Roche v Aetna Health Inc., 2014 WL 1309963 (D.N.J. March 31, 2014).

The plaintiff, New Jersey citizen, who was injured in a motor vehicle accident, brought a putative class action against five insurance defendants, Aetna Inc., Aetna Health Inc., Aetna Health Insurance Co., Aetna Life Insurance Co., and The Rawlings Company, LLC. The plaintiff claimed that the defendants were prohibited from pursuing subrogation or reimbursement claims with respect to New Jersey-regulated health benefit plans. The plaintiff’s medical treatment for the injuries she sustained in the accident was paid for by two health insurance plans.

The plaintiff successfully sued the other driver involved in her car accident and the other driver’s excess liability insurer, and was awarded damages. Then, the defendant Rawlings Company LLC (“Rawlings”), which was Aetna Life Insurance Company’s subrogation recovery vendor, sent her a letter asserting a lien, subrogation claim, and/or demand for reimbursement of the benefits paid as a result of the accident. In response to the letter, the plaintiff made payment to the defendants in the amount of $88,075.29.

The plaintiff along with two others filed an action (the “first action”) in the New Jersey state court against the same defendants. She later filed another action as class representative, again in the state court against the same five defendants.  Although the plaintiff filed two class actions, she was removed as a plaintiff from the first class action, which currently pending before the Court, Roche, Singleton and Minerly v. Aetna Inc., Civil Case No. 13-1377 (“Singleton”). The defendants removed both Singleton and Roche to the district court of New Jersey predicated upon diversity jurisdiction under CAFA, and federal question jurisdiction arising under the ERISA. The plaintiff moved to remand the case, which the district court granted in part.

The district court first noted that complaint set forth a cause of action centered upon a governmental health benefit plan that is exempt from ERISA. However, the complaint did not implicate the Bank of America policy and the defendants agreed that the New Jersey State Health Benefits Program plan was a non-ERISA plan. Accordingly, the district court concluded that the federal question jurisdiction was lacking because plaintiff’s complaint did not arise under federal law and exclusively implicates State law.

The district court, however, found that there was sufficient diversity between the parties to retain jurisdiction under CAFA. The plaintiff was New Jersey citizen, and the defendant Aetna Life Insurance Co. was a Connecticut Corporation with a principal place of business in Connecticut. Additionally, the class likely exceeds 100 members; and the plaintiff’s complaint alleged that there were over 100,000 individuals insured by Aetna in the State of New Jersey, and the defendants asserted that they had filed subrogation or reimbursement claims with “hundreds of members” of New Jersey governmental health insurance policies administered by Aetna. Lastly, the district court found that the amount-in-controversy far exceeded the jurisdictional threshold of $5 million.

The plaintiff however, argued that remand was appropriate because her claims fell within two exceptions to CAFA, the “local controversy” and “home state” exceptions, because the controversy is uniquely connected to New Jersey, the state in which the action was originally filed. The district court found that the complaint did not fall within the “local controversy exception” under CAFA because the plaintiff had previously filed, in the last three years, a class action in Roche, Singleton and Minerly v. Aetna Inc. that alleged the same or similar factual allegations.

The district court, however, found that remand may be appropriate because plaintiff’s claims appeared to fall within the home state exception to CAFA jurisdiction. The home state exception requires a federal court to decline to exercise jurisdiction where a party seeking to invoke the exception establishes that at least two thirds of the members of the putative class are citizens of the state where the action was originally filed and that the primary defendants are also citizens of the state in which the action was originally filed.

The district court observed that evidence here was insufficient for the plaintiff to demonstrate the number of class members who are citizens of New Jersey as opposed to the number of class members who are citizens of another state but have non-ERISA governmental health care policies originating from New Jersey. In fact, the plaintiff’s claims exclusively implicated New Jersey State Law and did not involve any matters of national or interstate interest. The plaintiff’s allegations in this regard, surpassed those considered deficient in Dicuio v. Brother Int’l Corp ., 11-CV-1147, 2011 WL 5557528, (D.N.J. Nov.15, 2011).

The defendant in Dicuio was a Delaware corporation with its principal place of business in New Jersey and removed the case to federal court predicated upon CAFA jurisdiction. The Dicuio court held that the plaintiff’s failure to limit its pleading to New Jersey citizens, combined with his failure to provide any evidence in support of his contention that two-thirds of the proposed class are New Jersey citizens renders his local controversy exception contention untenable. However, the proposed class in Dicuio considered a class that consisted of all purchasers in New Jersey, who since 2005 purchased Brother Laser Printers of similar models to Plaintiff’s and required the same color ink cartridges.

Here, the plaintiff’s claim was not “clearly frivolous” as the relationship between New Jersey governmental benefits to its citizens is far more connected than the out of state “passersby” who merely shop in New Jersey as described in Dicuio. Thus, while the plaintiff’s claim lacked the requisite specificity, it was more than mere speculation and jurisdictional discovery is warranted.

Likewise, the district court concluded that the jurisdictional discovery would aid the court in determining which of the defendants were “primary.” Additionally, the district court found that the plaintiff cannot sufficiently prove that the primary defendants reside in New Jersey.

The district court concluded that the home state exception appeared to negate the federal court’s jurisdiction; however, the evidence presented was not sufficient to conclusively establish the exception. Accordingly, the district court granted the plaintiff’s motion to remand in part, but ordered a limited jurisdictional discovery related to home state exception. –JR