Haisch v. Allstate Ins. Co., CIV-96-1647-PHX-ROS.
| Decision Date | 22 October 1996 |
| Docket Number | No. CIV-96-1647-PHX-ROS.,CIV-96-1647-PHX-ROS. |
| Citation | 942 F.Supp. 1245 |
| Parties | Elizabeth HAISCH, on behalf of herself and all others similarly situated, Plaintiff, v. ALLSTATE INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — District of Arizona |
Steve W. Berman, Hagens & Berman, Seattle, WA, Richard Anthony Dillenburg, Van O'Steen & Partners, Mesa, AZ, for plaintiff.
Keith B. Forsyth, Evan S. Goldstein, Grossman O'Grady & McGoldrick, Scottsdale, AZ, for defendant.
Plaintiff Elizabeth Haisch moves to remand this action to the state court from which it was removed by Defendant Allstate Insurance Company.
On February 16, 1996, Plaintiff, an Arizona resident, individually and on behalf of a putative class of Allstate Insurance Company insureds who paid premiums for Allstate Medical Payments ("Med Pay") coverage and were members of a Health Care Service Organization ("HCSO") or otherwise had health insurance from February 16, 1993 to the present,1 filed this action in the Superior Court of the State of Arizona in and for Maricopa County against Defendant Allstate Insurance Company, an Illinois corporation. As amended on June 14, 1996, the complaint alleges that while Defendant offers to all of its Arizona automobile policyholders optional Med Pay automobile coverage, under which Defendant promises to pay all reasonable expenses of its insured arising out of necessary medical treatment following an accident, Defendant uniformly refuses to pay for medical expenses incurred by its insured if those expenses are already covered by the insured's HCSO or health insurance. (Am. Compl. ¶¶ 2-3, 23.) The complaint alleges that Med Pay's failure to cover any medical expenses already covered by the insured's HCSO or health insurance renders such coverage useless to insureds who belong to an HCSO or health insurance plan.2 (Am. Compl. ¶ 4.) The complaint further alleges that although Defendant knows about the uselessness of Med Pay coverage to its insureds who belong to an HCSO or a health insurance plan, Defendant has offered and continues to offer Med Pay coverage as an option to its insureds and fails to disclose that it will refuse to pay for any medical expenses already covered by the insured's HCSO or health insurance. (Am.Compl. ¶¶ 5, 30.) The complaint alleges that the amount in controversy does not exceed $50,000 for Plaintiff Haisch or any member of the putative class. (Am.Compl. ¶ 12.) The complaint, which alleges negligent misrepresentation, misrepresentation, A.R.S. § 20-443, and violation of the Arizona Consumer Fraud Act, A.R.S. § 44-1521, seeks unspecified compensatory and punitive damages, declaratory and injunctive relief, attorney's fees, expert witness fees, and costs.3 (Am.Compl. at 11.)
On July 12, 1996, Defendant filed a Notice of Removal pursuant to 28 U.S.C. § 1441 alleging diversity jurisdiction under 28 U.S.C. § 1332. Plaintiff now seeks to remand this action on the grounds that Defendant has failed to meet the $50,000 amount in controversy requirement. Plaintiff also seeks costs and attorney's fees incurred as a result of the removal.
A federal court may exercise removal jurisdiction over a case only if jurisdiction existed over the suit as originally brought by the plaintiff. 28 U.S.C. § 1441(a). A strong presumption exists against removal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir.1992). The removing party bears the burden of establishing that federal subject matter jurisdiction exists. Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97, 42 S.Ct. 35, 37, 66 L.Ed. 144 (1921); Emrich v. Touche Ross & Co., 846 F.2d 1190, 1195 (9th Cir.1988).
As an initial matter, this Court recognizes that Defendant's Notice of Removal would be untimely if Plaintiff had served or otherwise provided Defendant with a copy of the original complaint in this case more than 30 days prior to the filing of the Notice of Removal. 28 U.S.C. § 1446(b). However, there is no indication in the Maricopa County Superior Court docket sheet, which was included in the record, that the original complaint was ever served on or otherwise provided to Defendant. Moreover, Plaintiff has not raised the timeliness of the Notice of Removal as a ground for remanding this case. As such, this Court concludes that Plaintiff has waived the timeliness of the Notice of Removal as a basis for remand. Fristoe v. Reynolds Metals Co., 615 F.2d 1209, 1212 (9th Cir.1980) ().
