Howard v. Globe Life Ins. Co.

Page 1412

973 F.Supp. 1412

Walter H. HOWARD, Edward McCorvey, Weldon Allen, Dorthy Collins, John Funk, Barbara Land, Bettye Rusche, Russel Smith, and Frank Way, Plaintiffs, v. GLOBE LIFE INSURANCE CO., Defendant.

John H. EDWARDS and Chris Johnson, Plaintiffs, v. MAYFLOWER NATIONAL LIFE INS. CO., Defendant.

Randall W. PITTS, Mary P. Pitts, Chris Bakich, Sharral Carnley, Joyce Foster, Roy Gay, Alphonza Randall, Peggy Smith, Sally Snider, Jerry Sweeten, Debra Thomas, Shan Watson, and Donald Wilkerson, Plaintiffs, v. UNION FIDELITY LIFE INSURANCE CO., Defendant.

Salvadore J. SERIO and Rebecca B. Serio, Plaintiffs, v. FIRST LIFE ASSURANCE CO., n/k/a The Mega Life & Health Ins. Co., Defendant.

Randall W. PITTS, Mary P. Pitts, Robert F. Caristi, Sr., Harrison Norris, Sr., and Lucille Norris, Plaintiffs, v. CENTURION LIFE INSURANCE CO., Defendant.

No. 3:96cv314/RV.

No. 3:96cv341/RV.

No. 3:96cv345/RV.

No. 3:96cv365/RV.

No. 3:96cv478/RV.

United States District Court, N.D. Florida, Pensacola Division.

December 27, 1996.

James Franklin McKenzie, McKenzie & Soloway, Pensacola, FL, for Walter H. Howard, Edward McCorvey, Weldon Allen, Dorothy Collins, John Funk, Barbra Land, Bettye Rusche, Russel Smith, Frank Way, John H. Edwards, Chris Johnson, Salvadore J. Serio, Rebecca B. Serio, Randall W. Pitts, Mary P. Pitts, Robert F. Caristi, Sr., Harrison Norris, Sr., Lucille Norris, Chris Bakich, Sharral Carnley, Joyce Foster, Roy Gay, Alphonza Randall, Peggy Smith, Sally Snider, Jerry Sweeten, Debra Thomas, Shan Watson, Donald Wilkerson.

Davis Duane Carr, Frank L. Parker, Pamela A. Moore, James W. Lampkin, Carr, Alford, Clausen, McDonald, L.L.C., Mobile, AL, for Globe Life Ins. Co.

Davis Duane Carr, Pamela A. Moore, James W. Lampkin, Carr, Alford, Clausen, McDonald, L.L.C., Mobile, AL, for Mayflower

Nat. Life Ins. Co., Mega Life & Health Ins. Co., Union Fidelity Life Ins. Co.

David Lee McGee, Beggs & Lane, Pensacola, FL, for Centurion Life Ins. Co.

OMNIBUS ORDER

VINSON, Chief Judge.

Pending are the plaintiffs' motions to remand to state court in the five cases identified above.¹

I. BACKGROUND

Plaintiffs originally filed their complaints as separate class actions in the Circuit Court of Escambia County, Florida.² The state court complaints all alleged several state law claims including common law and statutory fraud, unjust enrichment, civil conspiracy, and negligent misrepresentation. There are no federal claims alleged. The claims arose out of the alleged sale of excessive credit life insurance by the defendant insurance companies to the putative class members. Specifically, the putative class members claim that a defendant sold them credit life insurance in an amount greater than that required to pay off the balance of their loan, thereby violating Section 627.679(1)(a), Florida Statutes (1995). The class seeks declaratory and injunctive relief, monetary damages, and reasonable attorneys' fees and costs.

Each defendant removed this action from state court based on diversity of citizenship jurisdiction under Title 28, United States Code, Sections 1332 and 1441. Plaintiffs timely moved to remand each of the cases. Plaintiffs concede that the diversity of citizenship required by Section 1332 is present in each case, but assert that the amount in controversy does not exceed the $50,000 jurisdictional requirement. Plaintiffs contend that the individual class members' claims in each case cannot be aggregated to reach the jurisdictional amount required and, therefore, this court does not have jurisdiction. Although they acknowledge that the compensatory damages amount to only "a few hundred dollars of premiums allegedly overcharged," defendants raise several grounds in opposition to plaintiffs' contentions. First, they claim that each defendant's compliance cost associated with the injunctive and declaratory relief requested by plaintiffs would far exceed the $50,000 amount. Second, defendants point out that plaintiffs could (and likely will) amend their complaints to allege punitive damages in each case, and thereby place the required amount in controversy. Third, defendants also contend that plaintiffs included separate prayers for relief in each individual count in their complaints and that the possible recovery for each claim in a separate count should be considered when determining if the amount in controversy requirement has been satisfied. Finally, the defendants claim that plaintiffs' potential attorneys' fees award should be included in the computation of the amount in controversy.

