The opinion of the court was delivered by: McLaughlin, J.
This is a putative class action alleging that three Famous Dave's franchises in Philadelphia, Pennsylvania overcharged customers by imposing an unnecessary 8% sales tax on alcoholic beverages. The defendants have filed a motion to dismiss or stay the case. The Court will deny the motion to dismiss but will stay the case.
I. Facts as Alleged in the Complaint
The plaintiff brings this suit on behalf of himself and
others similarly situated against franchisor Famous Dave's of America and franchisee Pit Masters. Pit Masters owned three Famous Dave's franchises in Philadelphia, Pennsylvania. Am. Compl. ¶¶ 11, 17. The plaintiff alleges that all three franchises improperly imposed an 8% sales tax on alcoholic beverages in addition to the required 10% Philadelphia liquor tax. Id. ¶¶ 7-8, 10, 14, 16. The plaintiff contends that he paid the excess 8% in reliance on the defendants' assertion that it was a tax.*fn1 Id. ¶ 40.
The plaintiff alleges a violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law ("CPL"), conversion, fraud, and negligence. Id. ¶¶ 38, 43, 45, 51. He seeks statutory damages under the CPL in addition to compensatory damages, punitive damages, disgorgement of profits, costs of the action, and an injunction preventing the defendants from overcharging customers.
The defendants argue that this Court should dismiss the suit for lack of subject matter jurisdiction, dismiss it for failure to state a claim, or stay the case so that the plaintiff can pursue an administrative remedy. Because it is a threshold matter, the Court begins with the defendants' argument under Rule 12(b)(1) that this Court lacks subject matter jurisdiction. Society Hill Towers Owners' Ass'n v. Rendell, 210 F.3d 168, 175 (3d Cir. 2000).
A. Subject Matter Jurisdiction*fn2
The plaintiff asserts jurisdiction under the Class
Action Fairness Act ("CAFA"), 28 U.S.C. § 1332(d). The defendants challenge the plaintiff's ability to meet the amount-in-controversy requirement of that law.*fn3 Under CAFA, district courts have jurisdiction if "the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interests and costs." § 1332(d)(2).
The plaintiff seeks statutory damages under the Pennsylvania CPL.*fn4 Any person who suffers an ascertainable loss of money as a result of a CPL violation can recover "actual damages or one hundred dollars ($100), whichever is greater." 73 Pa. Cons. Stat. § 201-9.2(a). The plaintiff relies upon this statutory damage award of $100 for each class member to reach the amount-in-controversy requirement. The defendants argue that the plaintiff will be unable to certify a class because individual reliance is an element of the plaintiff's CPL claims. And without class members who can collect the statutory remedy, the plaintiff cannot meet the amount-in-controversy requirement.
A plaintiff's claim that alleges a sufficient amount in controversy will be dismissed only when "it appears to a legal certainty that the plaintiff was never entitled to recover the jurisdictional amount."*fn5 Frederico v. Home Depot, 507 F.3d 188, 195-97 (3d Cir. 2007); Samuel-Bassett v. Kia Motors Am., Inc., 357 F.3d 392, 396 (3d Cir. 2004). When "the merits of the case are closely intertwined with the jurisdictional proof," the Court of Appeals has cautioned against prematurely finding against jurisdiction. Gould Elecs., Inc., v. United States, 220 F.3d 169, 178 (3d Cir. 2000). In such cases, the court must demand "less in the way of jurisdictional proof than would be appropriate at a trial stage." Id.
In conformity with that principle, courts in the Third Circuit have declined to rule on issues of class certification at the motion to dismiss stage. See Bell v. Money Res. Corp., No. 08-639, 2009 U.S. Dist. LEXIS 11271, at *10 (E.D. Pa. Feb. 12, 2009); see also Martin v. Ford Motor Co., 765 F. Supp. 2d 673, 680-81 (E.D. Pa. 2011) (collecting cases denying motions to dismiss class actions before a class certification had been filed). The defendants cite no legal authority where a court dismissed a putative class action for lack of jurisdiction because of questions about possible class certification. CAFA does not require class certification as a prerequisite to federal jurisdiction. Bell, ...