Chicoine v. Wellmark Inc.

• Decision Date: 09 April 2018
• Docket Number: Case No.: 2:17-cv-01707-RDP
• Parties: BRADLEY A. CHICOINE, et al. Plaintiff, v. WELLMARK INC., et al. Defendants.
• Court: U.S. District Court — Northern District of Alabama

BRADLEY A. CHICOINE, et al. Plaintiff, v. WELLMARK INC., et al. Defendants.

Case No.: 2:17-cv-01707-RDP

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION

April 9, 2018

MEMORANDUM OPINION

This matter is before the court on Plaintiffs' Motion for Remand. (Doc. # 7). Shortly after Plaintiffs' Motion was filed, Defendants filed a Motion to Stay All Proceedings Pending Transfer by the Judicial Panel on Multidistrict Litigation. (Doc. # 8). Plaintiffs agreed to the Stay, but did not waive their argument that federal courts did not have subject matter jurisdiction over this case. (Doc. # 10). The case was stayed (Doc. # 13), and on October 5, 2017, it was transferred to this court for inclusion in In re Blue Cross Blue Shield Antitrust Litigation, MDL 2406. (Doc. # 15). Upon transfer, this court invited briefing on the Motion for Remand to address federal law as interpreted by the Eleventh Circuit Court of Appeals. (Doc. # 20). The Motion is now fully briefed. (Docs. # 23. 24, 26 and 27).

I. Procedural History

This case was filed on October 5, 2015, as a class action in the District Court for Polk County, Iowa by chiropractic physicians, who are licensed in Iowa and are all citizens of Iowa. (Doc. # 1-3). Plaintiffs seek damages and other relief based upon violation of the Iowa Competition Act, Iowa Code § 553.4 (2007), and have alleged that a combination or conspiracy in restraint of trade occurred in Iowa. (Id.). The purported class is limited to chiropractic physicians who are citizens of Iowa. No violation of federal law is alleged. (Id.).

Plaintiffs' Petition names only two defendants: Wellmark, Inc. d/b/a Wellmark Blue Cross and Blue Shield of Iowa, and Wellmark Health Plan of Iowa, Inc. ("Wellmark"). Both Defendants are Iowa corporations with principal places of business in Iowa. (Doc. # 1-3 ¶¶ 9-11). The original Petition identifies Blue Cross and Blue Shield Association ("BCBSA") as a non-party co-conspirator. (Doc. # 1-3 ¶ 12). It further identifies the (then) 38 other members of BCBSA as non-party co-conspirators. (Doc. # 1-3 ¶ 15).

On June 14, 2017, Plaintiffs filed a First Amended Petition striking their allegation that BCBSA is a is a non-party co-conspirator, as well as the allegations regarding BCBSA's agreement with the other BCBSA licensees. (Doc. # 2-1). Also on June 14, 2017, BCBSA, an Illinois corporation, filed a motion to intervene in this litigation in the Iowa District Court for Polk County, under Iowa Rules of Civil Procedure 1.407(1) and 1.407(2). The same day, the two named Iowa Defendants filed a Notice of Removal to the United States District Court, Southern District of Iowa, Central Division, pursuant to 28 U.S.C. § 1446(b)(3), invoking federal jurisdiction under the Class Action Fairness Act. 28 U.S.C.A. §1332(d). (Doc. # 1). This case was thereafter transferred to this court as a tag along by the Judicial Panel on Multidistrict Litigation. (Doc. # 15).

II. Standard of Review

Federal courts are courts of limited jurisdiction that possess only that power authorized by the Constitution and statute. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). It is axiomatic that this court is "'empowered to hear only those cases within the judicial power of the United States as defined by Article III of the Constitution,' and which have beenentrusted to them by a jurisdictional grant authorized by Congress." University of South Alabama v. American Tobacco Co., 168 F.3d 405, 408 (11th Cir. 1999) (quoting Taylor v. Appleton, 30 F.3d 1365, 1367 (11th Cir. 1994)).

The removing party has the burden of establishing subject matter jurisdiction over a case removed to this court. Roe v. Michelin North America, Inc., 613 F.3d 1058, 1061 (11th Cir. 2010). "That burden goes not only to the issue of federal jurisdiction, but also to questions of compliance with statutes governing the exercise of the right of removal." Parker v. Brown, 570 F. Supp. 640, 642 (S.D. Ohio 1983) (citations omitted). Courts strictly construe removal statutes. City of Vestavia Hills v. Gen. Fidelity Ins. Co., 676 F.3d 1310, 1313 (11th Cir. 2012) (citing Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 411 (11th Cir. 1999)). "[A]ll doubts about jurisdiction should be resolved in favor of remand to state court." Vestavia Hills, 676 F.3d at 1313.

