Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_15-md-02617/USCOURTS-cand-5_15-md-02617-15/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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Case Nos. 15-MD-02617-LHK; 15-CV-2873-LHK

ORDER GRANTING MOTION TO REMAND

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

IN RE ANTHEM, INC. DATA BREACH 

LITIGATION

MONICA SABATINO, et al., 

Plaintiffs,

v.

HMO MISSOURI, INC., et al., 

Defendants.

Case No. 15-MD-02617-LHK

ORDER GRANTING MOTION TO 

REMAND

Case No. 15-CV-2873-LHK

Plaintiffs Monica Sabatino and Michael Sabatino (collectively, “Plaintiffs”) bring a 

putative class action against defendants HMO Missouri, Inc. and Healthy Alliance Life Insurance 

Company (collectively, “Defendants”) arising out of a cyberattack on the computer system of 

Defendants’ parent company, Anthem, Inc. (“Anthem”). Before the Court is Plaintiffs’ motion to 

remand the case to the Circuit Court of St. Louis City, 22d Judicial Circuit, in the State of 

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Missouri. ECF No. 15.

1

Having considered the submissions of the parties, the relevant law, and the record in this 

case, the Court GRANTS Plaintiffs’ motion to remand the case to the Circuit Court of St. Louis 

City, Missouri.

I. BACKGROUND

A. Factual Background

Defendants are affiliates of Anthem, an Indiana corporation that is one of the largest health 

benefits companies in the United States. ECF No. 1, Notice of Removal (“Removal Notice”) ¶ 5. 

Through its affiliated health plans, Anthem delivers health benefit products and plans to tens of 

millions of members across the country. Id.

On February 4, 2015, Anthem announced that cyberattackers had gained unauthorized 

access to its data systems on or about December 10, 2014. ECF No. 1-1, Class Action Petition

(“Pet.”) ¶¶ 8-9. As a result of this breach, Plaintiffs allege that the personally identifiable 

information of up to 80 million current and former Anthem members was compromised. Id.

¶¶ 10-12. The allegedly compromised information includes members’ names, birthdays, medical 

identification numbers, social security numbers, street addresses, email addresses, and 

employment information, including income data. Id. ¶ 10.

Plaintiffs are “adult residents of Saint Louis County, Missouri” who have been Anthem 

members since April 2014. Pet. ¶¶ 1, 21. Plaintiffs claim that their personal information was 

compromised as a result of the Anthem data breach. Id. ¶¶ 21-24. “By virtue of their membership 

in Anthem,” Plaintiffs allege, “the company obtained their sensitive medical records, personal 

information, including their birthdays, social security numbers, address, and employment 

information.” Id. ¶ 21. As a result of the data breach, Plaintiffs claim they “are at a heightened 

risk for future identity theft.” Id. ¶ 23. Plaintiffs claim further that they “have been harmed in that 

they (1) paid more for insurance record privacy protections than they otherwise would have, and 

 

1 Unless otherwise indicated, all ECF references are to the docket of Case No. 15-CV2873-LHK in the Northern District of California.

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(2) paid for insurance record privacy protections that they did not receive.” Id. ¶ 24.

B. Procedural History

On February 16, 2015—twelve days after Anthem announced the data breach—Plaintiffs 

filed the instant putative class action in the Circuit Court of St. Louis City, Missouri. Removal 

Notice ¶ 1. A copy of the class action petition was served on Defendants on March 6, 2015. Id.

¶ 2. In the petition, Plaintiffs asserted four causes of action under Missouri law: (1) violation of 

the Missouri Merchandising Practices Act (“MMPA”), Mo. Rev. Stat. § 407.010 et seq., Pet. 

¶¶ 35-45; (2) breach of fiduciary duty, id. ¶¶ 46-52; (3) breach of contract, id. ¶¶ 53-57; and (4) 

negligence, id. ¶¶ 58-63. Plaintiffs brought these four causes of action on behalf of themselves 

and a statewide class of similarly situated individuals, defined as follows:

Missouri residents whose personal information was compromised as a result of the 

data breach announced in February 2015 and are (1) current and former members 

of a health insurance plan administered by Defendants, and/or (2) current and 

former Anthem employees.

