In a typical situation, defendants argue that plaintiffs lack standing and plaintiffs insist otherwise.  But, sometimes, the lack of standing can work in plaintiffs’ favor.  In Benton v. CVS Pharmacy, Inc., 2022 WL 1750462 (N.D. Cal. May 31, 2022), plaintiffs took the unusual step of arguing that they lacked Article III standing to bring their claims in federal court in order to have their case remanded back to state court.

The underlying dispute concerned consumers who complained that they had purchased “homeopathic products” from CVS that were marketed as treatments for colds and flus.  The plaintiffs alleged that there was no scientific evidence supporting the efficacy of homoeopathic products, and CVS therefore engaged in false and misleading marketing in violation of California consumer protection statutes.  The complaint sought restitution and injunctive relief. 

Plaintiffs originally brought their case in California state court, but CVS removed the case to federal court on diversity jurisdiction grounds.  CVS then moved to dismiss arguing, among other things, that to have Article III standing to seek injunctive relief, plaintiffs must face an imminent threat of future harm—but here, plaintiffs alleged that they had no intention of ever purchasing homeopathic products again and therefore lacked standing to seek injunctive relief. 

Plaintiffs used CVS’s motion to dismiss as grounds to remand the case to state court.  In particular, plaintiffs agreed that they lacked standing to seek an injunction and argued that, without the potential for an injunction, CVS could not establish diversity jurisdiction because the amount in controversy—less than $100 in restitution—fell far below the $75,000 minimum.  The court agreed.  Although CVS argued that plaintiffs’ request for attorneys’ fees satisfied the amount in controversy requirement, the court concluded that the inability of plaintiffs to seek an injunction meant that the possibility of attorneys’ fees was too “speculative” to support diversity jurisdiction.  With no other basis for federal jurisdiction, the court remanded the case and denied CVS’s motion to dismiss as moot.

Benton serves as a reminder to carefully consider the potential negative consequences of raising standing arguments when a case has been removed from state court.