PHILADELPHIA -- A class action lawsuit against Liberty Mutual Insurance will remain in the U.S. District Court for the Eastern District of Pennsylvania, the court decided July 17.
Excel Pharmacy Services filed the class action against Liberty Mutual in the Philadelphia Court of Common Pleas, alleging Liberty Mutual violated the Pennsylvania Workers’ Compensation Act and the Unfair Insurance Practices Act when it did not pay back Excel members for prescribed pharmaceuticals given to patients.
Excel wanted the court to issue a declaratory judgment against Liberty Mutual that said the insurance company infringed on the WCA and UIPA statutes.
Although that has yet to happen, Liberty Mutual had previously removed the case to the current federal district court. Excel attempted to remand the case back to the Court of Common Pleas, stating the $5 million amount-in-question threshold for federal jurisdiction cannot be established, and, even it could, the court should refuse to rule on the case.
Still, that wasn’t enough to convince the federal court to remand. It denied the motion and insisted the case stay where it is.
When it comes to the amount in controversy, Excel pointed out the Supreme Court decision in Dart Cherokee Basin Operating Co., LLC v. Owens. In that case, the high court ruled “when a defendant invokes federal jurisdiction and the plaintiff challenges the amount in controversy, ‘both sides submit proof and the court decides by a ponderance of the evidence, whether the amount in controversy requirement has been satisfied.'"
Meanwhile, Liberty Mutual relied on a Third Circuit decision from Frederico v. Home Depot that says Excel is the one responsible for showing that it can’t “recover the requisite amount in controversy because the relevant facts for establishing the amount in controversy are not in dispute, such as were the defendant relies on the facts alleged in the plaintiff’s complaint to establish the amount in controversy,” the court ruled.
Still, the federal district court said no matter what case one looks at, Excel is not entitled for the case to be remanded. Liberty Mutual provided evidence that it refused to pay Excel more than $60,000 for prescriptions given at the rates that Excel says Pennsylvania law requires. It also proved that it declined to pay back 28 possible class members more than $3 million. Considering the class is 2,000 people, the amount in question is more than $5 million, it was argued.
At the same time, Excel could not provide evidence that the amount in controversy is less than $5 million.
The court then evaluated Excel’s request for the court to simply use its discretion and refuse jurisdiction. The court still did not think this was the best way to go. It ruled, “Excel offers no explanation as to how resolution of the alleged fraud claim in state court will settle the matter of whether Liberty Mutual properly reimbursed Excel or other potential class members for prescribed medications.”
Judge Cynthia M. Rufe refused to remand the action.