In this action, where a health care provider merely sought a declaration that the insurance policy did not clearly state that the defendant would limit the statutory fee, the U.S. Eleventh Circuit Court of Appeals held that such a declaration would only open doors to insureds to seek damages from the insurance company far exceeding the amount-in-controversy threshold. Accordingly, the Eleventh Circuit directed the District Court to retain federal jurisdiction over the action.
The plaintiff, a healthcare provider brought a putative class action contending that the defendant, an insurer, did not indicate unambiguously in its insurance policy that it chose to limit payments to the statutory fee schedule against the Florida Supreme Court’s directive in Geico Gen. Ins. Co. v. Virtual Imaging Servs., Inc., 2013 WL 3332385 (Fla. July 3, 2013). In January 2012, Florencio Sanchez was injured in an automobile accident and received medical treatment from the plaintiff. Sanchez was insured by the defendant under a policy that provided her with personal injury protection (“PIP”) coverage.
The general rule for PIP coverage in Florida is that an insurance policy must cover 80% of all reasonable costs for medically necessary treatment resulting from an automobile accident. Florida law also provides that an insurer may opt out of it. When the plaintiff sought payment of 80% of the total amount billed, the defendant it opted out of the general payment rule, and paid only 80% of certain amounts set out in the statutory fee schedule contained in Fla. Stat. § 627.736(5)(a).
The complaint did not seek for monetary damages but, instead, sought a declaration that the form language used in policies did not clearly and unambiguously indicate that payments would be limited to the levels provided in § 627.736(5)(a). The defendant removed the case to the federal court asserting jurisdiction under CAFA. The plaintiff moved to remand contending that the defendant did not establish the amount-in-controversy exceeded $5 million as the complaint sought no damages. The District Court agreed and remanded the case. The defendant appealed.
The Eleventh Circuit noted that, for amount-in-controversy purposes, the value of injunctive or declaratory relief was the value of the object of the litigation measured from the plaintiff’s perspective. In support of its position that the value of the declaratory relief was too speculative, the plaintiff pointed to the multiple events that must occur before any putative class member could recover additional money from the plaintiff in the event that the declaratory judgment went in favor of the class. The plaintiff pointed that, under Florida law, a party seeking to file a suit to recover PIP benefits must first submit a pre-suit demand letter to the insurer for payment benefits. If the insurer rejects that demand, the party may file a suit for additional payment if it could be determined that the treatment in question was related to an accident, medically necessary, and billed at a reasonable rate. The plaintiff argued that with all of those contingencies standing between any class member and recovery, valuing a declaratory judgment was far too speculative.
The Eleventh Circuit found that the plaintiff’s speculative argument itself was too speculative. The Eleventh Circuit explained that estimating the amount-in-controversy was a simple affair considering the large number of medical bills at issue and the significant amount of money at stake. The Eleventh Circuit observed that, given the large bills, it was unlikely that most insureds and medical providers, who may be collectively owed $68,176,817.69, would leave the vast majority of that money on the table if a federal court declared that they were entitled to it.
The plaintiff relied on Leonard v. Enter. Rent a Car, 279 F.3d 967 (11th Cir.2002), where the plaintiffs sought injunction to stop the defendant from selling automobile insurance when it rented cars to customers. The Eleventh Circuit in Leonard held that the injunctive relief had no value because the plaintiffs had always been free to refuse purchase the insurance offered by the defendants, and hence, the relief could not be monetized.
The Eleventh Circuit, here, found that Leonard, could be distinguished because it concerned future transactions that were merely possible, as opposed to here, where the defendant was able to identify a specific number of bills that would be affected by the declaratory relief sought. Accordingly, the Eleventh Circuit reversed the District Court’s order remanding the case to state court.