Ayers v. State Farm Mutual Automobile Insurance Company et al

Filing 76

ORDER -- The Court's November 21, 2017 Show Cause Order (Doc. 66) is DISCHARGED. The claims set forth in Counts II-VI of the Complaint (Doc. 2, 56-94) are SEVERED and REMANDED to the Circuit Court of the Ninth Judicial Circuit in and for Orange County, Florida. The Clerk is DIRECTED to: (a) terminate Tammy Booth and Steven Hersh as parties; and (b) terminate the pending motion at Doc. 34. Signed by Judge Roy B. Dalton, Jr. on 12/21/2017. (VMF)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
FRANK AYERS,
Plaintiff,
v.

Case No. 6:17-cv-1265-Orl-37TBS

STATE FARM MUTUAL
AUTOMOBILE INSURANCE
COMPANY; RUTH MIER GRAHAM;
GOVERNMENT EMPLOYEES
INSURANCE COMPANY; TAMMY
BOOTH; and STEVEN HERSH,
Defendants.
_____________________________________
ORDER
This cause is before the Court on Defendants State Farm Mutual Automobile
Insurance Company (“State Farm”), Tammy Booth, and Steven Hersh’s (collectively,
“Defendants”) response to the Court’s November 21, 2017 Order to Show Cause.
(Doc. 67.)
I.

PROCEDURAL HISTORY

Plaintiff Frank Ayers initiated this action in state court against several defendants
asserting numerous individual state-law claims and a putative nation-wide class claim.
(Doc. 2.) Specifically, Plaintiff brought claims against Defendants for: (1) bad faith;
(2) fraud; and (3) tortious interference (collectively, “Individual Claims”). 1 (Doc. 2,

Plaintiff also seeks a declaratory judgment against State Farm and Defendants
Government Employees Insurance Company and Ruth Mier Graham (“Ms. Graham”).
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¶¶ 47–94.) Based on its alleged obligation to provide Plaintiff with counsel and
reimbursement of fees, he also lodges a putative class action claim for breach of contract
against State Farm (“Class Claim”). (Id. ¶¶ 95–116.)
Invoking the Court’s diversity jurisdiction, State Farm removed the action,
claiming that the Class Claim met the requirements of the Class Action Fairness Act,
28 U.S.C. § 1332(d)(2) (“CAFA”). (Doc. 31.) The Class Claim meets CAFA’s jurisdictional
requirements, but State Farm argues that the Court also has supplemental jurisdiction
over the Individual Claims. (See Doc. 1, pp. 11–12.) Upon review, the Court directed
Defendants to show cause why the Individual Claims should not be remanded given that
they do not appear to be within the Court’s supplemental jurisdiction. (Doc. 66.) As
Defendants have responded, the matter is now ripe for the Court’s consideration.
II.

LEGAL STANDARDS

Supplemental jurisdiction is governed by 28 U.S.C. § 1367(a), which provides that
unless:
[E]xpressly provided otherwise by Federal statute, in any civil
action of which the district courts have original jurisdiction,
the district courts shall have supplemental jurisdiction over
all other claims that are so related to the claims in the action
within such original jurisdiction that they form part of the
same case or controversy under Article III of the United States
Constitution.
This section “confers supplemental jurisdiction over all state claims which arise out of a

(Doc. 2, ¶¶ 47–55.) Although Defendants are correct that it too is an individual claim
(Doc. 67, p. 3), as discussed below, the declaratory judgment claim is qualitatively
different than the other Individual Claims. Infra n.5.
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common nucleus of operative fact with a substantial federal claim.” Parker v. Scarp Metal
Processors, Inc., 468 F.3d 733, 743 (11th Cir. 2006). This occurs when “[t]hey will involve
the same witnesses, presentation of the same evidence, and determination of the same,
or very similar, facts.” Palmer v. Hosp. Auth. of Randolph Cty., 22 F.3d 1559, 1563–64
(11th Cir. 1994).
III.

