Pilgrim v. Universal Health Card, LLC
660 F.3d 943
6th Cir.2011Background
- Pilgrim and Kirlin sued Universal Health Card and Coverdell & Company alleging deceptive advertising in a nationwide healthcare-discount program.
- Program offered provider discounts via ads, a website, and a toll-free line; Coverdell maintained provider network and reviewed advertising.
- Plaintiffs alleged the program was advertised as 'free' despite upfront and ongoing fees, and many listed providers did not honor discounts.
- District court dismissed for lack of subject-matter jurisdiction under CAFA and struck class allegations as unmanageable under state-law variations.
- Court acknowledged opt-out class of 30,850 members; later, district court concluded no single state's law controlled all claims for class purposes.
- Appeal focused on whether Rule 23 class certification was appropriate given multiple states’ consumer-protection laws and differing claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Predominance under Rule 23(b)(3) - can a multi-state class prevail? | Pilgrim argues common issues predominate despite state-law differences. | Universal/Coverdell contend varied state laws defeat common issues. | No; predominance not shown due to diverse state laws. |
| Choice-of-law framework - which state's law governs claims? | Morgan-like approach should apply a single governing framework. | Home-state injury and conduct vary; no single governing law. | Home-state law governs different claims; cannot unify for class treatment. |
| Manageability of a nationwide class with different state laws? | Some factual overlap could justify class treatment. | Substantial differences in laws and injuries make class unmanageable. | District court did not abuse discretion; differences overwhelm common issues. |
| Effect of varying advertisements and customer experiences on commonality? | Advertisements were substantially the same across states. | Statutory compliance led to variations; damages and proofs differ by state. | Variations negate predominance; no unified issues. |
| timeliness and procedure of class-certification ruling? | More time could yield discovery benefiting certification. | Rigorous analysis shows no likelihood discovery would cure issues. | No reversible error; timing does not undermine the decision. |
Key Cases Cited
- Morgan v. Biro Mfg. Co., 474 N.E.2d 289 (Ohio 1984) (place-of-injury controls in conflict-of-laws analysis)
- In re Bridgestone/Firestone, Inc., 288 F.3d 1012 (7th Cir. 2002) (nationwide class rarely appropriate with multi-state law differences)
- In re American Medical Systems, Inc., 75 F.3d 1069 (6th Cir. 1996) (avoid nationwide class when many different state laws apply)
- Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180 (9th Cir. 2001) (state-law variations complicate common issues in class actions)
- Szabo v. Bridgeport Machs., Inc., 249 F.3d 672 (7th Cir. 2001) (differences in state law undermine predominance)
- Castano v. American Tobacco Co., 84 F.3d 734 (5th Cir. 1996) (proliferation of disparate legal issues defeats class certification)
- Georgine v. Amchem Prods., Inc., 83 F.3d 610 (3d Cir. 1996) (multistate claims require individualized choice-of-law assessment)
- Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (U.S. 1997) (class actions with varied state-law claims require careful predominance analysis)
- Metz v. Unizan Bank, 649 F.3d 492 (6th Cir. 2011) (jurisdictional posture can be wrong but does not force reconsideration of merits)
- Gen. Tel. Co. v. Falcon, 457 U.S. 147 (U.S. 1982) (early guidance on class-action certification timing and rigorous analysis)