Id. ¶ 26 (emphasis added). “The precise number of Class members,” according to Plaintiffs, “can 

be obtained from information and records in Defendants’ possession and control.” Id. ¶ 29. 

Defendants estimate that the proposed class comprises at least 750,000 individuals. See Removal 

Notice ¶ 12.

On April 3, 2015, Defendants removed this action to the United States District Court for 

the Eastern District of Missouri. See Removal Notice. Defendants proffered two independent 

bases for subject matter jurisdiction in federal court: (1) diversity jurisdiction under the Class 

Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. § 1332(d); and (2) federal question jurisdiction 

under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), 42 U.S.C. 

§ 1320d et seq. See Removal Notice ¶¶ 10-23.

On April 10, 2015, Plaintiffs filed the instant motion to remand. ECF No. 15 (“Mot.”). 

Pursuant to a stipulation by the parties, see ECF Nos. 18, 19, Defendants opposed the motion on 

May 1, 2015, ECF No. 22 (“Opp.”). Plaintiffs replied on May 14, 2015. ECF No. 28 (“Reply”).

On May 14, 2015—the same day Plaintiffs filed their reply—Plaintiffs also filed a first 

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amended complaint. ECF No. 27, First Amended Complaint (“FAC”). In the FAC, Plaintiffs 

clarified that they “are citizens of Saint Louis County, Missouri,” not just “residents.” Id. ¶ 1. 

Plaintiffs also amended the class definition, replacing the word “residents” with “[c]itizens.” Id. 

¶ 25. The class definition now reads:

Citizens of Missouri whose personal information was compromised as a result of 

the data breach announced in February 2015 and are (1) current and former 

members of a health insurance plan administered by Defendants, and/or (2) current 

and former Anthem employees.

Id. (emphasis added). In all other respects, Plaintiffs’ FAC is materially the same as the original 

class action petition. For example, Plaintiffs continue to assert four causes of action under 

Missouri law: (1) violation of the MMPA, id. ¶¶ 34-44; (2) breach of fiduciary duty, id. ¶¶ 45-51; 

(3) breach of contract, id. ¶¶ 52-56; and (4) negligence, id. ¶¶ 57-62.

On May 18, 2015, in response to Plaintiffs’ FAC, Defendants filed a motion for leave to 

file a sur-reply. ECF No. 30. The district court granted the motion the next day. ECF No. 31. On 

May 28, 2015, Defendants filed their sur-reply, ECF No. 33, which argued that Plaintiffs’ “lastditch effort to avoid federal court” by amending their complaint was unavailing because the 

district court should only consider “what was pleaded at the time of removal,” id. at 1-2.

On June 8, 2015, the Judicial Panel on Multidistrict Litigation (“JPML”) issued a transfer 

order pursuant to 28 U.S.C. § 1407 selecting the undersigned judge as the transferee court for 

“coordinated or consolidated pretrial proceedings” in the multidistrict litigation (“MDL”) arising 

out of the Anthem data breach “that allegedly occurred sometime between December 10, 2014, 

and February 4, 2015.” Case No. 15-MD-02617-LHK, ECF No. 1 at 1-3. Accordingly, on June 

17, 2015, the JPML transferred the instant putative class action from the Eastern District of 

Missouri to the undersigned judge in the Northern District of California. ECF No. 34.

On July 31, 2015, the Court held a preliminary case management conference. See ECF 

No. 39. Counsel for Plaintiffs appeared at the case management conference and communicated to 

the Court Plaintiffs’ intent to pursue their pending motion to remand. Id. at 2. The Court set the 

motion for hearing on September 10, 2015, at 1:30 p.m. Id.

