our second case for this morning is sabrina rocco against travelers commercial insurance if you meant to get yourself organized beginning but honestly by the time i finished reading all of the briefs in this case it struck me as perhaps a very interesting debate about the content of illinois law about discovery but it is a mystery to me why that is of any pertinence to a federal court once you're in federal court with the case removed under caf if you'll concede for the sake of argument right now that the case isn't federal court it's a federal court matter to govern the scope of discovery to govern enforcement of discovery orders and so i am really having trouble seeing the relevance of it and i would be more than happy to talk about my second perhaps irrelevant thought about this case is that with cases like wal mart against duke's in my mind somewhere the thought that this it seems to me this would be an uphill slog to to certify this class in federal court well let's see if you think about that one because first of all you have a class representative who is not typical of the class she found out about the umbrella policy she got the benefit of that good for her you know she had a good lawyer that's great but we don't i don't know whether the supreme court of the united states under things like the general telephone case would say that she's typical of the class secondly i don't know why everybody's injury is the same some people might have had damages for a five hundred thousand dollars policy that are worth two hundred thousand dollars and they're completely unaffected by whether number l a policy exists or is disclosed other people may be in her position why is there commonality well here's what i'd say about it first but we don't know much about any of these members class and whether or not wal mart would preclude this is i think an open question particularly because there's a lot of litigation united states supreme court on that issue regularly and i know there's even been recent cases from the sudden circuit that it near world what wal mart's application so i don't think that's that's clear but more importantly we're not even to that point right now and i think it's pretty clear that petition but we we can get past the motion to dismiss this case and so we've never done the scuffle and without do any discovery in this case i don't think we can even begin to know the answer to that question i mean the reality of it is is because this fraud is so hip there's only three people or three entities in the world that would know of the existence of these in excess of six i think i understand that point let me come to cafe right now though because i don't want to get too distracted cafe and i'm looking at thirteen thirty two de wine defines the term class action in terms of the way that civil action was filed it doesn't look at you know certification or anything else and it includes filed under a similar state statute or rule of judicial procedure as rule twenty three will this case was filed in the state courts asserting that there were five hundred members of the class and asserting damages and so it's removed under cafe and i guess the question before us is you know how deeply into the weeds do seems to me this clearly was filed a class action you thought it was five hundred people they point out you know if there's even a ten thousand dollars shift because of the improved umbrella policy disclosures you hit five million why isn't that case that there has to be evidence and there was no evidence and so you have to be telling the federal court we said it was five hundred people but don't listen to a word we say well you know let's put it to something else yeah but in fairness to us not only do we say was five hundred but we also s complaint we're completely guessing we have no idea so it's not like we just came up with this one we sided challenge jurisdiction we said in the complaint we originally pled that we have no idea how big this case is also the facts crown case which we cite in this case where the point of say they said well the class was two hundred that's our guest and they said we believe it's two hundred and one of the district court to get found no jurisdiction because they said it's up to the defendant to come up with real evidence and that's not real  changed because they didn't know of the existence of the policy and i was doesn't that fall into the trap of class action classes that are defined by results not by sound characteristic well because when you negotiate a settlement you  you might take something a little less than the policy if you think that that's what the policy is it changes fundamentally the nature of the discussions if you're arguing about whether or not you should get five hundred thousand a one point five million  get to make that decision travelers does not get to make the decision to appoint its council to limit their arguments by defining the terms differently than they really are the facts really are either the federal courts the right place this gets me back to my other thing i think  well i think five hundred you know you said it was five hundred people you suggested that you know out of the entire state of illinois for twenty five years it doesn't seem impossible to be five hundred people then you have the legal certainty test in terms of the amount of controversy so once you get to federal court the federal court's going to resolve the case under federal procedural rules and by their asking a federal court to add to decide whether a state law has been violated you know well first let me ask the federal court to say they don't jurisdiction because the defendants haven't met their anger and i get that with and suppose we disagree then the substance of your case i know you don't want to be in federal court but the substance of your case is that you think the state disclosure laws are not being followed well yes right so why are the federal courts the right place to help the illinois courts and force their own disclosure rules exactly it should go back to state court this jurisdiction isn't state court it should be under local controversy rule you know under the home rule the discretionary rule you just made the point that we made about why this case should go back look at the local controversy will rules of course you just probably sat here and listen to this here too insurance cases dealing with nothing but state law that's what diversity jurors diction gives us well i understand it on the other side is but i'm but like it or case have you heard respectfully there we didn't you didn't have cafferty you didn't have the discretionary exception in the home rule exception so this requires a different level of analysis you need to look at those exceptions