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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 14-10001
Non-Argument Calendar
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D.C. Docket No. 0:13-cv-61759-WPD
SOUTH FLORIDA WELLNESS, INC.,
individually, and on behalf of all others similarly situated,
Plaintiff-Appellee,
versus
ALLSTATE INSURANCE COMPANY,
Defendant-Appellant.
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Appeal from the United States District Court
for the Southern District of Florida
________________________
(February 14, 2014)
Before CARNES, Chief Judge, MARCUS and PRYOR, Circuit Judges.
CARNES, Chief Judge:
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This appeal brings us the issue of whether the Class Action Fairness Act’s
$5,000,000 amount-in-controversy requirement can be satisfied if the plaintiff
seeks only declaratory relief. If it can be, there is federal jurisdiction in this case.
If it cannot be, there is not. Concluding that a pure declaratory judgment action
could not carry the required jurisdictional freight, the district court remanded the
case to state court. Concluding that a declaratory judgment action can be up to the
task, and that this one is, we reverse.
I.
In January 2012 Florencio Sanchez was injured in an automobile accident
and received medical treatment at South Florida Wellness, Inc. (Wellness), a
Florida-based healthcare provider. Sanchez was insured by Allstate Insurance
Company under a policy that provided her with personal injury protection (PIP)
coverage, and in connection with treatment that she received there, Sanchez
assigned to Wellness her right to benefits under that policy. Wellness sought
payment of 80% of the amount it had billed Sanchez, but Allstate paid a lower
amount based on its interpretation of Sanchez’s policy. Instead of paying 80% of
the total amount billed, Allstate paid Wellness only 80% of certain amounts set out
in the statutory fee schedule contained in Fla. Stat. § 627.736(5)(a).
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
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an automobile accident, subject to certain limits. See Fla. Stat. § 627.736(1)(a).
That is the payment Wellness sought from Allstate. Florida law also provides,
however, that an insurer may opt out of the general payment rule and instead limit
payment to 80% of a statutory fee schedule. See id. § 627.736(5)(a). Allstate
claims that it opted out of the general payment rule in favor of the more limited
statutory fee schedule approach in its Florida PIP policies, including the one that
covered Sanchez.
In July 2013, Wellness filed this putative class action in Florida state court,
contending that a recent Florida Supreme Court decision requires any insurer
choosing to limit payments to the statutory fee schedule to clearly and
unambiguously indicate in the insurance policy that it is doing so. See Appellee
Brief at 2; see also Geico Gen. Ins. Co. v. Virtual Imaging Servs., Inc., — So. 3d
—, 2013 WL 3332385, at *8, *10 (Fla. July 3, 2013). Wellness claims that
Allstate failed to do so. Its complaint proposed the following class:
Any and all health care providers and insureds who submitted claims
for no-fault benefits under PIP policies which were in effect from
March, 2008, where Allstate utilized the reimbursement methodology
pursuant to Florida Statute 627.736(5)(a)2(a-f) (2008) (the fee
schedule) to limit reimbursement to the provider or the insured where
the policy did not expressly and unambiguously indicate Defendant’s
election to limit reimbursement in accordance with Florida Statute
627.736(5)(a)2 as its sole methodology for payment of No Fault
claims.
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The complaint seeks no monetary damages. It seeks only a declaration that the
form language Allstate used in the class members’ PIP insurance policies did not
clearly and unambiguously indicate that payments would be limited to the levels
provided for in § 627.736(5)(a).
