Myrick v. Nationwide Mut. Ins. Co., 2008 WL 53183 (W.D. Wash. Jan. 3, 2008).

The plaintiff filed a putative class action in state court against the defendant, asserting that the defendant made Personal Injury Protection (“PIP”) coverage payments to insureds and then inappropriately sought reimbursement of those payments from the insureds even though they had not been made whole by a third party tortfeasor (Editors’ Note: Now there’s a shock, an insurance company that doesn’t want to bear the ultimate loss for an insured’s claim!). 

The defendant filed a notice of removal, asserting federal court jurisdiction under CAFA (a putative class of at least 100 – check; minimum diversity – check; and at least $5 million in controversy – check). The plaintiff filed a motion to remand, arguing that the defendant failed to show that the amount in controversy exceeds $5 million.

To justify removal, the defendant produced a declaration made by a Nationwide representative which stated that during the time period in question, Nationwide made PIP payments to Washington insureds and later recovered more than $7 million of these PIP payments. However, the plaintiff pointed out that the action only seeks recovery for those PIP payments the defendant sought to recover when its Washington insureds had not been made whole by a third party tortfeasor. Therefore, the plaintiff argued that if some of the alleged $7 million in PIP payments recovered by the defendant were from Washington insureds that were previously made whole by third party tortfeasors, then those recoveries should not be included within the recoveries at issue. 

Moreover, the plaintiff argued that if the defendant recovered some of the PIP payments from someone other than the insured, then those recoveries should also fall outside the context of the lawsuit.

(Editors’ Note: Can’t you just picture a Venn Diagram explaining all this?? Speaking of Venn Diagrams, check out one of our favorites below).

In the end, the court found that the defendant’s only evidence to support CAFA jurisdiction was the over-inclusive figure of $7 million. Therefore, the court found that the defendant failed to meet its burden of proving, by a preponderance of the evidence, that removal jurisdiction was proper. Accordingly, the court granted the plaintiff’s motion to remand, sending the putative class action back to state court.