Barker's Pharmacy v. Prime Therapeutics
3:14-cv-00591
M.D. La.Mar 20, 2015Background
- Two Louisiana independent pharmacies sued Prime Therapeutics (a PBM) in state court alleging violations of Louisiana statutes for failing to reimburse a $0.10 provider fee and to list that fee on remittance advices; they sought declaratory relief (ERISA non-preemption) and monetary relief (reimbursement, lost profits, fees, etc.).
- Prime removed to federal court asserting diversity jurisdiction (complete diversity) and that the amount in controversy exceeded $75,000 based largely on its estimated statewide cost of complying with the statutes.
- Plaintiffs moved to remand, arguing that for declaratory actions the amount in controversy must be measured from the plaintiff’s viewpoint (value to plaintiff) and that Prime improperly relied on its cost of compliance and aggregated claims.
- Prime argued the court may measure the amount in controversy by either the plaintiff’s benefit or the defendant’s compliance cost (either-viewpoint) and requested jurisdictional discovery if needed.
- The magistrate judge applied Fifth Circuit precedent requiring a plaintiff-viewpoint measure for declaratory/injunctive actions, found Prime’s removal evidence insufficient (Prime’s estimate of reimbursement was only $1,321.70 and other asserted amounts were cost-of-compliance figures), and recommended remand for lack of jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper measure of amount in controversy for declaratory/injunctive relief | Use plaintiff-viewpoint (value to plaintiff only) | Court may use either-viewpoint (including defendant’s cost of compliance) | Plaintiff-viewpoint rule applies; measure value to plaintiffs |
| Whether defendant may aggregate multiple plaintiffs’ claims | Aggregation not permitted to reach jurisdictional threshold | Defendant’s removal implicitly aggregated plaintiffs’ amounts | Aggregation of separate plaintiffs’ claims was improper here; defendant failed to show per-plaintiff amount exceeds $75,000 |
| Sufficiency of defendant’s evidence to meet removal burden | Plaintiff contends defendant failed to prove amount in controversy by preponderance | Defendant submitted statewide compliance-cost estimates and a verification | Evidence insufficient: reimbursement estimate small and compliance costs not usable under plaintiff-viewpoint rule to establish amount in controversy |
| Whether jurisdictional discovery should be allowed | Opposed (not argued in detail) | Requested as alternative to prove amount in controversy | Not reached as defendant failed initial burden; remand recommended |
Key Cases Cited
- Garcia v. Koch Oil Co. of Texas Inc., 351 F.3d 636 (5th Cir. 2003) (plaintiff-viewpoint governs amount-in-controversy in declaratory actions)
- Leininger v. Leininger, 705 F.2d 727 (5th Cir. 1983) (amount in controversy in equitable actions is value of the object of the litigation)
- Luckett v. Delta Airlines, Inc., 171 F.3d 295 (5th Cir. 1999) (burden on removing defendant; facially apparent or factual showing required)
- De Aguilar v. Boeing Co., 47 F.3d 1404 (5th Cir. 1995) (plaintiff can defeat removal only by showing to a legal certainty that amount is below threshold)
- St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283 (U.S. 1938) (standard for constraining plaintiff’s recovery to defeat jurisdictional amount)