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Phillips v. Wellpoint

November 23, 2010

CHARLOTTE PHILLIPS AND BOB MYRICK, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
WELLPOINT, INC., UNICARE NATIONAL SERVICES, INC., UNICARE ILLINOIS SERVICES, INC., UNICARE HEALTH INSURANCE COMPANY OF THE MIDWEST, RIGHTCHOICE MANAGED CARE, INC., AND RIGHTCHOICE INSURANCE COMPANY, DEFENDANTS.



The opinion of the court was delivered by: J. Phil Gilbert District Judge

MEMORANDUM AND ORDER

This matter comes before the Court on Plaintiffs' Motion to Remand (Doc. 24). Defendants filed a Response (Doc. 32) thereto, to which Plaintiffs filed a Reply (Doc. 48).

For the following reasons, the Court DENIES the instant motion.

BACKGROUND

On March 17, 2010, Plaintiffs filed their Complaint (Doc. 1-1, p. 2 - Doc. 1-2, p. 8), which remains the operative pleading in this litigation, against Defendants in the Circuit Court for the Third Judicial Circuit in Madison County, Illinois. The complaint states the following four claims against Defendants: 1) violation of the Illinois Health Insurance Portability and Accountability Act, specifically 215 ILCS 97/50, which chronicles renewability of individual health insurance coverage and exceptions pertaining thereto (Counts I and II); 2) breach of contract (Count III); and 3) violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1, et seq. (Count IV).

Plaintiffs bring this action on behalf of the following putative class: "all Illinois persons who were [Defendant] RightCHOICE [Insurance Company (hereinafter "RightCHOICE")] individual or group health insurance policyholders at the time of the notice of the conversion scheme,*fn1 who following termination of their RightCHOICE policies were either rejected for Unicare underwritten coverage or automatically converted into Unicare policies." Doc. 1-1, p. 45, & 107 (emphasis added). Plaintiffs estimate that their class, if certified, will exceed 12,000 individual RightCHOICE policyholders and 12,000 "group members." Id. at & 108.

Defendants timely removed the matter to this Court on May 12, arguing that federal jurisdiction exists for the following two reasons: 1) this matter arises under the laws of the United States pursuant to 28 U.S.C. §1331 because the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq., completely preempts Counts II and III and supplemental jurisdiction may be exercised over Counts I and IV; and 2) diversity jurisdiction exists pursuant to 28 U.S.C. § 1332 because of the applicability of the Class Action Fairness Act of 2005 ("CAFA"), Pub. L. No. 109-2, 119 Stat. 4 (codified in scattered sections of 28 U.S.C.). Plaintiffs filed the instant motion to remand shortly thereafter.

ANALYSIS

I. Removal and Remand Generally

As an initial matter, the Court notes the general standards under which it must evaluate Plaintiffs' motion to remand. Pursuant to 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." See also Rubel v. Pfizer Inc., 361 F.3d 1016, 1017 (7th Cir. 2004); Jones v. Gen. Tire & Rubber Co., 541 F.2d 660, 664 n.5 (7th Cir. 1976). The party seeking removal, as the proponent of federal subject matter jurisdiction, has the burden of proof as to the existence of such jurisdiction. See Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 540 (7th Cir. 2006); In re Brand Name Prescription Drugs Antitrust Litig., 123 F.3d 599, 607 (7th Cir. 1997).

"'Courts should interpret the removal statute narrowly and presume that the plaintiff may choose his or her forum.' Put another way, there is a strong presumption in favor of remand." Fuller v. BNSF Ry. Co., 472 F. Supp. 2d 1088, 1091 (S.D. Ill. 2007) (quoting Doe v. Allied-Signal, Inc., 985 F.2d 908, 911 (7th Cir. 1993)). And, "[a]ll doubts about the propriety of removal are to be resolved in favor of remand." Sabo v. Dennis Techs., LLC, No. 07-cv-283-DRH, 2007 WL 1958591, at *2 (S.D. Ill. July 2, 2007).

II. CAFA Generally

CAFA states, in pertinent part, that "federal courts have jurisdiction over cases in which the amount in controversy exceeds $5 million, the class contains at least 100 members, and . . . any member of a class of plaintiffs is a citizen of a State different from any defendant." In re Safeco Ins. Co. of Am., 585 F.3d 326, 300 (7th Cir. 2009) (citation and quotation marks omitted); 28 U.S.C. §§ 1332(d)(2), (d)(2)(A), (d)(5)(B), (d)(6), (d)(7) (2006).

Here, Plaintiffs do not dispute that this case meets the basic requirements of CAFA. Indeed, Plaintiffs' complaint alleges that the proposed class will exceed 20,000 policyholders and group members, and Defendants' Notice of Removal (Doc. 1) explains that the amount in controversy easily exceeds $5,000,000, which Plaintiffs do not contest. Further, with respect to minimal diversity of citizenship, Plaintiffs are citizens of Illinois, and Defendants have sufficiently demonstrated via affidavit that WellPoint is a citizen of Indiana. Doc. 6-1, p. 10, & 2 ("WellPoint Inc. is incorporated in the State of Indiana and its principal place of business is in Indianapolis, Indiana."); Se. Guar. Trust Co., Ltd. v. Rodman & Renshaw, Inc., 358 F. Supp. 1001, 1005-1006 (N.D. Ill. 1973) ("For the ...


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