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On August 27, 2015, the Court ordered the parties to file supplemental briefing on 

Plaintiffs’ motion to remand no later than September 4, 2015. ECF No. 40. The Court did so 

because the parties’ briefs, which were filed in the Eastern District of Missouri, a division of the

Eighth Circuit, did not cite to or otherwise address relevant Ninth Circuit precedent, which this 

Court must apply. See Newton v. Thomason, 22 F.3d 1455, 1460 (9th Cir. 1994) (holding that 

“when reviewing federal claims, a transferee court in this circuit is bound only by our circuit’s 

precedent”); see also In re Gen. Am. Life Ins. Co. Sales Practices Litig., 391 F.3d 907, 911 (8th 

Cir. 2004) (“When a transferee court receives a case from the MDL Panel, the transferee court 

applies the law of the circuit in which it is located to issues of federal law.”); In re Sony Gaming 

Networks & Customer Data Sec. Breach Litig., 996 F. Supp. 2d 942, 959 (S.D. Cal. 2014) (“In 

interpreting federal law, a transferee court in a multidistrict case should look to the law of its own 

circuit rather than the law of the transferor courts’ circuits.”).

Plaintiffs filed their supplemental brief on September 4, 2015. Case No. 15-MD-02617-

LHK, ECF No. 258 (“Pls. Supp. Br.”). Defendants did the same. ECF No. 41 (“Defs. Supp. 

Br.”).

II. LEGAL STANDARD

A suit may be removed from state court to federal court only if the federal court would 

have had subject matter jurisdiction over the case in the first instance. 28 U.S.C. § 1441(a); see 

Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987) (“Only state-court actions that originally 

could have been filed in federal court may be removed to federal court by the defendant.”). “In 

civil cases, subject matter jurisdiction is generally conferred upon federal district courts either 

through diversity jurisdiction, 28 U.S.C. § 1332, or federal question jurisdiction, 28 U.S.C. 

§ 1331.” Peralta v. Hispanic Bus., Inc., 419 F.3d 1064, 1068 (9th Cir. 2005). If it appears at any 

time before final judgment that the federal court lacks subject matter jurisdiction, the federal court 

must remand the action to state court. 28 U.S.C. § 1447(c).

There is no presumption against removal jurisdiction in CAFA cases. See Dart Cherokee 

Basin Operating Co., LLC v. Owens, 135 S. Ct. 547, 554 (2014) (vacating district court’s remand 

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order in putative class action on the ground that “a defendant’s notice of removal need include 

only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold”). 

The defendant, however, still bears the burden of establishing removal jurisdiction. See id. A 

notice of removal must contain a “short and plain statement of the grounds for removal,” a 

requirement that tracks the general pleading standard of Rule 8(a) of the Federal Rules of Civil 

Procedure. Id. at 553 (citing 28 U.S.C. § 1446(a)).

III. DISCUSSION

Defendants argue that there are two independent bases for subject matter jurisdiction in 

federal court: (1) diversity jurisdiction under CAFA; and (2) federal question jurisdiction under 

HIPAA. See Removal Notice ¶¶ 10-23; Opp. at 3-12; Defs. Supp. Br. at 2-9. Plaintiffs dispute 

both of these bases for jurisdiction.2 See Mot. at 3-12; Reply at 1-6; Pls. Supp. Br. at 2-9. For the 

reasons stated below, the Court agrees with Plaintiffs.

A. Diversity Jurisdiction Under CAFA

CAFA gives federal courts jurisdiction over certain class actions if (1) “the class has more 

than 100 members”; (2) “the parties are minimally diverse”; and (3) “the amount in controversy 

exceeds $5 million.” Dart Cherokee, 135 S. Ct. at 552 (citing 28 U.S.C. § 1332(d)(2), (5)(B)). 

CAFA’s “minimal diversity” requirement means that “a federal court may exercise jurisdiction 

over a class action if ‘any member of a class of plaintiffs is a citizen of a State different from any 

defendant.’” Mississippi ex rel. Hood v. AU Optronics Corp., 134 S. Ct. 736, 740 (2014) (quoting 

28 U.S.C. § 1332(d)(2)(A)). If a defendant cannot establish that CAFA’s minimal diversity has 

been satisfied, then CAFA cannot serve as a basis for subject matter jurisdiction. See Weight v. 

Active Network, Inc., 29 F. Supp. 3d 1289, 1292 (S.D. Cal. 2014) (explaining that if “there is no 

minimal diversity” under CAFA, “the Court must remand this case”).

As the Ninth Circuit has explained, “the diversity jurisdiction statute, 28 U.S.C. § 1332, 

 

2

Plaintiffs also raise the “home state exception” as a ground for remand. See Mot. at 8-10; 

Pls. Supp. Br. at 8-9. The Court need not address this argument because the Court remands on 

other grounds. 

