Recent 11th Circuit Class Action a Win for Insurers

Recent 11^th Circuit Class Action a Win for Insurers
by James L. Pattillo, Partner
December 12, 2020

The Eleventh Circuit bolstered insurers' ability to remain in Federal Court and avoid remand with its decision in Anderson v. Wilco Life Ins. Co., No. 19-14127, 2019 U.S. App. LEXIS 34952 (11th Cir. Nov. 22, 2019).  The Court held that the $5 million amount in controversy threshold in the Class Action Fairness Act (CAFA) was met by the aggregate face value of all policies subject to the class at the time of removal.

James L. Pattillo

Wilco submitted that the aggregate value of 581 similar policies was over $75 million. The Court reversed the District Court and its rationale that the face amount of the policy was too speculative to support the amount in controversy requirement. Anderson unsuccessfully argued that only the wrongfully charged premiums were in controversy, not the entire policy. The Eleventh Circuit noted a distinction between what is in controversy as opposed to what the plaintiffs are likely to recover, the latter being not determinate of the amount in controversy.

Insurers are reminded by this opinion that they do themselves no harm by arguing the worst case scenario to support removal. By doing so they do not increase exposure or provide additional support for a plaintiff's argument in support of damages. But they do extract themselves from the unpredictability of State Court in complex class action matters. For more information regarding the application of the Class Action Fairness Act, please contact Jim Pattillo at jlpattillo@csattorneys.com or 205-250-6647

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