United States District Court, N.D. Illinois, Eastern Division
SABRINA ROPPO, individually and on behalf of others similarly situated, Plaintiffs,
Travelers Insurance Company, Defendant.
MEMORANDUM OPINION AND ORDER
EDMOND E. CHANG, District Judge.
The present action stems from a personal-injury suit filed by Plaintiff Sabrina Roppo, which is currently pending in Lake County, Illinois. See R. 1-2, Def.'s Exh. B, Compl., Exh. D (attaching discovery responses from Roppo v. Block, No. 12 L 987, Circuit Court of Lake County). The alleged tortfeasor in that suit is insured by the Defendant, Travelers Commercial Insurance Company,  which is providing a defense (Roppo's personal-injury suit is a car-accident case). See R. 1, Notice of Removal ¶ 18; Compl. ¶¶ 24-28. In this now-federal lawsuit, Roppo contends that Travelers intentionally concealed the alleged tortfeasor's policy limits by failing to disclose an excess umbrella policy for three months. Roppo seeks to certify a class of "all Illinois persons who made a personal injury motor vehicle claims [sic] for accidents occurring after August 12, 1988 and had the Travelers Insurance Company misrepresent and conceal the actual policy limits of tortfeasor by not disclosing the excess or umbrella policy." Compl. ¶ 2 (asserting causes of action for (1) fraudulent concealment and misrepresentation of the policy limits and (2) an implied private right of action for violation of 215 ILCS 5/143.24b). Travelers filed a Notice of Removal of this action from the Circuit Court of Cook County, Illinois, asserting that Roppo's action was removable under the Class Action Fairness Act (also known by its acronym, CAFA). Notice of Removal ¶ 6.
After removing the case to federal court, Travelers moved to dismiss Roppo's Complaint under Federal Rule of Civil Procedure 12(b)(6). R. 9, Mot. Dismiss. For her part, Roppo moves to amend her complaint to add several local defendants (local as in they are Illinois citizens), and moves to remand, asserting that this Court does not properly have jurisdiction under CAFA (or, in the alternative, even if this Court does have jurisdiction, that this Court should decline to exercise jurisdiction). R. 17, Mot. Remand; R. 31, Mot. File Second Am. Compl. Roppo also requests that if this Court determines that Travelers has met its threshold burden for establishing subject matter jurisdiction under CAFA, then she wants permission to amend her complaint and to take limited discovery to resolve factual issues raised by her motion to remand. R. 28, Mot. Permit Discovery at 1. For the reasons discussed below, Roppo's Motion to Amend [R. 31] is granted because it is early in the litigation, and therefore Travelers' Motion to Dismiss [R. 9] is terminated as moot. But the Court does conclude that, even with the amended complaint, the Court has subject matter jurisdiction under CAFA, so Roppo's Motion to Remand [R. 17] is denied. Finally, the Court does not permit Roppo additional discovery: Roppo has failed to show that the relevant exceptions, 28 U.S.C. §§ 1332(d)(3) or 1332(d)(4), to CAFA jurisdiction are applicable, or that additional discovery is necessary to determine whether one of those CAFA exceptions applies.
Roppo was involved in a car accident and filed a personal-injury suit against Jeffrey Block, the alleged tortfeasor, in a state court action currently pending in Lake County, Illinois. See Compl. ¶¶ 24-28; see also Compl., Exh. D. Block is insured by Travelers, which is providing a defense in the personal-injury suit. Compl. ¶ 28. Roppo contends that in her personal-injury suit, Block initially failed to disclose an excess Travelers umbrella policy when responding to interrogatories and document requests. Id. ¶¶ 26-31. Travelers eventually did disclose and produce the policy, but not until two months after it should have disclosed the policy. Id. ¶ 30.
Following this, and before her personal-injury suit was resolved by the Lake County state court, Roppo filed a putative class action in the Circuit Court of Cook County, Illinois, alleging that Travelers fraudulently misrepresented and concealed actual policy limits of insured tortfeasors by not disclosing excess or umbrella policies. Compl. Roppo asserts two causes of action against Travelers: (1) for fraudulent concealment and misrepresentation of the policy limits; and (2) for an implied private right of action under the Illinois Insurance Code, 215 ILCS 5/143.24b. Id. ¶¶ 32-38. Roppo defines her putative class as "all Illinois persons who made a personal injury motor vehicle claims [sic] for accidents occurring after August 12, 1988 and had the Travelers Insurance Company misrepresent and conceal the actual policy limits of tortfeasor by not disclosing the excess or umbrella policy." Id. ¶ 2.