ANALYSIS

Defendants seek to invoke the Court’s jurisdiction over the Individual Claims by
arguing that: (1) CAFA provides original jurisdiction, rendering § 1367 inapplicable
(“Inapplicability Argument”); or, alternatively, (2) the Individual Claims arise from a
common nucleus of operative facts, satisfying § 1367(a) (“Satisfaction Argument”).
(Doc. 67, pp. 2–5.)
A.

Inapplicability Argument
To begin, the Court rejects Defendants’ Inapplicability Argument, which is

nothing more than selective quotation from a patchwork of non-binding opinions.
(Doc. 67, p. 4.) Contrary to Defendants’ position, the U.S. Court of Appeals for the
Eleventh Circuit has indicated in dicta that “[s]upplemental jurisdiction does have a role
in CAFA cases, but only in those that also have ‘state-law claims that were never subject
to CAFA jurisdiction.’” 2 Wright Transp., Inc. v. Pilot Corp., 841 F.3d 1266, 1273
(11th Cir. 2016) (quoting In Touch Concepts, Inc. v. Cellco P’ship, 788 F.3d 98, 102

court may consider dicta for its persuasive value. Drummond Co. v. Terrance P.
Collingsworth, Conrad & Scherer, LLP, 816 F.3d 1319, 1326 (11th Cir. 2016); Pretka v. Kolter
City Plaza II, Inc., 608 F.3d 744, 747 (11th Cir. 2010).
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(2d Cir. 2015)). Indeed, Wright is directly applicable here, as the Individual Claims are not
subject to CAFA jurisdiction. Following Wright’s logic, the Court concludes that “it [is]
appropriate to consider whether to grant supplemental jurisdiction over the non-class
claims.” Wright, 841 F.3d at 1273. 3
The Court’s conclusion is fortified by the overriding purpose of CAFA. While no
model of legislative clarity, at its core, CAFA was intended to rectify the abuses in the
current class action system—namely, the purposeful evasion of federal diversity
jurisdiction. S. REP. NO. 109-14, at 11–12, 27 (2005). 4 So the Senate Judiciary Committee
drafted “a narrowly-tailored expansion of federal diversity jurisdiction to ensure that
class actions that are truly interstate in character can be heard in federal court.” Id. at 27;
see also Dart Cherokee Basin Operating Co. v. Owens, 135 S. Ct. 547 554 (2014) (noting that
Congress “enacted [CAFA] to facilitate adjudication of certain class actions in federal
court”). The purpose of CAFA was not to alter or abrogate the exercise of supplemental
jurisdiction to class actions under § 1332(d)(2), and nothing in CAFA’s legislative history
remotely suggests otherwise.

Whether by design or inadvertence, Defendants failed to discuss or cite Wright in
their response. (See Doc. 67.) Although not controlling, Wright is clearly relevant and, in
the Court’s view, persuasive.
4 “[T]he authoritative source for finding the Legislature’s intent lies in the
Committee Reports on the bill, which represent the considered and collective
understanding of [those Members of Congress] involved in drafting and studying
proposed legislation.” Garcia v. United States, 469 U.S. 70, 76 (1984) (internal quotations
omitted). CAFA was not referred to committee by the House. See 151 Cong. Rec. H723-01,
H736 (statement of Rep. Watt) (noting that the bill had not been referred to the House
Judiciary Committee). Instead, after the Senate passed CAFA, the bill was referred to the
House floor for a vote. See H.R. 96, 109th Cong. (2005). Hence there is no accompanying
House committee report.
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Nevertheless, Defendants peddle an argument seeking § 1367’s preclusion simply
because they have invoked CAFA. (Doc. 67, pp. 4–5.) But this argument has neither
weight nor wings. Indeed, to saddle the Court with tag-along, state-law claims that
impact a single plaintiff runs contrary to CAFA’s purpose of providing a federal forum
for “interstate cases of national importance.” Class Action Fairness Act, § 2(b), Pub. L.
No. 109-2, 119 Stat. 4.
In addition, where Congress intends to preclude application of § 1367, it says so.
For instance, CAFA’s “mass action” provision limits the application of supplemental
jurisdiction to claims which exceed the amount in controversy of $75,000. See
28 U.S.C. § 1332(d)(11)(B)(i); see also Lowery v. Ala. Power Co., 483 F.3d 1184, 1206 n.51
(11th Cir. 2007) (noting that CAFA’s mass action provision is “the very sort of explicit
statutory exception from supplemental jurisdiction that § 1367(a) contemplates”). No
such language appears in § 1332(d)(2), which Defendants have invoked here. Thus, the
absence of such text, combined with CAFA’s legislative history, leads the Court to
conclude that § 1367 applies.
B.