because specifically the federal government has said that under certain search of situations when really this is just about what's going on in state court we need to send this case back so state court can deal with it and your honor i know you've said that the sooner we get past the jurisdiction thing but i i just want to strongly make the point that they have claimed that there is five million dollars or five hundred million dollars worth of fraud that they committed and that's the amount of controversy and they don't nikolay by any of the david that established policy it's and i will tell you this if i got into a car accident it was my fault and i had a million dollars worth of coverage and you asked me based on that what's the injuries of the person i hit ok you would have no idea yet they're telling you that you can infer just from those that that there's a least ten thousand dollars worth of damage to the person that i hit and i would say to you also they're saying it's over five million dollars supreme roco at best doesn't have anything close to ten thousand dollars worth of damages and yet somehow they're claiming that she is part of this class adds up to over five million dollars in the reality of it is is the records that show how much fraud is going on here are exclusively held by the only three people would have the person t defendant ok the insurance company ok who doesn't want to pay claim even though they collect the premium and their lawyer to the insurance company hired to protect the insurance company's distress and maybe tangentially their insurance  that's it and the end is justice king said in the creel fornia dredging case in the dissent he said wouldn't that be a tragedy for a paraplegic and a liberal life the rest of their life without a million dollars without access coverage because they never had any way to find out about it that's wrong and there's got to be a remedy for that and we're we think that this class is the only way that all these people would have been deprived of the knowledge that they have that they didn't that they will go to their great otherwise without success in this case knowing that there was a million dollars worth of coverage a traveler superman and apparently travel sort of agrees because they think there's at least five hundred million dollars in controversy and the only time i think they said it could go up to five hundred five right but they came up with the number of five hundred million and they said and the only way you get there is because they've looked through their files and their files tell them what there is that they regularly heightened existence and embroil apollo's and my client caught it had every right to rely on their false answers in this case and i did rely on all the decisions i made were based on those false answers and that's how i would get at this case and then i find out after the fact that that those answers were not effect true because i keep asking questions meet my client should not be penalize for the effect and even justice chank acknowledge that my client would have gotten a settlement six months earlier ok of two hundred fifty thousand dollars over t disclosed limit had they had they come forward and had they disclosed this policy earlier and they had every chance here to disclose the policy they send they send the letters that says it's only five hundred thousand they on the phone they tell me it's only five hundred thousand and you are asking them each of these times not just for the art of the deal liability policy but for umbrella or excess coverage or absolutely absolutely and i would say this to think about it just from a practical perspective this any war that's trying to represent a plaintiff really care what where one policy starts in the next one ends when you say policy limits ok what are you talking about you're talking about the most amount of money your client can get under shuras that's available and it's not like travelers what one of these policies and geico wrote the other one this was in that's not like the one just before the end should be embroiled in a different adjuster for the underline automobile policy there was one adjuster with one compan the department of insurance can been completely ineffectual as far as rooting out any any violations of this and frankly no one's going to root this out if we don't if it if this case is not successful this is the these cases people there is no one cent of  time and give people a chance today under my right i'll be subject to judicial sanctions not disclosing right but the reality of it is is when your piece is over you're the quadriplegic the justice can talks about that live the rest of your life statute like illinois that requires disclosure of coverage mike's periods has been that merit case i would direct your attention to it's the most factually similar case i would note the fact i've cited a million times the defense in this case it's mirror versus state enforce well i think the marriage cases recognize that there was a cause of action in georgia so i guess my answer to that would be i would say this i don't think it's only become recent that the that the lawyers that in their practice in this area the law became aware of how widespread this fraud was because the problem is is litigate your case you get your client what you think under the underlying policy and you settle the case and they sign a release or they get a judgment and you never learn one point admits to me all right well yeah i guess i did find one i mean otherwise i would still not know going back to your question because i didn't mean to skip it and whether there's private cause of action no i mean the question is does the statute right does the plaintiff need the statute to remedy the harm absolutely in this case and again it goes back to our point there's five different for different criteria each one of them we've met i don't think there's much dispute the fact that if there was a private cross action it would give some here that settlement statute i would point out is obviously for the purpose of trying to settle a case and who in their right mind would settle a case or try to settle a case without knowing all of the available coverage it would be malpractise for me to it's like say t one against state farm that case got passed the motion to dismiss we are now before judge actions on discovery against state farm the other one is the judgment the case she's since been elevated the appellate court she dismissed the complaint now down obviously thought that there was why it's she was concerned about damages in that case and the reason she was concerned about it was because the timeframe between when i was told them you know rockets were in answer and she described it as a lie