Allstate removed the case to federal court in August 2013, asserting that the
Class Action Fairness Act (CAFA), 28 U.S.C. § 1332(d)(2), provided for federal
subject matter jurisdiction over the lawsuit. In support of its claim of federal
jurisdiction, Allstate submitted an affidavit from Tara Watson, an Allstate
employee personally familiar with PIP claim-related business records maintained
by the company. Watson attested that the putative class included over 100
healthcare providers and insureds who had submitted “1,655,733 bills for payment
or reimbursement” of medical expenses based on PIP coverage under Allstate
Florida auto policies during the relevant time period. She calculated that Allstate
had paid out $126,474,216.25 in benefits for those claims based on the fee
schedule in § 627.736(5)(a). She also calculated that if Allstate had not limited
payment based on § 627.736(5)(a), then the putative class members would have
been entitled to $194,651,033.94 in benefits (80% of the billed amounts). Allstate
maintained that the amount in controversy was the difference between those two
figures –– $68,176,817.69 –– because that is the additional amount of benefits the
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putative class members would be eligible to recover in the event that they received
the declaratory judgment.
Wellness moved to remand the case to state court. It contended that Allstate
had not established that the amount in controversy exceeds $5 million because the
complaint did not seek damages but only a declaration that the language of the
Allstate insurance policies did not clearly and unambiguously adopt the coverage
caps of § 627.736(5)(a), as Florida law requires for them to be effective. While
recognizing a declaration in its favor would entitle the class members to seek
additional payment from Allstate, Wellness nevertheless argued that the financial
effects of the declaratory judgment could not be considered for purposes of
determining the amount in controversy because those effects were too speculative.
The district court granted the motion to remand. It agreed with Wellness
that “the value of the declaratory relief [was] too speculative” for purposes of
satisfying CAFA’s amount-in-controversy requirement because Allstate had failed
to show that “declaratory judgment in this case will necessarily trigger a flow of
money to [the] plaintiffs.” Allstate, of course, disagrees and contends that it met
its burden of showing that the amount in controversy involving the declaratory
judgment Wellness seeks exceeds $5 million.
II.
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CAFA grants subject matter jurisdiction to federal district courts over class
actions in which (1) any member of the plaintiff class is a citizen of a state
different from the state of citizenship of any defendant, (2) the aggregate amount in
controversy exceeds $5 million, and (3) the proposed plaintiff class contains at
least 100 members. 1 See 28 U.S.C. § 1332(d)(2), (5)–(6); see also 7A Charles
Alan Wright et al., Federal Practice and Procedure § 1756.2 (3d ed. 2005). Only
the second of those three requirements is at issue in this appeal.
“We review de novo the district court’s decision to remand a case to state
court for lack of subject matter jurisdiction.” Lowery v. Ala. Power Co., 483 F.3d
1184, 1193 (11th Cir. 2007). Where the plaintiff has not alleged a specific amount
of damages, the defendant seeking removal must establish by a preponderance of
the evidence that the amount in controversy exceeds the jurisdictional minimum.
Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 752 (11th Cir. 2010). A court
may rely on evidence put forward by the removing defendant, as well as
reasonable inferences and deductions drawn from that evidence, to determine
whether the defendant has carried its burden. Id. at 753–54.
What counts is the amount in controversy at the time of removal. Id. at 751.
It is less a prediction of “how much the plaintiffs are ultimately likely to recover,”
than it is an estimate of how much will be put at issue during the litigation; in other
1
CAFA also contains several exceptions to this broad grant of jurisdiction, see 28 U.S.C.
§ 1332(d)(3)–(4), but those exceptions are not at issue in this case.
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words, the amount is not discounted by the chance that the plaintiffs will lose on
the merits. Id. (quotation marks omitted); see also McPhail v. Deere & Co., 529
F.3d 947, 956 (10th Cir. 2008) (“The amount in controversy is not proof of the
amount the plaintiff will recover. Rather, it is an estimate of the amount that will
be put at issue in the course of the litigation.”). Potential developments, such as
“[t]he possibility that the putative class will not be certified, or that some of the
unnamed class members will opt out,” are irrelevant to the jurisdictional analysis.
Pretka, 608 F.3d at 772 (noting that the jurisdictional determination “is based only
on the facts as they exist at the time of removal”).
