Waithe v. Arrowhead Clinic, Inc., No. CV 409-021, 2010 WL 5463106 (S.D. Ga. Dec 29, 2010).

In this case, a District Court in Georgia refused to remand the lawsuit to the state court finding, inter alia,that the drop of the removing defendant did not mean that non removing defendants lacked standing to oppose the remand.

The plaintiffs originally filed this lawsuit in the State Court of Liberty County, Georgia, asserting negligence, breach of fiduciary duty, and fraud against the defendants, who included six businesses and three individuals. 

One of the co-defendants, Harry W. Brown, Sr., removed the action to federal court pursuant to CAFA. The plaintiffs, shortly thereafter, amended their complaint to drop the removing defendant Brown. The plaintiffs then filed a motion to remand the action to state court, which the District Court denied.

The plaintiffs alleged, among other things, that patients suffered harm “through the overutilization of chiropractic services,” by “incurring liability for chiropractic treatment,” and as a result of overbilling. Thus, the damages plaintiffs sought included those flowing from the defendants’ alleged fraudulent conduct, including but not limited to, disgorgement of any attorney’s fees and/or payments on medical liens obtained by the defendants pursuant to their scheme, which allegedly involved the defendant medical practitioners sending patient information to the defendant legal professionals and sharing various fees. The Court noted that the money at issue, then, consisted of attorney’s fees and medical payments the defendants received from individuals who were clients of the defendant legal practitioners and patients of the defendant medical professionals. 

The defendants declared that the common patient-clients have incurred medical charges from medical care provided by the defendants; and it totaled to an amount $9,047,864.48, excluding the attorney’s fees paid to the defendant legal practitioners, and the attorney’s fees and punitive damages sought by the plaintiffs. The Court thus found that the defendants established by ‘a preponderance of the evidence’ that the amount in controversy exceeded the $5 million.

Next, the plaintiffs claimed that case should be remanded because the only removing defendant was no longer a party to the lawsuit. While the plaintiffs argued that because none of the remaining defendants chose to remove the case, they lacked the “standing to oppose its remand,” the Court held that the plaintiffs found no authority to support their position. The Court therefore declined to “impose a new eligibility requirement on parties to challenge a motion to remand”.

Again, with no authority to support that the removing defendant must be a diverse party under CAFA, the plaintiffs argued that the removing defendant did not have the ability to remove the action because he was a citizen of the State of Georgia. Citing Lowery v. Alabama Power Co., 483 F.3d 1184, 1196 (11th Cir. 2007), the Court stated that CAFA’s language and the case law interpreting it establish that “a class action removable under CAFA may be removed by any defendant without the consent of all defendants,” The Court, therefore, held that the removing defendant’s purported status as a non-diverse party did not prevent him from seeking removal. (Editors’ Note: See the CAFA Law Blog analysis of Lowery published on May 15, 2007).

The Court also refused to accept the plaintiffs’ contention that the removal of the case was procedurally defective because it was filed more than 30 days after the removing defendant received service of the summons and complaint. Although the plaintiffs’ argument was premised on the claim that the action of leaving a copy of the summons and complaint with an individual working at the removing defendant’s place of employment triggered the 30 day time limit, the plaintiffs offered no argument as to how leaving a copy of the summons and complaint with one of removing defendant’s employees at his work place constituted service. Finding it as an insufficient service, the Court held that the notice of removal was indeed provided within the 30 day period when the removing defendant’s counsel formally acknowledged the suit.

Finally, the Court declined the plaintiffs’ request that the Court exercise its discretion to decline jurisdiction because the case involved a “local controversy,” The Court held that if the plaintiffs uncover relevant evidence during discovery, they could then move for remand at the appropriate time.