In multidistrict litigation, "on matters of procedure, the transferee court must apply federal law as interpreted by the court of the district where the transferee court sits." Various Plaintiffs v. Various Defendants ("Oil Field Cases"), 673 F.Supp.2d 358, 362-63 (E.D. Pa. 2009) (Robreno, J.); see also Murphy v. F.D.I.C., 208 F.3d 959, 966 (11th Cir. 2000) ("uniformity does not require that transferee courts defer to the law of the transferor circuit."); Costco Wholesale Corp. v. Johnson & Johnson Vision Care, Inc., 2015 WL 9987969, at *1 (M.D. Fla. Nov. 4, 2015) (in multidistrict litigation, "the law of this Circuit applies to federal claims and procedural matters.").

III. Analysis

There are two ways for a defendant to remove a case under § 1446(b):

The first way (formerly referred to as "first paragraph removals") [and accomplished via § 1446(b)(1)] involves civil cases where the jurisdictionalgrounds for removal are apparent on the face of the initial pleadings. The second way (formerly referred to as "second paragraph removals") [and accomplished via § 1446(b)(3)] contemplates removal where the jurisdictional grounds later become apparent through the defendant's receipt of "an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable."

Jones v. Novartis Pharms. Co., 952 F. Supp. 2d 1277, 1281-82 (N.D. Ala. 2013) (quoting 28 U.S.C. § 1446(b)(3)).

Defendants removed this action under § 1446(b)(3), which reopens the removal period for thirty days when the defendant receives a document "from which it may first be ascertained that the case is one which is or has become removable." 28 U.S.C. § 1446(b)(3). (Doc. # 1 at 5-6). When a case is removed pursuant to § 1446(b)(3), a defendant must "unambiguously establish federal jurisdiction" from "other paper" received "from the plaintiff" (or the court, if the document is an order). Lowery v. Ala. Power Co., 483 F.3d 1184, 1213 (11th Cir. 2007), overruled on other grounds by Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 752 (11th Cir. 2010); Sallee v. Ford Motor Co., 2014 WL 1492874, at *4-5 (M.D. Ala. Apr. 16, 2014) (discussing the procedure governing § 1446(b)(3) removals); Exum v. State Farm Fire & Cas. Co., 821 F. Supp. 2d 1285, 1291-94 (M.D. Ala. 2011) (noting the tension between Lowery's "unambiguously establish" standard and the preponderance standard of Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353 (11th Cir. 1996), and recognizing that Lowery remains good law as to "other paper" removals); Moore v. Wal-Mart Stores E., L.P., 2015 WL 5813164, at *6 (M.D. Ala. 2015) ("Despite Plaintiff's protestations and the flux within the Eleventh Circuit regarding how to reconcile it with the preponderance of the evidence standard, Lowery has yet to be overruled or otherwise abrogated, and its 'unambiguously establish' standard applies to the case at bar.").

Importantly, Section 1446(b)(3) permits removal within thirty days after a defendant's receipt from the plaintiff of "other paper from which it may first be ascertained that the case is one which is or has become removable." Simpson v. Primerica Life Ins. Co., 2017 WL 2857699, at *2 (M.D. Ala. May 22, 2017), report and recommendation adopted, 2017 WL 2838078 (M.D. Ala. June 30, 2017). In other words, under this subsection, "a case becomes removable when three conditions are present: there must be (1) 'an amended pleading, motion, order or other paper,' which (2) the defendant must have received from the plaintiff (or from the court, if the document is an order), and from which (3) the defendant can 'first [] ascertain' that federal jurisdiction exists." Lowery, 483 F.3d at 1213 n.63 (quoting 28 U.S.C. § 1446(b)).

Here, the propriety of Defendants' removal turns on the applicability of the voluntary-involuntary rule. The voluntary-involuntary rule has been recognized for well over a century. See, e.g., Whitcomb v. Smithson, 175 U.S. 635, 638 (1900); Great N. Ry. Co. v. Alexander, 246 U.S. 276, 281 (1918). The rule survived the codification of section 1446, and is still followed by the Eleventh Circuit. Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 761 (11th Cir. 2010); Insinga v. LaBella, 845 F.2d 249, 252 (11th Cir. 1988). The rule provides that "only a voluntary act by the plaintiff may convert a non-removable case into a removable one." Pretka, 608 F.3d at 761. Thus, for example, "if [a] resident defendant [is] dismissed from the case by the voluntary act of the plaintiff, the case [becomes] removable, but if the dismissal [is] the result of either the defendant's or the court's action against the wish of the plaintiff, the case [can]not be removed." Insinga, 845 F.2d at 252; see also Pretka, 608 F.3d at 761 (explaining "that an initially non-removable case cannot be converted into a removable one by evidence of the defendant or by an order of the court.") (internal quotation marks omitted). In Insinga, the Eleventh Circuit recognized that the voluntary-involuntary rule serves a dual purpose: (1) ensuring the finality ofstate-court proceedings and (2) promoting a plaintiff's right to choose a litigating forum. 845 F.2d at 253.

"Where courts have found that plaintiffs crossed the line into the 'voluntary' side of the voluntary-involuntary rule, the plaintiff undertook some affirmative act that was analytically similar to abandoning the claims against the defendant." Farah v. Guardian Ins. & Annuity Co., Inc., 2017 WL 3261604, at *6 (S.D. Fla. Aug. 1, 2017). If a court order or a "dismissal [is] the result of either the defendant's or the court's action again...