Jackson v. St. Jude Medical Neuromodulation Division et al
Filing
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ORDER denying 15 Plaintiff Daniel Jackson's Motion to Remand; denying as moot 23 Defendant Medtronic, Inc.'s Notice of Joinder in Defendant St. Jude Medical Neuromodulation Division's Response In Opposition to Plaintiff's Mot ion to Remand and Further Memorandum In Opposition and Request For Severance. Defendants St. Jude and Medtronic are ORDERED to show cause as to why the amount in controversy exceeds $75,000 as to Defendant Allstate Property and Casualty Insurance Company on or before October 3, 2014. Signed by Judge Sheri Polster Chappell on 9/22/2014. (LMF)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
DANIEL JACKSON,
Plaintiff,
v.
Case No: 2:14-cv-318-FtM-38CM
ST. JUDE MEDICAL
NEUROMODULATION DIVISION,
MEDTRONIC, INC. and ALLSTATE
PROPERTY & CASUALTY
INSURANCE COMPANY,
Defendants.
/
ORDER1
This matter comes before the Court on Plaintiff Daniel Jackson's Motion to
Remand (Doc. #15) filed on June 26, 2014. Defendant St. Jude Medical Neuromodulation
Division ("Defendant St. Jude") filed a Response to Plaintiff's Motion to Remand (Doc.
#20) on July 14, 2014, to which Defendant Medtronic, Inc. joined (Doc. #21). Plaintiff filed
a Reply to Defendant's Response (Doc. #31) on August 4, 2014. Plaintiff’s motion is ripe
for review.
BACKGROUND
On June 8, 2011, Plaintiff was injured in a motor vehicle accident. (Doc. #5 at
¶ 4). He was a passenger to a permissive driver when another vehicle rear-ended the
1
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vehicle in which he was riding. (Doc. #5 at ¶ 4). Roughly one year later, Plaintiff initiated
this action against the owner and driver of the rear-ending vehicle (collectively "Car
Accident Defendants") in the Circuit Court of the Twentieth Judicial Circuit in and for Lee
County, Florida. (Doc. #15 at 1).
On August 29, 2012, Plaintiff filed an Amended Complaint releasing the Car
Accident Defendants and naming Defendant Allstate Property & Casualty Insurance
Company ("Defendant Allstate"). (Doc. #15 at 2). Plaintiff included Defendant Allstate
because it insured the vehicle he was riding in at the time of the accident. (Doc. #15 at
2). Plaintiff brought a breach of contract claim against Defendant Allstate for its alleged
failure to make full and timely medical and disability payments for his injuries that
stemmed from the automobile accident. (Doc. #5 at ¶¶ 6, 8; Doc. #15 at 2).
On December 13, 2013, Plaintiff filed a Second Amended Complaint (Doc. #5) in
which he added St. Jude Medical and Medtronic, Inc. as defendants and set forth various
products liability and negligence claims. Plaintiff purchased two medical devices from
Defendants St. Jude and Medtronic before and after the accident, and both devices have
allegedly malfunctioned. (Doc. #5 at ¶¶ 13, 44).
Defendants St. Jude and Medtronic were served with the Second Amended
Complaint on May 8, 2014, and May 9, 2014, respectively. (Doc. #15 at ¶¶ 4-5). On June
9, 2014, St. Jude filed a Notice of Removal (Doc. #1) pursuant to 28 U.S.C § 1441.
Defendants Allstate and Medtronic consented to the removal. (Doc. #3; Doc. #4). Plaintiff
thereafter filed the instant Motion to Remand (Doc. #15), arguing the Court does not have
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subject matter jurisdiction over this case due to a lack of diversity between Plaintiff and
Defendant Allstate.2
DISCUSSION
A. Motion to Remand
A defendant may remove a civil case from state court provided the case could have
been brought in federal court. See 28 U.S.C. § 1441(a). Federal courts have original
jurisdiction if there is complete diversity of citizenship among the parties and the amount
in controversy exceeds $75,000, exclusive of interest and costs.
