Horning v. Laboratory Corp. of America, Slip Copy, 2009 WL 2905553 (N.D. Ill., Sep 03, 2009) (NO. 09C3421).
In this case, the United States District Court for the Northern District of Illinois, denied the plaintiffs’ motion to remand the action finding that when evaluating a motion to remand, the amount in controversy is assessed on the claims made in the complaint, and not the amount that the plaintiffs are actually entitled to recover.
The plaintiffs, David and Patricia Horning, brought an action in the Circuit Court of Cook County, Illinois, alleging that the defendant, Laboratory Corporation of America (“Labcorp”), maintained a practice of accepting payment from an insurance company or the United Healthcare Preferred Provider program (“PPO”) and later billed the patient for an amount greater than what was specified in the explanation of benefits. In this case, Patricia Horning had laboratory tests performed by Labcorp under a PPO. Pursuant to the PPO’s explanation of benefits, the PPO paid Labcorp for the tests and Patricia was not required to make any additional payment. The plaintiffs claimed that immediately after the tests, Labcorp billed them and demanded payment in the amount of $332; and a later bill was for $8.05. The plaintiffs, as representatives of a putative class, filed a two-count complaint asserting breach of contract claim and an Illinois Consumer Fraud Act claim.
Labcorp removed the case successfully contending that the plaintiffs together with the putative class members satisfied the $ 5 million amount in controversy requirement under CAFA. Labcorp asserted that the plaintiffs’ claim was typical of the nationwide class, which was that Labcorp charged Patricia $322 for laboratory tests without the right to do so. The complaint alleged that Labcorp performs over 300,000 tests per day, and Labcorp calculated this number to 75,000,000 tests over the course of a year.
Based on the Seventh Circuit’s holding in Brill v. Countrywide Home Loans, Inc., 427 F.3d 446 (7th Cir. 2005) that the court must assess the amount the plaintiffs have placed in controversy, and not the amount they are actually entitled to recover when evaluating a motion to remand – the District Court took the $330.05 overcharge in the plaintiffs’ complaint, and multiplied it by 75,000,000, which yielded $ 24,753,750,000. In other words, overcharges in 15,150 instances or 0.2% of the tests that Labcorp performs over the course of a year, would produce the jurisdictional amount needed to satisfy CAFA.
Because the plaintiffs alleged that Labcorp’s practice of overbilling patients existed nationwide, the District Court remarked that it was plausible to conclude that overbilling occurred in those instances, in fact, over billing may gave occurred in more instances. Furthermore, as the suits are removed on pleadings, before presentation of evidence or other proofs, the District Court concluded that Labcorp had established that the plaintiffs’ complaint inspired an amount in controversy exceeding the $5 million required under CAFA.