Cox et al v. Air Methods Corporation et al

Filing 29

MEMORANDUM OPINION AND ORDER: The court DENIES AS MOOT plaintiffs' 10 MOTION to Remand to Circuit Court of Mercer County; GRANTS plaintiffs' unopposed 9 MOTION to Extend Deadline to Respond to the Motion to Transfer or Stay; DENIES Plai ntiffs' 12 AMENDED MOTION to Remand; GRANTS Defendants' 6 MOTION to Stay and DENIES Defendants' 6 MOTION to Transfer. The parties shall file a joint status report regarding the status of the Colorado Action within 60 days of the entry of this Memorandum Opinion and Order and shall do so every 60 days thereafter. Signed by Senior Judge David A. Faber on 5/30/2018. (cc: counsel of record) (arb)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
AT BLUEFIELD
MICHAEL AND TABITHA COX, individually
and on behalf of their minor child, W.C.,
Plaintiffs,
v.

CIVIL ACTION NO. 1:17-04610

AIR METHODS CORPORATION and ROCKY
MOUNTAIN HOLDINGS, LLC,
Defendants.
MEMORANDUM OPINION AND ORDER
Pending before the court is (1) Plaintiffs’ Amended Motion
to Remand (ECF No. 12) and (2) Defendants’ Motion to Transfer or
Stay (ECF No. 6).

For the reasons that follow, the court denies

plaintiffs’ motion to remand and stays this matter pending the
dispositive motion to dismiss currently before the United States
District Court for the District of Colorado in Scarlett v. Air
Methods Corporation, et al.
I.

BACKGROUND

A. Factual History
On August 18, 2017, plaintiffs filed a putative class
action against defendants, Air Methods Corporation and its
holding company, Rocky Mountain Holdings, LLC (collectively
“Defendants”).

Defendants provide air ambulance services in

West Virginia and other states.

Plaintiffs’ child W.C. was

hospitalized at Princeton Community Hospital in Princeton, West

Virginia and required air transportation to CAMC Women’s and
Children’s Hospital in Charleston, West Virginia.
¶ 14.

Complaint at

Defendants transported W.C. the necessary 76 rotor miles.

Id. at ¶¶ 14-16.

No written contract or verbal agreement

memorialized these services.

Id. at ¶ 15.

Plaintiffs received a bill for $52,634.76 from Defendants.
Id. at ¶ 16.

Plaintiffs’ insurer, West Virginia Public Employee

Insurance Agency (“PEIA”) paid Defendants $6,704.14.
17.

Id. at ¶

PEIA also concluded that plaintiffs would be responsible to

pay $586.79.

Id.

Nevertheless, plaintiffs received a bill from

Defendants for $45,930.62, the amount unpaid by PEIA.
17-18.

Id. at ¶¶

When Defendants requested additional payment from PEIA,

the insurer refused, stating in a May 6, 2016 letter that the
additional $45,930.62 “is clearly excessive.”
B.

See ECF 1-1, Ex.

These excessive charges form the foundation for plaintiffs’

claims: that Defendants actions constitute a breach of West
Virginia implied contract law.

Complaint at ¶¶ 36-41.

Plaintiffs’ claims are on behalf of themselves and other
similarly situated West Virginians who have used Defendants’
transportation services.

Id. at ¶ 40.

Plaintiffs define the

proposed class as:
All patients who, without entering a written agreement
with Defendants for medical transport prior to the
transport, received medical transport by Defendants
from a location in West Virginia to a healthcare

2

facility during the period of five (5) years prior to
the commencement of this action.
Id. at ¶ 27.

The Complaint alleges “[u]pon information, the

proposed class would include hundreds, if not thousands of class
members.”

Id. at ¶¶ 27–28.

The action seeks damages for any

overpayments collected by Defendants.

In the alternative,

plaintiffs request that the court enjoin Defendants from
charging and collecting unreasonable rates.

Id. at ¶¶ 36-51.

B. Procedural History
Plaintiffs originally filed their action in the Circuit
Court of Mercer County, West Virginia on August 18, 2017.

Id.

Defendants removed the action to federal court on December 22,
2017, citing the removal requirements under the Class Action
Fairness Act of 2005 (“CAFA”) and traditional diversity
jurisdiction.

