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Fischer v. Continental Loss Adjusting Services

December 23, 2008


The opinion of the court was delivered by: Herndon, Chief Judge


I. Background

On February 15, 2005, Plaintiff Dale Fischer, a chiropractor, filed a Class Action Complaint against Defendants for their improper PPO practices (Doc. 2) in state court in St. Clair County, Illinois. Fischer's claims alleged that Defendants engaged in the practice of taking improper reductions based on purported PPO reductions, taking reductions they had no valid contractual right to or failing to channel patients to the providers in exchange for the PPO reductions.

When the complaint was filed, Dale Fischer, doing business as Lebanon Chiropractic, was the only named plaintiff. Defendants filed a motion to dismiss on May 9, 2005 in state court arguing that Plaintiff's claims were time barred, Plaintiff lacked standing, and the Court lacked jurisdiction. On October 9, 2006, the Court rejected the arguments, stating that it was not persuaded that the wrong plaintiff entity was named in the complaint and that the court had jurisdiction over the matter (Doc. 2, Ex, D pp.1-2). The court did grant Plaintiff leave to amend the complaint by interlineation to identify the applicable entity to the extent there was any discrepancy (Id., Ex. D. p. 1). More than a year later, Defendants filed a motion for summary judgment on November 20, 2007. On May 7, 2008, six months after Defendant filed a motion for summary judgment in state court, Plaintiff sought and was granted leave to add his closely held corporation, Lebanon Chiropractic Clinic, S.C. as a plaintiff.

On June 6, 2008, Defendants removed the case to this Court, asserting federal subject matter jurisdiction pursuant to the Class Action Fairness Act ("CAFA"). Defendants argue that the adding of the new plaintiff constituted a new action triggering federal jurisdiction under CAFA. Defendants argue that Plaintiffs amended complaint does not relate back to the original complaint because Plaintiff filed an untimely original complaint and lacked standing. Plaintiffs filed a motion to remand on June 23, 2008, arguing that the amended complaint should relate back to the original complaint and that Plaintiff had standing (Doc. 9). Defendants filed a response (Doc. 16). Plaintiffs filed a reply and supplemental authority in support of their motion to remand (Docs. 18 & 19). Defendants filed a response to the supplemental authority (Doc. 22).

Defendants have also filed a motion for hearing in regards to the motion for remand (Doc. 17). However, the Court finds that the parties have fully briefed the issues and a hearing is not needed. Therefore, Defendants' motion for hearing (Doc. 17) is DENIED.

II. Discussion

A. Legal Standard

Under 28 U.S.C. § 1441, "any 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). Under CAFA, federal courts have jurisdiction in diversity over class actions and putative class actions involving one hundred or more class members in which any member of the plaintiff class is a citizen of a state different from that of any defendant, and in which, after aggregating all claims of class members, an amount in excess of $5 million, exclusive of interest and costs, is in controversy. See28 U.S.C. § 1332(d)(1)(B), (d)(2)(A), (d)(5)(B), (d)(6), (d)(8); Hart v. FedEx Ground Package Sys. Inc., 457 F.3d 675, 676-77 (7th Cir. 2006); Knudsen v. Liberty Mut. Ins. Co., 435 F.3d 755, 758 (7th Cir. 2006).

Class actions filed in state court in which the statutory prerequisites for federal subject matter jurisdiction under CAFA are met may be removed to federal court. See 28 U.S.C. § 1453(b); Santamarina v. Sears, Roebuck & Co., 466 F.3d 570, 571 (7th Cir. 2006); Bemis v. Allied Prop. & Cas. Ins. Co., No. 05-CV-751-DRH, 2006 WL 1064067, at *2 (S.D. Ill. Apr. 20, 2006). A removing defendant has the burden of establishing that the prerequisites for the exercise of federal jurisdiction on removal under CAFA are satisfied and doubts as to the propriety of such removal must be resolved in favor of remand to state court. See Brill v. Countrywide Home Loans, Inc., 427 F.3d 446, 448 (7th Cir. 2005); Orbitz, LLC v. Worldspan, L.P., 425 F. Supp. 2d 929, 931 (N.D. Ill. 2006); Fiore v. First Am. Title Ins. Co., No. 05-cv-474-DRH, 2005 WL 3434074, at *2 (S.D. Ill. Dec. 13, 2005).

B. Analysis

The central issue is whether a separate action commenced when Lebanon Chiropractic Clinic, S.C. was added as an additional plaintiff. If a new action was commenced then the suit is removable; however, if a new action was not commenced, then the action was filed before the enactment of CAFA and must be remanded.

"CAFA is not retroactive and therefore only applies to class actions which are'commenced on or after the date of enactment' of the statute, February 18, 2005." Schillinger v. 360Networks USA, Inc., Civil No. 06-138-GPM, 2006 WL 1388876, at *2 (S.D. Ill. May 18, 2006) (citations omitted). A lawsuit initially is "commenced" for purposes of removal under CAFA when the suit is originally filed in state court. See Pfizer, Inc. v. Lott, 417 F.3d 725, 726 (7th Cir. 2005). Under the law of Illinois, where this action initially was filed, "[e]very action, unless otherwise expressly provided by statute, shall be commenced by the filing of a complaint." 735 ILCS 5/2-201(a). Thus, this action was commenced for CAFA purposes on February 15, 2005 when it was filed originally in the St. Clair County circuit court.

However, Defendants argue that the addition of Lebanon Chiropractic Clinic, S.C., in May 2008 commenced a new action triggering federal court jurisdiction under CAFA. According to Defendants, the amended complaint does not relate ...

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