Beye v. Horizon Blue Cross Blue Shield of New Jersey, 568 F.Supp.2d 556 (D.N.J. 2008)

The bottom line is, if your 2-step plan is to: 1) brief the issue and provide evidence supporting your position; and then 2) “respectfully request that the Court render its decision,” don’t take the second step first.

Several individual plaintiffs filed two class actions against two health insurers in federal court in New Jersey, alleging a variety of state- and federal-law claims predicated on the defendants’ allegedly improper denial of coverage for treatment of eating disorders. The plaintiffs alleged jurisdiction based on ERISA claims (for some of the plaintiffs) and based on CAFA and supplemental jurisdiction (for other plaintiffs). The defendants moved to dismiss the claims in both lawsuits on a variety of grounds. In the course of a complicated opinion responding to both motions, the court addressed Burford abstention, preemption of state-law claims by ERISA, implied causes of action, extinction of claims by discharge in bankruptcy, and other fun issues . . . but still managed to squeeze in some CAFA.

The court noted that the non-ERISA plaintiffs had established minimal diversity and had alleged a class of more than 100 members and more than $5 million in controversy. The defendants contended, however, that the $5 million amount-in-controversy requirement might not be met, and argued that the court should decline jurisdiction under CAFA’s “local controversy” and “home-state controversy” exceptions (§ 1332(d)(4)(A) and (B), respectively). The defendants presented no evidence in support of these contentions, except to assert that only 29.7% of one defendant’s total insureds were outside of the state of New Jersey and that there was no reason why a greater percentage of the class members would be outside of New Jersey, implying that more than two-thirds of the plaintiff class was from the home state of the primary defendant. 

The court was unpersuaded. The court noted an absence of “sufficient evidence upon which to base its determination,” but also noted that discovery had been completed during the pendency of the motions to dismiss. The court, therefore, deferred its decision on the CAFA jurisdiction issue and ordered the defendants to move within 30 days to dismiss the non-ERISA plaintiffs, supporting their motion with evidence (which the court noted was within the control of the defendants), or to file a joint statement with the plaintiffs regarding jurisdiction or lack of jurisdiction, again supporting the position taken with proof.

In the context of discussing the insufficiency of the evidence regarding CAFA jurisdiction, the court made mention of a letter sent to the court by one of the defendants, in which the defendant stated that it was “respectfully request[ing] that the Court render its decision” on subject-matter jurisdiction under CAFA. The court pointedly noted that the letter had been submitted “without submitting any additional evidence,” and that the letter provided “no grounds upon which the Court could render a final decision upon the issue.”

That is, (to paraphrase): evidence first, ‘hurry-up and decide’ letter second (if at all).