and the timeframe in which it was revealed was only three weeks which was not the six months that was in this case she thought that even though class actions can be based on a one dollar a lot that there was there had to be a point certain quantity to amount before you got to damages so that's one of the that's probably the main issue or there are few lines but that was the basis that was the main basis for her think essentially she threw it out on damages to justice chang good morning i wanted to start with the jurisdictional issue the federal question addressed diction the operative complaint at the time that judgment was entered was the third amended complaint which had eleven counts one of the counts was for rico and rico gives rise to a federal question jurisdiction despite the fact that the whole complaint was dismissed with prejudice that does not create the jurisdiction provided by rico so the question is whether this was a rico allegation that passed what i like to call the bell versus hood standard is there at least enough merit in it to engage the jurisdiction of the federal court or was it just so patiently inadequate as an allegation that the elegance has been cited in steel company against citizens for a better environment in many other case established supreme court principle because it did looks awfully weak to me is as a rico claim so i'm just trying to figure out how bad is it it is weak and you know this the standard the standard however is that the count has to be clearly wholly insubstantial and frivolous right now and that's what i'm asking you right so you know travelers move to dismiss all eleven comes when w she was paid she got her and a mountain settlement that reflected the umbrella policy how she popped and how does she have standing as an aggrieved party well  we don't think that she does right ok she doesn't have standing what judge trying found that he didn't need to reach the question of whether there was actually damage here but he offered his views on it and the event that it would be helpful to the parties but that doesn't answer the damages is a different question from standing you have to be a person with an actual injury obviously you know the rest of the litany you know an actual interest injury in fact you know caused by the violation is redress a bill and there's a serious question whether whether the named plaintiff ms roco has at this moment or at the time of removal injury in fact let's turn three in fact well you know there's been many cases that have been dismissed for lack of any injury in fact but it did that did not mean that there was no jurisdiction to consider it does mean there is no jurisdiction if there is no article three standing the supreme court regards status of j i like judge chang is a fine judge but you know we're here to review this case and i don't know if the judge settlement had been six months earlier whether it would have been a few dollars less you know maybe it was more six months later to account for the time value of the lapse in time between the actual initial injury and the time the check was written so seems to me highly speculative  all understand time value of money we deal with it all the time that in this context it's a little bit hard to you and so i'm uncomfortable with rico as a hook for this move to talk about cafe for a minute because my issue with that is just to remind you i'm sure you know this that pleading requirements in state court are quite different from pleading requirements in federal court and state court maybe you can say there are five hundred members of the class and you don't have to put money down to soon as you are the party who wanted to be in federal court removed asserting that cafe is required the burden is on you to show that cafe is satisfied so how do you use how do you meet that burden without evidence jurisdictional evidence is common and why how can you do that without evidence well as an initial matter requiring cafe is a pleading issue if we relied on the allegations of the complaint that estimated five hundred members of the class but you know what it's not really pleading i'm going to quibble with you here let's suppose we had a really simple case of first year civil  classic case where a complaint in state court says a is a citizen of illinois be as a citizen of texas it's filed in illinois court so we're going to remove to the federal court in illinois based on diversity and after the case is removed a who doesn't want to be in federal court says you know i don't think that b is a citizen of texas there's evidence to be is also a citizen of illinois and there's no diversity the court would find facts on that the court would would have to explore you know where's the you know let's assume the is an individual where does b vote where does b have a house where does b do things and so there's jurisdictional facts and the same thing it's under the same statute thirteen thirty two d the same thing i would imagine is true where you remove you assert of course that these things are there but your challenge why don't you have to back it up because there's because the facts that are pleaded in the complaint have consequences whether you're in state court or federal court this but so in my example you would say there's no jurisdictional discovery as to whether there is true diversity between a allegedly of illinois and b allegedly of texas i think the true diversity really a different  thirty two a for regular diversity jurisdiction including citizenship in different states never mind alien age and the amount in controversy there are similar criteria they're not identical  d of thirty and thirty two the number of people minimal diversity and amount of controversy i don't understand why if there are challenges you don't have the same kind of evidentiary obligation that you would have of what's at thirteen thirty two a challenge well there's there's abundant cases where plaintiffs either don't make any allegation in a complaint on a jurisdictional fact like for example the amount of controversy here or the plaintiff is a eged that there's a very substantial amount of controversy and and under those circumstances there's more of an onus upon the removing defendant to actually provide affirmative evidence that the constant beyond controvers satisfied but this that the law is that where the where the complaint cleaves a jurisdictional fact which which which is here standard fire versus knowles for example that the u s supreme court decided the defendant is permitted to rely on the further explanation with respect women and in terms of specifics right this is not a case where a plaintiff actually settled for automobile policy limits and then later discovered that there was an umbrella policy