Carrigan et al v. Southeast Alabama Rural Health Associates et al (JOINT ASSIGN)
MEMORANDUM OPINION AND ORDER: The removing Defendants have failed to meet their burden of proving federal jurisdiction under CAFA. It is, therefore, ORDERED that Plaintiffs motion to remand (Doc. 28 ) is GRANTED and that this action is REMANDED t o the Circuit Court of Pike County, Alabama as further set out in the opinion and order. The Clerk of the Court is DIRECTED to take the necessary steps to effectuate remand. Signed by Chief Judge William Keith Watkins on 9/12/2017. Copy furnished to Clerk, Circuit Court of Pike County, Alabama. (Attachments: # 1 Civil Appeals Checklist) (dmn, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
DAWN COBB CARRIGAN AND
JANET GATES, individually and on
behalf of all others similarly situated,
) CASE NO.: 2:17-CV-114-WKW
SOUTHEAST ALABAMA RURAL
GREENWAY ASSOCIATES, LLC;
GREENWAY EHS, INC.; SUNRISE
LEE INVESTMENT CONSULTANTS, )
MEMORANDUM OPINION AND ORDER
Plaintiffs Dawn Cobb Carrigan and Janet Gates bring a class action on behalf
of themselves and all others similarly situated seeking indeterminate damages
suffered as a result of lost medical records.
Defendants are Southeast Alabama
Rural Health Associates (“SARHA”), a non-profit Alabama corporation; Greenway
Health, LLC (“Greenway”), a Delaware LLC; Greenway EHS (“EHS”), an Alabama
corporation; Sunrise Technology Consultants LLC (“Sunrise”), an Alabama
corporation; and Lee Investment Consultants, LLC (“Lee”), an Alabama
Plaintiffs originally filed the lawsuit in the Circuit Court of Pike County,
Alabama, but Defendants Greenway and EHS (“the Greenway Defendants”)
removed it here under the jurisdictional provision of the Class Action Fairness Act
of 2005 (“CAFA”), see 28 U.S.C. §§ 1332(d)(11) and 1453.
Before the court is Plaintiffs’ motion to remand for lack of subject-matter
jurisdiction, filed pursuant to 28 U.S.C. § 1332. (Doc. # 28.) Plaintiffs argue that
the amount in controversy is not satisfied and that there exists no diversity of
Alternatively, Plaintiffs argue that CAFA’s local controversy
exception precludes subject-matter jurisdiction.
After careful consideration, the
court finds that the motion to remand is due to be granted because Defendants have
failed to establish that the amount in controversy requirement is satisfied.
I. STANDARD OF REVIEW
Federal courts have a strict duty to exercise the jurisdiction conferred on them
by Congress. Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716 (1996). At the
same time, “[f]ederal courts are courts of limited jurisdiction.”
Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994).
Burns v. Windsor
Against that legal backdrop, in
actions removed from state court to federal court, federal courts usually strictly
construe removal statutes, resolve all doubts in favor of remand, and place the burden
of proving jurisdiction on the removing defendant.
Miedema v. Maytag Corp., 450
F.3d 1322, 1328–30 (11th Cir. 2006). However, the Supreme Court has made clear
that “no antiremoval presumption attends cases invoking CAFA, which Congress
enacted to facilitate adjudication of certain class actions in federal court.”
Cherokee Basin Operating Co. v. Owens, 135 S. Ct. 547, 554 (2014). Accordingly,
there is no longer any presumption in favor of remand in deciding CAFA jurisdiction
questions. See Dudley v. Eli Lilly & Co., 778 F.3d 909, 912 (11th Cir. 2014).
In their class action complaint, Plaintiffs allege that Defendant SARHA failed
to maintain patient medical records between November 2011 and August 2016
because of the other Defendants’ failure to maintain properly the database that
housed the medical records.
(Compl. ¶ 1.)
Specifically, Plaintiffs allege that
Greenway, EHS, Sunrise, and Lee represented to SARHA that they maintained a
backup database to secure the medical records when those Defendants knew that no
such backup existed. (Compl. ¶¶ 9–10.) As a result, Plaintiffs argue, SARHA
violated its duty to secure properly its patients’ medical records, resulting in
damages to Plaintiffs and the class they represent.
Plaintiffs seek relief for themselves and all others similarly situated for
Defendants’ failure to maintain medical records. The proposed class is defined as
including “[a]ll persons in the State of Alabama who received treatment at SARHA
medical facilities from November of 2011 through August 26, 2016 who were
entitled under Alabama and Federal law to have their medical records properly
preserved.” (Compl. ¶ 15(I).) At the time the complaint was filed, SARHA had
received over 700 separate requests for medical records, including subpoenas in
ongoing litigation, requests from patients to forward information to specialists,
request for vaccination records to enroll children in school, and requests for records
to send to insurance providers. (Compl. ¶ 51.) It was unable to comply with any
of these requests. (Compl. ¶ 52.)
Specifically, Plaintiffs make two claims: (1) for a violation of Alabama
Administrative Code Chapter 545-x-4-.08 and -.09, and (2) for negligence and
wantonness. On each count, Plaintiffs do not make a specific demand for damages;
instead, they demand “any and all available fines, penalties, damages, compensatory
damages, punitive damages, attorney’s fees, interest and costs.”
(Compl. ¶ 59.)
This case began in the Circuit Court of Pike County, and the Greenway
Defendants removed it to the United States District Court for the Middle District of
Alabama within thirty days of being served with a summons and copy of the
complaint. See § 1332(d)(2) (governing class action removals); § 1446(b)
(governing removal procedures).