We have held that “[f]or amount in controversy purposes, the value of
injunctive or declaratory relief is the value of the object of the litigation measured
from the plaintiff’s perspective.” Morrison v. Allstate Indem. Co., 228 F.3d 1255,
1268 (11th Cir. 2000) (quotation marks omitted). Stated another way, the value of
declaratory relief is “the monetary value of the benefit that would flow to the
plaintiff if the [relief he is seeking] were granted.” Id. For CAFA purposes, we
aggregate the claims of individual class members and consider the monetary value
that would flow to the entire class if declaratory relief were granted. See 28 U.S.C.
§ 1332(d)(6); see also Cappuccitti v. DirecTV, Inc., 623 F.3d 1118, 1122 (11th Cir.
2010); Pretka, 608 F.3d at 772. While absolute certainty is neither attainable nor
required, the value of declaratory or injunctive relief must be “sufficiently
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measurable and certain” to satisfy the amount-in-controversy requirement.
Morrison, 228 F.3d at 1269. That requirement is not satisfied if the value of the
equitable relief is “too speculative and immeasurable.” Cohen v. Office Depot,
Inc., 204 F.3d 1069, 1077 (11th Cir. 2000) (quotation marks omitted); see also
Leonard v. Enter. Rent a Car, 279 F.3d 967, 973 (11th Cir. 2002). It is a matter of
degree.
In this case, Allstate has carried its burden of establishing an amount in
controversy that exceeds $5 million. Wellness did not provide any evidence to
rebut Allstate’s Watson affidavit or to controvert its calculations. The affidavit
establishes that the declaratory judgment Wellness seeks will determine whether
Allstate made insufficient payments on more than 1.6 million “bills for payment or
reimbursement,” with the amount of the insufficiency exceeding $68 million,
which it will owe the putative class members. That is the amount in controversy,
see McPhail, 529 F.3d at 956, and it is far above the $5 million threshold set by
CAFA.
In support of its position that the value of the declaratory relief in this case
was too speculative, Wellness points to the multiple events that must occur before
any putative class member could recover additional money from Allstate in the
event that the declaratory judgment goes in favor of the class. Under Florida law, a
party seeking to file a suit to recover PIP benefits must first submit a pre-suit
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demand letter to the insurer for payment of benefits. Fla. Stat. § 627.736(10)(a). If
the insurer rejects that demand for payment, the party may file suit and may be
entitled to additional payment, but only if the relevant factfinder determines that
the treatment in question was (1) related to an accident, (2) medically necessary,
and (3) billed at a reasonable rate. See id. § 627.736(4)(b)(6).
Wellness argues that with all of those contingencies standing between any
class member and recovery, valuing a declaratory judgment is far too speculative.
That speculation argument rests on two premises. First, it relies on the assumption
that class members armed with a declaratory judgment would not later seek out the
additional payment they are owed. That assumption is contrary to human nature
and the nature of lawyers. Second, the speculation argument asks us to believe
without any basis for doing so that the vast majority of the 1,655,733 bills that
were submitted to Allstate for PIP benefits were (1) unrelated to an accident, (2)
not medically necessary, or (3) for treatments billed at an unreasonable rate.
Wellness’ speculation argument is itself too speculative. It requires
indulging the kind of “conjecture, speculation, or star gazing” that we have found
inappropriate in analyzing the amount in controversy. See, e.g., Pretka, 608 F.3d
at 754. Although the putative class members might have to take an extra step or
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two after obtaining declaratory relief to get money from Allstate, 2 that does not
mean that determining that the amount in controversy exceeds $5 million is too
speculative of a task. Estimating the amount in controversy is not nuclear science;
it does not demand decimal-point precision. See id. (“The law does not demand
perfect knowledge or depend any less on reasonable inferences and deductions
than we all do in everyday life.”). And the undertaking is not to be defeated by
unrealistic assumptions that run counter to common sense. Given the large number
of medical bills at issue and the significant amount of money at stake, we find it
unlikely that most insureds and medical care 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. See id.