II. ANALYSIS

Any civil case filed in state court may be removed by the defendant to federal court if the case could have been brought originally in federal court. See 28 U.S.C. § 1441(a); Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 2429, 96 L.Ed.2d 318 (1987). Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1356 (11th Cir. 1996); B., Inc. v. Miller Brewing Co., 663 F.2d 545 (5th Cir.1981). In considering a motion to remand when the plaintiff and defendant disagree on issues of jurisdiction, questions or doubts are to be resolved in favor of returning the matter to state court. Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir.1994).

In order for a federal court to have jurisdiction over a case pursuant to Title 28 United States Code, Section 1332, the amount in controversy must currently exceed $50,000, exclusive of costs and interest.³ Where the plaintiff fails to request a specific damage award in the complaint, the burden is on the defendant to prove by a preponderance of the evidence "that the amount in controversy more likely than not exceeds the $50,000 jurisdictional requirement." Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1357 (11th Cir.1996); see De Aguilar v. Boeing, 11 F.3d 55 (5th Cir.1993); Gafford v. General Electric Co., 997 F.2d 150, 158 (6th Cir.1993).

Here, there are four separate grounds advanced by the defendants for satisfying the jurisdictional amount. Each will be analyzed separately.

(A) AGGREGATION OF CLAIMS.

First, the defendants contend that even though each of the plaintiff's claims will be relatively small, the aggregate of all class members' claims in each case will undoubtedly exceed $50,000. Class aggregation alone, however, is not enough. In 1969, the United States Supreme Court held that class plaintiffs cannot aggregate their individual claims in order to meet the jurisdictional dollar amount in controversy requirement of Title 28, United States Code, Section 1332. Snyder v. Harris, 394 U.S. 332, 89 S.Ct. 1053, 22 L.Ed.2d 319 (1969). The effect of Snyder is to require at least one class plaintiff to meet the federal jurisdictional amount.

In 1973, the Supreme Court, further restricting the diversity jurisdictional limitations of its Snyder v. Harris decision, held that in addition to the plaintiffs' inability to aggregate individual claims, each individual putative class plaintiff had to satisfy the amount in controversy, or be dismissed from the class action. Zahn v. International Paper Co., 414 U.S. 291, 94 S.Ct. 505, 38 L.Ed.2d 511 (1973). Therefore, the Supreme Court's holding effectively eliminated federal jurisdiction in state-law class actions where each putative plaintiff's claim did not meet the jurisdictional amount.

To the extent that Snyder and Zahn hold that the claims of several plaintiffs cannot be aggregated in order to satisfy the jurisdictional amount in controversy (unless the plaintiffs are enforcing a common and undivided interest or right), it continues to be well-settled law. However, Zahn's requirement that each putative class plaintiff must meet the diversity jurisdictional amount in controversy requirement now seems to have been overruled by the enactment of the supplemental jurisdiction statute [Pub.L. No. 101-650, 104 Stat. 5113 (codified as amended at 28 U.S.C. § 1367 (1995))]. See Stromberg Metal Works, Inc. v. Press Mechanical, Inc., 77 F.3d 928 (7th Cir.1996); In re Abbott Laboratories, 51 F.3d 524 (5th Cir.1995); see also 1 J. Moore, Moore's Federal Practice ¶ 0.97[5] (Supp.) (stating that by its express terms, 28 U.S.C. § 1367 plainly overrules Zahn). The conclusion that Zahn has been overruled is based, in large part, on the fact that Section 1367(a) unambiguously grants federal courts supplemental jurisdiction over all claims that are part of the same case or controversy as the claims over which the court has original jurisdiction. Thus, if one plaintiff's claim meets the jurisdictional requirements, then the other plaintiffs may be within the court's supplemental jurisdiction. Further, it is noteworthy that Section 1367(b) does not specifically exclude class actions from application of the statutory supplemental jurisdiction, although it does exclude other types of cases.

I conclude that the Fifth and Seventh Circuits have correctly construed the effect of Section 1367 on Zahn, in Stromberg Metal Works, Inc. v. Press Mechanical, Inc., 77 F.3d 928 (7th Cir.1996), and In re Abbott Laboratories, 51 F.3d 524 (5th Cir.1995). I am also of the opinion that a number of district court decisions to the contrary have misconstrued the effect of Section 1367.⁴ As the law now stands, it is my determination that all putative class members may sue together, as a class in federal court, as long as at least one class representative meets the jurisdictional requirements.

Nevertheless, in cases where no single plaintiff's claim satisfies the amount in controversy requirement,⁵ such as the present cases, the issue of Section 1367's effect on Zahn does not arise. The nonaggregation rule still applies, the supplemental jurisdiction is not present, and a federal court does not have jurisdiction over any of the plaintiffs' claims. See Anthony v. Security Pacific Financial Services, Inc., 75 F.3d 311, 315 (7th Cir.1996); Packard v. Provident National Bank, 994 F.2d 1039, 1045 (3d Cir. 1993). In the absence of a common and undivided interest...