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speaks of citizenship, not of residency.” Kanter v. Warner-Lambert Co., 265 F.3d 853, 857 (9th 

Cir. 2001). A “natural person’s state citizenship is . . . determined by her state of domicile, not her 

state of residence.” Id. “A person’s domicile,” in turn, “is her permanent home, where she resides 

with the intention to remain or to which she intends to return,” and “[a] person residing in a given 

state is not necessarily domiciled there, and thus is not necessarily a citizen of that state.” Id.; see 

also, e.g., Weible v. United States, 244 F.2d 158, 163 (9th Cir. 1957) (“Residence is physical, 

whereas domicile is generally a compound of physical presence plus an intention to make a certain 

definite place one’s permanent abode, though, to be sure, domicile often hangs on the slender 

thread of intent alone, as for instance where one is a wanderer over the earth.”).

In the instant case, Plaintiffs’ original petition stated that “Plaintiffs are adult residents of 

Saint Louis County, Missouri.” Pet. ¶ 1 (emphasis added). The original petition’s class definition 

also spoke of residency, rather than citizenship:

Missouri residents whose personal information was compromised as a result of the 

data breach announced in February 2015 and are (1) current and former members 

of a health insurance plan administered by Defendants, and/or (2) current and 

former Anthem employees.

Id. ¶ 26 (emphasis added). Defendants, both of whom are Missouri citizens, see id. ¶¶ 2-3, assert 

“that at least one member of the putative class is presently a resident of Missouri while 

maintaining citizenship in another state,” Removal Notice ¶ 15. In support of that assertion, 

Defendants allege that their “insurance programs do not restrict membership to citizens of

Missouri,” and that their “members include individuals enrolled in Defendants’ plans as ‘guests’

while resident in Missouri on a semi-permanent or extended basis, but who maintain citizenship 

. . . in other states.” Removal Notice ¶ 15a-b. According to Defendants, in 2014 they enrolled 513 

“guest” members, whose states of domicile varied from Connecticut to Hawaii. ECF No. 22-1, 

Declaration of Val Curry ¶ 5. On this basis, Defendants argue that they have established minimal 

diversity by a preponderance. See Defs. Supp. Br. at 3.

However, on May 14, 2015—more than one month after Defendants had removed the case 

to federal court—Plaintiffs filed the FAC, which clarified that Plaintiffs “are citizens of Saint 

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Louis County, Missouri,” not just “residents.” FAC ¶ 1. Plaintiffs also amended the class 

definition, replacing the word “residents” with “[c]itizens.” Id. ¶ 25. The class definition in the 

FAC reads:

Citizens of Missouri whose personal information was compromised as a result of 

the data breach announced in February 2015 and are (1) current and former 

members of a health insurance plan administered by Defendants, and/or (2) current 

and former Anthem employees.

Id. (emphasis added).

Ordinarily, “post-removal amendments to the pleadings cannot affect whether a case is 

removable, because the propriety of removal is determined solely on the basis of the pleadings 

filed in state court.” Williams v. Costco Wholesale Corp., 471 F.3d 975, 976 (9th Cir. 2006); see 

also Sparta Surgical Corp. v. Nat’l Ass’n of Sec. Dealers, Inc., 159 F.3d 1209, 1213 (9th Cir. 

1998) (explaining that “jurisdiction must be analyzed on the basis of the pleadings filed at the time 

of removal without reference to subsequent amendments”). That said, the Ninth Circuit recently 

held that “plaintiffs should be permitted to amend a complaint after removal to clarify issues 

pertaining to federal jurisdiction under CAFA.” Benko v. Quality Loan Serv. Corp., 789 F.3d 

1111, 1117 (9th Cir. 2015). In Benko, the issue was not CAFA’s minimal diversity requirement, 

but whether the in-state defendant was “significant” for purposes of the “local controversy 

exception” to CAFA jurisdiction. Id. at 1116-17 (quoting 28 U.S.C. § 1332(d)(4)(A)(i)). The 

