Papurello v. State Farm Fire & Cas. Co.

• Decision Date: 16 November 2015
• Docket Number: Civ. A. No. 15–1005.
• Citation: 144 F.Supp.3d 746
• Court: U.S. District Court — Western District of Pennsylvania
• Parties: Vincent PAPURELLO and Linda Papurello, individually and on behalf of others similarly situated, Plaintiffs, v. STATE FARM FIRE & CAS. CO., Defendant.

144 F.Supp.3d 746

Vincent PAPURELLO and Linda Papurello, individually and on behalf of others similarly situated, Plaintiffs,

v.STATE FARM FIRE & CAS. CO., Defendant.

Civ. A. No. 15–1005.

United States District Court, W.D. Pennsylvania.

Signed Nov. 16, 2015.

Daniel P. McDyer, Anstandig, McDyer & Yurcon, P.C., Pittsburgh, PA, for Plaintiffs.

Robert E. Dapper, Jr., Daniel J. Twilla, Dapper, Baldasare, Benson, Behling and Kane, P.C., Pittsburgh, PA, Heidi Dalenberg, Joseph A. Cancila, Jr., Schiff Hardin LLP, Chicago, IL, Suzanne L. Wahl, Schiff Hardin LLP, Ann Arbor, MI, Defendant.

OPINION

CONTI, Chief Judge.

I. Introduction

This insurance class action was removed to this court from the Court of Common Pleas of Allegheny County, Pennsylvania. Individually and on behalf of a putative class of Pennsylvania homeowners, plaintiffs Vincent and Linda Papurello (“plaintiffs”) allege defendant State Farm Fire and Casualty Co. (“defendant” or “State Farm”) violated Pennsylvania law by paying initial amounts under homeowners' insurance policies determined by a two-step procedure. Under that procedure, State Farm made a payment under the first step equal to the amount of estimated replacement costs of materials, taxes, and labor less depreciation.

This opinion addresses: (1) plaintiffs' motion for remand to state court or abstention (ECF No. 15); and (2) defendant's motion to dismiss plaintiffs' amended complaint for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6) (“Rule 12(b)(6) ”). (ECF No. 20.)

II. Procedural History

On July 6, 2015, plaintiffs filed a three-count class action complaint against defendant in the Court of Common Pleas of Allegheny County, Pennsylvania, alleging: (1) individual and class-wide Pennsylvania common law breach of contract claims; (2) individual and class-wide claims under Pennsylvania's insurance bad faith statute, 42 Pa. Cons.Stat. § 8371 ; and (3) individual and class-wide claims under Pennsylvania's Unfair Trade Practices and Consumer Protection Law (the “CPL”), 73 PA. STAT. §§ 201–1 et seq. (ECF No. 1–2.)

On August 3, 2015, defendant removed this putative class action to this court pursuant to 28 U.S.C. §§ 1441 and 1453, asserting traditional diversity jurisdiction under 28 U.S.C. § 1332(a)(1), supplemental jurisdiction under 28 U.S.C. § 1367, and jurisdiction under the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. § 1332(d)(2). (ECF No. 1 at 1.)

On August 31, 2015, plaintiffs filed an amended complaint against defendant. (ECF No. 10.) In their amended complaint, plaintiffs modified their class definition to include

[a]ll persons who, since January 1, 2011[:] (a) were policyholders under [defendant's homeowners'] policy which promised replacement cost[;] and (b) incurred covered partial damage to their residence, located in ... Pennsylvania, for which a claim was accepted ... [and] a replacement cost for the loss [was] determined by [defendant], but from which replacement cost [defendant] deducted depreciation amounts and taxes.¹

(Id. at 7–8 ¶ 28.)

On September 2, 2015, plaintiffs filed the instant motion for remand to state court or abstention and a supporting brief. (ECF Nos. 15, 16.) On September 23, 2015, defendant filed a response in opposition to plaintiffs' motion for remand or abstention and a supporting brief. (ECF Nos. 22, 23.)

On September 23, 2015, defendant filed the instant Rule 12(b)(6) motion to dismiss plaintiffs' amended complaint in its entirety and a supporting brief. (ECF Nos. 20, 21.) On October 9, 2015, plaintiffs filed a response in opposition to defendant's Rule 12(b)(6) motion to dismiss and a supporting brief. (ECF Nos. 26, 27.)

On October 29, 2015, the court held a hearing at which the parties argued plaintiffs' motion for remand or abstention and defendant's Rule 12(b)(6) motion to dismiss.

Having been fully briefed and argued, plaintiffs' and defendant's motions are ripe for disposition. For the reasons set forth at the October 29, 2015 hearing and in this opinion, the court will: (1) deny plaintiffs' motion for remand or abstention; and (2) deny in part and grant in part defendant's Rule 12(b)(6) motion to dismiss. Plaintiffs' individual breach of contract and individual statutory bad faith claims shall proceed. Plaintiffs' individual CPL claim and class-wide breach of contract, statutory bad faith, and CPL claims will be dismissed with prejudice for failure to state a claim upon which relief can be granted, pursuant to Rule 12(b)(6).

