The underlying dispute centers on Discord's alleged collection of personal information from children under thirteen without obtaining verifiable parental consent, as required by the Children's Online Privacy Protection Act. New Jersey Attorney General Matthew J. Platkin and Acting Director of the Division of Consumer Affairs Elizabeth Harris filed a four-count civil complaint in the Superior Court of New Jersey, Chancery Division, Essex County, accusing Discord of unconscionable, abusive, and deceptive commercial practices in violation of the New Jersey Consumer Fraud Act. The complaint alleged that Discord had actual knowledge that children used its platform but relied instead on what the complaint called "nominal bans" of users under thirteen rather than obtaining the required parental consent.
Discord removed the case to federal court on May 2, 2025, arguing that Count IV — which pleads an NJCFA violation by incorporating COPPA's requirements — raises a substantial federal question. The state moved to remand, and Magistrate Judge Michael A. Hammer issued a Report and Recommendation on September 10, 2025, concluding that Discord failed to satisfy the substantiality and federal-state balance prongs of the Grable test. Discord objected; the district court, in an opinion by Judge Jamel K. Semper, adopted the R&R in full.
The court's analysis turned on the structure of Count IV. New Jersey did not sue under COPPA directly or invoke the statute's parens patriae enforcement provision. Instead, it proceeded under N.J.S.A. 56:8-4(b), which treats any commercial practice violating state or federal law as conclusively presumed to be an unlawful practice under the NJCFA. COPPA functions as the borrowed standard, not the cause of action. The court held that this distinction is fatal to Discord's removal argument: Count IV is, at its core, a state-law claim.
On substantiality, the court followed Gunn v. Minton's instruction that the federal issue must be significant to the federal system as a whole, not merely to the parties. The court rejected Discord's argument that the forward-looking, nationwide scope of the injunctive relief sought elevated the federal interest, holding that the relief sought by the parties does not drive the substantiality analysis under Gunn. The court also held that a desire for uniform interpretation of federal law alone does not make a federal issue substantial, and that any COPPA question here would be fact-specific and binding only on the parties.
On the fourth Grable prong, the court emphasized that COPPA authorizes FTC enforcement and state attorney general parens patriae actions but creates no private federal right of action. Allowing removal of state consumer-protection claims that merely incorporate COPPA standards would, the court warned — drawing on the Ninth Circuit's Nevada v. Bank of America — herald a potentially enormous shift into federal court and disturb the federal-state division of labor. New Jersey's sovereign interest in enforcing its own laws in its own courts supported remand.
The court denied the state's request for attorney's fees, agreeing with Magistrate Judge Hammer that the motion raised the fees request only perfunctorily in its conclusion, that Discord had an objectively reasonable basis for removal, and that the state provided no specific fee amount or supporting information.