A&M Gerber Chiropractic LLC v. GEICO General Insurance Company

Filing 45

ORDER denying 7 Motion to Remand to State Court. Signed by Judge Beth Bloom on 12/30/2016. (ail)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 16-cv-62610-BLOOM/Valle

A&M GERBER CHIROPRACTIC LLC,
a/a/o Conor Carruthers, on behalf of itself
and all others similarly situated,
Plaintiff,
v.
GEICO GENERAL INSURANCE COMPANY,
Defendant.
_________________________________________/
ORDER ON MOTION TO REMAND
THIS CAUSE is before the Court upon a Motion to Remand filed by Plaintiff A&M
Gerber Chiropractic LLC (“Plaintiff”), ECF No. [7] (the “Motion”). The Court has carefully
considered the Motion, all supporting and opposing filings, the relevant authority, and is
otherwise duly advised. For the reasons that follow, the Motion is denied.
I.

BACKGROUND
Plaintiff filed a Complaint in the Circuit Court of the Seventeenth Judicial Circuit in and

for Broward County, Florida, and served Defendant Geico General Insurance Company
(“Defendant”) on October 4, 2016. Plaintiff brings class claims for declaratory relief against
Defendant, alleging that Defendant has a wide-spread practice of improperly paying claims at a
reduced amount, “utiliz[ing] the Code BA with respect to payment” of any such claim. See ECF
No. [1-2] ¶¶ 11, 21 (“Complaint”). Defendant filed a Notice of Removal on November 3, 2016,
relying on the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332, 28 U.S.C. § 1441(a) and
(b), and 28 U.S.C. § 1453, asserting that “this is a putative class action with more than 100

Case No. 16-cv-62610-BLOOM/Valle
putative class members that are seeking to recover in excess of $5,000,000 in the aggregate, and
there is minimal diversity.” ECF No. [1] ¶ 8. The instant Motion to Remand, ECF No. [7],
followed.
Defendant initially based its amount in controversy allegation on the affidavit of David
Antonacci (“Antonacci”), attached to the Notice of Removal at Exhibit 4. See ECF No. [1-5].
On November 30, 2016, the Court granted Plaintiff’s motion for expedited discovery to take the
deposition of Antonacci, ordering that Defendant additionally provide “the data Antonacci relies
upon to reach the conclusions made in his affidavit, ECF No. [1-5].” ECF No. [22] at 2. After
taking Antonacci’s deposition, Defendant’s Response to the Motion to Remand and Plaintiff’s
Reply timely followed. See ECF Nos. [37], [40].
II.

LEGAL STANDARD
“Federal courts are courts of limited jurisdiction. They possess only that power

authorized by Constitution and statute, which is not to be expanded by judicial decree.”
Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (internal citations omitted).
“[A]ny civil action brought in a State court of which the district courts of the United States have
original jurisdiction, may be removed by the defendant or the defendants, to the district court of
the United States for the district and division embracing the place where such action is pending.”
28 U.S.C. § 1441(a); see 28 U.S.C. § 1446. “Federal district courts, of course, have original
jurisdiction over diversity cases and matters arising under federal law.” Whitt v. Sherman Int’l
Corp., 147 F.3d 1325, 1329 (11th Cir. 1998) (citing 28 U.S.C. §§ 1331, 1332). “[O]nce a federal
court determines that it is without subject matter jurisdiction, the court is powerless to continue.”
Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 410 (11th Cir. 1999).

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The CAFA “expanded considerably the subject matter jurisdiction of the federal courts
over class actions that meet certain minimal requirements.” Dudley v. Eli Lilly & Co., 778 F.3d
909, 911 (11th Cir. 2014) (citing Miedema v. Maytag Corp., 450 F.3d 1322, 1327 (11th Cir.
2006)). “Specifically, CAFA grants federal district courts jurisdiction over class actions where
(1) any member of the plaintiff class is a citizen of a state different from the state of citizenship
of any defendant, (2) the aggregate amount in controversy exceeds $5 million, and (3) the
proposed plaintiff class contains at least 100 members.” Id. (emphasis omitted) (citing 28 U.S.C.
§ 1332(d)(2), (5)-(6)); see S. Florida Wellness, Inc. v. Allstate Ins. Co., 745 F.3d 1312, 1315
(11th Cir. 2014) (hereinafter, “Wellness”). While normally a court shall “presume[ ] that a cause
lies outside this limited jurisdiction,” Kokkonen, 511 U.S. at 377, the Supreme Court has “made
clear that ‘no anti-removal presumption attends cases invoking CAFA, which Congress enacted
to facilitate adjudication of certain class actions in federal court.’” Dudley, 778 F.3d at 912
(quoting Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S. Ct. 547, 554 (2014)).
Nevertheless, a defendant seeking removal on the basis of diversity jurisdiction must
demonstrate the existence of federal jurisdiction and the amount in controversy by a
preponderance of the evidence. See 28 U.S.C. § 1446(c)(2)(B); Pretka v. Kolter City Plaza II,
Inc., 608 F.3d 744, 752 (11th Cir. 2010); Williams v. Best Buy Co., 269 F.3d 1316, 1319 (11th
Cir. 2001).
III.

