Shook, Hardy & Bacon Global Product Liability Partner Frank Cruz-Alvarez and Associate Talia Zucker have co-authored an article appearing in the Washington Legal Foundation’s “The Legal Pulse” on April 16, 2014. Titled “Eighth Circuit Creates New Class Action Fairness Act Requirement, Sends Case to State Court,” the article discusses the Eighth Circuit’s April 4 ruling in Wallace v. ConAgra Foods, Inc. This consumer-fraud case involves putative class claims that some of the company’s Hebrew National beef products are not 100 percent kosher as the label states. Invoking the Class Action Fairness Act (CAFA), ConAgra removed the case to federal court and then moved to dismiss on First Amendment and Article III standing grounds. The district court dismissed the claims with prejudice, agreeing that the issues are intrinsically religious in nature and thus, under the First Amendment, civil courts may not resolve such matters.
The authors explain that, rather than upholding the district court on its merits determination, the Eighth Circuit reached the procedural standing issue and revived the lawsuit by finding that the plaintiffs failed to alleged a particularized, actual injury in fact—that is, “they failed to allege that all or even most of the Hebrew National products they purchased contained non-kosher beef, ‘which means the particular packages of processed beef they purchased may have been—and indeed more than likely were—prepared in accordance with minimum kosher standards.’” While Cruz-Alvarez and Tucker agree that the plaintiffs lacked standing, they fault the Eighth Circuit for not dismissing the suit without prejudice “(the remedy for lack of Article III standing.)”. . . Instead, the court “read an erroneous standing requirement into CAFA that is not present in the statute or the legislative history. On this basis, the court concluded that without Article III standing, there is no CAFA claim, which necessarily means the Court has no jurisdiction.” The authors conclude, “This analysis is quite troubling both legally and practically. In the future, companies seeking to invoke CAFA and remove cases to federal court should be wary of the Eighth Circuit’s decision to connect Article III standing with jurisdiction under CAFA.”