See ECF No. 1.

Soon thereafter, Defendants filed

a Motion to Transfer or Stay, seeking to either transfer this
action to the United States District Court for the District of
Colorado or stay the action until that court makes a ruling on a
pending motion to dismiss.

ECF No. 6.

On January 22, 2018,

plaintiffs filed a motion to remand the action to the Circuit
Court of Mercer County.

ECF No. 10.

On the same date,

plaintiffs filed the operative Amended Motion to Remand. 1

1

See

Accordingly, Plaintiffs’ Motion to Remand Case to Circuit Court
of Mercer County is DENIED as moot. Id.
3

Each motion has been fully briefed. 2

ECF No. 12.

The court

first reviews the jurisdictional issues raised in plaintiffs’
Amended Motion to Remand and then proceeds to Defendants’ Motion
to Transfer or Stay.
II.

PLAINTIFFS’ AMENDED MOTION TO REMAND

Plaintiffs’ amended motion to remand claims Defendants have
offered insufficient evidence to establish that this action
meets CAFA’s jurisdictional threshold of at least 100 class
members and $5,000,000 amount in controversy.
2-6.

Id.

ECF No. 13 at pp.

The court disagrees and DENIES plaintiff’s motion.

A. Applicable Law
A defendant may remove to federal district court “any civil
action brought in a State court of which the district courts of
the United States have original jurisdiction. . . .” 28 U.S.C. §
1441(a).

Under CAFA, an action may be originally brought in

federal court if it has (1) at least one member of the class who
is a citizen of a state different than at least one of the
defendants; (2) the class consists of at least one hundred
members; and (3) the amount in controversy exceeds $5,000,000,
exclusive of interest and costs.

28 U.S.C. § 1332(d)(2).

To

properly remove an action under CAFA, a defendant must file a

2

Plaintiffs’ unopposed motion seeking to extend the deadline to
respond to the Motion to Transfer or Stay is GRANTED. ECF No.
9.
4

notice of removal “containing a short and plain statement of the
grounds for removal.”

28 U.S.C. § 1446(a); see also Strawn v.

AT&T Mobility LLC, 530 F.3d 293, 297 (4th Cir. 2008)
While defendant bears the burden of alleging federal
jurisdiction under CAFA, Strawn, 530 F.3d at 297, there is “no
antiremoval presumption attend[ing] cases invoking CAFA . . . a
defendant's notice of removal need include only a plausible
allegation that the amount in controversy exceeds the
jurisdictional threshold.”

Dart Cherokee Basin Op. Co. v.

Owens, –– U.S. ––, 135 S. Ct. 547, 554 (2014).

If jurisdiction

is challenged, the parties are required to submit proof and the
court must determine if federal jurisdiction under CAFA has been
met by a preponderance of the evidence.

28 U.S.C. §

1446(c)(2)(B); Dart, 135 S. Ct. at 553–54.
The parties agree that CAFA’s minimal diversity requirement
is met.

Therefore, the court assesses whether Defendants have

demonstrated by a preponderance of the evidence the numerosity
and amount in controversy requirements.
B. Discussion
Defendants’ notice of removal relies on plaintiffs’ own
representations within the Complaint.

The Complaint states that

the proposed class “include[s] hundreds, if not thousands of
members.”

Complaint at ¶ 28.

Defendants assert that the plural

“hundreds” exceeds the 100-person class numerosity threshold.
5

Therefore, if “hundreds” means 200 class members, and each
member was overcharged $45,930.62 (the alleged overcharge of
representative plaintiffs), the requested damages would total
$9,186,124, exceeding the $5,000,000 amount in controversy.
ECF No. 1 at pp. 5-6.

See

Defendants also argue that the injunctive

relief requested by plaintiffs would exceed $5,000,000.

Id.

Plaintiffs contend that this “methodology” fails to
establish jurisdiction under CAFA.

While the court is prone to

believe that Defendants’ notice of removal meets its obligation
under Dart, 135 S. Ct. at 551, Defendants’ Response removes all
doubt.

See ECF No. 19.

The Response attaches the affidavit of

Paul Webster, Vice President of Policy and Health Economics for
Air Methods. 3

See ECF No. 19-1.

