Opinion
No. 00-CV-0681-DRH.
December 14, 2000
MEMORANDUM AND ORDER
I. Introduction
On July 25, 2000, Manual Hernandez filed a class action complaint in the Circuit Court of Madison County, Illinois against American Family Mutual Insurance Company d/b/a American Family Insurance, ("American Family") (Doc. 2). On behalf of himself and other similarly situated persons, Hernandez alleges that American Family has engaged in a practice of manufacturing disputes over medical claims under auto insurance policies in order to avoid paying the full amount of benefits owed under such policies. Hernandez alleges breach of contract, violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq., and common law fraud. Hernandez seeks compensatory damages and punitive damages not to exceed $75,000 or an award of damages through fluid recovery not to exceed $75,000 per class member.
On August 30, 2000, American Family removed the action to this Court, asserting that subject matter jurisdiction lies under the federal diversity statute, 28 U.S.C. § 1332. On September 14, 2000, Hernandez moved to remand the case to state court based on lack of subject matter jurisdiction (Doc. 7). American Family objects to the remand motion. Having reviewed the pleadings and the applicable case law, the Court finds that it lacks subject matter jurisdiction and grants Hernandez's motion to remand.
II. Analysis
American Family does not contend that Hernandez's breach of contract, common law fraud and consumer fraud action presents any federal question. American Family asserts jurisdiction only under the federal diversity statute. That statute requires complete diversity between the parties plus an amount in controversy which exceeds $75,000.00, exclusive of interest and costs. Complete diversity means that "none of the parties on either side of the litigation may be a citizen of the state of which a party on the other side is a citizen." Howell v. Tribune Entertainment Co ., 106 F.3d 215, 217 (7th Cir. 1997). Therefore, the Court must determine whether Hernandez's action satisfies the amount in controversy requirement and whether the parties are diverse.
The removal statute, 28 U.S.C. § 1441, is construed narrowly, and doubts concerning removal are resolved in favor of remand. Doe v. Allied-Signal, Inc ., 985 F.2d 908, 911 (7th Cir. 1993). To remove an action based on federal diversity jurisdiction, a defendant must establish the elements by competent proof showing a reasonable probability that such jurisdiction exists. Chase v. Shop `N Save Warehouse Foods, Inc ., 110 F.3d 424, 427 (7th Cir. 1997). Therefore, the defendant must show that at least one of the named plaintiffs has a claim that exceeds the $75,000 threshold. In re Brand Prescription Drugs Antitrust Litigation , 123 F.3d 599, 607 (7th Cir. 1997), cert. denied , 522 U.S. 1153 (1998); Garbie v. DaimlerChrysler Corp ., 211 F.3d 407, 409 (7th Cir. 2000). If one named plaintiff exceeds that amount, any other named plaintiffs "and the unnamed class members can, by virtue of the supplemental jurisdiction conferred on the federal district courts by 28 U.S.C. § 1367, piggyback on that plaintiff's claim." Brand Name Prescription , 123 F.3d at 607.
A plaintiff can block removal of an action based upon diversity jurisdiction by giving with his or her state court complaint a binding stipulation or affidavit that an amount less than $75,000, exclusive interest and costs, is in controversy, see In re Shell Oil Co ., 970 F.2d 355, 356 (7th Cir. 1992) (per curiam), or simply by disclaiming any recovery in excess of the jurisdictional minimum, see Brand Name Prescription , 123 F.3d at 607. In a class action, claims may be aggregated to satisfy the jurisdictional amount in controversy if plaintiffs are seeking to enforce a single title or right in which they have a common and undivided interest. Id . at 608 ( citing Snyder v. Harris , 394 U.S. 332, 335 (1969)). A single title or right exists for the purposes of aggregation if the amount in controversy in an action is an aggregate in which each plaintiff has an undivided share so that the absence of any plaintiff from the action would serve to increase the recovery of all the other plaintiffs. Id . (citing Shields v. Thomas , 58 U.S. (17 How.) 3, 5 (1854)). Further, the Seventh Circuit recently held that in class actions "[w]hatever the form of relief sought, each plaintiff's claim must be held separate from each other plaintiff's claim from both the plaintiff's and the defendant's standpoint." Del Vecchio v. Conseco, Inc ., 230 F.3d 974, 978 (7th Cir. 2000) (emphasis added) (quoting Brand Name Prescription , 123 F.3d at 610). Hence, the amount in controversy from a defendant's point of view is the amount the defendant risks paying the named plaintiff, not the amount the defendant may have to pay the entire class. Id .