Ninth Circuit explained that when “a defendant removes a case to federal court under CAFA, and 

the plaintiffs amend the complaint to explain the nature of the action for purposes of our 

jurisdictional analysis, we may consider the amended complaint to determine whether remand to 

the state court is appropriate.” Id. at 1117. In Benko, “the Plaintiffs amended the [complaint] to 

elaborate on estimates of the percentage of total claims asserted against Meridian, an in-state 

Defendant, and the dollar value of those claims”—i.e., information that “is directly related to 

CAFA’s local controversy exception.” Id. The Benko plaintiffs, unlike the plaintiff in Sparta 

Surgical, “did not amend the [complaint] to eliminate a federal question so as to avoid federal 

jurisdiction.” Id.

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Here, Plaintiffs amended their state court petition to “clarify” that they are not only 

residents of Missouri, but citizens as well. Benko, 789 F.3d at 1117. They also “amend[ed] the 

complaint to explain the nature of the action,” id.—namely, that Plaintiffs are pursuing their four

state law claims on behalf of themselves and a class of similarly situated “[c]itizens of Missouri,” 

FAC ¶ 25. When Plaintiffs filed their petition in state court, there was no reason under state law 

for them to distinguish between residency and citizenship for pleading purposes. See Weight, 29 

F. Supp. 3d at 1291, 1293 (considering plaintiff’s revised class definition, which had been 

amended to include “citizens” of a state rather than “residents,” because “the instant action was 

originally filed in the California state court system, which has no equivalent of diversity 

jurisdiction and thus does not require the careful distinction between ‘residents’ and ‘citizens’”). 

That distinction only became relevant when Defendants sought removal to federal court under 

CAFA. As the Ninth Circuit recognized in Benko, state court complaints “may not address 

CAFA-specific issues.” 789 F.3d at 1117. “By amending their complaint in these circumstances,” 

the Ninth Circuit continued, “plaintiffs can provide a federal court with the information required to 

determine whether a suit is within the court’s jurisdiction under CAFA.” Id. That is precisely 

what Plaintiffs did here. See FAC ¶¶ 1, 25. Consequently, the Court considers Plaintiffs’ 

clarifications in the FAC and finds that CAFA’s minimal diversity requirement has not been met 

in this action between citizens of Missouri.

In reaching this conclusion, the Court notes its agreement with several other district courts 

in the Ninth Circuit. In Weight, for example, the district court considered the plaintiff’s amended 

complaint, which had revised the class definition to include “citizens of California” rather than 

“California residents,” in determining whether CAFA’s minimal diversity requirement was 

satisfied. 29 F. Supp. 3d at 1291, 1293. The district court did so because “when a pleading is 

amended to clarify the original complaint rather than manipulate the forum, the court can look to 

the amended complaint to determine whether the court exercised jurisdiction over the action at the 

time of removal.” Id. at 1292 (citing Schuster v. Gardner, 319 F. Supp. 2d 1159, 1164-65 (S.D. 

Cal. 2003)). Finding the plaintiff’s revision to be a mere “clarification,” the court in Weight

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granted the plaintiff’s motion to remand due to lack of minimal diversity under CAFA. Id. at 

1293-94.

Even more on point are the recent decisions in Wickens v. Blue Cross of California, Inc., 

No. 15CV834-GPC JMA, 2015 WL 4255129 (S.D. Cal. July 14, 2015), and Smilow v. Anthem 

Blue Cross Life & Health Ins. Co., No. CV 15-4556-MWF(AGRX), 2015 WL 4778824 (C.D. Cal. 

Aug. 13, 2015), both of which involve putative class actions arising out of the same Anthem data 

breach giving rise to this action.

3

 In Wickens, the district court, relying on Benko, found it proper 

to consider the plaintiff’s amended complaint because “the change from ‘residents’ to ‘citizens’ of 

California in the class description is a clarification of the Court’s jurisdiction.” 2015 WL 

4255129, at *4-5. Taking the amended complaint into consideration was “especially” appropriate, 

the Wickens court held, because “the Complaint alleges claims against California based 

Defendants, alleges only California law causes of action, and the class was intended to be limited 

to individuals who entered into contracts with California corporations for future services in 

California.” Id. at *5. Finding no minimal diversity under CAFA in light of the plaintiff’s 

clarification to the class definition, the court in Wickens remanded the case to state court. Id.

