Petition for Certiorari filed with SCOTUS in Supplements Case

On Monday, Hotze Health & Wellness Center International One, LLC., Physician’s Preference International, LP, Braidwood Management, Inc., Paradigm Holdings, LLC, and Dr. Steven Hotze filed a petition for writ of certiorari to the Supreme Court of the United States against respondent Environmental Research Center, Inc. asking the court to provide clarity on when an appeal from a remand order is precluded under statute

According to the petition, the respondent is a California corporation and the petitioners are all Texas based entities. The petition states this action commenced as a private enforcement action  by the respondent/plaintiff against the petitioners for failing to include required warnings on nutritional supplements under California’s Proposition 65. The petition purports that Proposition 65 requires warnings about chemicals that California knows to cause cancer, birth defects and other reproductive harm and authorizes private parties to bring enforcement actions in which they can recoup a quarter of the civil penalties under Proposition 65.

The petition states that on September 10, 2018, petitioner Physician’s Preference International, LP (PPILP) timely removed the action to federal court and the respondent moved to remand the case for lack of an Article III case or controversy and insufficient amount of controversy for diversity jurisdiction. Further, the complaint states the district court sua sponte raised the issue that the non-party state of California may destroy diversity jurisdiction because it authorizes private enforcement of Proposition 65. The petitioner states it argued that federal jurisdiction was proper under assignee standing, purchaser standing and supplemental jurisdiction. 

The petition purports that the district court subsequently remanded the case without affirmatively deciding if jurisdiction was lacking and without addressing the purchaser standing and supplemental jurisdiction arguments. 

The petition goes on to state that on January 16, 2020, petitioner Paradigm Holdings, LLC removed the case to the Northern District of California using the same argument brought by PPILP that jurisdiction was proper because the respondent had purchaser-based standing and supplemental jurisdiction. However, the petitioners purport that it also amended its brought a prudential doctrine argument that the respondent had third-party standing under Proposition 65 to defeat the argument that California may destroy diversity jurisdiction.The petition states that the case was again remanded along the same lines, but the judge awarded the respondent $42,164.30 in attorneys fees pursuant to 28 U.S.C. § 1447(c). 

According to the petition, the petitioners appealed both remands to the Ninth Circuit and the award of attorney’s fees as “actual expenses” because there is no evidence that the respondent actually paid its counsel anything. The petition purports that the appeal was denied for being frivolous because 28 U.S.C. § 1447(d) generally bars review of a district court order remanding a case to state court. 

The petitioners argue the remands, award of attorney’s fees and the denial of its appeal was improper because the prudential third-party standing argument is appealable under 28 U.S.C. § 1447(d) because it is outside of its scope as a non-jurisdictional issue. The petitioner further argues that current precedent states otherwise unappealable remand orders can be appealable if bound up with an appealable remand order such as the second remand order due to the third-party standing argument. 

The petitioners request that the Court grant their writ of certiorari as it raises important issues of appellate and removal jurisdiction and procedure, as well as issues of constitutional and  prudential standing for state “bounty-hunter” laws that authorize private enforcement of state claims by private parties. Additionally, the petitioners ask the Court to make a determination whether their appeal to the Ninth Circuit was frivolous and whether the remand and order for attorney’s fees was proper. The petitioners are represented by Laurie L. York.