Even valuing the amount in controversy from American Family's viewpoint, the Court finds that American Family has failed to show by competent proof a reasonable probability that an amount exceeding $75,000, exclusive of interest and costs, is in controversy. American Family urges the Court to find that under the theories of fluid recovery and unjust enrichment based upon on the aggregation of the class members claims, the amount in controversy exceeds $75,000. The Court is not persuaded by this argument. First, Hernandez expressly disclaimed in his state court complaint any recovery in excess of $75,000 (Doc. 2, p. 2 — 7, p. 14, p. 15 p. 16). Second, no single title or right in which the class members have a common and undivided interest is at issue in this case for the purposes of aggregation. This is not a case where there is one res at issue, such as an estate. See Del Vecchio , 230 F.3d at 978. Instead, the class members are seeking relief which any of them could pursue individually, and no class member's recovery depends upon or is affected by the presence of any other class member in this action. The Court finds that each of the insureds is entitled to his or her own separate recovery. Therefore, American Family's argument is not in accord with the holdings of the Seventh Circuit.
"Accepted wisdom" provides that the plaintiff's evaluation of the stakes must be respected when deciding whether a claim meets the amount in controversy requirement for federal diversity jurisdiction. Barbers, Hairstyling for Men Women, Inc., v. Bishop , 132 F.3d 1203, 1205 (7th Cir. 1997). Hernandez's complaint alleges that the amount in controversy as to his claims is less than $75,000. American Family has not demonstrated with reasonable probability that it risks paying Hernandez — the named plaintiff — more than the $75,000 needed to confer subject matter jurisdiction on this Court. See Brand Name Prescription , 123 F.3d at 607. The Court agrees with the Seventh Circuit's succinct assessment in a recent class action suit: "None of the plaintiffs is apt to recover anything close to $75,000." Garbie , 211 F.3d at 410. Further, additional defects flaw this removal.
For instance, the Court cannot determine that complete diversity exists. Hernandez identifies himself as an Illinois citizen. American Family's removal notice identifies Hernandez as an Illinois citizen and itself as follows: ". . . defendant is not a citizen of the state of Illinois" and "Plaintiff alleges that defendant "American Family Mutual Insurance Company d/b/a American Family Insurance is a foreign corporation which does business in Illinois and throughout the United States (Class Action Complaint, ¶ 13). (Doc. 1, p. 3, ¶ 4 ¶ 9). The party invoking federal diversity jurisdiction "must satisfy the diversity requirements for each defendant or else encounter dismissal." Kamel v. Hill-Rom Co ., 108 F.3d 799, 805-806 (7th Cir. 1997). The existence of diversity jurisdiction "cannot be determined without knowledge of every defendant's place of citizenship." Howell , 106 at 217. Here, the Court does not "know" the place(s) of American Family's citizenship, so the existence of complete diversity cannot be established. The requirements of the federal diversity statute have not been satisfied. Stated simply, subject matter jurisdiction does not lie here. Stated simply, subject matter jurisdiction does not lie here.
See also Market Street Associates Limited Partnership v. Frey , 941 F.2d 588, 589-90 (7th Cir. 1991) (jurisdictional allegations insufficient where removing defendant listed only the citizenship of the plaintiff's sole general partner — not the limited partners of the partnership — and stated "none of the defendants is a citizen of" Wisconsin, the state of plaintiff's citizenship).
III. Conclusion
Because it lacks subject matter jurisdiction, the Court GRANTS Hernandez's motion to remand (Doc. 7) and REMANDS this case to the Circuit Court of Madison County, Illinois. Further, the Court DENIES as moot the remaining pending motions (Docs. 5, 16, 26 29).
IT IS SO ORDERED.