The Webster affidavit asserts

in the previous five (5) years from the August 18, 2017 date of
suit, 4 Defendants have “provided emergency ambulance transport
from locations in West Virginia to healthcare facilities for
more than 1,600 patients without entering in a written agreement
for the transport.”

Id. at ¶ 3.

The total charged for these

1,600 transportations exceeds $70 million.

Id. at ¶ 4.

3

The affidavit may be used under Dart, which rejected the
argument that a legally deficient notice of removal “could not
be cured by post-removal evidence about the amount in
controversy.” 135 S. Ct. at 552 (internal quotations omitted).
4

Consistent with the proposed class as defined in the Complaint.
6

The Webster affidavit puts to rest any question as to
whether plaintiffs’ defined class meets the numerosity and
amount in controversy thresholds of CAFA. 5

While plaintiffs

could argue that the affidavit is over-inclusive as to the
amount in controversy (they do not), $70 million far surpasses
$5 million.

Accordingly, Defendants’ removal is proper under

CAFA, 28 U.S.C. § 1332(d), and plaintiffs’ motion to remand is
DENIED.
III. DEFENDANTS’ MOTION TO TRANSFER OR STAY
Defendants contend that this action was filed nine (9)
months after another putative nationwide class action involving
the same parties, same issues, and same claims was filed in the
United States District Court for the District of Colorado,
Scarlett v. Air Methods Corp., Case No. 1:16-CV-02723 (“Colorado
Action”).

ECF No. 6.

To date, six related class actions have

been consolidated in the District of Colorado either by joint
agreements or through judicial consolidation.

See ECF No. 6-9

(consolidating actions involving proposed nationwide classes and
statewide classes from Oklahoma, South Carolina, Alabama,

5

The Webster affidavit also declares that the financial harm to
Defendants would exceed $5 million if plaintiffs were awarded
their proposed injunctive relief, providing another for meeting
the amount in controversy threshold. See Hunt v. Wash. State
Apple Advert. Comm'n, 432 U.S. 333, 347 (1977) (“In actions
seeking declaratory or injunctive relief, it is well established
that the amount in controversy is measured by the value of the
object of the litigation.”).
7

Florida, Georgia, Mississippi, and Tennessee).

An additional

action, filed in the Northern District of Ohio (“Ohio Action”) 6
has been stayed until a pending motion to dismiss is ruled upon
in the Colorado Action.

This motion to dismiss in the Colorado

Action is grounded upon preemption by the Airline Deregulation
Act, 9 U.S.C. § 40101, et seq., also applicable to this action.
Moreover, this motion has been fully briefed by the parties and
oral argument had been held.

Finally, Defendants state that the

nationwide class in the Colorado Action 7 encompasses this
proposed class, which includes only West Virginians.
A. Applicable Law
The first-to-file rule favors judicial comity by attempting
to avoid duplicative litigation and conserve judicial resources.
Under the first-to-file rule, “the first suit should have
priority, absent the showing of balance of convenience in favor

6

See ECF No. 6-2, Byler, et al. v. Air Methods Corp., et al.,
No. 1:17-CV-00236, (N.D. Ohio Aug. 30, 2017) (staying under
first-to-file doctrine).
7

The consolidated complaint states its proposed nationwide class
consists of:
All persons, or legal representatives of persons, who
were charged for, or who have been billed for, air
medical transport by Defendants from or to locations
within the United States without having entered into a
written agreement with a price specified for that
medical transport during the relevant statute of
limitations period.
ECF No. 6-9 at ¶ 219.
8

of the second action.”

Ellicott Mach. Corp. v. Modern Welding

Co., 502 F.2d 178, 180 n. 2 (4th Cir. 1974) (internal quotations
marks and citation omitted); Allied–General Nuclear Servs. v.
Commonwealth Edison Co., 675 F.2d 610, 611 n. 1 (4th Cir. 1982)
(“Ordinarily, when multiple suits are filed in different Federal
courts upon the same factual issues, the first or prior action
is permitted to proceed to the exclusion of another subsequently
filed.”).

