Stromberg specify that such supplemental jurisdiction only
applies when at least one of the multiple plaintiffs satisfies
the amount in controversy requirement. 77 F.3d at 931; 51 F.3d at
527-529. Because none of the plaintiffs in the instant case
exceeds the jurisdictional amount requirement we need not reach
the Abbott Laboratories/Stromberg Metal Works issue of whether
or not a district court may properly exercise supplemental
jurisdiction under 28 U.S.C. § 1367 over members of a class who
do not meet the amount in controversy requirement. See, Anthony
v. Security Pacific Financial Services, Inc., 75 F.3d 311, 316
n. 2 (7th Cir. 1996).
The class members in the instant case are Larry Sharrow, Cathy
Robinson, and all others similarly situated. These plaintiffs are
all persons who contracted to purchase a vehicle or mobile home.
Their contracts included provisions for the defendant to purchase
insurance on their behalf if they defaulted on their insurance
coverage. Such insurance is called "collateral protection
insurance" or "force placed insurance." All of the plaintiffs
defaulted on their insurance coverage and thereby triggered the
contractual provisions for collateral protection insurance. The
defendant purchased collateral protection insurance, and the
plaintiffs now challenge that purchase under state law. The
plaintiffs claim the collateral protection insurance purchased by
the defendant was unconscionably expensive.
The complaint specifically states the "actual damages sought by
Plaintiffs and each class member is less than $50,000 for each
individual plaintiff and each individual class member." The
complaint repeatedly asks for actual damages in excess of
$15,000, but less than $50,000. Clearly, the actual damages
sought by individual plaintiffs in this case do not satisfy the
minimum amount in controversy requirement for federal diversity
jurisdiction. Each of the plaintiffs in this case stands to
recover much less than the requisite $50,000.
The plaintiffs also seek punitive damages. Punitive damages may
be included in a court's calculation of the amount in
controversy. Bell v. Preferred Life Society, 320 U.S. 238, 239,
64 S.Ct. 5, 6, 88 L.Ed. 15 (1943); Sharp Electronics Corp. v.
Copy Plus, Inc., 939 F.2d 513, 515 (7th Cir. 1991). "Where
punitive damages are required to satisfy the jurisdictional
requirement in a diversity case, a two-part inquiry is necessary.
The first question is whether punitive damages are recoverable as
a matter of state law. If the answer is yes, the court has
subject matter jurisdiction unless it is clear beyond a legal
certainty that the plaintiff would under no circumstances be
entitled to recover the jurisdictional amount." Anthony v.
Security Pacific Financial Services, Inc., 75 F.3d 311, 315 (7th
Cir. 1996) (citing Cadek v. Great Lakes Dragaway, Inc.,
58 F.3d 1209, 1211 (7th Cir. 1995)).
Illinois law requires a very high level of culpability to
support an award of punitive damages. The Illinois Supreme Court
has limited punitive damage availability to "conduct involving
some element of outrage similar to that usually found in crime.
The conduct must be outrageous, either because the defendant's
acts are done with an evil motive or because they are done with a
reckless indifference to the rights of others." Loitz v.
Remington Arms, 138 Ill.2d 404, 150 Ill.Dec. 510, 563 N.E.2d 397
(1990) (citing Restatement (Second) of Torts § 908) "In this
context, willful and wanton misconduct approaches the degree of
moral blame attached to intentional harm, since the defendant
deliberately inflicts a highly unreasonable risk of harm upon
others in conscious disregard of it." Loitz, 150 Ill.Dec. at
510, 563 N.E.2d at 397. Illinois has further statutorily limited
punitive damages in the context of insurance cases. The Illinois
Insurance Code provides a $25,000 cap on punitive damage awards.
215 ILCS 5/155.
In the case at bar, the class plaintiffs' vague claims do not
support a finding of possible punitive damages sufficient to
satisfy the amount in controversy requirement of diversity
jurisdiction. All of the plaintiffs' various state law theories
are based on a claim that the contractually based "collateral
protection insurance" (or "forced place insurance") purchased by
the defendant was in some way against the law, e.g. a breach of
contract, or a tort such as negligence, or a violation of an
Illinois statute. There is no Illinois case law supporting a
cause of action based on collateral protection insurance
practices such as those alleged by the plaintiffs. Other states
have addressed related, but not identical issues, with mixed
results. See e.g., Logsdon v. Fifth Third Bank of Toledo,
100 Ohio App.3d 333, 654 N.E.2d 115 (1994) appeal denied 72 Ohio St.3d 1552,
650 N.E.2d 1371 (1995) (finding neither fiduciary
relationship nor duty of good faith in class action collateral
protection insurance case); Surrett v. TIG Premier Ins. Co.,
869 F. Supp. 919 (M.D.Ala. 1994) (finding no duty to disclose in
collateral protection insurance case); Kenty v. Transamerica
Premium Ins. Co., 72 Ohio St.3d 415, 650 N.E.2d 863 (1995)
(recognizing collateral protection insurance claims under
tortious interference with contract and civil conspiracy).*fn1
The court, in its review of the relevant case law does not see
support for large punitive damage awards to individual
plaintiffs. The court is not deciding whether the instant
plaintiffs can recover punitive damages under their multiple
state law theories. Instead the court is making the limited
inquiry of whether it is likely that any single plaintiff could
recover combined compensatory and punitive damages sufficient to
meet the amount in controversy requirement of federal diversity
jurisdiction. The court now finds that no single plaintiff has
alleged a claim for combined compensatory and punitive damages in
the amount of more than $50,000., therefore this court lacks
jurisdiction and must remand the case to the Illinois courts.
IT IS THEREFORE ORDERED THAT the case is remanded to state
court on the basis of lack of jurisdiction.
The clerk is directed to remand the case to the Champaign
County Circuit Court.