Similarly, the district court in Smilow found it appropriate to consider the plaintiff’s 

amended complaint because “an amendment to change ‘residents’ of California to ‘citizens’ of 

California, in this case, would constitute a clarification” of the court’s jurisdiction. 2015 WL 

4778824, at *6 (internal quotation marks omitted). Citing Benko, the Smilow court concluded that 

“the Ninth Circuit has recognized an exception to the general rule that courts must look to preremoval filings to determine jurisdiction, where a party amends a complaint in order to clarify 

certain jurisdictional facts.” Id. Concluding that there was no minimal diversity under CAFA in 

light of the plaintiff’s clarification to the class definition, the court in Smilow granted the 

plaintiff’s motion to remand the case to state court. Id.

Defendants’ citation to Doyle v. OneWest Bank, FSB, 764 F.3d 1097 (9th Cir. 2014) (per 

 

3

The defendants in Wickens and Smilow have sought permission to appeal the district 

court rulings to the Ninth Circuit. See Defs. Supp. Br. at 5.

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curiam), which predates Benko, does not counsel a different result. See Defs. Supp. Br. at 7. In 

Doyle, the defendants removed a putative nationwide class action under CAFA. After removal, 

the California plaintiff amended her complaint by “narrow[ing] the putative class definition to a 

California-class only.” Id. (alteration in original). The plaintiff then moved to remand the action

to state court under one of the exceptions to CAFA jurisdiction, and the district court granted the 

motion based on the amended class definition. Doyle, 764 F.3d at 1098. Vacating the district 

court’s remand order, the Ninth Circuit held that the district court “should have determined the 

citizenship of the proposed plaintiff class based on Doyle’s complaint ‘as of the date the case 

became removable.’” Id. (quoting Mondragon v. Capital One Auto Fin., 736 F.3d 880, 883 (9th 

Cir. 2013)). 

Doyle is distinguishable, however, because the plaintiff there did not seek to merely clarify 

her complaint to aid in the federal court’s jurisdictional analysis. Instead, the Doyle plaintiff 

sought to dramatically narrow the scope of the action from a nationwide class action to a statewide 

class action on behalf of California plaintiffs only. In the instant case, by contrast, Plaintiffs have 

sought from the outset to represent Missourians only. The FAC simply clarifies that Plaintiffs, as 

well as the proposed class, are citizens of Missouri, not just residents, see FAC ¶¶ 1, 25—a 

distinction that was of no moment when Plaintiffs filed this action in state court. The district 

courts in Wickens and Smilow distinguished Doyle on similar grounds. See Wickens, 2015 WL 

4255129, at *4 (distinguishing Doyle because it “did not address any amendment or clarification 

by Plaintiff to support federal jurisdiction or an exception to the rule that jurisdiction is determined 

at the time of removal”); Smilow, 2015 WL 4778824, at *6 (finding Doyle “inapposite” because 

“the Ninth Circuit was not asked to make a determination between an amendment and a 

clarification, which is the issue presented in this case”).

Accordingly, the Court considers Plaintiffs’ clarifications in the FAC and concludes that 

CAFA’s minimal diversity requirement has not been met in this action because both Plaintiffs and 

Defendants are citizens of Missouri. See FAC ¶¶ 1-3, 25. CAFA, therefore, cannot serve as a 

basis for this Court’s subject matter jurisdiction. See Weight, 29 F. Supp. 3d at 1292.

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B. Federal Question Jurisdiction Under HIPAA

“Absent diversity of citizenship, federal-question jurisdiction is required.” Caterpillar, 

482 U.S. at 392. Federal question jurisdiction is governed by 28 U.S.C. § 1331, which provides 

that federal courts have original jurisdiction over civil actions “arising under the Constitution, 

laws, or treaties of the United States.” Federal question jurisdiction “is determined (and must 

exist) as of the time the complaint is filed and removal is effected.” Strotek Corp. v. Air Transp. 

Ass’n of Am., 300 F.3d 1129, 1131 (9th Cir. 2002). Removal pursuant to § 1331 is governed by 

the “well-pleaded complaint rule,” which provides that federal question jurisdiction exists only 

when “a federal question is presented on the face of plaintiff’s properly pleaded complaint.” 

