ST. LOUIS — A proposed class action alleging the makers of Red Hot candies underfilled its cardboard boxes will have to continue in state court in the city of St. Louis rather than in federal court.
The boxes were claimed to be "slack-filled," which is defined as the difference between the actual capacity of a container and the volume of the product it contains, according to chainanalytics.com.
The 8th Circuit Court of Appeals on Oct. 13 denied Ferrara Candy Co.'s appeal of a St. Louis federal court judge's decision to remand the case.
The panel of appeals judges disagreed with Ferrara's argument that a U.S. District Court for the Eastern District of Missouri judge erred in applying the plaintiffs' "viewpoint rule" when calculating the amount of damages in controversy.
Ferrara had argued that the Class Action Fairness Act, which keeps cases in federal court if the amount in controversy exceeds $5 million, should apply in this case. But the district court applied the plaintiffs' viewpoint rule because plaintiffs believe the amount in controversy does not meet the threshold for removal.
Among information Ferrara submitted to support its position was an affidavit from a Ferrara executive who stated that the costs of upgrading packaging equipment "necessary changes to Ferrara's production capital equipment, which could result from an injunction requiring a material increase in the percentage of fill of Red Hots candy" would exceed $6 million, the ruling states.
The panel disagreed with Ferrara's estimations.
"If the plaintiffs prevail in this case, they will be entitled to monetary relief and attorney’s fees well below $5 million, regardless of whether the monetary relief comes in the form of compensatory damages, restitution, or disgorgement," the panel held. "Punitive damages are not in controversy because the petition does not seek them."
Judges James Loken, Bobby Shepherd and Jane Kelly comprised the panel.