Elizabeth Blevins v. Seydi Vakkas Aksut
2017 U.S. App. LEXIS 3689
| 11th Cir. | 2017Background
- Plaintiffs allege Dr. Seydi V. Aksut and several hospital/clinic defendants performed and billed for medically unnecessary interventional cardiology procedures.
- Plaintiffs filed a putative class action in Alabama state court asserting federal RICO claims (18 U.S.C. § 1962) and state-law claims.
- Defendants removed to federal court under federal-question jurisdiction (28 U.S.C. § 1331); Plaintiffs moved to remand relying on CAFA’s local-controversy provision (28 U.S.C. § 1332(d)(4)).
- The district court denied remand and dismissed the federal RICO claims for failure to allege injuries to “business or property” under 18 U.S.C. § 1964(c); it declined supplemental jurisdiction over state-law claims.
- On appeal the Eleventh Circuit reviewed denial of remand and dismissal de novo and considered whether § 1332(d)(4) bars federal-question jurisdiction and whether payments for unnecessary treatment constitute RICO-recoverable economic injury.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CAFA § 1332(d)(4) precludes federal-question jurisdiction and requires remand | § 1332(d)(4) requires district courts to decline jurisdiction over local class actions, including federal-question ones, or vests exclusive jurisdiction in state court | § 1332(d)(4) only restricts the grant of diversity-based CAFA jurisdiction (§ 1332(d)(2)) and does not affect § 1331 federal-question jurisdiction | Rejected plaintiffs’ view: § 1332(d)(4) does not divest or preclude § 1331 jurisdiction; remand denial affirmed |
| Whether payments for allegedly unnecessary medical procedures qualify as injury to "business or property" under RICO (18 U.S.C. § 1964(c)) | Payments made to defendants for unnecessary procedures are economic harms and thus injuries to business or property entitling plaintiffs to RICO relief | Alleged harms are personal injuries (medical injury) and any pecuniary losses flow from those personal injuries and are not recoverable under § 1964(c) | Payments for medically unnecessary procedures are economic injuries distinct from personal injury; dismissal vacated and RICO claim survives pleading-stage challenge |
| Whether appellate jurisdiction or standard of review precludes de novo review | Not directly argued on the merits by plaintiffs on appeal | Defendants contended appellate jurisdiction or preservation issues limit review to plain-error | Court found it had appellate jurisdiction and applied de novo review |
| Whether Rule 9(b) failure might independently justify dismissal | Plaintiffs did not concede Rule 9(b) failure at this stage | Defendants argued heightened pleading required for fraud-based RICO | Court declined to resolve Rule 9(b) issue and remanded for further proceedings |
Key Cases Cited
- Lowery v. Ala. Power Co., 483 F.3d 1184 (11th Cir.) (explaining CAFA’s purpose to broaden federal jurisdiction over class actions)
- Miss. ex rel. Hood v. AU Optronics Corp., 134 S. Ct. 736 (2014) (noting Congress enacted CAFA to address keeping national cases in state courts)
- Morrison v. YTB Int’l, Inc., 649 F.3d 533 (7th Cir.) (describing § 1332(d)(4) as akin to abstention that does not itself divest federal jurisdiction)
- Graphic Commc’ns Local 1B v. CVS Caremark Corp., 636 F.3d 971 (8th Cir.) (stating local-controversy provision recognizes federal subject-matter jurisdiction and operates as an abstention doctrine)
- Mims v. Arrow Fin. Servs., LLC, 565 U.S. 368 (2012) (federal courts presumptively have § 1331 jurisdiction when federal law creates a private right)
- Ironworkers Local Union 68 v. AstraZeneca Pharm., LP, 634 F.3d 1352 (11th Cir.) (payment for medically unnecessary prescriptions can constitute RICO injury to property)
- Grogan v. Platt, 835 F.2d 844 (11th Cir.) (§ 1964(c) excludes personal injuries and pecuniary losses flowing from personal injuries)
- Jackson v. Sedgwick Claims Mgmt. Servs., Inc., 731 F.3d 556 (6th Cir.) (both personal injuries and pecuniary losses flowing from them are not recoverable under § 1964(c))