“Procedurally, the court first considers whether the

two competing actions are substantively the same or sufficiently
similar to come within the ambit of the first-to-file rule.

If

they do, the court then considers whether any exception to the
rule should be applied.”

Harris v. McDonnell, No. 5:13CV00077,

2013 WL 5720355, at *3 (W.D. Va. Oct. 18, 2013)
While the Fourth Circuit “has no unyielding ‘first-tofile’ rule,” CACI Intern., Inc. v. Pentagen Technologies Int'l.,
1995 WL 679952, at *6 (4th Cir. 1995) (unpublished), the Sixth
Circuit in Baatz v. Columbia Gas Transmission, LLC, 814 F.3d
785, 789 (6th Cir. 2016), recently held:
[C]ourts generally evaluate three factors: (1) the
chronology of events, (2) the similarity of the
parties involved, and (3) the similarity of the issues
or claims at stake. If these three factors support
application of the rule, the court must also determine
whether any equitable considerations, such as evidence
of inequitable conduct, bad faith, anticipatory suits,
or forum shopping, merit not applying the first-tofile rule in a particular case.

9

(citations, quotations, and emphasis omitted).

This same test

has been applied in districts in our circuit. See Harris, supra
at *3 (applying same three-factor test); Scardino v. Elec.
Health Res., LLC, No. 2:14-CV-2900-PMD, 2016 WL 1321147, at *2
(D.S.C. Apr. 5, 2016) (same).
“When a case falls within the ambit of the [first-to-file]
rule, district courts generally stay or dismiss the later-filed
case.”

Moore's Elec. & Mech. Const., Inc. v. SIS, LLC, No.

6:15-CV-00021, 2015 WL 6159473, at *3 (W.D. Va. Oct. 20, 2015);
see also Ohio Sec. Ins. Co. v. K R Enterprises, Inc., No. CV
1:15-16264, 2017 WL 6390944, at *4 (S.D.W. Va. Dec. 14, 2017)
(“Under the first-to-file rule, a district court may, in its
discretion, dismiss, stay, or transfer a later filed lawsuit in
deference to the first-filed action.”).
B. Discussion
While neither of the parties adapts their arguments to
factors enumerated above, the parties’ substantive disagreement
flows from whether or not this action is sufficiently similar to
the Colorado Action.

The first factor, the chronology of

events, favors Defendants because this action was filed after
each of the actions now consolidated in the Colorado Action.
1. Similarities of the Parties Involved
Plaintiffs contend that its action should not be
transferred, and thereby joined into the Colorado Action,
10

because the putative class has yet to be certified.
at p.4.

ECF No. 17

But class certification is not a consideration under

the first-to-file rule because the court’s role is merely to
consider “whether there is substantial overlap with the putative
class even though the class has not yet been certified.”
814 F.3d at 790 (collecting cases).

Baatz,

On the contrary, a court in

our circuit concluded the first-to-file rule is “particularly
appropriate,” in a pre-class certification context, as it avoids
“multiple attempts at certification in two different courts.”
Ortiz v. Panera Bread Co., No. 1:10CV1424, 2011 WL 3353432, at
*2 (E.D. Va. Aug. 2, 2011).

Here, the proposed class in the

Colorado Action encompasses the instant proposed class of West
Virginians.

This factor favors Defendants and application of

the first-to-file rule.
2. Similarities of the Issues or Claims at Stake
A review of plaintiffs’ factual and legal claims
demonstrates that not only is there substantial overlap between
the issues and claims in this action and the Colorado Action but
that each complaint is almost a verbatim recitation.

Compare

ECF No 1-1, with ECF Nos. 6-1, 6-6, 6-7, 6-8. The only
difference involves who is included in the different proposed
classes.
Plaintiffs argue (as did the plaintiffs in the Ohio
Action), that sufficient similarity does not exist because their
11

claims rely on the implied contract law of West Virginia.
Compare ECF No 17 at pp. 6-8, with ECF No. 6-2 at p.6.

The

court finds little merit in this assertion because the legal
issues and underlying factual claims are exactly the same.

See

Allied–General Nuclear Servs., 675 F.2d at 611 n. 1.
Accordingly, the court finds that each factor favors Defendants
and that the first-to-file rule is applicable.
3. Equitable Considerations
Since the first-to-file rule is applicable, the court
reviews whether equitable considerations warrant retaining
jurisdiction.

