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Rosenberg v. Geico General Insurance Company

United States District Court, S.D. Florida

December 13, 2019

RANDY ROSENBERG, D.C., P.A., a/a/o Danielle Russell, on behalf of itself and all others similarly situated, Plaintiff,



         THIS CAUSE is before the Court upon Defendant GEICO General Insurance Company's (“Defendant”) Motion to Dismiss, ECF No. [33] (“Motion”). Plaintiff Randy Rosenberg, D.C., P.A. (“Plaintiff”) filed its Response in Opposition, ECF No. [34] (“Response”), to which Defendant filed a Reply, ECF No. [35] (“Reply”). Further, after conducting a Hearing on the Motion, Defendant filed two Notices of Supplemental Authority, ECF Nos. [51] & [52], and Plaintiff likewise filed a Notice of Supplemental Authority, ECF No. [53]. The Court has considered the Motion, all opposing and supporting submissions, the arguments presented at the Hearing, the record in this case, and the applicable law, and is otherwise fully advised. For the reasons set forth below, Defendant's Motion is granted in part and denied in part.

         I. BACKGROUND

         Plaintiff brings this class action for declaratory judgment (Count I) and breach of contract (Count II) against Defendant, alleging that Defendant has a wide-spread practice of improperly paying personal injury protection (“PIP”) claims at a reduced amount. See ECF No. [26] (“Amended Complaint”). Plaintiff challenges Defendant's interpretation of a specific endorsement to one of its automobile policies, “FLPIP (01-13).” Id. at 1-2. The endorsement includes the following language: “A charge submitted by a provider, for an amount less than the amount allowed above, shall be paid in the amount of the charge submitted.” Id. at 6.

         According to the Amended Complaint, Danielle Russell (“Russell”) was insured under an automobile insurance policy with Defendant. Id. at 7. Russell was involved in a motor vehicle accident while insured. Id. at 6-7. Plaintiff is a healthcare provider that provided medical care to Russell for the injuries she sustained in the motor vehicle accident, in exchange for an assignment of benefits. Id. at 7. The Amended Complaint lists four charges for Russell's medical services, for which Plaintiff submitted claims to Defendant. Id. at 7-8.

         The four charges listed in the Amended Complaint were for amounts less than the amount permitted by a permissive fee schedule under Florida Statutes § 627.736 (“Florida PIP Statute”). Id. For each charge that was below the fee schedule amount, Defendant reimbursed Plaintiff for 80% of the billed amount and provided an Explanation of Review (“EOR”) that contained the code “BA.” Id. The BA code indicated that Defendant reduced reimbursement of the charge to 80% of the billed amount. Id. The Florida PIP Statute states that “[t]he insurer may limit reimbursement to 80 percent” of certain schedules of maximum charges, including “[f]or all other medical services supplies and care” not listed in subsections (5)(a)1a-e, “200 percent of the allowable amount under: (I) The participating physicians fee schedule of Medicare Part B.” Fla. Stat. § 627.736(5)(a)1f(I). Plaintiff believes that the language in the endorsement required full payment of bills for amounts that were less than the amounts set forth in the fee schedule, rather than payment of 80% of the billed amounts. Id. at 6. Defendant takes the contrary position. Id.

         This action was originally filed in the Seventeenth Judicial Circuit in and for Broward County, Florida, asserting a single class declaratory judgment claim. Defendant filed a Notice of Removal on June 6, 2019, ECF No. [1], relying on the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332, 28 U.S.C. § 1441(a) and (b), and 28 U.S.C. § 1453. Plaintiff filed a Motion for Remand “in an abundance of caution” for the Court to consider whether remand was appropriate for lack of Article III standing. ECF No. [7]. In response, Defendant argued that dismissal, rather the remand, was necessary for a lack of standing. ECF No. [10]. The Court denied the Motion for Remand, holding that Plaintiff had Article III standing because the declaratory judgment claim in the original Complaint sought individual, supplemental monetary damages resulting from Defendant allegedly paying less on certain insurance claims than owed to Plaintiff. ECF No. [19]. On September 11, 2019, Plaintiff filed its Amended Complaint, adding an additional claim for breach of contract on a class-wide basis. See ECF No. [26].

         In the instant Motion, Defendant moves for dismissal pursuant to Rule 12(b)(1) and 12(b)(6), arguing that Plaintiff lacks standing under Article III and that the Amended Complaint fails to state a breach of contract claim that could be certified on a class-wide basis. ECF No. [33]. Plaintiff contends that it has sufficiently established Article III standing and that a determination on class certification issues is inappropriate at the motion-to-dismiss stage, where the parties have not had the opportunity to engage in discovery in order to sufficiently establish all of the elements required for class certification. ECF No. [34].

         On November 26, 2019, this Court held a Hearing on Defendant's Motion to Dismiss, which was attended by Plaintiff's counsel and Defendant's counsel. During the Hearing, Defendant argued primarily that the individual issues regarding the calculation of damages for each class member indicate, on the face of the Amended Complaint, that Plaintiff cannot establish the typicality and predominance elements required for class certification. Plaintiff, on the other hand, first advised the Court that it was withdrawing Count I of its Amended Complaint and would only be proceeding on the breach of contract claims asserted under Count II. Additionally, Plaintiff argued that the issue of class certification is premature at the motion-to-dismiss stage of the litigation and that individualized issues on damages nonetheless do not preclude class certification.