In their notice of removal, the Greenway
Defendants contend that jurisdiction of this CAFA action is proper because the
minimal diversity requirements are satisfied, there are more than 100 plaintiffs, and
the monetary claims exceed $5 million in the aggregate. (Not. of Removal ¶ 8); see
§ 1332(d)(2), (5). Specifically, Defendants argue that, based on certain provisions
of the Alabama Code that empower a commission to fine medical practitioners up
to $10,000 per violation, the amount in controversy is satisfied, given that the class
allegedly numbers 70,000.
(Not. of Removal ¶ 18); see Ala. Code §§ 34-24-360, -
Plaintiffs responded by filing a motion to remand to state court.
challenge the Greenway Defendants’ ability to prove that the amount in controversy
and minimal diversity requirements under CAFA are satisfied.
(Mot. to Remand
Alternatively, Plaintiffs argue that CAFA’s local controversy exception
applies to preclude jurisdiction. (Mot. to Remand 8–9.)
CAFA gives district courts subject-matter jurisdiction to entertain class
actions removed from state courts provided that four requirements are met:
amount in controversy requirement of an aggregate of $5,000,000 in claims; (2) a
diversity requirement of minimal diversity; (3) a numerosity requirement that the
action involve the monetary claims of 100 or more plaintiffs; and (4) a commonality
requirement that the plaintiffs' claims involve common questions of law or fact.”
Lowery v. Ala. Power Co., 483 F.3d 1184, 1202–03 (11th Cir. 2007); see 28 U.S.C.
§ 1332(d)(11). Here, Plaintiffs challenge two of these requirements—the amount
in controversy and minimal diversity requirements—and also argue that the local
controversy exception to CAFA applies even if the threshold CAFA requirements
Defendants have failed to establish that the amount in controversy
requirement is satisfied, so there exists no subject-matter jurisdiction and this action
is due to be remanded to state court.
For that reason, Plaintiffs’ remaining
arguments will not be considered and this action must be remanded to state court.
“CAFA does not change the traditional rule that the party seeking to remove
the case to federal court bears the burden of establishing federal jurisdiction.”
Evans v. Walter Indus., Inc., 449 F.3d 1159, 1164 (11th Cir. 2006). Therefore,
when “the plaintiff has not pled a specific amount of damages, the removing
defendant must prove by a preponderance of the evidence that the amount in
controversy exceeds the jurisdictional requirement.”
Williams v. Best Buy Co.,
Inc., 269 F.3d 1316, 1319 (11th Cir. 2001).
In determining whether the amount in controversy is satisfied, “a court may
rely on evidence put forward by the removing defendant, as well as reasonable
inferences and deductions drawn from that evidence.”
Dudley, 778 F.3d at 912–
13. The removing defendant “is not required to prove the amount in controversy
beyond all doubt or to banish all uncertainty about it.”
II, Inc., 608 F.3d 744, 754 (11th Cir. 2010).
Pretka v. Kolter City Plaza
However, “the defendant is not
excused from the duty to show by fact, and not mere conclusory allegation, that
federal jurisdiction exists.” Lowery, 483 F.3d at 1217.
Plaintiffs argue that the amount in controversy requirement is not satisfied
because Defendants have not proved, by a preponderance of the evidence, that the
amount exceeds $5,000,000.
As the party seeking removal, Defendants bear the
burden of proof, and, Plaintiffs argue, they have failed to do so here.
In favor of removal, Defendants point to sections of the Alabama Code that
grant the Medical Licensure Commission the power to levy fines on medical
practitioners up to $10,000 for each failure to maintain a medical record.
1, 33); see Ala. Code §§ 34-24-360, -381. According to Defendants, using this
code section to determine the amount in controversy is “possibly the only way to
estimate the amount in controversy.”
(Doc. # 33, at 4.)
And, considering the
“sheer size” of the purported class, Defendants argue, the amount in controversy
must be satisfied. (Doc. # 33, at 4.)
However, Defendants do not explain how the Alabama Code provisions are
relevant to determining the amount in controversy in this case.
By its own terms,
the cited section of the Code gives the Medical Licensure Commission the “power
and duty to . . . fine any licensee whenever the licensee shall be found guilty on the
basis of substantial evidence of . . . [f]ailure to maintain for a patient a medical record
which meets the minimum standards stated in the rules and regulations promulgated
by the commission.” Ala. Code § 34-24-360. As Defendants admit, (Doc. # 1,
¶ 17), the provisions apply only to medical practitioners, of which there are none in
this case. Moreover, even if a medical practitioner were involved in this case, the
Code does not provide for a private cause of action, but for administrative fines.
Simply put, Defendants have failed to show how the cited portions of the Alabama
Code are relevant to determining the amount in controversy.
Defendants do not offer any evidence whatsoever about Plaintiffs’ damages.
Instead, they claim that unrelated provisions of the Alabama Code are the only way
to prove that the amount in controversy requirement is satisfied.
If that is so, then
Defendants cannot prove that the amount is satisfied in this case. Even “[t]hough
the defendant . . . may have no actual knowledge of the value of the claims, the
defendant is not excused from the duty to show by fact, and not mere conclusory
allegation, that federal jurisdiction exists.”
Lowery, 483 F.3d at 1217.
Defendants have offered little more than conclusory allegations that the claims
They must do more to come within federal subject-matter
The removing Defendants have failed to meet their burden of proving federal
jurisdiction under CAFA.
It is, therefore, ORDERED that Plaintiffs’ motion to
remand (Doc. # 28) is GRANTED and that this action is REMANDED to the Circuit
Court of Pike County, Alabama.
The Clerk of the Court is DIRECTED to take the necessary steps to effectuate
DONE this 12th day of September, 2017.
/s/ W. Keith Watkins
CHIEF UNITED STATES DISTRICT JUDGE
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