million dollars come from that's not in the plaintiff's complaint in state court correct that's not so made it up so why it why doesn't it fit exactly within the rule that you just cited to us well that's that's what i was getting that there's it's we have what we have before the court is a single incident and the plaintiff's allegation is this happens all the time i understand that your job though is the removing party is to show that the case belongs in federal court and you said well we're entitled to rely on the allegations in the state court complaint and let's assume for the moment that that means you can rely on the five hundred people you they never mentioned five million dollars and five hundred people might include some people who have you know a two hundred fifty dollar difference and some people who had you just kind of pulled ten thousand out of the air because that was a nice easy mathematical device but why don't you have the burden of showing as our jurisdictional amount cases suggest that you're going to meet the five million well i think that your question suggests that or that you could meet the five million that it's not clear to a legal certainty that you won't meet the five million you know obviously we know those tests too i mean if if we had we're faced with a complaint that alleges the traveller engages in this conduct many many many times and let's say there were some way the travelers had available to it to find out that in fact this was the only time it ever happened i guess it would be if it sounds like your question would suggest that the case could not be adjudicated in federal court it in fact it is a different situation which is that i mean it's our belief that this doesn't happen we know of a single incident that the tapping but it's the plaintiff that alleges that it happens all the time and we have to go by the can't we have to assume that that's true for purpose of this of this  but assuming is different from evidence about jurisdictional mount there's a long line of cases that say roughly you know you can accept the plaintiff's allegation of a jurisdictional amount which is routine in cases that start out in federal court and somebody says to jurisdictional mounts greater than seventy five thousand dollars fine you can take up the minute somebody challenges it you've got to come forward with evidence like how many instances are there and what's the average settlement amount and what's you know how many umbrella policies are out there you've got to come forward with some evidence that will at least show that it could be this much so we did so first the the requirement is for the defendant to make a good faith estimate that's plausible and that would control unless it's legally in hospital that the that the estimate that they come up with could be actor so travelers did submit  declaration and they looked at this in two possible ways all of what we know from the complaint is that this has allegedly happened five hundred times the complaint alleges that each peter flass member has damages substantially what are so what we looked at this two ways we looked at what our policy limits well the minimum umbrella policy limits are million dollars by the way we also in the declaration says this we also have limits of five million and ten million we only use the lowest we used a million dollars and we allege that the damages could be up to five hundred million dollars if each person had damages that would maxed out the limits now if they didn't we also listed that's very unlikely controversy needs to be adjudicated by the federal court because the plaintiff claims that this is what's happening we also looked at the other and we looked at what it was so we said ok we looked at the declaration talks about the lowest auto policy limits which is fine three hundred thousand or five hundred thousand and we said even in this substantial damage we're only ten thousand dollars each you'd still come up with five million dollars we know that the plaintiff wound up recovering not ten thousand but two hundred fifty thousand and this doesn't even account for the fact that the plaintiff has pleaded punitive damages do we think you'll ever get punitive damages absolutely not but the law says you take those into consideration for the amount of controversy and courts have contends that  between when the proper limits are not disclosed and to use just as polls words that sounds very conclusionary well i mean i guess a finder of fact could could decide whether or not there really is a is a delay and what the value of that delay would be i would think in some circumstances maybe there would be a delay in other circumstances there weren't you could talk about whatever these litigation strategy decisions like goes to the fact as to whether you  you know that the complaint has three pages of rico allegations and and there were added later on were they well right so the plaintiffs counsel to file these three cases against three insurance companies and two of the insurance companies are only citizens traverses not so we removed and that's when plaintiff counsel had the idea of adding hitchens and they sell to non diverse defendants with the hopes  of affecting a local controversy remained and i'm not going to be able to get into that but he lost on that the local controversy exception doesn't apply here and so he made largely i take it your position because those in state defendants didn't have a substantial enough role correct that they they don't even under the the the standard that's most favorable to plaintiff's counsel which that the mandatory local council except local controversy exception when more than two thirds of the class bright red citizens of illinois he these are not there's no significant basis for recovery against them or discovery to find the answer to that out i would say this maze ellen associates for years has only been represented travelers in short in the probability that they are significant defendant in this case is very very high secondly  indicating that you thought judge can't change got it right on the jurisdiction issue after you ruled and i made that conclusion dark came out and suggested that in certain situations united states supreme court gave this advice that it wanted to  they added they had the rico count was because the p l o got tonight and i don't disagree with it absolutely was true also they said well you said well how is their jurisdiction in this case about five million dollars amount controversy th of people that's in the class i would go back to this council said well we don't know the answer to that the answer to that is in their fights and it's only in their fights the people that were paraplegics that don't know can only know looking at their files