Plaintiffs' motion for remand or abstention presents a threshold question of subject-matter jurisdiction the court must resolve before addressing defendant's Rule 12(b)(6) motion to dismiss. Lewis v. Ford Motor Co., 610 F.Supp.2d 476, 480 (W.D.Pa.2009) (“Because [the court] cannot address [the defendant's Rule 12(b)(6) motion to dismiss] if it does not have [subject-matter] jurisdiction, ... [the court] begin[s] [its] analysis with [the plaintiff's] [m]otion to [r]emand.”).

III. Discussion—Plaintiffs' Motion for Remand or Abstention

In their motion for remand or abstention, plaintiffs argue: (1) defendant failed to prove federal subject-matter jurisdiction by a preponderance of the evidence; and (2) the court should decline to hear this action pursuant to the abstention principles set forth in Burford v. Sun Oil Co., 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424 (1943). (ECF No. 16.)

Below, the court addresses: (A) the legal standards for and merits of plaintiffs' arguments for remand to state court for lack of federal subject-matter jurisdiction; and (B) the legal standard for and merits of plaintiffs' arguments for Burford abstention.

A. Remand to state court for lack of federal subject-matter jurisdiction

Unless expressly precluded by federal statute, a defendant may remove a civil action filed in state court to the federal district court for the district and division embracing the place in which the action pends, provided the federal district court has “original”—i.e., federal subject-matter—jurisdiction with respect to the plaintiff's claims. 28 U.S.C. § 1441(a). If the court lacks federal subject-matter—jurisdiction over the plaintiff's claims, the case must be remanded to state court. 28 U.S.C. § 1447(c) (“If at any time before final judgment it appears that the district court lacks [subject-matter] jurisdiction, the case shall be remanded [to state court].”).²

As stated previously, defendant removed this putative class action from state court to this court asserting: (1) diversity jurisdiction under 28 U.S.C. § 1332(a)(1) and supplemental jurisdiction under 28 U.S.C. § 1367 ; and (2) CAFA jurisdiction under 28 U.S.C. § 1332(d)(2). (ECF No. 1 at 1.)

For the reasons set forth below, the court concludes defendant established traditional § 1332(a)(1) diversity jurisdiction, § 1367 supplemental jurisdiction, and CAFA jurisdiction over plaintiffs' individual and class-wide claims.

1. Traditional diversity and supplemental jurisdiction

Pursuant to 28 U.S.C. § 1332(a)(1), “[f]ederal district courts are vested with original jurisdiction over civil actions” in which: (1) the parties are “ ‘citizens of different States' ”; and (2) the “matter in controversy exceeds the sum or value of $75,000,” exclusive of interest and costs. McCann v. Newman Irrevocable Trust, 458 F.3d 281, 286 (3d Cir.2006) (quoting 28 U.S.C. § 1332(a)(1) ). The party asserting § 1332(a)(1) diversity jurisdiction bears the burden of proof by a preponderance of the evidence. Id. (citing McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936) ).

If § 1332(a)(1) diversity jurisdiction applies to at least one of plaintiffs' state law claims, the court has discretion to exercise “supplemental jurisdiction” with respect to claims not within the court's original jurisdiction, provided the claims are “so related” they “form part of the same case or controversy under Article III of the United States Constitution.” 28 U.S.C. §§ 1367(a), (c) ; United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966) (holding supplemental jurisdiction is appropriate where state law claims share a “common nucleus of operative fact” with claims falling within the court's original jurisdiction). Section 1367 authorizes supplemental jurisdiction over putative class members' claims if “at least one named plaintiff” satisfies § 1332(a)(1)'s $75,000 amount in controversy requirement and complete diversity is present. See Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 549, 125 S.Ct. 2611, 162 L.Ed.2d 502 (2005).

Each requirement for § 1332(a)(1) diversity jurisdiction and § 1367 supplemental jurisdiction is addressed in turn below.

a. Complete diversity under § 1332(a)(1)

Traditional diversity jurisdiction under § 1332(a)(1) requires complete diversity of citizenship—i.e., all plaintiffs must be of diverse citizenship from all defendants. Strawbridge v. Curtiss, 7 U.S. 267, 267, 3 Cranch 267, 2 L.Ed. 435 (1806). Citizenship of natural persons is “synonymous with domicile, and ‘the domicile of an individual is his true, fixed and permanent home and place of habitation.’ ” McCann, 458 F.3d at 286 (quoting Vlandis v. Kline, 412 U.S. 441, 454, 93 S.Ct. 2230, 37 L.Ed.2d 63 (1973) ). “[A] corporation,” on the other hand, “shall be deemed ... a citizen of every [s]tate ... by which it has been incorporated and of the [s]tate ... where it has it.s principal place of business.” 28 U.S.C. § 1332(c)(1) (emphasis added). “ ‘[P]rincipal place of business' ”—as used in § 1332(c)(1) —refers to a corporation's “ ‘nerve center’ ”—i.e., “normally ... the place where the corporation maintains its headquarters....” Hertz Corp. v. Friend, 559 U.S. 77, 92–93, 130 S.Ct. 1181, 175 L.Ed.2d 1029 (2010).

In their state court complaint, the named plaintiffs allege they are “adult citizens of ... Pennsylvania” residing in Pittsburgh. (ECF No. 1–2 at 4 ¶ 1.) During the October 29, 2015 hearing,...