Several consumers filed California state law class actions against Kimberly-Clark in federal district court, alleging that they were misled into believing that Kleenex Germ Removal wet wipes contained germicides, not just soaps. The district court dismissed the non-California plaintiffs’ claims for lack of personal jurisdiction, and dismissed the remaining claims with prejudice on the grounds that it was not plausible that the labels would deceive a reasonable consumer. The plaintiffs appealed.
On appeal, the Ninth Circuit was concerned as to whether diversity jurisdiction existed at all, and invited plaintiffs to submit a proposed amended complaint addressing there concerns. In an opinion issued today, though, the Court held (1) that district courts may not establish diversity of citizenship based on judicial notice, as opposed to allegations in the complaint, and (2) that the action did not meet the requirements for jurisdiction under either the diversity statute or the Class Action Fairness Act, as plaintiffs failed to allege $75,000 in controversy based on actual and punitive damages. The Court engaged in a lengthy analysis of how to compute the amount in controversy and why that amount was not shown here. The Court also refused to “constructively amend” the complaint based on a declaration from a Kimberly-Clark employee, finding that dismissing the case and allowing it to be re-filed in state court was the appropriate course,