In doing so, the court considers the factors for

deciding a motion to transfer enumerated in 28 U.S.C § 1404(a),
which include: “(1) the weight accorded the plaintiff's choice
of venue, (2) witness convenience and access, (3) convenience of
the parties, and (4) the interest of justice.”

Harris, supra,

at *5, citing Cross v. Fleet Reserve Ass'n Pension Plan, 383 F.
Supp. 2d 852, 856 (D. Md. 2005).
Plaintiffs argue that it is unfair to litigate this matter
in the far-off jurisdiction of Colorado.

They allege the

Complaint is rooted in West Virginia contract law and that
transfer effectively deprives plaintiffs of their counsel
because only attorneys licensed in Colorado would be capable of
litigating the matter.

12

While “plaintiff's choice of venue is entitled to
substantial weight in determining whether transfer is
appropriate,”

Bd. of Trustees, Sheet Metal Workers Nat. Fund v.

Baylor Heating & Air Conditioning, Inc., 702 F. Supp. 1253, 1256
(E.D. Va. 1988), the court finds that this fails to overcome the
court’s interest in uniformity.

Moreover, requiring this court

and the District Court of Colorado to proceed separately in the
same task of determining whether plaintiffs’ claims are
preempted by federal law, especially when this issue has been
heard in the Colorado Action, would prove the “epitome of
judicial waste.”

Charlotte-Mecklenburg Hosp. Auth. v. Facility

Wizard Software, Inc., No. 3:08-CV-00463-FDW, 2008 WL 5115281,
at *1 (W.D.N.C. Dec. 4, 2008); see also United States v. Brick,
846 F.2d 74 (4th Cir. 1988) (“The purpose of the rule is to
‘promote efficient use of judicial resources’ and it ‘should be
applied in a manner serving sound judicial administration.’”)
(quoting Orthmann v. Apple River Campground, Inc., 765 F.2d 119,
121 (8th Cir. 1985)).
C. A Stay Is a Suitable Alternative to Transfer or
Dismissal
Because this case is within the ambit of the first-to-file
rule, the court in its discretion must determine whether
transfer, stay, or dismissal of this action would best serve the
interests of justice.

Akin to the Ohio Action, this court finds

13

that a temporary stay, rather than transfer or dismissal, is
appropriate.

Landis v. N. Am. Co., 299 U.S. 248, 254 (1936)

(“[T]he power to stay proceedings is incidental to the power
inherent in every court to control the disposition of the causes
on its docket with economy of time and effort for itself, for
counsel, and for litigants.”).

A single dispositive issue—

whether plaintiffs’ claims are preempted by the Airline
Deregulation Act—is being considered in the Colorado Action.
Moore's Elec. & Mech. Const., Inc. v. SIS, LLC, No. 6:15-CV00021, 2015 WL 6159473, at *7 (W.D. Va. Oct. 20, 2015) (finding
the first-to-file rule applies and staying case pending
determination of a motion to dismiss pending before another
district court).

While duplicitous briefing on this issue of

federal law would prove unnecessary and could result in a lack
of uniformity if plaintiffs survive this challenge, the case is
grounded in West Virginia contract law and would require the
testimony of West Virginia witnesses.

Accordingly, this court

believes that the proper disposition for this case is to defer
to the Colorado Action and proceed after a ruling on the motion
to dismiss pending in Colorado.
IV.

CONCLUSION

For the reasons above, the Plaintiffs’ Amended Motion to
Remand (ECF No. 12) is DENIED. Defendants’ motion to transfer or
stay (ECF No. 6) is GRANTED as to Defendants’ motion to stay and
14

DENIED as to Defendants’ motion to transfer.

The parties shall

file a joint status report regarding the status of the Colorado
Action within 60 days of the entry of this Memorandum Opinion
and Order and shall do so every 60 days thereafter.
The Clerk is further DIRECTED to send a copy of this
Memorandum Opinion and Order to all counsel of record.
IT IS SO ORDERED this 30th day of May, 2018.
Enter:

David A. Faber
Senior United States District Judge

15