Gottlieb v. Lincoln Nat'L. Life Ins. Co.
| Decision Date | 23 September 2005 |
| Docket Number | No. CIV.A. RDB 05-1602.,CIV.A. RDB 05-1602. |
| Citation | 388 F.Supp.2d 574 |
| Parties | Sheldon K. GOTTLIEB, et. al. Plaintiffs, v. LINCOLN NATIONAL LIFE INSURANCE COMPANY Defendant. |
| Court | U.S. District Court — District of Maryland |
Sheldon K. Gottlieb, Potomac, MD, pro se.
Sharon E. Gottlieb, Potomac, MD, pro se.
Bryan D. Bolton, Cheryl A. C. Brown, Funk and Bolton PA, Baltimore, MD, John Van Lear Dorsey, Kathleen A. Birrane, Office of the Attorney General, Baltimore, MD, for Defendants.
This action arises out of a complaint that Dr. Sheldon K. and Mrs. Sharon E. Gottlieb (the "Gottliebs"), both Maryland residents, filed with the Maryland Insurance Administration ("MIA") against Lincoln National Life Insurance Company ("Lincoln"), an Indiana company. The complaint alleges that Lincoln misled the Gottliebs into purchasing two life insurance policies in the mid-1980s. MIA conducted an investigation, determined that there was no evidence of misrepresentation, and notified the Gottliebs of their right to a hearing before the Maryland Insurance Commissioner (the "Commissioner"). The Gottliebs exercised that right and the Commissioner subsequently delegated his authority to conduct the hearing to the Office of Administrative Hearings of the State of Maryland ("OAH"). Lincoln then attempted to remove the underlying proceeding from OAH to this Court, alleging that this Court has jurisdiction pursuant to 28 U.S.C. § 1332. Shortly thereafter, MIA requested that the case be remanded to OAH.
Pending before this Court are six motions: MIA's Motion to Strike all filings made by Lincoln or in the Alternative to Remand; and the motions of Defendant Lincoln to Dismiss, to Strike MIA's Motion to Remand, to Stay State Court Proceedings and Request Emergency Hearing, to Shorten Time for Plaintiffs to Respond to Emergency Hearing, and to file Surreply. The parties' submissions have been carefully reviewed. No hearing is necessary. See Local Rule 105.6 (D.Md.2004). For the reasons stated below, MIA's Motion to Strike all filings made by Lincoln or in the Alternative to Remand will be GRANTED and all further proceedings in this case will be remanded to the Office of Administrative Hearings of the State of Maryland.
On January 24, 2005, the Gottliebs filed a complaint with MIA alleging that Lincoln misled them into purchasing two life insurance policies in May 1984. (Notice of Removal Ex. 1.) By letter dated March 3, 2005, MIA informed the Gottliebs that "[o]ur investigation found no evidence of misrepresentation of the policies that were purchased over 20 years ago." (Notice of Removal Ex. 2.) MIA also noted that its determination is final "within this administration level" and advised the Gottliebs of their right to a hearing within 30 days. (Id.)
On March 28, 2005, the Gottliebs sent a letter to the Commissioner disagreeing with MIA's determination and requesting a hearing before the Commissioner. (Notice of Removal Ex. 4.) On April 4, 2005, MIA forwarded the Gottliebs' request to Lincoln. (Id.) In its cover letter to Lincoln, MIA explained that (Id.)
On April 19, 2005, MIA informed the parties that the Gottliebs' request for an administrative hearing was approved. (Notice of Removal Ex. 5.) MIA also forwarded this request to OAH, the entity that would conduct the hearing for MIA. (Id.) On May 13, 2005, the Commissioner delegated authority to OAH to conduct the hearing requested by the Gottliebs. (Notice of Removal Exs. 6-8.)
On May 18, 2005, OAH sent notice that the hearing was scheduled for Wednesday, July 6, 2005 at 2:30 p.m. (Notice of Removal Ex. 9.) Lincoln received a copy of this notice of hearing on May 26, 2005. (Id.; Notice of Removal ¶ 6.) The primary focus of the OAH hearing is whether Lincoln violated § 16-105 or § 27-202 of the Maryland Insurance Article when it sold life insurance policies to the Gottliebs. (See Notice of Removal Exs. 6-8.)
On June 13, 2005, Lincoln filed a notice of removal that purported to remove the action from OAH to this Court. On June 20, 2005, Lincoln filed a motion to dismiss the claims asserted in the Gottliebs' complaint. On July 13, 2005, MIA filed a motion to strike all filings made by Lincoln or in the alternative to remand. On August 5, 2005, Lincoln filed a motion to strike MIA's motion. On August 8, 2005, Lincoln filed an emergency motion to stay the state proceedings and request for emergency hearing. On August 15, 2005, Lincoln filed a motion to shorten time for plaintiffs to respond to Lincoln's emergency motion. On September 2, 2005, Lincoln filed a motion for leave to file a surreply.
