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Simon v. Blue Cross and Blue Shield of Kansas City

United States District Court, W.D. Missouri, Western Division

September 9, 2014

DEBRA SIMON, et al., Plaintiffs,


ORTRIE D. SMITH, Senior District Judge.

Pending is Plaintiff's Motion to Remand. The Court has considered the parties' arguments, and the motion (Doc. # 10) is granted.


Plaintiff Debra Simon filed this suit in Jackson County Circuit Court on behalf of herself and on behalf of the putative class. She alleges Defendant offered health insurance plans on the Federal Exchange created pursuant to the Affordable Care Act ("the Exchange"). Petition, ¶¶ 6-7. Consumers were able to search the Exchange for insurers and policies via the internet. A consumer could gain more information about Defendant's plan(s) by clicking on links on the Exchange's website; the link would take the consumer to the insurer's site. Petition, ¶ 8. Defendant's website (but not the Exchange) included a "Provider Directory, " which purported to "list[ ] all of the in-network physicians associated with that plan." Petition, ¶ 9. Unfortunately, Defendant's Provider Directory for the "Blue Select Plan" included physicians who were not in the network for that plan. Petition, ¶ 10. Plaintiff alleges this error caused consumers to "receive[ ] an inferior plan lacking the network providers previously listed, " which caused them to incur out-of-network charges or pay additional sums to get the plan they actually expected. Petition, ¶¶ 11-13.

Plaintiff asserts two claims. Count I asserts violations of the Missouri Merchandising Practices Act ("MMPA") and Count II asserts a claim for unjust enrichment. She seeks to represent a class consisting of

All Blue... Cross Blue Shield of Kansas City policyholders who purchased a plan via the Exchange, and who received a plan with less innetwork healthcare providers than what Blue Cross promoted in its website.

Petition, ¶ 21.

Plaintiff is a citizen of Kansas. Defendant is incorporated in the State of Missouri and has its principal place of business in that state as well. The Notice of Removal includes affidavits confirming that the Blue Select Plan has a smaller physician network - and is cheaper than - the "Preferred Care Blue Plan." 5, 394 people enrolled in the Blue Select Plan: 3, 504 (or 64.96%) live in Missouri, and the remaining 1, 890 (35.04%) live in Kansas. Kincaid Declaration, ¶ 3. The Blue Select Plan has "a term of one year and consumers are generally not permitted to change plans mid-year, except when a special enrollment event occurs." McCabe Declaration, ¶ 5.


Defendant removed this case to federal court, alleging federal jurisdiction exists under 28 U.S.C. § 1332(d)(2), which codifies portions of the Class Action Fairness Act ("CAFA"). This statute (when combined with section 1332(d)(5)(B)) provides that district courts have original jurisdiction over cases in which a claim is asserted on behalf of a class and where (1) there are more than 100 class members, (2) more than $5 million is in controversy, and (3) at least one member of the class is a citizen of a state different from that of at least one defendant. Plaintiff and other members of the class are citizens of Kansas and Defendant is a citizen of Missouri, so the minimal diversity requirement is satisfied.[1] Defendant's affidavits establish, and Plaintiff does not dispute, that the class consists of more than 100 members. Plaintiff challenges Defendant's assertion that more than $5 million is in controversy. Alternatively, Plaintiff contends the "interests of justice" exception applies and the Court should exercise its discretion to remand the case. The Court concludes that more than $5 million is in controversy. However, the Court also concludes it should exercise its discretion to decline jurisdiction pursuant to the "interests of justice" exception codified at 28 U.S.C. § 1332(d)(4).

A. Amount in Controversy

The party invoking federal jurisdiction bears the burden of demonstrating it exists, so Defendant - as the party removing the case to federal court - bears the burden in this case. E.g., Bell v. Hershey Co. , 557 F.3d 953, 956 (8th Cir. 2009). Factual matters (such as the amount in controversy) must be established by the preponderance of the evidence. E.g., id. at 957 & n.5. When removal is based on section 1332, "the sum demanded in good faith in the initial pleading shall be deemed to be the amount in controversy" unless "the State practice either does not permit demand for a specific sum or permits recovery of damages in excess of the amount demanded." 28 U.S.C. § 1446(c)(2)(A). In that case, "the notice of removal may assert the amount in controversy." Id . Missouri does not permit the plaintiff to demand a specific sum, so the Court looks to the Notice of Removal to ascertain the amount in controversy. In so doing, the Court must keep in mind that Defendant's burden is a pleading requirement and not a demand for proof. E.g., Raksas v. Johnson & Johnson , 719 F.3d 884, 888 (8th Cir. 2013).

The Declarations attached to the Notice of Removal establish that the difference in premiums for the Blue Select Plan and the Preferred Care Blue Plan (multiplied by the number of people who purchased the Blue Select Plan), estimated for a year, comes to approximately $3.8 million. Plaintiff quarrels with the extrapolation to a year's worth of premiums, reasoning that Defendant would not continue to display false information on its website for that long. However, Plaintiff fails to account for the fact that the insurance contracts are valid for one year, and the consumer cannot change coverage (absent the occurrence of certain life events) before the year has passed. "Once the proponent of federal jurisdiction has explained plausibly how the stakes exceed [the requisite amount], then the case belongs in federal court unless it is legally impossible for the plaintiff to recover that much. Even if it is highly improbable that the Plaintiffs will recover the amounts Defendant[ ] [has] put into controversy, this does not meet the legally impossible standard." Raskas, 719 F.3d at 888 (quotation omitted). Put another way, the question is whether the class might recover actual damages of approximately $3.8 million, not whether it really will. E.g., Hartis v. Chicago Title Ins. Co. , 694 F.3d 935, 944 (7th Cir. 2012) (citing Kopp v. Kopp , 280 F.3d 883, 885 (7th Cir. 2002)). Defendant's extrapolation seems reasonable.

Obviously, $3.8 million does not exceed $5 million. However, in addition to actual damages, Plaintiff seeks punitive damages and attorney fees pursuant to the MMPA. The value of these recoveries is included when assessing the amount in controversy. E.g. Hartis v. Chciago Title Ins. Co. , 656 F.3d 778, 781-82 (7th Cir. 2009) (statutory attorney fees included in amount in controversy); OnePoint Solutions, LLC v. Borchert , 486 F.3d 342, 348 (7th Cir. 2007) (punitive damages included). The Court has little difficulty concluding that a jury might legally award punitive damages in an amount that brings the amount in controversy to ...

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