LaPlant v. Northwestern Mutual Life Insurance
886 F. Supp. 2d 1001
E.D. Wis.2012Background
- LaPlant, holder of Northwestern Mutual Life Insurance participating policy, sued a Wisconsin mutual insurer on behalf of a class alleging improper dividend calculations and related fiduciary breaches.
- Plaintiff's class expanded to include policyholders from other states; defendant removed the case under CAFA, §1332(d).
- Court is asked to remand, arguing CAFA’s corporate governance exception applies and federal jurisdiction is lacking.
- Defendant is a Wisconsin-incorporated mutual with a Wisconsin headquarter, issuing Wisconsin-based participating policies; dividends historically paid via a Wisconsin-based fund and alleged breaches occurred in Wisconsin.
- Wisconsin choice-of-law principles are used to determine governing law for putative class claims; amendment-based choice-of-law provisions are challenged.
- The court resolves the remand issue in favor of remand, finding the corporate governance exception applies and Wisconsin law governs the claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| CAFA corporate governance exception applies | LaPlant argues exception removes CAFA jurisdiction. | Northwestern Mutual contends exception does not apply since issues extend beyond internal affairs. | Remand granted; corporate governance exception applies. |
| Do Wisconsin choice-of-law rules govern the class claims? | Wisconsin law governs internal affairs; arguments extend to out-of-state policyholders. | Noonan does not compel; choice-of-law framework favors Wisconsin law. | Wisconsin law governs the putative class claims. |
| Is the amendment's choice-of-law provision enforceable? | Amendment governs some members’ claims. | Provisions should be enforced if applicable. | Amendment unenforceable; Wisconsin law governs absent amendment. |
Key Cases Cited
- Greenwich Financial Services Distressed Mortgage Fund 3, LLC v. Countrywide Financial Corp., 603 F.3d 23 (2d Cir. 2010) (source of internal affairs analysis and broad reading of "relates to" in CAFA)
- Appert v. Morgan Stanley Dean Witter, Inc., 673 F.3d 609 (7th Cir. 2012) (CAFA corporate governance exception burden on plaintiff; proper standard of review)
- Beloit Liquidating Trust v. Grade, 270 Wis.2d 356, 677 N.W.2d 298 (Wis. 2004) (Wisconsin choice-of-law factors; five-factor test for state contact significance)
- Drinkwater v. American Family Mutual Insurance Co., 290 Wis.2d 642, 714 N.W.2d 568 (Wis. 2006) (framework for Wisconsin choice-of-law analysis in contract/tort claims)
- Noonan v. Northwestern Mut. Life Ins. Co., 276 Wis.2d 33, 687 N.W.2d 254 (Ct. App. 2004) (Wisconsin law on internal affairs and fiduciary duties in context of related claims)
- Pittway Corp. v. U.S.A., 88 F.3d 501 (7th Cir. 1996) (internal affairs and corporate governance relevance)
- Nagy v. Riblet Prods. Corp., 79 F.3d 572 (7th Cir. 1996) (fiduciary-breach claims implicating internal corporate affairs)