S. Fla. Wellness, Inc. v. Allstate Ins. Co.

• Citation: 745 F.3d 1312
• Decision Date: 14 February 2014
• Docket Number: No. 14–10001,Non–Argument Calendar.,14–10001,n–Argument Calendar.
• Parties: SOUTH FLORIDA WELLNESS, INC., individually, and on behalf of all others similarly situated, Plaintiff–Appellee, v. ALLSTATE INSURANCE COMPANY, Defendant–Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

745 F.3d 1312

SOUTH FLORIDA WELLNESS, INC., individually, and on behalf of all others similarly situated, Plaintiff–Appellee,

v.ALLSTATE INSURANCE COMPANY, Defendant–Appellant.

No. 14–10001

Non–Argument Calendar.

United States Court of Appeals,Eleventh Circuit.

Feb. 14, 2014.

Lawrence M. Kopelman, Kopelman & Blankman, PA, Fort Lauderdale, FL, for Plaintiff–Appellee.

Douglas G. Brehm, Shutts & Bowen, LLP, Miami, FL, for Defendant–Appellant.

Appeal from the United States District Court for the Southern District of Florida. D.C. Docket No. 0:13–cv–61759–WPD.

Before CARNES, Chief Judge, MARCUS and PRYOR, Circuit Judges.

CARNES, Chief Judge:

This appeal brings us the issue of whether the Class Action Fairness Act's $5,000,000 amount-in-controversy requirement can be satisfied if the plaintiff seeks only declaratory relief. If it can be, there is federal jurisdiction in this case. If it cannot be, there is not. Concluding that a pure declaratory judgment action could not carry the required jurisdictional freight, the district court remanded the case to state court. Concluding that a declaratory judgment action can be up to the task, and that this one is, we reverse.

I.

In January 2012 Florencio Sanchez was injured in an automobile accident and received medical treatment at South Florida Wellness, Inc. (Wellness), a Florida-based healthcare provider. Sanchez was insured by Allstate Insurance Company under a policy that provided her with personal injury protection (PIP) coverage, and in connection with treatment that she received there, Sanchez assigned to Wellness her right to benefits under that policy. Wellness sought payment of 80% of the amount it had billed Sanchez, but Allstate paid a lower amount based on its interpretation of Sanchez's policy. Instead of paying 80% of the total amount billed, Allstate paid Wellness only 80% of certain amounts set out in the statutory fee schedule contained in Fla. Stat. § 627.736(5)(a).

The general rule for PIP coverage in Florida is that an insurance policy must cover 80% of all reasonable costs for medically necessary treatment resulting from an automobile accident, subject to certain limits. SeeFla. Stat. § 627.736(1)(a). That is the payment Wellness sought from Allstate. Florida law also provides, however, that an insurer may opt out of the general payment rule and instead limit payment to 80% of a statutory fee schedule. See id. § 627.736(5)(a). Allstate claims that it opted out of the general payment rule in favor of the more limited statutory fee schedule approach in its Florida PIP policies, including the one that covered Sanchez.

In July 2013, Wellness filed this putative class action in Florida state court, contending that a recent Florida Supreme Court decision requires any insurer choosing to limit payments to the statutory fee schedule to clearly and unambiguously indicate in the insurance policy that it is doing so. See Appellee Brief at 2; see also Geico Gen. Ins. Co. v. Virtual Imaging Servs., Inc., ––– So.3d ––––, ––––, ––––, 2013 WL 3332385, at *8, *10 (Fla. July 3, 2013). Wellness claims that Allstate failed to do so. Its complaint proposed the following class:

Any and all health care providers and insureds who submitted claims for no-fault benefits under PIP policies which were in effect from March, 2008, where Allstate utilized the reimbursement methodology pursuant to Florida Statute 627.736(5)(a) 2(a-f) (2008) (the fee schedule) to limit reimbursement to the provider or the insured where the policy did not expressly and unambiguously indicate Defendant's election to limit reimbursement in accordance with Florida Statute 627.736(5)(a) 2 as its sole methodology for payment of No Fault claims.

The complaint seeks no monetary damages. It seeks only a declaration that the form language Allstate used in the class members' PIP insurance policies did not clearly and unambiguously indicate that payments would be limited to the levels provided for in § 627.736(5)(a).