Satisfaction Argument
Because § 1367(a) applies in the CAFA context, the Court turns to apply it.

Defendants posit that the Individual Claims arise out of a common nucleus of operative
fact with the Class Claim by citing these common threads: (1) State Farm’s insurance
policy; (2) the auto accident between Plaintiff and Ms. Graham; and (3) State Farm’s
handling of Ms. Graham’s claims. (Doc. 67, pp. 2, 3.) With this, Defendants conclude that
all claims are so related as to form the same case or controversy under § 1367(a). (Id. at 3.)
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The Court disagrees.
Here, the Individual Claims will not require the same witnesses, presentation of
the same evidence, nor determination of similar facts as the Class Claim. See Palmer,
22 F.3d at 1563–64. As Defendants admit, and the Court has previously explained (see
Doc. 66), to prove the Individual Claims, the Court need not resolve the policy
interpretation issue of the Class Claim. 5 Instead, the evidence needed to prove the
Individual Claims concerns Defendants’ handling of Ms. Graham’s bodily injury claim
and Plaintiff’s request for information about such claim. (Compare Doc. 2, ¶¶ 76, 83, 85,
86 with id. ¶¶ 107, 109.) Sure, all claims may minimally overlap, but that alone does not
satisfy § 1367(a). So the Individual Claims do not arise out of common nucleus of
operative fact with the Class Claim, and the Court does not have supplemental
jurisdiction over the Individual Claims.
Lastly, the Court needs no reminder of its “virtually unflagging obligation” to
exercise jurisdiction where conferred, but that obligation hinges on the presence of proper
jurisdiction in the first instance. See Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006)
(“Courts . . . have an independent obligation to determine whether subject-matter
jurisdiction exists, even in the absence of a challenge from any party.”). Based on the
foregoing, the Individual Claims are due to be severed and remanded. See
Fed. R. Civ. P. 21 (setting forth the Court’s authority to sever any claim against a party);

Notably, Plaintiff’s claim for declaratory judgment requires the Court to interpret
several of the same policy provisions as the Class Claim. So, to the extent the declaratory
judgment claim turns on the coverage issue necessary to resolve the Class Claim, the
Court retains supplemental jurisdiction over it. See Palmer, 22 F.3d at 1563–64.
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see also 28 U.S.C. § 1447(c) (requiring remand where a court lacks subject matter
jurisdiction).
Accordingly, it is ORDERED AND ADJUDGED as follows:
1.

The Court’s November 21, 2017 Show Cause Order (Doc. 66) is
DISCHARGED.

2.

The claims set forth in Counts II–VI of the Complaint (Doc. 2, ¶¶ 56–94) are
SEVERED and REMANDED to the Circuit Court of the Ninth Judicial
Circuit in and for Orange County, Florida.

3.

The Clerk is DIRECTED to: (a) terminate Tammy Booth and Steven Hersh
as parties; and (b) terminate the pending motion at Doc. 34.

DONE AND ORDERED in Chambers in Orlando, Florida, on December 21, 2017.

Copies to:
Counsel of Record
The Circuit Court of the Ninth Judicial Circuit
in and for Orange County, Florida

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