         A. Rule 12(b)(1)

         One element of the case-or-controversy requirement under Article III of the United States Constitution is that plaintiffs “must establish that they have standing to sue.” Raines v. Byrd, 521 U.S. 811, 818 (1997). “‘The law of Article III standing . . . serves to prevent the judicial process from being used to usurp the powers of the political branches,' and confines the federal courts to a properly judicial role.” Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016) (citations omitted) (citing Clapper v. Amnesty Int'l USA, 568 U.S. 398, 408 (2013); Warth v. Seldin, 422 U.S. 490, 498 (1975)). “Standing for Article III purposes requires a plaintiff to provide evidence of an injury in fact, causation and redressibility [sic].” Dermer v. Miami-Dade Cty., 599 F.3d 1217, 1220 (11th Cir. 2010) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). Specifically, “[t]o have standing, a plaintiff must show (1) he has suffered an injury in fact that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to conduct of the defendant; and (3) it is likely, not just merely speculative, that the injury will be redressed by a favorable decision.” Kelly v. Harris, 331 F.3d 817, 819-20 (11th Cir. 2003); see also Bochese v. Town of Ponce Inlet, 405 F.3d 964, 980 (11th Cir. 2005).

         “The party invoking federal jurisdiction bears the burden of proving standing.” Fla. Pub. Interest Research Grp. Citizen Lobby, Inc. v. E.P.A., 386 F.3d 1070, 1083 (11th Cir. 2004) (quoting Bischoff v. Osceola Cty., 222 F.3d 874, 878 (11th Cir. 2000)). A Rule 12(b)(1) motion challenges the district court's subject matter jurisdiction and takes one of two forms: a “facial attack” or a “factual attack.” “A ‘facial attack' on the complaint ‘require[s] the court merely to look and see if [the] plaintiff has sufficiently alleged a basis of subject matter jurisdiction, and the allegations in his complaint are taken as true for the purposes of the motion.'” McElmurray v. Consol. Gov't of Augusta-Richmond Cty., 501 F.3d 1244, 1251 (11th Cir. 2007) (quoting Lawrence v. Dunbar, 919 F.2d 1525, 1529 (11th Cir. 1990)). “A ‘factual attack,' on the other hand, challenges the existence of subject matter jurisdiction based on matters outside the pleadings.” Kuhlman v. United States, 822 F.Supp.2d 1255, 1256-57 (M.D. Fla. 2011) (citing Lawrence, 919 F.2d at 1529); see also Stalley ex rel. U.S. v. Orlando Reg'l Healthcare Sys., Inc., 524 F.3d 1229, 1233 (11th Cir. 2008) (“By contrast, a factual attack on a complaint challenges the existence of subject matter jurisdiction using material extrinsic from the pleadings, such as affidavits or testimony.”).

         “In assessing the propriety of a motion for dismissal under Fed.R.Civ.P. 12(b)(1), a district court is not limited to an inquiry into undisputed facts; it may hear conflicting evidence and decide for itself the factual issues that determine jurisdiction.” Colonial Pipeline Co. v. Collins, 921 F.2d 1237, 1243 (11th Cir. 1991). As such, “[w]hen a defendant properly challenges subject matter jurisdiction under Rule 12(b)(1), the district court is free to independently weigh facts, and ‘may proceed as it never could under Rule 12(b)(6) or Fed.R.Civ.P. 56.'” Turcios v. Delicias Hispanas Corp., 275 Fed.Appx. 879, 880 (11th Cir. 2008) (quoting Morrison v. Amway Corp., 323 F.3d 920, 925 (11th Cir. 2003)).

         B. Rule 12(b)(6)

         Federal Rule of Civil Procedure 8 requires that a pleading contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Although a complaint “does not need detailed factual allegations, ” it must provide “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); see Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (explaining that Rule 8(a)(2)'s pleading standard “demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation”). In the same vein, a complaint may not rest on “‘naked assertion[s]' devoid of ‘further factual enhancement.'” Iqbal, 556 U.S. at 678 (alteration in original) (quoting Twombly, 550 U.S. at 557). “Factual allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. These elements are required to survive a motion brought under Rule 12(b)(6) that requests dismissal for failure to state a claim upon which relief can be granted.

         When reviewing a motion under Rule 12(b)(6), a court, as a general rule, must accept the plaintiff's allegations as true and evaluate all plausible inferences derived from those facts in favor of the plaintiff. Miccosukee Tribe of Indians of Fla. v. S. Everglades Restoration All., 304 F.3d 1076, 1084 (11th Cir. 2002); AXA Equitable Life Ins. Co. v. Infinity Fin. Grp., LLC, 608 F.Supp.2d 1349, 1353 (S.D. Fla. 2009). However, this tenet does not apply to legal conclusions, and courts “are not bound to accept as true a legal conclusion couched as a factual allegation.” Twombly, 550 U.S. at 555; see Iqbal, 556 U.S. at 678; Thaeter v. Palm Beach Cty. Sheriff's Office, 449 F.3d 1342, 1352 (11th Cir. 2006). Moreover, “courts may infer from the factual allegations in the complaint ‘obvious alternative explanations,' which suggest lawful conduct rather than the unlawful conduct the plaintiff would ask the court to infer.” Am. Dental Ass'n v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010) (quoting Iqbal, 556 U.S. at 682). A court considering a Rule 12(b) motion is generally limited to the facts contained in the complaint and attached exhibits, including documents referred to in the complaint that are central to the claim. Wilchombe v. TeeVee Toons, Inc., 555 F.3d 949, 959 (11th Cir. 2009); see also Maxcess, Inc. v. Lucent Techs., Inc., 433 F.3d 1337, 1340 n.3 (11th Cir. 2005) (“[A] document outside the four corners of the complaint may still be considered if it is central to the plaintiff's claims and is undisputed in terms of authenticity.” (citing Horsley v. Feldt, 304 F.3d 1125, 1135 (11th Cir. 2002))).

         III. ...

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