Nonprofit Seeks Remand, for Lack of Jurisdiction, of Claim Starbucks Lied About Ethical Sourcing

The National Consumers League sought March 13 to have its case against Starbucks moved from the U.S. District Court for the District of Columbia to a local D.C. court, arguing that the federal bench lacks subject matter jurisdiction for its claim that the coffee company lied to consumers that it was sourcing its coffee ethically (National Consumers League v. Starbucks Corp., D.D.C. 24-cv-00421).

“Federal courts have consistently held that they lack jurisdiction over complaints indistinguishable from the one at issue here,” the nonprofit said.

Starbucks in February removed the case from the D.C. Superior Court by claiming that the litigation involved diversity of citizenship and a federal statute, the Class Action Fairness Act; but it did so without citing “a single decision” that sustained removal in a similar situation, the National Consumers League said.

The Class Action Fairness Act only allows removal of class actions, which this case is not, National Consumers League said.

Starbucks cited one case, Rotunda v. Marriott Int’l, in support of its opposing claim. But that case only allows the company to move for dismissal in state court on an argument that the damages the case seeks are only available from a class action, the nonprofit said.

It's a “universally rejected contention” such cases brought by nonprofits are class actions, National Consumers League said. It said its case is not a class action, but a private attorney general suit on behalf of the general public. This is allowed by a “unique provision” of the D.C. Consumer Protection and Procedures Act that lets nonprofits “sue on behalf of D.C. consumers to combat false or misleading information in the D.C. marketplace,” it said.

“Like every other federal court to consider this issue, this Court should reject Starbucks’ attempt to urge this nonsensical application of Rotunda,” it said.

The league also said that its action could not exceed the $75,000 damages requirement to be removed for diversity under the Civil Code of Procedure.

Starbucks claimed “upon information and belief” that the nonprofit itself, or at least one of its members, had purchased enough of the company’s products to breach the $75,000 damages threshold.

This was not true, the National Consumers League said.

“NCL … has only purchased two Starbucks coffee or tea products in the past three years, totaling $34 in value, and it has no members who have purchased Starbucks products in the past three years because NCL has not been a membership organization since approximately 2012 so has no members who could have made such purchases,” it said.

National Consumers League’s case alleges that Starbucks is lying to consumers about where it gets its coffee.

“Starbucks falsely advertises that it is ‘committed to 100% ethical coffee sourcing’ and to ‘100% ethically sourced tea’ when in fact it sources these products from suppliers that subject their workers to severe human rights and labor abuses, including forced and child labor as well as rampant and egregious sexual harassment and assault,” it said.