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Horning v. Laboratory Corporation of America

September 3, 2009

DAVID HORNING AND PATRICIA HORNING ON BEHALF OF THEMSELVES AND THE CLASSES DEFINED BELOW, PLAINTIFFS,
v.
LABORATORY CORPORATION OF AMERICA DEFENDANT.



The opinion of the court was delivered by: Charles P. Kocoras, District Judge

MEMORANDUM OPINION

This matter comes before the court on the motion of Plaintiffs David and Patricia Horning ("Horning"), on behalf of themselves and all others similarly situated to remand this case to the Circuit Court of Cook County. Defendant Laboratory Corporation of America ("Labcorp") moves to dismiss Count I of the Horning's complaint pursuant to Fed. R. Civ. P. 12(b)(6). For the reasons set forth below, the Hornings' motion to remand the case is denied and Labcorp's motion is granted.

BACKGROUND

This action was originally filed in the Circuit Court of Cook County, Illinois, on May 4, 2009. On June 5, Labcorp removed the case to this court under the Class Action Fairness Act ("CAFA"), 28 U.S.C. §§ 1332(d) and 1453. Labcorp perceives that the Hornings, together with the putative class members, satisfy the $5 million amount in controversy requirement under CAFA. The Hornings resist Labcorp's position and responded with this instant motion to remand.

According to the allegations of the underlying action, Patricia Horning had laboratory tests performed by Labcorp under a United Healthcare Preferred Provider program ("PPO"). Pursuant to the PPO's explanation of benefits, the PPO paid Labcorp for the tests and Patricia was not required to make any additional payment. Shortly thereafter, the Hornings claim that Labcorp billed them and demanded payment in the amount of $322; a later bill was for $8.05. Asserting that Labcorp maintains a practice of accepting payment from an insurance company or PPO and later billing the patient for an amount greater than was specified in the explanation of benefits, the Hornings, as representatives of a putative nationwide class, filed a two-count complaint asserting a breach of contract claim and an Illinois Consumer Fraud Act claim.

LEGAL STANDARDS

A. Motion to Remand

Under CAFA, federal courts have diversity jurisdiction over class actions that satisfy the following criteria: (1) minimal diversity; (2) 100 or more class members; and (3) an aggregate amount in controversy exceeding $5 million. See 28 U.S.C. § 1332(d)(2). As the proponent of federal jurisdiction, the removing party bears the burden of describing how the controversy exceeds $5 million. Brill v. Countrywide Home Loans, Inc., 427 F.3d 446, 448 (7th Cir. 2005). Since the amount in controversy is a pleading requirement and not a proof issue, a removing party need not "confess liability in order to show that the controversy exceeds the threshold." Id. at 449. The proponent must show what the stakes of litigation could be as well as what they are given the plaintiff's actual demands. Id. Once the proponent has plausibly suggested that the relief exceeds $5 million, then the case remains in federal court unless the plaintiff can show it is legally impossible to recover that much. Spivey v. Vertrue, Inc., 528 F.3d 982, 986 (7th Cir. 2008).

B. Motion to Dismiss Under Fed. R. Civ. P. 12(b)(6)

A Rule 12(b)(6) motion to dismiss is used to test the legal sufficiency of a complaint. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). In ruling on a motion to dismiss, a court must draw all reasonable inferences in favor of the plaintiff, construe allegations of a complaint in the light most favorable to the plaintiff, and accept as true all well-pleaded facts and allegations in the complaint. Bontkowski v. First Nat'l Bank of Cicero, 998 F.2d 459, 461 (7th Cir. 1993); Perkins v. Silverstein, 939 F.2d 463, 466 (7th Cir. 1991). To state a claim on which relief can be granted, a plaintiff must satisfy two conditions: first, the complaint must describe the claim in sufficient detail to give the defendant fair notice of what the claim is and the grounds upon which it rests; and second, its allegations must plausibly suggest that the plaintiff has a right to relief, raising that possibility above a speculative level. EEOC v. Concentra Health Servs., 496 F.3d 773, 776 (7th Cir. 2007); see also Ashcroft v. Iqbal, - U.S. -, 129 S.Ct. 1937, 1950 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 1964-65 (2007). However, a pleading need only convey enough information to allow the defendant to understand the gravamen of the complaint. Payton v. Rush-Presbyterian-St. Luke's Med. Ctr., 184 F.3d 623, 627 (7th Cir. 1999).

With these principles in mind, we turn to the instant motions.

DISCUSSION

A. Motion to Remand

The Hornings contest federal jurisdiction on the grounds that their complaint does not support Labcorp's assertion that the aggregate amount in controversy, i.e. the combined claims of the Hornings and the putative class, exceed $5 million. Labcorp argues that it has satisfied its burden of establishing federal jurisdiction by referencing the actual demands contained in the complaint. First, Labcorp asserts the Hornings' claim against Labcorp is typical of the nationwide class, which is that Labcorp charged Patricia $322 for laboratory tests without the right to do so. Next, the complaint alleges that Labcorp performs over 300,000 tests per day and Labcorp calculates this number to be 75,000,000 tests over the course of a year. ...


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