DISCUSSION
A.

Amount in Controversy

Plaintiff does not dispute that there exists “over 100 persons in the class and that there is
diversity of citizenship,” but argues that Defendant has failed to sustain its burden to show that
the amount in controversy exceeds $5,000,000.00. Motion at 2-3. The instant dispute, therefore,
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is one of evidentiary sufficiency. Even in CAFA cases, “all that is required is a ‘short and plain
statement of the grounds for removal,’ including ‘a plausible allegation that the amount in
controversy exceeds the jurisdictional threshold’ . . . unless ‘the plaintiff contests, or the court
questions, the defendant’s allegation.’” Dudley, 778 F.3d at 912 (quoting Dart, 135 S. Ct. at
554). “‘[A] court may rely on evidence put forward by the removing defendant, as well as
reasonable inferences and deductions drawn from that evidence,’” to determine whether the
amount in controversy exceeds the jurisdictional minimum. Id. at 913 (quoting Wellness, 745
F.3d at 1315). “For CAFA purposes,” a court properly “aggregate[s] the claims of individual
class members and consider[s] the monetary value that would flow to the entire class if
declaratory relief were granted.” Wellness, 745 F.3d at 1316 (citations omitted). Although a
removing defendant need not establish the amount in controversy with “decimal-point
precision,” the “requirement is not satisfied if the value of the equitable relief is ‘too speculative
and immeasurable.’” Id. at 1316, 1317 (quoting Cohen v. Office Depot, Inc., 204 F.3d 1069,
1077 (11th Cir. 2000)).
Defendant initially based its amount in controversy allegation on Antonacci’s affidavit.
See ECF No. [1-5]. Antonacci is a Technical Supervisor at Government Employees Insurance
Company (“GEICO”), who, in his affidavit, estimates that over 1,000,000 bills include the
“Explanation Code BA.” See id. ¶¶ 1, 4. “Based on a subset of data with the Explanation Code
BA,” Antonacci then concludes that the average amount in controversy per bill equals $11.84,
equating to a controversy of at least $11,840,000.

See id. ¶¶ 7-8.

Plaintiff challenged

Antonacci’s calculations, and upon Plaintiff’s motion, the Court ordered that Defendant make
Antonacci available for deposition.

In his deposition, Antonacci testifies that he reviewed

Defendant’s data and records, and found that in fact, 1.9 million bills and 77,000 claims contain
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the code “BA.” See ECF No. [36-1] 20:2-4, 40:8-14 (“Antonacci Depo.”). Antonacci states that
for the charges in which a BA code was utilized between January 2013 and September 2016, the
difference between 100% of the billed amount and 80% of the billed amount – the deduction at
issue – equals approximately $23 million, well over the $5 million threshold. See id. at 12:1316, 36:4-9, 39:13-22.
Plaintiff argues that Antonacci has “inflated” the amount in controversy because he did
not remove “claims that were not otherwise covered under the insurance policy,” and improperly
utilized a “mathematical formula” instead of “the amount actually paid by GEICO.” ECF No.
[40] at 3. However, on a motion to remand, “‘the pertinent question is what is in controversy in
the case, not how much the plaintiffs are ultimately likely to recover.’” Dudley, 778 F.3d at 913
(quoting Pretka, 608 F.3d at 751); see also McPhail v. Deere & Co., 529 F.3d 947, 956 (10th
Cir. 2008) (“The amount in controversy is not proof of the amount the plaintiff will recover.
Rather, it is an estimate of the amount that will be put at issue in the course of the litigation.”).
The Eleventh Circuit faced a similar issue in Wellness, where it found an affidavit submitted by
the employee of the defendant insurance company sufficient because it “identif[ied] a specific
number of bills that would be affected by the declaratory relief sought, as well as a concrete
monetary value that the plaintiffs may be eligible to recover if they obtain relief.” Wellness, 745
F.3d at 1317. As in Wellness, Plaintiff has “not provide[d] any evidence to rebut [the] affidavit”
or to meaningfully “controvert its calculations.” Id. at 1316. And, “[g]iven the large number of
medical bills at issue and the significant amount of money at stake” – in this case, potentially
$23 million – even if the Court speculated that a large percentage “would be siphoned off by one
contingency or another,” it is unlikely that the amount in controversy would dip below the
jurisdictional amount. See id. at 1316-17.
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The Wellness Court also considered and rejected the argument, now made by Plaintiff,
that the amount at issue in an action for declaratory relief against an insurance company for
improper billing payments is overly speculative. First, the Wellness Court made clear that a
court properly considers the potential recovery of “any class member,” not simply the named
plaintiff. Id. at 1316. Second, and more to the point, the Eleventh Circuit reasoned that the
speculation argument improperly “relies on the assumption that class members armed with a
declaratory judgment would not later seek out the additional payment they are owed. That
assumption is contrary to human nature and the nature of lawyers.” Id. Even if “the putative
class members might have to take an extra step or two after obtaining declaratory relief to get
money . . . determining that the amount in controversy exceeds $5 million is [not] too speculative
of a task.” Id. at 1316-17. The Court finds the analysis in Wellness applicable and controlling.
And, although Antonacci may not have accounted for every potential variable in the bills he
identified, he states that the bills utilize the Code BA, encompassing the bills put at issue by
Plaintiff covering “claims for no-fault benefits under PIP policies . . . where GEICO utilized the
Code BA with respect to payment of each claim.” Complaint ¶ 21; see Antonacci Depo at 16:1116, 19:13–20:13. The Court, therefore, is not faced with the mathematical uncertainty or similar
layers of “assumptions” presented in the authority relied up by Plaintiff. 1

