Vallier v. American Fidelity Assurance Company, Slip Copy, 2008 WL 4330028 (D. Kan., Sep. 16, 2008)(No. 08-2267-JAR)
Plaintiff, Verle Vallier, filed a putative class action seeking damages from American Fidelity Assurance Company (AFA) for breach of contract with fraudulent intent, fraud and bad faith, claiming that AFA changed the “actual charges” policy language in its disease cancer expense policy.
Defendant, however moved to stay this action pending the approval of a Louisiana state law class action encompassing the same claims as plaintiff sued on in this case (Guidry, et al. v. American Public Life Insurance Co., et al., Case No. 2008-3465 (14th Judicial District, Parish of Calcasieu, La. July 10, 2008) . AFA claims that once the Louisiana state law settlement has been approved, it will preclude plaintiff’s class action suit.
Plaintiff, not wanting anything to do with the “rural southern Louisiana” class action, while clicking his heels three times and stating “there’s no place like home,” moved the Kansas Federal Court to exercise its inherent powers under the All Writs Act (28 U.S.C. §1651(a)) to enjoin AFA from participating in the Guidry settlement to protect and preserve the specific federal jurisdiction that congress intended federal district courts to have when it enacted CAFA.
Plaintiff claims that in passing CAFA Congress was (1) reserving to the federal courts exclusive jurisdiction over all multi-state class action claims and (2) imposing mandatory procedures governing the resolution of all multi-state claims. Plaintiff also accused the defendants of purposefully conspiring to deprive federal courts of their jurisdiction over this multi-state class action by hand picking a rural state forum (Louisiana) and participating in a settlement there.
Defendants rejected the suggestion that the proposed settlement of the Louisiana class action was in any way unfair, stating that it was negotiated at arms-length by a “Special Master” (possibly the all knowing Wizard of OZ – “pay not attention to the man behind the curtain”).
The court, denying plaintiff’s emergency motion to enjoin the state court proceeding, held that CAFA does not mandate that class actions of any variety be filed in federal court, it simply expands a federal court’s jurisdiction over class actions; and CAFA’s restriction on settlements only applies to class action cases pending in federal court.
Maybe plaintiff should have listened to the munchkins and followed the yellow brick road to Louisiana State Court to raise his objections there!