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Carrigan v. Southeast Alabama Rural Health Associates

United States District Court, M.D. Alabama, Northern Division

September 12, 2017

DAWN COBB CARRIGAN AND JANET GATES, individually and on behalf of all others similarly situated, Plaintiffs,



         Plaintiffs Dawn Cobb Carrigan and Janet Gates bring a class action on behalf of themselves and all others similarly situated seeking indeterminate damages suffered as a result of lost medical records. Defendants are Southeast Alabama Rural Health Associates (“SARHA”), a non-profit Alabama corporation; Greenway Health, LLC (“Greenway”), a Delaware LLC; Greenway EHS (“EHS”), an Alabama corporation; Sunrise Technology Consultants LLC (“Sunrise”), an Alabama corporation; and Lee Investment Consultants, LLC (“Lee”), an Alabama corporation.

         Plaintiffs originally filed the lawsuit in the Circuit Court of Pike County, Alabama, but Defendants Greenway and EHS (“the Greenway Defendants”) removed it here under the jurisdictional provision of the Class Action Fairness Act of 2005 (“CAFA”), see 28 U.S.C. §§ 1332(d)(11) and 1453.

         Before the court is Plaintiffs' motion to remand for lack of subject-matter jurisdiction, filed pursuant to 28 U.S.C. § 1332. (Doc. # 28.) Plaintiffs argue that the amount in controversy is not satisfied and that there exists no diversity of citizenship. Alternatively, Plaintiffs argue that CAFA's local controversy exception precludes subject-matter jurisdiction. After careful consideration, the court finds that the motion to remand is due to be granted because Defendants have failed to establish that the amount in controversy requirement is satisfied.


         Federal courts have a strict duty to exercise the jurisdiction conferred on them by Congress. Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716 (1996). At the same time, “[f]ederal courts are courts of limited jurisdiction.” Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994). Against that legal backdrop, in actions removed from state court to federal court, federal courts usually strictly construe removal statutes, resolve all doubts in favor of remand, and place the burden of proving jurisdiction on the removing defendant. Miedema v. Maytag Corp., 450 F.3d 1322, 1328-30 (11th Cir. 2006). However, the Supreme Court has made clear that “no antiremoval presumption attends cases invoking CAFA, which Congress enacted to facilitate adjudication of certain class actions in federal court.” Dart Cherokee Basin Operating Co. v. Owens, 135 S.Ct. 547, 554 (2014). Accordingly, there is no longer any presumption in favor of remand in deciding CAFA jurisdiction questions. See Dudley v. Eli Lilly & Co., 778 F.3d 909, 912 (11th Cir. 2014).


         In their class action complaint, Plaintiffs allege that Defendant SARHA failed to maintain patient medical records between November 2011 and August 2016 because of the other Defendants' failure to maintain properly the database that housed the medical records. (Compl. ¶ 1.) Specifically, Plaintiffs allege that Greenway, EHS, Sunrise, and Lee represented to SARHA that they maintained a backup database to secure the medical records when those Defendants knew that no such backup existed. (Compl. ¶¶ 9-10.) As a result, Plaintiffs argue, SARHA violated its duty to secure properly its patients' medical records, resulting in damages to Plaintiffs and the class they represent.

         Plaintiffs seek relief for themselves and all others similarly situated for Defendants' failure to maintain medical records. The proposed class is defined as including “[a]ll persons in the State of Alabama who received treatment at SARHA medical facilities from November of 2011 through August 26, 2016 who were entitled under Alabama and Federal law to have their medical records properly preserved.” (Compl. ¶ 15(I).) At the time the complaint was filed, SARHA had received over 700 separate requests for medical records, including subpoenas in ongoing litigation, requests from patients to forward information to specialists, request for vaccination records to enroll children in school, and requests for records to send to insurance providers. (Compl. ¶ 51.) It was unable to comply with any of these requests. (Compl. ¶ 52.)

         Specifically, Plaintiffs make two claims: (1) for a violation of Alabama Administrative Code Chapter 545-x-4-.08 and -.09, and (2) for negligence and wantonness. On each count, Plaintiffs do not make a specific demand for damages; instead, they demand “any and all available fines, penalties, damages, compensatory damages, punitive damages, attorney's fees, interest and costs.” (Compl. ¶ 59.)

         This case began in the Circuit Court of Pike County, and the Greenway Defendants removed it to the United States District Court for the Middle District of Alabama within thirty days of being served with a summons and copy of the complaint. See § 1332(d)(2) (governing class action removals); § 1446(b) (governing removal procedures). In their notice of removal, the Greenway Defendants contend that jurisdiction of this CAFA action is proper because the minimal diversity requirements are satisfied, there are more than 100 plaintiffs, and the monetary claims exceed $5 million in the aggregate. (Not. of Removal ¶ 8); see § 1332(d)(2), (5). Specifically, Defendants argue that, based on certain provisions of the Alabama Code that empower a commission to fine medical practitioners up to $10, 000 per violation, the amount in controversy is satisfied, given that the class allegedly numbers 70, 000. (Not. of Removal ¶ 18); see Ala. Code §§ 34-24-360, -381.

         Plaintiffs responded by filing a motion to remand to state court. They challenge the Greenway Defendants' ability to prove that the amount in controversy and minimal diversity requirements under CAFA are satisfied. (Mot. to Remand 4-7.) Alternatively, Plaintiffs argue that CAFA's local controversy exception applies to preclude jurisdiction. (Mot. to Remand 8-9.)


         CAFA gives district courts subject-matter jurisdiction to entertain class actions removed from state courts provided that four requirements are met: “(1) an amount in controversy requirement of an aggregate of $5, 000, 000 in claims; (2) a diversity requirement of minimal diversity; (3) a numerosity requirement that the action involve the monetary claims of 100 or more plaintiffs; and (4) a commonality requirement that the plaintiffs' claims involve common questions of law or fact.” Lowery v. Ala. Power Co., 483 F.3d 1184, 1202-03 (11th Cir. 2007); see 28 U.S.C. ยง 1332(d)(11). Here, Plaintiffs challenge two of these requirements-the ...

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