Opinion
01 Civ. 9498 (MBM)
March 14, 2002
WILLIAM M. SHERNOFF, ESQ. JEFFREY ISAAC EHRLICH, ESQ. (Attorneys for Plaintiffs) Shernoff Bidart Darras Claremont, CA 91711-5498
LANCE A. ETCHEVERRY, ESQ. (Attorney for Defendant) Skadden Arps Los Angeles, CA 90071-3144
FRANKLIN B. VELIE, ESQ. DEIRDRE A. BURGMAN, ESQ. (Attorneys for Defendant) Salans Hertzfeld Heilbronn Christy Viener New York, N Y 10020-2457
OPINION AND ORDER
This case was filed initially in the state courts of California. It is one of a group of cases filed throughout the country in which claimants under life insurance policies issued to victims of the German campaign of genocide preceding and during World War II, known as the Holocaust, have sued insurers for failure to pay benefits. The claimant in this case has sued on her own behalf and on behalf of others similarly situated to enjoin one of those insurance companies, defendant Assicurazioni Generali S.p.A., from allegedly misleading potential claimants in California as to the strength of their claims for both contractual and extracontractual damages, including punitive damages.
Following removal to the United States District Court for the Central District of California, the case was transferred to this court by order of the Judicial Panel on Multidistrict Litigation. Pending at the time of the transfer was plaintiff's motion to remand the case to the state courts of California because the complaint does not seek relief that meets the federal jurisdictional threshold of $75,000. For the reasons set forth below, the motion is denied.
Plaintiff's argument is easily summarized. Her complaint seeks only injunctive relief to abate what she describes as Generali's misleading practice of soliciting potential claimants to participate in a compensation scheme developed by an entity called the International Commission on Holocaust Era Insurance Claims ("ICHEIC"). (See, e.g., Cmplt. ¶ 30) According to the complaint, Generali fails to disclose to potential claimants that they are being asked to give up rights to sue for "contractual damages, extra-contractual damages, and punitive damages" (Cmplt. ¶ 41) and are encouraged instead, without proper disclosure, to settle claims for far less than their true value through a formula developed by ICHEIC, a strictly private entity funded by its insurer members, including Generali. (See e.g., id. at ¶¶ 42-45) Although plaintiff does not state in her complaint the value of her claim, or the range of values of claims by members of the class, she states that Generali itself has paid settlements in prior lawsuits in California to collect proceeds of insurance policies of the sort at issue in this case that "substantially exceed" (id. ¶ 44) the amounts Generali offers under the ICHEIC formula. Because she seeks only injunctive relief to stop misleading practices, plaintiff reasons, the value to each potential claimant is nominal.
Generali argues that the value of the underlying controversy is the true value to be considered, notes that plaintiff's counsel in prior cases "invariably seek vastly more than $75,000 for such claims against Generali" (Def. Mem. at 3; see Simshauser Decl. ¶¶ 5-13 and Exs. 3-9, showing, inter alia, that counsel have made settlement demands exceeding $300,000 in other similar cases), and cites as well the pending class action complaint, which raises the same underlying claim as this plaintiff's complaint and was filed in the first instance in federal court.
Defendant, having removed the case to federal court and thereby having averred the existence of federal jurisdiction, has the burden to prove that such jurisdiction exists. See United Food Commercial Workers Union v. CenterMark Properties Meriden Square, Inc., 30 F.3d 298, 301 (2d Cir. 1994). Moreover, if the averring party's allegations of jurisdiction are challenged "`in any appropriate manner,'" as they are here, "[the averring party] `must support them by competent proof.'" Id. (alteration in original) (quoting McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189 (1936)
Defendant has met its burden in this case. Here, the value of the injunctive relief plaintiff seeks depends on the value of not being induced to give up a claim for compensatory and punitive damages arising from a failure to pay benefits allegedly due under insurance policies, which in turn depends on the value of such a claim. As reflected in the demands made in other similar cases filed by plaintiff's counsel, and in the class action pending in this court, that value far exceeds $75,000 per claim.
For the above reasons, plaintiff's motion to remand is denied.