See 28 U.S.C.
§ 1332(a); Morrison v. Allstate Indem. Co., 228 F.3d 1255, 1261 (11th Cir. 2000). The
party seeking removal bears the burden of establishing diversity jurisdiction as of the date
of the removal. See Moreland v. SunTrust Bank, No. 2:13-cv-242-FtM-29UAM, 2013 WL
3716400, at *1 (M.D. Fla. July 15, 2013) (citing Pretka v. Kolter City Plaza II, Inc., 608
F.3d 744, 751 (11th Cir. 2010); Sammie Bonner Constr. Co. v. W. Star Trucks Sales, Inc.,
330 F.3d 1308, 1310 (11th Cir. 2003)). Additionally, removal statutes are to be strictly
construed, and any doubt as to the presence of jurisdiction should be resolved in favor of
remand. See Russell Corp. v. Am. Home Assurance Co., 264 F.3d 1040, 1050 (11th Cir.
2001); Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994); Pacheco de Perez
v. AT&T Co., 139 F.3d 1368, 1373 (11th Cir. 1998). With these principles in mind, the
Court will address Plaintiff's Motion to Remand.
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Before turning to the merits of Plaintiff's Motion to Remand, the Court sees it fit to comment on several
conflicting factual allegations in Plaintiff’s papers. According to the Second Amended Complaint, Plaintiff
was injured on August 22, 2009, when Defendant St. Jude's medical device allegedly malfunctioned. (Doc.
#5 at ¶ 14). This date is inconsistent with Plaintiff's contention that he purchased this device on May 13,
2011. (Doc. #5 at ¶ 13). As best the Court can tell, this is a typographical error warranting clarification.
Additionally, in Plaintiff's Motion to Remand, he states Defendant Medtronic's medical device was surgically
implanted in his body prior to the accident. (Doc. #15 at 1). This statement conflicts with the Second
Amended Complaint in which Plaintiff contends he "purchased" Defendant Medtronic's medical device
roughly seventeen months after the accident. (Doc. #5 at ¶ 44).
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Plaintiff argues the Court should remand this case to the Twentieth Judicial Circuit
because he and Defendant Allstate are not diverse parties. (Doc. #15 at ¶ 22). According
to Plaintiff, his breach of contract claim against Defendant Allstate is a "direct action"
under 28 U.S.C. § 1332(c)(1), and thus he and Defendant Allstate are both citizens of
Florida.
For the purposes of determining diversity, a corporation is generally deemed to be
a citizen of every state in which it was incorporated, as well as the state in which it
maintains its principle place of business. See 28 U.S.C. § 1332. Section 1332(c)(1)
contains an exception for liability insurers in certain circumstances.
[I]n any direct action against the insurer of a policy or contract
of liability insurance . . . to which action the insured is not
joined as a party-defendant, such insurer shall be deemed a
citizen of every State and foreign state of which the insured is
a citizen.
28 U.S.C. § 1332(c)(1). In other words, § 1332(c)(1) treats insurers as if they are citizens
of the same state as their insured in direct actions by third parties against those carries.
See Kong v. Allied Prof'l Ins. Co., 750 F.3d 1295, 1299 (11th Cir. 2014) ("[I]f a third-party
plaintiff brings a direct action against a tortfeasor's liability insurer, the insurer is
considered a citizen of the insured's stated.").
Although not statutorily defined, courts have "'uniformly defined' the term 'direct
action' to refer to those 'cases in which a party suffering injuries or damage for which
another is legally responsible is entitled to bring suit against the other's liability insurer
without joining the insured or first obtaining a judgment against him." Kong, 750 F.3d at
1299-1300 (quoting Fortson v. St. Paul Fire & Marine Ins. Co., 751 F.2d 1157, 1159 (11th
Cir. 1985) (emphasis omitted)). A direct action does not exist unless the plaintiff's causes
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of action against the insurer "is of such a nature that the liability sought to be imposed
could be imposed against the insured[.]" Fortson, 751 F.2d at 1159. Applying these
principles to the case at bar, the Court finds that § 1332(c)(1) does not preclude diversity
jurisdiction.
