Kazlauskas v. United Healthcare Ins. Co., No. 11–2144, 2011 WL 4499001 (C.D. Ill. Aug. 16, 2011).
Every now and then a CAFA related case comes across my desk that makes me think to myself (and sometimes out loud, what the hell?). This is one of those cases that made me take a minute out of my day of lawyering to get on PACER and find out the back story.
Sadly, we did not get the juicy details I was hoping for. Nevertheless, the opinion does provide some background. The plaintiff was an undergraduate student at the University of Illinois at Urbana–Champaign when he purchased the Student Injury and Sickness Insurance Plan offered at the University by United Healthcare. The plaintiff was injured when he fell off a third floor balcony of an apartment while intoxicated.
United Healthcare refused to pay the plaintiff’s expenses incurred for medical treatment and our college friend brought a class action suit against the defendant in state court for breach of contract. The plaintiff also included a statutory claim for vexatious refusal to provide coverage under Illinois Insurance Code, 215 ILCS 5/155.
The defendant filed a Notice of Removal, removing this action from the Circuit Court of the Sixth Judicial Circuit, Champaign County, Illinois.
The plaintiff subsequently filed a motion for remand, which the Magistrate Judge denied.
The plaintiff contended that the defendant had failed to demonstrate the grounds for removal that are requisite under CAFA, 28 U.S.C. § 1332(d), pertaining to diversity of citizenship and amount in controversy in class actions.
The defendant responded that it removed this action on the basis of traditional diversity jurisdiction, governed by 28 U.S.C. § 1332(a). The defendant alleged that it was a citizen of the State of Connecticut and the plaintiff was a citizen of the State of Illinois, and the amount in controversy exceeded $75,000. The defendant also argued that, even though the plaintiff sought to represent a putative class, only the citizenship of the named plaintiff is considered for the purposes of establishing diversity.
The Magistrate Judge observed that in class actions, only the citizenship of the named plaintiffs matters for diversity purposes. In CAFA, Congress expanded statutory diversity jurisdiction through § 1332(d), but in doing so Congress did not affect those cases in which parties could already establish complete diversity under § 1332(a). Accordingly, the Magistrate Judge concluded that as long as the defendant can properly allege diversity jurisdiction under 28 U.S.C. § 1332(a), pertaining to traditional diversity jurisdiction, it does not also have to meet the requirements of CAFA, 28 U.S.C. § 1332(d).
So I looked on PACER to see what happened to our college friend. Again, not much in the way of juicy details. But eventually the case was dismissed pursuant to a 12(b)(6) motion. If you are interested in the intricacies of Illinois Insurance Law, you might read the decision. In Illinois there is a statute that says group health policies cannot decline coverage for injuries that are the result of drinking too much. But United Healthcare claims this was not a group health policy (blah, blah, insurance regulation stuff I skipped through). The court agreed and the case was dismissed.
The Court did state that our college friend could have avoided a 12(b)(6) motion by making a statement that he was not drunk at the time of his unfortunate fall off the balcony which would have created a fact issue. Here again, we can all imagine those pesky details that prevented this dude from being able to swear in a court of law that he was not drunk when he fell off a balcony. Mr. Kazlauskas has appealed the order dismissing his case so perhaps we will find out some day. Until then, let’s all join together and sing, “Texas Bite, Texas Bite, Texas jump up and bite my ass.” (sung to the tune of the Texas Fight Song).
The plaintiff alleged that, by the terms of the Plan, the defendant routinely and wrongfully denied coverage to students who have sustained injuries caused by or resulting from intoxication, illegal drugs, or any drugs or medicines not taken in the prescribed dosage. The plaintiff alleged that this coverage exclusion was prohibited under Illinois law, and therefore was void as against public policy.