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Whitaker v. Shelter Mutual Insurance Co.

United States District Court, W.D. Arkansas, Fort Smith Division

March 15, 2019

DONALD K. WHITAKER, individually and on behalf of all others similarly situated PLAINTIFF
v.
SHELTER MUTUAL INSURANCE COMPANY DEFENDANT and SAMUEL BAGGETT, on behalf of himself and all other similarly situated persons and entities PLAINTIFF
v.
SHELTER MUTUAL INSURANCE COMPANY DEFENDANT

          OPINION AND ORDER

          P.K. HOLMES, III U.S. DISTRICT JUDGE.

         Before the Court are two putative class actions against Defendant Shelter Mutual Insurance Company (“Shelter”). Both cases were removed pursuant to the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d). Plaintiff Donald K. Whitaker's action was removed to this Court on May 23, 2018 from the Circuit Court of Logan County, Arkansas. Whitaker seeks certification of the following class:

Residents of the State of Arkansas who, from January 15, 2011 through the date of resolution of this action, (a) purchased a policy of insurance from the Defendant; (b) made a claim for automobile medical payment or PIP benefits; (c) had their benefits reduced by the defendant's discounting scheme and (d) failed to exhaust the limits of their med pay or PIP benefits.

(No. 2:18-CV-02091, Doc. 4, p. 7, ¶ 23). Plaintiff Samuel Baggett's action was removed to the United States District Court for the Eastern District of Arkansas on September 25, 2018 from the Circuit Court of Pulaski County, Arkansas, and was transferred to this Court on November 7, 2018 because Shelter is Defendant in both Whitaker and Baggett, the classes are similarly defined, and there is substantial overlap of claims and relief sought. Baggett seeks certification of the following class:

All Arkansas residents, including Plaintiff and all similarly situated persons for the period from March 13, 2013 to the present (the “Class period”), who have or had automobile liability insurance with a Med Pay provision issued by Shelter, and who were denied Med Pay coverage because of payments made by another insurance plan.
Excluded from the class are the agents, affiliates and employees of Shelter and the assigned judge and his/her staff, and members of the appellate courts and their staff.

(No. 2:18-CV-02190, Doc. 5, p. 4, ¶ 2). Despite these different class definitions, Shelter's notices of removal in each case rely on amounts in controversy identified based on the same internal analysis of claims. Both cases will be remanded because Shelter has not demonstrated that this Court can exercise subject matter jurisdiction under CAFA.

         In Baggett's case, Baggett filed a motion (No. 2:18-CV-02190, Doc. 15) to remand and a brief (No. 2:18-CV-02190, Doc. 16) in support, and Shelter has filed a response (No. 2:18-CV-02190, Doc. 26) and brief (No. 2:18-CV-02190, Doc. 27) in opposition. Baggett filed a reply (No. 2:18-CV-02190, Doc. 30) with leave of Court. That motion will be granted and Baggett's case will be remanded.

         In Whitaker's case, no motion[1] to remand has been filed, but after the issue of subject matter jurisdiction was raised in Baggett's case, the Court entered an order (No. 2:18-CV-02091, Doc. 21) in Whitaker's case on January 24, 2019 directing Shelter to show that this Court has subject matter jurisdiction over the removed action. Shelter has filed its response (No. 2:18-CV- 02091, Doc. 22) and brief in support (No. 2:18-CV-02091, Doc. 23). Whitaker did not file a reply. Whitaker's case will also be remanded.

         I. Law

         “The district courts of the United States . . . ‘are courts of limited jurisdiction . . . possess[ing] only that power authorized by Constitution and statute.'” Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552 (2005) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)). “[S]ubject matter jurisdiction is primary and an absolute stricture on the court.” In re Prairie Island Dakota Sioux, 21 F.3d 302, 304-05 (8th Cir. 1994). CAFA vests subject matter jurisdiction in this Court for certain class actions where “the [putative] class has more than 100 members, the parties are minimally diverse, and the amount in controversy exceeds $5 million.” Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S.__, 135 S.Ct. 547, 552 (2014) (citing 28 U.S.C. § 1332(d)(2)).

         When the Court's subject matter jurisdiction over an action removed from a State court by a defendant has been called into question, either because a plaintiff has challenged that defendant's removal allegations or because the Court has sua sponte raised the question, the removing defendant must demonstrate, by preponderance of the evidence, that jurisdiction is proper. Dart Cherokee Basin Operating Co., LLC, 135 S.Ct. at 553-54; Hartis v. Chicago Title Ins. Co., 694 F.3d 935, 944-45 (8th Cir. 2012). The removing party's burden is to describe how the amount in controversy exceeds the jurisdictional amount, and remains a pleading requirement, and not a demand for proof. Hartis, 694 F.3d at 944-45.

         II. Jurisdictional Facts

         From January 15, 2011 until the present, Shelter has sold automobile insurance in the State of Arkansas. Putative class members in both Whitaker and Baggett purchased automobile insurance policies from Shelter. The State of Arkansas requires that automobile insurance policies “provide minimum medical and hospital benefits” to the insured, family members, ...


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