See All-S.

Subcontractors, Inc. v. Amerigas Propane, Inc., 2015 WL 4603567, at *11 (N.D. Fla. July 30,
2015); Scenic Health All., Inc. v. State Farm Mut. Auto. Ins. Co., 124 F. Supp. 3d 1291, 1296
(S.D. Fla. 2015). Accordingly, the Court finds CAFA’s amount in controversy requirement
satisfied in this case.

1

Some of which, the Court notes, predates Dudley and Dart. See Thomas v. Bank of Am. Corp., 570 F.3d
1280, 1283 (11th Cir. 2009); Miedema v. Maytag Corp., 450 F.3d 1322 (11th Cir. 2006).

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B.

Standing

Plaintiff, in somewhat of an interesting twist, also argues that the Complaint does not
assert an injury-in-fact sufficient to confer federal court jurisdiction. “Where the plaintiff seeks
declaratory or injunctive relief, as opposed to damages for injuries already suffered . . . the
injury-in-fact requirement insists that a plaintiff allege facts from which it appears there is a
substantial likelihood that he will suffer injury in the future.” See Strickland v. Alexander, 772
F.3d 876, 883 (11th Cir. 2014). “[A] plaintiff seeking declaratory or injunctive relief must allege
and ultimately prove a real and immediate – as opposed to a merely hypothetical or conjectural –
threat of future injury.” Id. (quotations and emphasis omitted). In regard to class actions, a
plaintiff cannot simply “include class action allegations . . . and expect to be relieved of
personally meeting the requirements of constitutional standing, even if the persons described in
the class definition would have standing themselves to sue.” Griffin v. Dugger, 823 F.2d 1476,
1483 (11th Cir. 1987) (internal quotations omitted). Simply put, “[t]here must be a substantial
likelihood that the plaintiff will suffer future injury . . . a ‘perhaps’ or ‘maybe’ chance is not
enough.” Malowney v. Fed. Collection Deposit Grp., 193 F.3d 1342, 1347 (11th Cir. 1999).
On the issue of standing, the Court first returns to Wellness. Wellness involved a similar
class-complaint in which a health-care provider brought a class action for declaratory relief
against Allstate, an insurance company, for Allstate’s allegedly deficient payments made
pursuant to a statutory fee schedule. See Wellness, 745 F.3d at 1314. Like the proposed class in
this case, the Wellness plaintiff defined the class open-ended to include “[a]ny and all health care
providers and insureds who submitted claims for no-fault benefits under PIP policies which were
in effect from March, 2008, where Allstate utilized the reimbursement methodology pursuant to
Florida Statute 627.736(5)(a) 2(a-f) (2008) (the fee schedule) to limit reimbursement to the
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provider or the insured . . . .” Id. at 1314. The district court granted the plaintiff’s motion to
remand and the Eleventh Circuit reversed, defining the issue as “whether the [CAFA’s]
$5,000,000 amount-in-controversy requirement can be satisfied if the plaintiff seeks only
declaratory relief. If it can be, there is federal jurisdiction in this case. If it cannot be, there is
not.”

Id. at 1313

(emphasis added).

