College of Dental Surgeons of P.R. v. Conn. General Life Ins. Co., No. 09-2201, 2009 WL 3384807 (1st Cir. P.R. Oct. 22, 2009).   

In this case, the First Circuit vacated a premature order of the district court that the complaint, which did not sufficiently define the contours and membership of the plaintiff class within federal pleading requirements, eliminated jurisdiction under CAFA.

The College of Dental Surgeons of Puerto Rico, an entity created by the Puerto Rico legislature, brought action on its behalf and on behalf of its dentist members, in a Puerto Rico court, against twenty-five defendants (insurance companies and health maintenance organizations), alleging that the defendants engaged in questionable and sometimes fraudulent practices anent contracting and claims processing to the dentists’ economic detriment in violation of Puerto Rico law. The complaint contained nine claims seeking injunctive and declaratory relief and damages in excess of $150,000,000, and alleged that the pleaded facts qualified the case for treatment as a class action.  

Two defendants, Connecticut General Life Insurance Company and Metropolitan Life Insurance Company, shifted the battleground to federal court arguing that the complaint contained class-type allegations sufficient to come within CAFA’s scope. 

Several other defendants (not sure what these guys were thinking) and the College moved to remand, and the district court remanded the action reasoning that it had no subject matter jurisdiction because the complaint did not sufficiently define the plaintiff class. In doing so, the district court did not reach questions whether any of CAFA’s specific jurisdictional exceptions applied.

Upon the two defendants’ request to pursue an immediate interlocutory appeal, the First Circuit granted leave. In doing so, the First Circuit noted that while most remand orders are not immediately appealable, CAFA provides the courts discretionary authority to grant leave to appeal. The First Circuit observed that the CAFA question–the relationship between CAFA jurisdiction and the precision of the class allegations contained in the complaint–was important, unsettled, and recurrent, and therefore, was a factor weighing in favor of granting leave to appeal. 

The First Circuit vacated the district court’s remand ruling, holding that it prematurely determined that it lacked CAFA jurisdiction.

The First Circuit observed that in deciding that the complaint did not confer CAFA jurisdiction, the district court downplayed the class-wide allegations in the complaint.

To satisfy CAFA’s definition of a class action under 28 U.S.C. § 1332(d)(1)(B), a case need only be filed under either Fed. R. Civ. P. 23 or some state-law analogue of that rule.  The First Circuit found that the complaint plainly invoked Puerto Rico’s class action rules, P.R. Laws Ann. tit. 32, app. III, R. 20.1-20.2, and contained allegations of harm to the members of the class. Specifically, the complaint alleged claims for class-wide relief; it consistently alleged harm to the dentists as a professional group; it described the College as representing the “dentistry class” in Puerto Rico; it stated that its allegations were similar to those made in a class action pending in the district court for the Southern District of Florida; and it sought class-wide relief.  

The First Circuit next stated that the College, as an association of dentists rather than an individual dentist, could itself be a member of a certifiable class, and thus under Hunt v. Wash. State Apple Comm’n, 432 U.S. 333, 343 (1977) standard, could sue on behalf of its members. The First Circuit observed that the allegation in the complaint that the defendants’ pernicious practices harmed all affected dentists in the same way did not require the fact-intensive-individual inquiry, therefore, the injunctive and declaratory relief that the College sought could be granted without the participation of individual dentists as parties.

Finally, the First Circuit stated that reviewing the complaint alone is not normally a suitable occasion for determining whether the plaintiff has sufficiently defined a cognizable class; it has to be done at the class certification stage. Thus, the First Circuit concluded that the district court’s ruling on the inadequacy of the class definition was premature.