There is another consideration. The larger the calculated amount at stake,
the easier it is to be confident that collection contingencies should not count for
much. Cf. Morrison, 228 F.3d at 1270–71 (“What is only merely possible with
respect to one policyholder—a sum of future claims for diminished value with a
present value of $75,000—becomes quite probable with respect to over a million
policyholders. With that many policies alleged to be in effect, we clearly cannot
conclude to a legal certainty that the value of the injunction sought in this case, if
2
If the putative class obtained declaratory relief, Allstate might choose to simply pay the
claimants the additional amount owed after determining that it was not worth the cost to litigate
the reasonableness of charges on 1,655,733 different bills. If that did not occur, however, the
putative class members would have to request the additional payment from Allstate and wait for
Allstate to deny the request before they could file suit. See Fla. Stat. § 627.736(10)(a).
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viewed in the aggregate, is too uncertain to satisfy the amount in controversy
requirement.”). The maximum difference in the amount of payments that rides on
the outcome of the declaratory judgment is in excess of $68 million, which is more
than thirteen times the $5 million amount-in-controversy threshold. Even if we
speculated that 90% of that amount would be siphoned off by one contingency or
another –– an extraordinarily unlikely outcome –– more than $6.8 million would
still be at stake.
Wellness’ reliance on our Leonard decision is misplaced because the facts in
that case are distinguishable from those in this case. The plaintiffs in Leonard
sought, among other things, an injunction to stop the defendant from selling
automobile insurance when it rented cars to customers. See 279 F.3d at 970, 973.
We held that the requested injunctive relief had no value because the plaintiffs had
“always been free to refuse to purchase the insurance offered by the defendants.”
Id. at 973. We could not assign a monetary value to the injunctive relief because
we would have to speculate as to how many future customers might purchase the
optional insurance absent an injunction. See id.
While the issue in Leonard concerned future transactions that were merely
possible, the issue here concerns past transactions that actually did occur. The
calculations in the Watson affidavit were based on medical treatment that putative
class members had already received and actual bills that had already been incurred.
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Unlike in Leonard, where the plaintiffs could not identify how many future sales
might be affected if we granted injunctive relief, here Allstate is able to identify a
specific number of bills that would be affected by the declaratory relief sought, as
well as a concrete monetary value that the plaintiffs may be eligible to recover if
they obtain relief. Because Watson’s calculations were based on actual
transactions that took place and concrete amounts that were billed, the
$68,176,817.69 figure she calculated is not a number “divined by looking to the
stars.” See Lowery, 483 F.3d at 1215.
Although members of the putative class might not ultimately recover the full
$68,176,817.69, that possibility does not shut the door on federal jurisdiction. As
we have said before, “the pertinent question [at the jurisdictional stage] is what is
in controversy in the case, not how much the plaintiffs are ultimately likely to
recover.” Pretka, 608 F.3d at 751; see also McPhail, 529 F.3d at 956 (“The
amount in controversy is not proof of the amount the plaintiff will recover. Rather,
it is an estimate of the amount that will be put at issue in the course of the
litigation.”). Here, the amount that will be put at issue is the amount that the
putative class members may be eligible to recover from Allstate in the event that
they obtain declaratory relief.3 That $68,176,817.69 figure exceeds CAFA’s
3
Wellness claims that the class members do not stand to gain anything of monetary value
from a declaratory judgment. We disagree. A declaratory judgment would establish that Allstate
provided members of the putative class with insufficient payment on bills that have already been
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amount-in-controversy threshold, and thus the district court erred in concluding
that the threshold was not met.
For these reasons, we reverse the district court’s order remanding the case to
state court and remand for further proceedings consistent with this opinion.
REVERSED AND REMANDED.
incurred, and it would give those class members a right to receive additional payment. That right
to additional payment represents “the monetary value of the benefit that would flow to the
plaintiff if the [declaratory relief] were granted.” See Morrison, 228 F.3d at 1268.
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