainty. Therefore, the court followed the mandate of 28 U.S.C. § 1447(c) and remanded the action to the Alameda County Superior Court, Case No. 26CV191145, for lack of subject matter jurisdiction. The court also denied the pending motion to dismiss, ECF 15, without prejudice, as moot.
Key Takeaways
- When a federal district court determines it lacks subject matter jurisdiction over a case removed from state court, 28 U.S.C. § 1447(c) requires remand rather than dismissal, leaving no discretion to dismiss the action outright.
- A narrow futility exception to the general remand rule permits dismissal only where there is absolute certainty that the state court would dismiss the action following remand, a standard that is difficult to meet.
- Article III standing requires a plaintiff to allege facts supporting an inference of concrete injury, and the absence of such allegations deprives the federal court of subject matter jurisdiction.
- A defendant's concession that the plaintiff lacks Article III standing does not automatically result in dismissal; the court must still follow the statutory mandate to remand when jurisdiction is lacking.
- When a case is remanded for lack of jurisdiction, pending motions such as motions to dismiss become moot and are denied without prejudice.
Why It Matters
This order reinforces the mandatory nature of 28 U.S.C. § 1447(c), which requires federal courts to remand removed cases to state court when subject matter jurisdiction is lacking. The decision underscores that federal courts have no discretion to dismiss such cases outright, even when both parties agree that Article III standing is absent. The narrow futility exception applies only in rare circumstances where dismissal by the state court is an absolute certainty.
The ruling also highlights the importance of Article III standing as a threshold jurisdictional requirement in federal court. Plaintiffs must allege concrete injuries to establish standing, and the failure to do so will result in remand if the case was removed from state court. This decision serves as a reminder that defendants seeking dismissal on standing grounds may instead face remand to state court, where the action may proceed under potentially different procedural rules and standards.