Plaintiff's single argument in support of remand is simple – because he has been
an insured under the subject insurance policy at all relevant times, his claim against
Defendant Allstate is a direct action. (Doc. #15 at ¶ 17; Doc. #5 at ¶ 5). "Such a claim is
not a 'direct action' against the insurer of a policy or contract of liability insurance,' within
the meaning of § 1332(c)(1)." Castilla v. Nat'l Union Fire Ins. of Pittsburgh, Pa., 2011 WL
4916307, at *2 (S.D. Fla. Oct. 17, 2011). Even assuming Plaintiff is an "insured" under
the subject insurance policy, the law is well settled that § 1332(c)(1) does not apply to
cases in which the insured brings an action against his insurer. See Bowers v. Cont'l Ins.
Co., 753 F.2d 1574, 1576-77 (11th Cir. 1985) ("The general rule has always been that
the direct action proviso does not affect suits brought by an insured against his own
insurer."); see also Kong, 750 F.3d at 1300 ("[F]or purpose of demonstrating diversity, a
direct action is one in which an injured third-party claimant sues an insurance company
for payment of a claim without first joining or obtaining judgment against the company's
insured.").
Additionally, "the key feature of a direct action under § 1332(c) is, and always has
been, the plaintiff's ability ‘to skip suing the tort feasor and sue directly his insurance
carrier.'" Kong, 750 F.3d at 1300 (quotation omitted). Plaintiff's cause of action against
Defendant Allstate, however, does not involve tort claims or tortfeasors. He strictly brings
a breach of contract claim for Defendant Allstate's alleged failure to make full medical and
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disability payments owed to him under the subject insurance policy. (Doc. #5 at ¶¶ 1-9).
Accordingly, the Court declines to apply § 1332(c)(1)(A) to Plaintiff's breach of contract
claim. See Kenyon v. Fidelity & Guar. Life Ins. Co., No. 6:12-cv-951-Orl-36GJK, 2012
WL 4478983, at *2 (M.D. Fla. Sept. 11, 2012) ("In this case, Plaintiff alleges that
Defendant breached the parties' contract by failing to pay life insurance benefits. Thus,
Plaintiff's action is not 'of such a nature that the liability sought to be imposed could be
imposed against the insured.'"), report and recommendation adopted by, 2012WL
4478985 (M.D. Fla. Sept. 28, 2012).
Furthermore, "[i]f the cause of action is based on the insurer's duty and not the
insured's duty, the action is not a direct action." Jennings Constr. Servs. Corp. v. Ace
Am. Ins. Co., No. 6:10-cv-1671, 2011 WL 1357689, at *2 (M.D. Fla. Mar. 16, 2011). That
is the situation here because Plaintiff has sued Defendant Allstate for not paying him
benefits afforded under the subject insurance policy. See John Cooper Produce, Inc. v.
Paxton Nat'l Ins. Co., 774 F.2d 433, 435 (11th Cir. 1985) (stating the direct action
exception to diversity jurisdiction applies "only if the claim which the third party has against
the insured—for intentional tort, negligence, fraud, etc.— is the same one asserted
against the insurance company as within the zone of primary liability for which the
company issued the policy"). Plaintiff's cause of action is based on Defendant Allstate's
duty, not any duty of an insured, and is therefore not a direct action. This is not a situation
in which the liability Plaintiff seeks to impose against Defendant Allstate, i.e., damages
for breach of insurance policy, could also be imposed against an insured or the owner of
the vehicle in which Plaintiff was riding in at the time of the accident. See Jennings
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Constr., 2011 WL 1357689, at *2 ("[Plaintiff] could not bring his claims of breach of Policy
against the [two insureds].").
Thus, under the circumstances in this case, the Court is limited to examining
Defendant Allstate's state of incorporation and principal place of business, which are
Illinois, for purposes of determining diversity of citizenship. Since Plaintiff is a Florida
citizen, Defendant Allstate and Plaintiff are diverse parties.