"The burden of establishing federal jurisdiction is placed on the party seeking removal." Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir.1994) (citing Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97, 42 S.Ct. 35, 66 L.Ed. 144 (1921)). Furthermore, "[b]ecause removal jurisdiction raises significant federalism concerns," courts "must strictly construe removal jurisdiction." Id. (citing Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 61 S.Ct. 868, 85 L.Ed. 1214 (1941)). "If federal jurisdiction is doubtful, a remand is necessary." Mulcahey, 29 F.3d at 151 (). This strict policy against removal and for remand protects the sovereignty of state governments and state judicial power. Shamrock, 313 U.S. at 108-09, 61 S.Ct. 868.
MIA began participating in this action without moving to intervene under Fed.R.Civ.P. 24. Lincoln relies on this fact to argue that this Court cannot consider the merits of MIA's motions. In response, MIA requests that this Court treat its first motion as a motion to intervene. For reasons explained below, this Court will grant this request and allow MIA to intervene. Cf. Woodruff v. Hartford Life Group Ins. Co., 378 F.Supp.2d 546, 551 (D.Md.2005) ().
Intervention is governed by Fed.R.Civ.P. 24, which provides in part that:
(a) Intervention of Right. Upon timely application anyone shall be permitted to intervene in an action: ... (2) when the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest, unless the applicant's interest is adequately represented by existing parties.
(b) Permissive Intervention. Upon timely application anyone may be permitted to intervene in an action: ... (2) when an applicant's claim or defense and the main action have a question of law or fact in common. When a party to an action relies for ground of claim or defense upon any statute or executive order administered by a federal or state governmental officer or agency or upon any regulation, order, requirement, or agreement issued or made pursuant to the statute or executive order, the officer or agency upon timely application may be permitted to intervene in the action.
MIA argues that it may intervene in this action on the basis of either Rule 24(a)(2) or Rule 24(b)(2). See Resp. to Lincoln's Mot. to Strike, p. 4.
The United States Court of Appeals for the Fourth Circuit interprets Rule 24(a)(2) to entitle an applicant to intervene as a matter of right if the applicant can demonstrate: (1) a significantly protectable interest in the subject matter of the action; (2) that the protection of this interest would be impaired because of the action; and (3) that the applicant's interest is not adequately represented by existing parties to the litigation. See Teague v. Bakker, 931 F.2d 259, 260-61 (4th Cir.1991) (citations omitted). Applying this standard, this Court finds that MIA is entitled to intervene in this action as a matter of right.
First, MIA has a significantly protectable interest in the subject matter of this action. MIA has a statutory obligation to oversee and enforce Maryland's insurance licensing and regulatory laws. See, e.g., Md.Code Ann. [Ins.] § 16-106 (2005). The subject matter of this action is the complaint that the Gottliebs filed with MIA on January 24, 2005. MIA's interest in that subject matter is narrow, particular, and jurisdictional, i.e., protecting its position that reviewing Lincoln's conduct under Maryland licensing and regulatory laws is not barred by the settlement of civil contract and tort claims asserted in a class action lawsuit.1 (See Notice of Removal Ex. 6 (); see also Lincoln's Reply in Furtherance of Its Motion to Strike MIA's Motion to Strike, Ex. 3, p. 2 ().)
Second, MIA's interest would be impaired if this matter were disposed of without MIA. MIA's interest involves reviewing Lincoln's conduct when it sold life insurance policies to the Gottliebs for a very specific purpose: to determine whether that conduct violated Maryland licensing and regulatory laws. If this matter were to proceed without MIA, however, that conduct would be reviewed under Maryland tort law, not Maryland licensing and regulatory law. Moreover, as Lincoln carefully points out, if this action were to proceed in this Court, MIA would...
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...not a state court raises [a] jurisdictional defect,” which can be considered by the court, sua sponte. Gottlieb v. Lincoln Nat'l Life Ins. Co., 388 F.Supp.2d 574, 579 & n. 3 (D.Md.2005). Although the Fourth Circuit has not addressed the issue, the Third Circuit has likewise considered, sua ......
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...preemption in areas such as insurance, which are traditionally regulated under state police powers. Cf. Gottlieb v. Lincoln Nat'l Life Ins. Co., 388 F.Supp.2d 574, 582 (D.Md.2005) (noting the State of Maryland's substantial interest in regulating Maryland insurance companies, agents, and br......
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