Back Doctors Ltd. v. Metropolitan Property & Casualty Insurance
2011 U.S. App. LEXIS 6760
| 7th Cir. | 2011Background
- Back Doctors sued in Illinois state court alleging insurer underpaid medical providers using software that violates contracts and the Illinois Deceptive Practices Act.
- Removal occurred under CAFA amendments to 28 U.S.C. §§ 1332(d), 1453, based on >$5 million stakes with minimal diversity.
- Back Doctors argued the amount in controversy was under $5 million because punitive damages were not pled or alleged as wanton.
- The district court remanded, finding removal disfavored and lack of a reasonable probability that the stakes exceed $5 million.
- This appeal followed, with the court addressing whether the amount-in-controversy requirement can be satisfied despite post-removal developments.
- The court ultimately remands for merits after determining punitive damages could push the stakes over $5 million.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CAFA removal was proper given potential punitive damages. | Back Doctors argues the complaint seeks no punitive damages, so >$5M not shown. | Metropolitan contends punitive damages could exceed $5M, meeting CAFA threshold. | Yes; punitive damages could push to >$5M, allowing removal. |
| Whether events after removal affect jurisdiction. | Back Doctors argues later statements cannot undo removal. | Post-removal pleadings cannot nullify jurisdiction. | No; post-removal claims cannot defeat jurisdiction. |
| Whether Illinois law could prevent punitive damages, affecting the threshold. | Omission of punitive claim may preclude punitive award. | Omission does not bind class; punitive can be awarded. | Punitive damages possible; threshold may be exceeded. |
Key Cases Cited
- St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283 (1938) (allegations accepted unless impossible to recover minimum; jurisdictional facts by preponderance)
- Oshana v. Coca‑Cola Co., 472 F.3d 506 (7th Cir. 2006) (proponent may estimate stakes; removing party controls unless legally impossible)
- Brill v. Countrywide Home Loans, Inc., 427 F.3d 446 (7th Cir. 2005) (clarified stakes must reflect plaintiff's actual demands)
- Sadowski v. Meridian Security Ins. Co., 441 F.3d 536 (7th Cir. 2006) (elaborated on the 'reasonable probability' concept; later abandoned)
- In re Shell Oil Co., 970 F.2d 355 (7th Cir. 1992) (decertification/remand considerations; post-removal actions)
- Cunningham Charter Corp. v. Learjet, Inc., 592 F.3d 805 (7th Cir. 2010) (avoid remand based on class changes after removal)