The Eleventh Circuit found that the plaintiff had

sufficiently established the $5 million threshold, and accordingly “remand[ed] for further
proceedings.” Id. at 1318. In reversing the district court, the Eleventh Circuit did not question
whether the plaintiff lacked standing to sue for declaratory relief in federal court for failure to
plead a threat of future injury, despite the well-recognized principle that “every court has an
independent duty to review standing as a basis for jurisdiction at any time, for every case it
adjudicates.” Florida Ass’n of Med. Equip. Dealers, Med-Health Care v. Apfel, 194 F.3d 1227,
1230 (11th Cir. 1999). 2 Wellness is the most factually-analogous case cited by the parties, and,
as the Eleventh Circuit concluded that the district court had jurisdiction to adjudicate the action
for declaratory relief, the Court finds Wellness instructive.
Having so concluded, the Court finds that the Complaint adequately alleges a threat of
future injury such that Plaintiff has standing to bring suit in federal court. Plaintiff alleges that
Defendant “has had a general business practice of applying explanation code BA to its claims to
effect payments,” defining the class open-endedly to cover “any subsequent policies with
substantially similar language that were in effect since January 1, 2013.” Complaint ¶¶ 21, 22.
Plaintiff also pleads that Defendant currently disputes Plaintiff’s “interpretation and has instead
asserted that it is only required to pay 80% of the billed amount,” id. ¶ 36, while Defendant states

2

The Court recognizes that Apfel did “not decide what, if any, precedential value a case has when the
decision reaches the merits without any discussion of standing,” and accordingly, does not consider
Wellness binding precedent on the issue. Apfel, 194 F.3d at 1230. Nevertheless, the Court considers the
absence of a standing discussion in Wellness probative.

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that “GEICO has not changed the terms of its FLPIP (01-13) policy and any policy amendment
would require approval of the Florida Insurance Commissioner’s office.” ECF No. [37] at 13.
As the Eleventh Circuit recognized in Wellness, claims for a declaratory judgment in such cases
are not entirely abstract, as a favorable ruling “would establish that [Defendant] provided
members of the putative class with insufficient payment on bills that have already been incurred,
and it would give those class members a right to receive additional payment. That right to
additional payment represents ‘the monetary value of the benefit that would flow to the plaintiff
if the declaratory relief were granted.’” Wellness, 745 F.3d at 1318 n.3 (alteration omitted)
(quoting Morrison v. Allstate Indem. Co., 228 F.3d 1255, 1268 (11th Cir. 2000)). Plaintiff is a
“healthcare provider” allegedly representative of an open-ended class of other health-care
providers involving 77,000 similar claims and approximately two million bills paid by
Defendant, and Defendant apparently has no intention of changing its interpretation of the
policy.

Plaintiff’s claimed harm is easily-repeatable and has allegedly and systematically

occurred millions of times in three years. Thus, under the circumstances of this case, the Court
does not find Plaintiff’s chance of future injury “too remote.” See O’Shea v. Littleton, 414 U.S.
488, 498 (1974); Malowney, 193 F.3d at 1347. Plaintiff, in fact, pleads that “[i]nterpretation of
the Policy, the PIP statute, and its amendments are not dependent on the factual circumstances
applying to Plaintiff and each Class Member,” id. ¶ 18, undercutting Plaintiff’s argument that
standing depends on the Court finding that Plaintiff will have a factually “identical claim” in
every respect, in the future. ECF No. [40] at 4. Considering Plaintiff’s allegations in light of
Wellness, the Court finds this action materially distinguishable from the cases Plaintiff relies
upon. See Coccaro v. Geico Gen. Ins. Co., 648 F. App’x 876, 879 (11th Cir. 2016) (rejecting
claims of future injury premised on the possibility that plaintiff and the class would renew their
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allegedly violative insurance policy because, as a matter of law, they could not assert future
injury); Esteves v. SunTrust Banks, Inc., 615 F. App’x 632, 635-36 (11th Cir. 2015) (plaintiffs
“allege that the defendants had committed various bad acts in the past,” but do not “allege facts
showing a real and immediate—as opposed to a merely hypothetical or conjectural—threat of
future injury” in the “conclusory” complaint); Thompson v. State Farm Fire & Cas. Co., 2015
WL 2344209, at *5 (M.D. Ga. May 14, 2015) (“Because the Plaintiffs’ injury is contingent upon
their townhouse suffering damage, the practical likelihood that the contingency will occur and
that the controversy is a real one is decisive in determining whether an actual controversy exists”
(internal quotations and alterations omitted)). Accordingly, the Court does not find that Plaintiff
lacks standing on the bases alleged, and the Motion is denied.
IV.

CONCLUSION
For the reasons stated herein, it is ORDERED AND ADJUDGED that the Motion to

Remand, ECF No. [7], is DENIED.
DONE AND ORDERED in Miami, Florida, this 30th day of December, 2016.

_________________________________
BETH BLOOM
UNITED STATES DISTRICT JUDGE
Copies to:
Counsel of Record

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