Federal Court Remands Consumer Protection Claims Filed Against Cereal Maker

A federal court in the District of Columbia has remanded to the D.C. Superior Court a lawsuit brought by the National Consumers League (NCL) against General Mills alleging that the company falsely misrepresents that Cheerios® “has drug-quality properties that would reduce total and ‘bad’ cholesterol levels when eaten.” Nat’l Consumers League v. General Mills, Inc., No. 09-01881 (D.D.C., decided January 15, 2010). The cereal maker removed the case to federal court claiming that it was removable either as a class action under the Class Action Fairness Act (CAFA) or under the court’s diversity jurisdiction.

The NCL disclaimed Article III standing because it did not sustain any injury in fact, but was instead bringing the suit under the “private attorney general” provision of the D.C. Consumer Protection Procedures Act. This provision allows a person to bring an action on behalf of the general public to seek relief “from the use by any person of a trade practice in violation of the law.” Because NCL did not itself sustain any harm, the court agreed that it lacked standing to pursue litigation in the federal court. The court also determined that even if NCL had Article III standing, the court lacked subject matter jurisdiction because the case was not a class action and, as a private attorney general suit, fell squarely within a CAFA exception. The court further concluded that the claims did not reach the monetary threshold required for diversity jurisdiction.