Erie Insurance Exchange v. Erie Indemnity Co.
2013 U.S. App. LEXIS 13338
| 3rd Cir. | 2013Background
- Exchange sued its attorney-in-fact Indemnity in Pennsylvania state court alleging misappropriation of over $300 million in fees.
- Original Complaint was filed by Exchange 'by' four members as trustees ad litem, purportedly on behalf of all members.
- PA Rule 2152 allowed suits by an unincorporated association's members; the rule does not resemble Rule 23.
- Indemnity removed, arguing CAFA class action; district court remanded, finding no CAFA class action.
- Amended complaint deleted references to Rule 2152 and asserted claims by individuals on behalf of Exchange; issue remained whether CAFA applies.
- Court ultimately held the case was not a CAFA class action because it was filed under state rules not sufficiently similar to Rule 23.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the case falls within CAFA’s class action definition | Indemnity: case is a true class action. | Exchange: not a class action under CAFA because filed under Pennsylvania Rule 2152. | Not a CAFA class action. |
| Whether Pennsylvania Rule 2152 or Rule 2177 provides a 'rule similar to Rule 23' for CAFA | Rules 2152/2177 should be considered similar to Rule 23. | Rule 2152/2177 are not sufficiently like Rule 23 to authorize a class action under CAFA. | No; not sufficiently similar to Rule 23. |
| Whether substance of allegations overcomes formal labels for CAFA jurisdiction | Complaint pleading on behalf of all members would satisfy class action prerequisites. | Label and procedural vehicle control jurisdiction; not a class action. | Substance does not establish CAFA class action; not eligible for removal. |
| Whether equitable estoppel/forum manipulation arguments affect CAFA jurisdiction | Subsequent federal suit shows forum manipulation; jurisdiction should remain in federal court. | Subsequent filings do not confer jurisdiction retroactively. | Estoppel/ forum manipulation not applicable to extending jurisdiction; no jurisdiction. |
Key Cases Cited
- Marcus v. BMW of N. Am., LLC, 687 F.3d 583 (3d Cir.2012) (class-action prerequisites guide CAFA jurisdiction)
- Jarbough v. Att’y Gen., 483 F.3d 184 (3d Cir.2007) (look to substance over labeling for jurisdiction)
- Centifanti v. Nix, 865 F.2d 1422 (3d Cir.1989) (look to substance of claims in jurisdictional analysis)
- Purdue Pharma P.P. v. Kentucky, 704 F.3d 208 (2d Cir.2013) (piercing state-law labels; classify by operative facts)
- Nye v. Erie Ins. Exchange, 504 Pa. 3, 470 A.2d 98 (Pa.1983) (subsidiaries’ standing to bring class actions under PA law)