NEWARK (LN) — U.S. District Judge Jamel K. Semper granted New Jersey’s motion to remand the state’s consumer fraud lawsuit against Discord Inc. to state court, holding that the platform’s removal based on a Children’s Online Privacy Protection Act (COPPA) violation did not satisfy federal jurisdiction requirements.
Semper adopted a magistrate judge’s report and recommendation, finding that Discord failed to carry its burden of establishing that the case presented a substantial federal issue significant to the federal system as a whole.
The suit, filed by New Jersey Attorney General Matthew J. Platkin and Acting Director of the New Jersey Division of Consumer Affairs Elizabeth Harris, alleges that Discord engaged in unconscionable and deceptive commercial practices by collecting information from children under 13 without verifiable parental consent.
Count IV of the complaint specifically alleges that Discord violated the New Jersey Consumer Fraud Act by violating the federal COPPA.
Discord removed the action to federal court on May 2, 2025, arguing that Count IV raised a substantial federal question under the Grable test.
Magistrate Judge Michael A. Hammer issued a report and recommendation on Sept. 10, 2025, opining that the motion to remand should be granted. Discord objected, arguing the report misread Supreme Court precedent and ignored the forward-looking nature of the injunctive relief sought.
Semper rejected Discord’s objections, agreeing with the magistrate judge that the federal issue was not substantial enough to justify federal jurisdiction.
The magistrate judge wrote that the inquiry turns on the issue’s importance “to the federal system as a whole,” not its importance to the litigants, citing the Supreme Court’s decision in Gunn v. Minton. Semper adopted this reasoning.
The court found that any COPPA issue in the case would be dependent on the specific facts and its resolution would be binding exclusively on the parties, rather than having nationwide significance.
Semper also ruled that exercising federal jurisdiction would disrupt the federal-state balance Congress chose for COPPA enforcement.
The court adopted the magistrate judge’s finding that Count IV is, at its core, a state-law claim, noting that the Attorney General was borrowing the COPPA standard to plead a New Jersey Consumer Fraud Act violation rather than invoking the federal statute’s own enforcement provisions.
The court emphasized that New Jersey has a “strong sovereign interest in enforcing its state laws... of its own state.”
Semper also denied the plaintiffs’ request for attorney’s fees, agreeing with the magistrate judge that Discord had an objectively reasonable basis for seeking removal and that the plaintiffs’ motion for fees was perfunctory.
Platkin’s office did not immediately respond to a request for comment on Tuesday.