867 F. Supp. 2d 1143
D.N.M.2012Background
- Plaintiffs seek remand to state court for lack of federal jurisdiction, asserting CAFA inapplicability and fraudulent joinder concerns.
- Defendants removed the case to federal court asserting CAFA jurisdiction with minimal diversity and an aggregated class exceeding $5 million.
- Plaintiffs allege NM uninsured/underinsured motorist policy reforms mandated by Jordan v. Allstate Ins. Co. and related NM statutory/regulatory framework.
- Desert Mountain is a NM defendant/agent; Travelers and other insurers are out-of-state insurers, with class claims allegedly targeting NM policyholders.
- Court finds CAFA jurisdiction exists, no CAFA exceptions apply, and declines to abstain or remand; case will proceed in federal court.
- 21st Century Insurance was dismissed; remaining insurers face class-wide equitable relief under Jordan prescript.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| CAFA jurisdiction present? | Plaintiffs contend CAFA not satisfied. | Defendants assert CAFA meets the threshold and exceptions do not apply. | CAFA jurisdiction exists; no exceptions apply. |
| McCarran-Ferguson reverse preemption? | McCarran-Ferguson reverse-preempts CAFA to enforce NM regulations. | McCarran-Ferguson does not reverse-preempt CAFA. | McCarran-Ferguson does not reverse preempt CAFA. |
| Local-controversy exception applies? | Case is a truly local NM matter enforcing Jordan mandates. | Desert Mountain not a significant defendant; relief not significant against local defendant. | Local-controversy exception does not apply. |
| Abstention under Brillhart/Burford? | Court should abstain; enforcement should occur in state court. | No pending state proceeding; abstention inappropriate. | Court will not abstain under Brillhart, Burford, or related standards. |
| Reserves standing/joinder concerns? | Standing may be lacking; case should be remanded if standing defects exist. | Standing issues acknowledged; CAFA analysis remains unaffected. | Standing issues not dispositive; CAFA jurisdiction remains. |
Key Cases Cited
- Coffey v. Freeport McMoran Copper & Gold, 581 F.3d 1243 (10th Cir. 2009) (local-cont controversy interpretation; significant-relief standard)
- Grimes v. Crown Life Ins. Co., 857 F.2d 699 (10th Cir. 1988) (McCarran-Ferguson relevance to Burford abstention; insurance regulation balance)
- Atlantic & Pacific Ins. Co. v. Combined Ins. Co. of Am., 312 F.2d 513 (6th Cir. 1962) (McCarran-Ferguson Act not reverse-preempting CAFA/diversity)
- Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491 (1952) (declaratory judgments discretionary; avoid unnecessary interference)
- St. Paul Fire and Marine Ins. Co. v. Runyon, 53 F.3d 1169 (10th Cir. 1995) (five-factor test for exercising jurisdiction over declaratory judgments)
- Quackenbush v. Allstate Ins. Co., 517 U.S. 706 (1996) (Burford abstention; rare, not general rule)
- New Orleans Pub. Serv., Inc. v. Council of City of New Orleans, 491 U.S. 350 (1989) (Burford abstention framework; state interfacing administrative review)
- Guttman v. Khalsa, 446 F.3d 1027 (10th Cir. 2006) (Rooker-Feldman applicability limits; not for cases challenging state law interpretations)