For the reasons explained above, Plaintiff's claim against Defendant Allstate is not
a direct action within the meaning of § 1332(c)(1)(A) and diversity jurisdiction is not
defeated. Accordingly, the Court denies Plaintiff's Motion for Remand.
B. Subject Matter Jurisdiction
Federal courts are courts of limited jurisdiction and are obligated to inquire about
jurisdiction sua sponte whenever it may be lacking. See Kokkonen v. Guardian Life Ins.
Co. of Am., 511 U.S. 375, 377 (1994); Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405,
410 (11th Cir. 1999) (citations omitted). Under this framework, the Court will examine
whether it may exercise jurisdiction over this case, focusing specifically on whether the
amount in controversy exceeds $75,000 as to the breach of contract claim against
Defendant Allstate.
As a preliminary matter, "[t]he general rule with respect to the aggregation of the
claims of a plaintiff against two or more defendants is that 'where a suit is brought against
several defendants asserting claims against each of them which are separate and distinct,
the test of jurisdiction is the amount of each claim, and not their aggregate.'" Jewell v.
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Grain Dealers Mut. Ins. Co., 290 F.2d 11, 13 (5th Cir. 1961) (quotation omitted).3 Simply
put, where a plaintiff names multiple defendants in a single action and asserts separate
and distinct claims against each defendant, the amount in controversy must exceed
$75,000 for each claim. Here, Plaintiff asserts one breach of contract against Defendant
Allstate for medical and disability payments provided in the subject insurance policy. His
remaining products liability and negligence claims target Defendants St. Jude and
Medtronic for medical devices that were surgically implanted in his body. The Court finds
these claims to be separate and distinct.
Plaintiff demands damages "in excess of $15,000" because Defendant Allstate has
allegedly denied him payment under the medical and disability payment provisions
afforded in the insurance policy. (Doc. #5 at ¶¶ 1, 8). "Where, as here, 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." See Williams v. Best Buy Co., 269 F.3d 1316, 1319 (11th Cir. 2001). "If
the jurisdictional amount is not facially apparent from the complaint, the court should look
to the notice of removal and may require evidence relevant to the amount in controversy
at the time the case was removed." Williams, 269 F.3d at 1319.
After reviewing the Second Amended Complaint and Notice of Removal, it is
unclear whether the breach of contract claim exceeds $75,000. In response to an
interrogatory, Plaintiff submitted a hospital billing statement (Doc. #1-3 at 9-10, 16) that
lists $173,156.31 in total medical expenses. It appears, however, $162,972.38 has been
3
In Bonner v. City of Prichard, 661 F.2d 1206, 1208 (11th Cir. 1981) (en banc), the Eleventh Circuit adopted
as binding precedent all decisions that the former Fifth Circuit issued before the close of business on
September 30, 1981.
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paid and Defendant Allstate is listed several times as a payee for the expenses. (Doc.
#1-3 at 16). As it stands, the Court is uncertain whether Plaintiff seeks $10,183.93 of
unpaid bills, or a greater amount exclusive of any costs for bringing this action. The Court,
therefore, directs Defendants to show good cause as to why the claim against Defendant
Allstate exceeds $75,000.
Accordingly, it is now
ORDERED:
(1) Plaintiff Daniel Jackson's Motion to Remand (Doc. #15) is DENIED.
(2) Defendant Medtronic, Inc.'s Notice of Joinder in Defendant St. Jude Medical
Neuromodulation Division's Response In Opposition to Plaintiff's Motion to
Remand and Further Memorandum In Opposition and Request For Severance
(Doc. #23) is DENIED as moot.
(3) Defendants St. Jude and Medtronic are ORDERED to show cause as to why
the amount in controversy exceeds $75,000 as to Defendant Allstate Property
and Casualty Insurance Company on or before October 3, 2014.
DONE and ORDERED in Fort Myers, Florida this 22nd day of September, 2014.
Copies: All Parties of Record
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