943 F.3d 917
11th Cir.2019Background
- Anderson purchased a Conseco/Wilco universal (flexible premium) life policy in 2001 with a $150,000 face amount; policy's accumulation value earned a 3% guarantee and funded monthly COI (cost-of-insurance) deductions.
- Beginning in 2012 Anderson alleges Wilco dramatically increased COI rates (statute-of-limitations limits claims to post‑Dec. 6, 2012), depleting accumulation value and causing her policy to lapse by July 2017.
- Anderson brought a putative Georgia class action seeking money damages and equitable relief requiring Wilco to reinstate lapsed/surrendered policies and to reduce premiums for similarly situated Georgia policyholders.
- Wilco removed under CAFA, alleging the aggregate face value of 581 CIUL2 policies that lapsed/surrendered exceeded $75 million; Anderson moved to remand arguing the face values are too speculative to count toward the $5 million CAFA threshold.
- The district court remanded, finding Wilco failed to prove the $5 million amount-in-controversy; the Eleventh Circuit reversed, holding reinstatement claims make the policies’ face value part of the amount in controversy and Wilco met its burden.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the face value of lapsed life policies may be included in CAFA amount-in-controversy when plaintiff seeks reinstatement | Anderson: lawsuit challenges overcharged premiums; only wrongfully charged premiums (past money damages) are at issue; face values are speculative | Wilco: reinstatement seeks to restore policies; the face amounts are the monetary value of the injunctive relief and aggregate for CAFA | Face value is included; reinstatement relief makes the face amounts the value of the object of litigation, so aggregate face value counts toward CAFA threshold |
| Burden/evidence to prove amount in controversy under CAFA | Anderson: Wilco has not proved by preponderance that controversy exceeds $5M | Wilco: submitted operational declaration showing 581 CIUL2 lapsed policies with aggregate face value >$75M and other COI charge data | Wilco met its preponderance burden via declaration and reasonable inferences; amount-in-controversy exceeded $5M |
| Whether contingency (future lapse, surrender, timing/amount at death) makes face-value valuation too speculative | Anderson: contingencies mean Wilco would likely not pay full face amounts; too speculative to include now | Wilco: amount-in-controversy measured at time of removal; speculation about later events is irrelevant | Court rejects speculation argument; contingencies affect recovery, not the amount put at issue at removal |
| Applicability of prior decisions (e.g., Mann, Friedman) that limited inclusion of future revenue or premium relief | Anderson: cites Mann/Friedman to show injunctive relief valuing future revenue or rate changes is speculative | Wilco: distinguishes those cases because they involved future purchases/renewals or ongoing policies, not reinstatement of previously purchased/lapsed policies | Court distinguishes Mann and Friedman; those involved speculative future purchases or non-lapsed policies and are inapposite to reinstatement cases where face value historically measures risk |
Key Cases Cited
- Guardian Life Ins. Co. of Am. v. Muniz, 101 F.3d 93 (11th Cir. 1996) (when validity of a life policy is contested, face amount is the amount in controversy because insurer faces an ever‑present liability)
- Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. 81 (U.S. 2014) (CAFA removal pleading standard: a plausible allegation suffices and, when contested, defendant must prove amount by a preponderance)
- S. Fla. Wellness, Inc. v. Allstate Ins. Co., 745 F.3d 1312 (11th Cir. 2014) (value of declaratory/injunctive relief is the value of the object of litigation; aggregate class benefits may satisfy CAFA)
- Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744 (11th Cir. 2010) (amount-in-controversy is measured at time of removal and is an estimate of what is put at issue, not ultimate recovery)
- Morrison v. Allstate Indemnity Co., 228 F.3d 1255 (11th Cir. 2000) (value of injunctive or declaratory relief equals the monetary value of the benefit that would flow to plaintiffs)
- Waller v. Professional Ins. Corp., 296 F.2d 545 (5th Cir. 1961) (where injunction would keep a policy in force, the policy face value is part of the controversy)
- In re Minn. Mut. Life Ins. Co. Sales Practices Litig., 346 F.3d 830 (8th Cir. 2003) (face value at issue where insured seeks equitable relief restoring a lapsed policy)
- Elhouty v. Lincoln Benefit Life Co., 886 F.3d 752 (9th Cir. 2018) (in declaratory actions about whether a policy is in effect the face amount measures the amount in controversy)
- Cohen v. Office Depot, Inc., 204 F.3d 1069 (11th Cir. 2000) (amount-in-controversy does not include injunctive relief that is too speculative and immeasurable)
- Friedman v. N.Y. Life Ins. Co., 410 F.3d 1350 (11th Cir. 2005) (distinguished: involved ongoing health policies and a de minimis injunctive request rather than reinstatement of lapsed life policies)