Amoche v. Guarantee Trust Life Ins. Co., 556 F. 3d 41 (1st Cir. 2/13/09).
Amoche filed for a class action againstGuarantee Trust Life Insurance Company (GTL). After three amended petitions, Amoche defined the class “enough” for GTL to seek removal. Not so fast, the district court denied GTL’s request and 1st Circuit Court of Appeal affirmed.
Amoche defined the class in one of numerous amended complaint as “all persons sold GTL single premium credit life and/or credit disability insurance products in connection with their credit purchase of a motor vehicle dealer located within New Hampshire…”
After that amended complaint, Amoche filed a motion for leave to file another amended complaint to include “consumers from other states” who bought vehicles financed through nine specific companies or lenders.
At this point in the litigation, GTL sought removal. After presentation of experts discussed below, Amoche’s attorney informed the court that GTL was made aware, in writing, of which 13 states would be included in the litigation. However, GTL did not follow up with any research of which individuals would be included in those states.
In order to prove amount in controversy, GTL went all the way up the hierarchy to the vice president of GTL’s credit insurance division. In an affidavit, Reed Gass, the vice president, explained how the amount in controversy could be met by determining New Hampshire’s clients multiplied by the number of states limited to the class definition. Yet, Gass had no idea which New Hampshire customers would fit in the defined class. Gass admitted GTL did not keep detailed records of which lender the insured used. Great witness! He cast doubt on the figure GTL wanted the court to use in order to rule in favor of removal.
To counter GTL’s argument, Amoche submitted an affidavit from a “expert” project manager. Aaron Goulette was a project manager for New Hampshire Unearned Premiums Litigation. He somehow had the figures, which Gass said were not kept by GTL, of which individuals in New Hampshire used one of the lenders included in the class definition. Weird, considering a vice president from the company at issue could not identify which lender was used, yet a project manager could present a very accurate list?
Since the burden to prove the amount in controversy was on GTL, did GTL present enough evidence to satisfy the minimum amount of $5 million?
The 1st Circuit explained what was necessary to show the amount was met. GTL had to show the amount in controversy existed to a reasonable probability or, “for all practical purposes,” enough to meet the preponderance of the evidence standard. About half a paragraph later, the court recanted this belief and stated the reasonable probability standard should apply because the preponderance of the evidence standard does not apply due to the “nature of this inquiry.” Anyway, GTL had to prove that there is a reasonable probability that the amount in controversy is over $5 million.
As you could guess, due to the excellent affidavit of Gass, GTL did not prove anything to a reasonable certainty besides the fact that it has around 450,000 clients in New Hampshire. Moreover, the court noted that GTL could have, but who knows due to excellent record keeping, a completely different number of clients in each state who fit the defined class. At this point in litigation, GTL’s argument flat out crashed!
Maybe GTL should have waited to see who was actually suing them before filing for removal. I think they jumped the gun slightly. GTL should have been able to present some evidence to support the amount in controversy, yet GTL settled with introducing one affidavit which contained nothing helpful.
After “much” deliberation and based on all the evidence introduced, the 1st Circuit ruled the there was a draw between plaintiff’s and defendant’s evidence, meaning GTL failed to meet its burden. The defendant motion to remove was denied, yet the court made sure to leave the door open in the future just in case someone presents evidence for the amount in controversy to be met. Luckily for GTL, litigation can be removed from state court when evidence comes to light which is sufficient to prove federal jurisdiction, specifically the amount in controversy.
By: Dustin Poche’