Allstate removed the case to federal court in August 2013, asserting that the Class Action Fairness Act (CAFA), 28 U.S.C. § 1332(d)(2), provided for federal subject matter jurisdiction over the lawsuit. In support of its claim of federal jurisdiction, Allstate submitted an affidavit from Tara Watson, an Allstate employee personally familiar with PIP claim-related business records maintained by the company. Watson attested that the putative class included over 100 healthcare providers and insureds who had submitted “1,655,733 bills for payment or reimbursement” of medical expenses based on PIP coverage under Allstate Florida auto policies during the relevant time period. She calculated that Allstate had paid out $126,474,216.25 in benefits for those claims based on the fee schedule in § 627.736(5)(a). She also calculated that if Allstate had not limited payment based on § 627.736(5)(a), then the putative class members would have been entitled to $194,651,033.94 in benefits (80% of the billed amounts). Allstate maintained that the amount in controversy was the difference between those two figures—$68,176,817.69—because that is the additional amount of benefits the putative class members would be eligible to recover in the event that they received the declaratory judgment.

Wellness moved to remand the case to state court. It contended that Allstate had not established that the amount in controversy exceeds $5 million because the complaint did not seek damages but only a declaration that the language of the Allstate insurance policies did not clearly and unambiguously adopt the coverage caps of § 627.736(5)(a), as Florida law requires for them to be effective. While recognizing a declaration in its favor would entitle the class members to seek additional payment from Allstate, Wellness nevertheless argued that the financial effects of the declaratory judgment could not be considered for purposes of determining the amount in controversy because those effects were too speculative.

The district court granted the motion to remand. It agreed with Wellness that “the value of the declaratory relief [was] too speculative” for purposes of satisfying CAFA's amount-in-controversy requirement because Allstate had failed to show that “declaratory judgment in this case will necessarily trigger a flow of money to [the] plaintiffs.” Allstate, of course, disagrees and contends that it met its burden of showing that the amount in controversy involving the declaratory judgment Wellness seeks exceeds $5 million.

II.

CAFA grants subject matter jurisdiction to federal district courts over class actions in which (1) any member of the plaintiff class is a citizen of a state different from the state of citizenship of any defendant, (2) the aggregate amount in controversy exceeds $5 million, and (3) the proposed plaintiff class contains at least 100 members.¹See28 U.S.C. § 1332(d)(2), (5)-(6); see also7A Charles Alan Wright et al., Federal Practice and Procedure § 1756.2 (3d ed.2005). Only the second of those three requirements is at issue in this appeal.

“We review de novo the district court's decision to remand a case to state court for lack of subject matter jurisdiction.” Lowery v. Ala. Power Co., 483 F.3d 1184, 1193 (11th Cir.2007). Where the plaintiff has not alleged a specific amount of damages, the defendant seeking removal must establish by a preponderance of the evidence that the amount in controversy exceeds the jurisdictional minimum. Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 752 (11th Cir.2010). A court may rely on evidence put forward by the removing defendant, as well as reasonable inferences and deductions drawn from that evidence, to determine whether the defendant has carried its burden. Id. at 753–54.

What counts is the amount in controversy at the time of removal. Id. at 751. It is less a prediction of “how much the plaintiffs are ultimately likely to recover,” than it is an estimate of how much will be put at issue during the litigation; in other words, the amount is not discounted by the chance that the plaintiffs will lose on the merits. Id. (quotation marks omitted); see also McPhail v. Deere & Co., 529 F.3d 947, 956 (10th Cir.2008) (“The amount in controversy is not proof of the amount the plaintiff will recover. Rather, it is an estimate of the amount that will be put at issue in the course of the litigation.”). Potential developments, such as “[t]he possibility that the putative class will not be certified, or that some of the unnamed class members will opt out,” are irrelevant to the jurisdictional analysis. Pretka, 608 F.3d at 772 (noting that the jurisdictional determination “is based only on the facts as they exist at the time of removal”).

We have held that “[f]or amount in controversy purposes, the value of injunctive or declaratory relief is the value of the object of the litigation measured from the plaintiff's perspective.” Morrison v. Allstate Indem. Co., 228 F.3d 1255, 1268 (11th Cir.2000) (quotation marks omitted). Stated another way, the value of declaratory relief is “the monetary value of the benefit that would flow to the plaintiff if the [relief he is seeking] were granted.” Id. For CAFA purposes, we aggregate the claims of individual class members and consider the monetary value that would flow to the entire class if declaratory relief were granted. See28 U.S.C. § 1332(d)(6); see also Cappuccitti v. DirecTV, Inc., 623 F.3d 1118, 1122 (11th Cir.2010); Pretka, 608 F.3d at 772. While absolute certainty is neither attainable nor required, the value of declaratory or injunctive relief must be “sufficiently measurable and certain” to satisfy the amount-in-controversy requirement. Morrison, 228 F.3d at 1269. That requirement is not satisfied if the value of the equitable relief is “too speculative and immeasurable.” Cohen v. Office Depot, Inc., 204 F.3d 1069, 1077 (11th Cir.2000) (quotation marks omitted); see also Leonard v. Enter. Rent a Car, 279 F.3d 967, 973 (...