Diversity jurisdiction is proper only if the matter is between citizens of different states and the amount in controversy exceeds the sum of $50,000. 28 U.S.C. § 1332. There is no dispute that the parties in the instant case are diverse.4 Thus, the sole issue to be resolved is whether the amount in controversy exceeds $50,000 for Plaintiff and each class member.
In a class action suit, each plaintiff's claim must satisfy the jurisdictional amount requirement. Zahn v. International Paper Co., 414 U.S. 291, 301, 94 S.Ct. 505, 512, 38 L.Ed.2d 511 (1973). If the plaintiff's complaint does not allege a specific amount of damages, the removing defendant must prove by a preponderance of the evidence that the amount in controversy exceeds $50,000. Sanchez v. Monumental Life Ins. Co., 95 F.3d 856, 862 (9th Cir.1996); Gaus, 980 F.2d at 566-67. The defendant must set forth evidence establishing that it is more likely than not that the amount in controversy exceeds the required amount. Sanchez, 95 F.3d at 862 (quotation and citation omitted). Conclusory allegations that the damages are in excess of the jurisdictionally required sum are insufficient. Gaus, 980 F.2d at 567.
In the instant case, because Plaintiff's complaint does not allege a specific amount of damages,5 Defendant must prove by a preponderance of the evidence that the amount in controversy exceeds $50,000 for Plaintiff and each class member.
Actual damages in this case is likely to be quite small per plaintiff. Plaintiff seeks to recover a return of her Med Pay premiums and interest accrued therefrom. (Am.Compl. ¶¶ 7, 37, 41, 45.) Plaintiff Haisch contends in the Motion to Remand that she personally expended $968 in Med Pay premiums over a six-year period. (Pl.'s Mot. Remand at 2.) Thus, the actual damages alleged by Plaintiff Haisch amount to approximately $1,000.00. Defendant has failed to dispute this figure or otherwise argue that any of the class members' actual damages are significantly higher. Thus, Defendant has failed to show that any of the class members' actual damages will significantly contribute towards meeting the $50,000 jurisdictional threshold.
With respect to Plaintiff's request for injunctive relief, she merely seeks that Defendant "cease and desist from engaging in the conduct" alleged in the complaint. (Am. Compl. at 11.) Because the Ninth Circuit has firmly rejected the examination of the potential detriment accruing to Defendant as a result of the equitable relief sought, see Snow v. Ford Motor Co., 561 F.2d 787, 790 (9th Cir.1977), this Court must examine the potential benefits arising out of the injunctive relief that might accrue in favor of Plaintiff and the class. However, because Defendant has failed to address the effect of equitable relief on the amount in controversy requirement, it would be speculative to calculate the value accruing to Plaintiff and the class from the equitable relief sought. Thus, this Court is not persuaded that the equitable relief sought by Plaintiff would significantly contribute towards establishing diversity jurisdiction.
Although attorney's fees and costs could be substantial, a potentially sizeable class action lawsuit, Defendant completely fails to address this matter in either its Notice of Removal or Response to Plaintiff's Motion to Remand. Moreover, as this Court's analysis of punitive damages will demonstrate, it is unlikely that the potential attorney's fees will be so immense that the required amount in controversy with respect to each of the putative class members can be met. See Karofsky v. Abbott Lab., 921 F.Supp. 18, 20 (D.Me. 1996) (). In any event, without any briefing from Defendant, this Court will not speculative with respect to whether attorney's fees and costs would significantly contribute towards establishing diversity jurisdiction.
With respect to the class members' claims for punitive damages,6 (Am.Compl. ¶ 7), Defendant alleges that extraordinarily large punitive damages awards have been awarded against insurance companies in cases involving fraud. (Def.'s Notice of Removal ¶ 9.) Defendant also contends that its wealth and financial resources vastly increase the likelihood that a potential punitive damages award would be "considerable." (Def.'s Notice of Removal ¶ 10.) In essence, Defendant states that merely because extraordinary punitive damages have been awarded in similar cases and the size of its financial resources constitute sufficient evidence that the amount in controversy requirement in the instant case has been met for Plaintiff and each of the class members. (Def.'s Opp'n Mem. at 6.) This Court disagrees. It would be inherently speculative for this Court to conclude that the amount in controversy requirement can be met by simply asserting that large punitive damage awards have been awarded in the past against insurance companies faced with allegations of fraud. As Plaintiff points out, Defendant has failed to articulate why the particular facts that are alleged in the instant action might warrant extraordinary punitive damages.
Moreover, Bolling v. Union Nat'l Life Ins. Co., 900 F.Supp. 400 (M.D.Ala.1995), the case upon which Defendant places primary reliance for...
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