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Ayers v. State Farm Mutual Automobile Insurance Co.

United States District Court, M.D. Florida, Orlando Division

December 21, 2017

FRANK AYERS, Plaintiff,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY; RUTH MIER GRAHAM; GOVERNMENT EMPLOYEES INSURANCE COMPANY; TAMMY BOOTH; and STEVEN HERSH, Defendants.

          ORDER

          ROY B. DALTON JR. UNITED STATES DISTRICT JUDGE

         This cause is before the Court on Defendants State Farm Mutual Automobile Insurance Company (“State Farm”), Tammy Booth, and Steven Hersh's (collectively, “Defendants”) response to the Court's November 21, 2017 Order to Show Cause. (Doc. 67.)

         I. Procedural History

         Plaintiff Frank Ayers initiated this action in state court against several defendants asserting numerous individual state-law claims and a putative nation-wide class claim. (Doc. 2.) Specifically, Plaintiff brought claims against Defendants for: (1) bad faith; (2) fraud; and (3) tortious interference (collectively, “Individual Claims”).[1] (Doc. 2, ¶¶ 47-94.) Based on its alleged obligation to provide Plaintiff with counsel and reimbursement of fees, he also lodges a putative class action claim for breach of contract against State Farm (“Class Claim”). (Id. ¶¶ 95-116.)

         Invoking the Court's diversity jurisdiction, State Farm removed the action, claiming that the Class Claim met the requirements of the Class Action Fairness Act, 28 U.S.C. § 1332(d)(2) (“CAFA”). (Doc. 31.) The Class Claim meets CAFA's jurisdictional requirements, but State Farm argues that the Court also has supplemental jurisdiction over the Individual Claims. (See Doc. 1, pp. 11-12.) Upon review, the Court directed Defendants to show cause why the Individual Claims should not be remanded given that they do not appear to be within the Court's supplemental jurisdiction. (Doc. 66.) As Defendants have responded, the matter is now ripe for the Court's consideration.

         II. Legal standards

         Supplemental jurisdiction is governed by 28 U.S.C. § 1367(a), which provides that unless:

[E]xpressly provided otherwise by Federal statute, in any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to the claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.

         This section “confers supplemental jurisdiction over all state claims which arise out of a common nucleus of operative fact with a substantial federal claim.” Parker v. Scarp Metal Processors, Inc., 468 F.3d 733, 743 (11th Cir. 2006). This occurs when “[t]hey will involve the same witnesses, presentation of the same evidence, and determination of the same, or very similar, facts.” Palmer v. Hosp. Auth. of Randolph Cty., 22 F.3d 1559, 1563-64 (11th Cir. 1994).

         III. Analysis

         Defendants seek to invoke the Court's jurisdiction over the Individual Claims by arguing that: (1) CAFA provides original jurisdiction, rendering § 1367 inapplicable (“Inapplicability Argument”); or, alternatively, (2) the Individual Claims arise from a common nucleus of operative facts, satisfying § 1367(a) (“Satisfaction Argument”). (Doc. 67, pp. 2-5.)

         A. Inapplicability Argument

         To begin, the Court rejects Defendants' Inapplicability Argument, which is nothing more than selective quotation from a patchwork of non-binding opinions. (Doc. 67, p. 4.) Contrary to Defendants' position, the U.S. Court of Appeals for the Eleventh Circuit has indicated in dicta that “[s]upplemental jurisdiction does have a role in CAFA cases, but only in those that also have ‘state-law claims that were never subject to CAFA jurisdiction.'”[2] Wright Transp., Inc. v. Pilot Corp., 841 F.3d 1266, 1273 (11th Cir. 2016) (quoting In Touch Concepts, Inc. v. Cellco P'ship, 788 F.3d 98, 102 (2d Cir. 2015)).Indeed, Wright is directly applicable here, as the Individual Claims are not subject to CAFA jurisdiction. Following Wright's logic, the Court concludes that “it [is] appropriate to consider whether to grant supplemental jurisdiction over the non-class claims.” Wright, 841 F.3d at 1273.[3]

         The Court's conclusion is fortified by the overriding purpose of CAFA. While no model of legislative clarity, at its core, CAFA was intended to rectify the abuses in the current class action system-namely, the purposeful evasion of federal diversity jurisdiction. S. Rep. No. 109-14, at 11-12, 27 (2005).[4] So the Senate Judiciary Committee drafted “a narrowly-tailored expansion of federal diversity jurisdiction to ensure that class actions that are truly interstate in character can be heard in federal court.” Id. at 27; see also Dart Cherokee Basin Operating Co. v. Owens, 135 S.Ct. 547 554 (2014) (noting that Congress “enacted [CAFA] to facilitate adjudication of certain class actions in federal court”). The ...


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