Travelers timely removed the lawsuit to this Court, asserting that there is federal jurisdiction under CAFA, 28 U.S.C. § 1332, 28 U.S.C. § 1441(a) and (b), and 28 U.S.S. § 1453, because this is a putative class action with more than 100 putative class members who are seeking to recover a total in excess of $5 million and there is minimal diversity. Notice of Removal ¶ 6. Shortly after removing the lawsuit, Travelers filed a motion to dismiss this action in its entirety under Rule 12(b)(6), arguing that Roppo's fraud claim fails because she does not plead either reliance or damage, and that Roppo's claim under 215 ILCS 5/143.24b fails because Roppo did not allege facts that would give rise to a statutory violation and because there is no private right of action under the statute. R. 10, Def.'s Mot. Dismiss Br. at 6-13.
Before Travelers' Motion to Dismiss was fully briefed, Roppo filed two motions of her own: a Motion for Leave to File an Amended Complaint [R. 15] and a Motion to Remand [R. 17]. Then Roppo filed yet another motion, a motion to file a proposed "Second" Amended Complaint [R. 31] (this motion was filed before a decision on whether Roppo could file a "first" Amended Complaint). The Second Amended Complaint adds two new defendants-Jason Hitchings (Block's attorney in the Lake County personal-injury suit) and Maisel & Associates (the law firm at which Hitchings works). Mot. File Second Am. Compl. at 1. In her Motion to Remand, Roppo argues that the Defendants that she seeks to add via amendment to her complaint are "significant local defendants" and, therefore, that the "local controversy" exception under 28 U.S.C. § 1332(d)(4)(A) requires remand. Mot. Remand at 2-3. At the very least, Roppo argues, the Court should decline jurisdiction under § 1332(d)(3). Roppo, moreover, argues that Travelers has failed to meet its burden of showing that the putative class consists of over 100 members and the amount in controversy exceeds $5 million, and, therefore, that jurisdiction under CAFA, 28 U.S.C. § 1332, does not apply. R. 26, Pl.'s Reply Mot. Remand.
1. Joinder of Additional Defendants
First, the Court grants Roppo leave to file her Second Amended Complaint, which adds Defendants Hitchings and Maisel & Associates. "[W]hen a party has been joined after the case has been removed to federal court, the court should apply 28 U.S.C. § 1447-which addresses post-removal procedures-in lieu of Rule 15." Bostrom v. Target Corp., No. 06-cv-1628, 2006 WL 3370176, at *1 (N.D. Ill. Nov. 21, 2006). Section 1447(e) states that "[i]f after removal the plaintiff seeks to join additional defendants whose joinder would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and remand the action to the State court." 28 U.S.C. § 1447. District courts, at their discretion, may "dismiss a nondiverse party to retain diversity jurisdiction." Jass v. Prudential Health Care Plan, Inc., 88 F.3d 1482, 1492 (7th Cir. 1996). To decide whether the post-removal joinder of a nondiverse party is appropriate, the Court should consider the following factors: "(1) the plaintiff's motive for seeking joinder, particularly whether the purpose is to defeat federal jurisdiction; (2) the timeliness of the request to amend; (3) whether the plaintiff will be significantly injured if joinder is not allowed; and (4) any other relevant equitable considerations." Schur v. L.A. Weight Loss Ctrs., Inc., 577 F.3d 752, 759 (7th Cir. 2009).
Roppo seeks to add two additional defendants in her Second Amended Complaint, contending that "these new defendants are not new to this case as their misconduct was intentionally detailed and alleged in the original complaint. The only thing that changes in the amended complaint is their status as named defendants." Pl.'s Reply Mot. Remand at 11. As Travelers points out, it appears likely that Roppo's primary purpose for adding these defendants "is to attempt remand under the local controversy exception." R. 20, Def.'s Resp. Mot. Remand at 11. As this Opinion discusses later, however, joinder of these two defendants will not destroy subject matter jurisdiction because the local-controversy exception does not apply. Given the early stage in the litigation at which Roppo seeks to join these additional parties (so there is no prejudice to Travelers arising from delay or any other reason), their relevance to the underlying action, and the fact that their presence will not defeat federal jurisdiction, joinder is appropriate under 28 U.S.C. § 1447. See Schur, 577 F.3d at 759.
2. Motion to Dismiss
Because this Court has granted Roppo leave to file her Second Amended Complaint, Travelers' Motion to Dismiss [R. 9] is terminated as moot. It would not be appropriate to consider Travelers' Motion to Dismiss before the additional added defendants have been served (let alone secured legal representation). If, after the additional defendants have been served, Travelers wishes to move to dismiss (which it ...