United States District Court, E.D. Arkansas, Western Division
KYLE RHODES, individually and as plaintiff class representative; WESLEY ATWOOD, individually and as plaintiff class representative; and SAMANTHA HUDON, individually and as plaintiff class representative PLAINTIFFS
KROGER CO. DEFENDANT
OPINION AND ORDER
LEON HOLMES UNITED STATES DISTRICT JUDGE
Rhodes, Wesley Atwood, and Samantha Hudon commenced this
putative class action in the Circuit Court of Pulaski County,
Arkansas, against Kroger Co. and two of its Arkansas district
managers, Andrea Tyson and Patrick Scherrey, challenging the
legality of portions of Kroger's discount program. Kroger
offers discounts to customers who apply for and use a Kroger
Plus Card, and one day a week Kroger offers Kroger Card
customers over age 55 an additional discount of five percent.
The plaintiffs contend that Kroger's actions violate Ark.
Code Ann. § 4-75-501(a)(2), which makes it unlawful for
any person or corporation willfully to fail to grant any
purchaser of a manufactured product a discount that is
granted to other purchasers of like quantities. As a remedy,
the plaintiffs seek between $200 and $1, 000 for each
purchase, which represents the civil penalty provided in Ark.
Code Ann. § 4-75-501(b)(1).
first removed this action on June 1, 2015, asserting
subject-matter jurisdiction based on traditional diversity
pursuant to 28 U.S.C. § 1332(a) and based on the Class
Action Fairness Act (CAFA) pursuant to 28 U.S.C. §
1332(d)(2). The plaintiffs filed a motion to remand and this
Court remanded the action to the Circuit Court of Pulaski
County, holding that Arkansas citizens Tyson and Scherrey
were not fraudulently joined and thus traditional diversity
was not a basis for federal jurisdiction, and that CAFA's
local controversy exception applied and mandated remand.
Rhodes v. Kroger Co., 4:15CV312 JLH, 2015 WL 5006070
(E.D. Ark. Aug. 24, 2015). The local controversy exception
applied because the alleged conduct of Tyson and Scherrey
formed a significant basis for the class claims and Tyson and
Scherrey were defendants from whom significant relief was
sought. Kroger petitioned the Eighth Circuit for permission
to appeal the remand order pursuant to 28 U.S.C. §
1453(c). The Eighth Circuit entered an order granting
permission to appeal but later withdrew the order, saying
that it had been improvidently granted. Kroger then requested
this Court to reconsider the remand order, but this Court
remand, the plaintiffs and Kroger briefed and argued a motion
to dismiss filed on behalf of all of the defendants. The
state court denied the motion as to Kroger but held sua
sponte that the complaint failed to state a claim
against Tyson and Scherrey because they were not engaged in
the sale of any manufactured product as is required for
conduct to be unlawful under Ark. Code Ann. §
4-75-501(a). After Tyson and Scherrey were dismissed, Kroger
removed this action a second time on September 2,
2016. Kroger asserts that because the dismissal
of local defendants Tyson and Scherrey rendered the local
controversy exception inapplicable, the case is now removable
pursuant to CAFA. Document #1. The plaintiffs have filed a
motion to remand. For the following reasons, the motion to
remand is granted.
threshold issue is whether the second removal is timely. A
removal must comply with the procedural requirements set
forth by Congress in 28 U.S.C. § 1446. Section
The notice of removal of a civil action or proceeding shall
be filed within 30 days after the receipt by the defendant,
through service or otherwise, of a copy of the initial
pleading setting forth the claim for relief upon which such
action or proceeding is based, or within 30 days after the
service of summons upon the defendant if such initial
pleading has then been filed in court and is not required to
be served on the defendant, whichever period is shorter.
received a copy of the complaint on May 1, 2015, which
triggered the original 30-day period for removal. Document #1
at 162. That original 30-day period has clearly expired.
However, section 1446(b)(3) provides:
[I]f the case stated by the initial pleading is not
removable, a notice of removal may be filed within 30 days
after receipt by the defendant, through service or otherwise,
of a copy of an amended pleading, motion, order or other
paper from which it may first be ascertained that the case is
one which is or has become removable.
received a copy of the order dismissing Tyson and Scherrey
from the action on August 29, 2016. Kroger argues that it was
first able to ascertain that the action had become removable
upon receipt of the order, so the dismissal of Tyson and
Scherrey triggered a new 30-day period for removal.
order for section 1446(b)(3) to apply and to allow for timely
removal, the action as stated in the initial complaint must
not have been removable. The statutes do not define
“removable.” The question here is: If the facts
alleged in the initial complaint gave this Court original
jurisdiction, was the action “removable” as that
term is used in the statute even if the local controversy
exception mandated remand?
right to remove an action from state to federal court is
derived from 28 U.S.C. § 1441(a), which provides:
Except as otherwise expressly provided by Act of Congress,
any civil action brought in a State court of which the
district courts of the United States have original
jurisdiction, may be removed by the defendant . . . .
well-established sources of original jurisdiction are federal
question jurisdiction and traditional diversity jurisdiction.
28 U.S.C. §§ 1331-32. With the enactment of CAFA,
Congress has expanded diversity jurisdiction with respect to
certain class actions. 28 U.S.C. § 1332(d). CAFA
provides that district courts have original jurisdiction over
class actions in which the amount in controversy exceeds $5,
000, 000 and there is minimal diversity of citizenship. 28
U.S.C. § 1332(d)(2). A district court, however,
“shall decline to exercise jurisdiction” over
certain local controversies. 28 ...