Caterpillar, 482 U.S. at 392.

“[I]n certain cases,” the Supreme Court has explained, “federal-question jurisdiction will 

lie over state-law claims that implicate significant federal issues.” Grable & Sons Metal Prods., 

Inc. v. Darue Eng’g & Mfg., 545 U.S. 308, 312 (2005). Under Grable, a federal court may 

exercise jurisdiction over a state-law claim only if (1) the action necessarily raises a federal issue 

that is (2) disputed and (3) substantial, and if (4) the court may entertain the case without 

disturbing the congressionally approved balance of federal and state judicial responsibilities. Id. at 

314. The party seeking to establish jurisdiction must justify a need for “the experience, solicitude, 

and hope of uniformity that a federal forum offers on federal issues.” Id. at 312.

Defendants assert here that Plaintiffs’ “claims raise important federal questions and 

implicate a compelling federal interest that warrants this Court’s exercise of federal question 

jurisdiction.” Removal Notice ¶ 18 (citing Grable, 545 U.S. at 314). The basis for Defendants’ 

assertion is that Plaintiffs’ breach of fiduciary duty claim “turn[s] on the allegation that 

Defendants ‘fail[ed] to institute’ certain ‘safeguards’ purportedly described and required by 

regulations promulgated by federal authorities under HIPAA.” Defs. Supp. Br. at 9 (quoting Pet. 

¶¶ 49-50). Moreover, Defendants assert that “how Anthem and similarly situated companies 

respond to the threat of cyber attacks raises substantial federal questions and implicates a 

compelling federal interest” under Grable because “cyber attacks” are “one of the most serious 

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national security challenges we must confront.” Removal Notice ¶¶ 19, 23 (quoting Exec. Order 

No. 13,636, 78 Fed. Reg. 11,739, 11,739 (Feb. 12, 2013)).

The Court is not persuaded that Grable’s third and fourth prongs have been met. 545 U.S. 

at 314. It is well established that “the mere reference of a federal statute in a pleading will not 

convert a state law claim into a federal cause of action if the federal statute is not a necessary 

element of the state law claim and no preemption exists.” Easton v. Crossland Mortgage Corp., 

114 F.3d 979, 982 (9th Cir. 1997). Plaintiffs’ single reference to HIPAA in a sixty-threeparagraph complaint does not convert Plaintiffs’ state law claim for breach of fiduciary duty into a 

federal cause of action. See Pet. ¶ 48. Indeed, the previous paragraph makes clear that Plaintiffs’ 

claim arises under state law: “Under Missouri common law, Defendants owed and continue to owe 

a fiduciary duty to Plaintiffs and the Class to maintain the privacy of their insurance records and 

medical information contained therein.” Id. ¶ 47 (emphasis added). Although this action resulted 

from a data breach that has had consequences nationwide, at bottom this particular lawsuit is 

between Missouri plaintiffs and Missouri defendants based on alleged violations of Missouri law.

Furthermore, the Ninth Circuit has held post-Grable that “HIPAA itself does not provide 

for a private right of action.” Webb v. Smart Document Solutions, LLC, 499 F.3d 1078, 1082 (9th 

Cir. 2007). “[W]here there is no federal private right of action,” the Ninth Circuit continued, 

federal courts generally “may not entertain a claim that depends on the presence of federal 

question jurisdiction under 28 U.S.C. § 1331.” Id. at 1083 (citing Merrell Dow Pharm. Inc. v. 

Thompson, 478 U.S. 804, 817 (1986)). Thus, allowing federal question jurisdiction based on 

Plaintiffs’ single reference to HIPAA would effect an “end-run around clear precedent precluding 

a private right of action under HIPAA.” Huling v. City of Los Banos, No. 1:11-CV-01797 LJO, 

2012 WL 253251, at *8 (E.D. Cal. Jan. 25, 2012); see also Dickman v. MultiCare Health Sys., No. 

C15-5193 BHS, 2015 WL 3477178, at *3 (W.D. Wash. June 2, 2015) (concluding that “it would 

undermine congressional intent to allow claims for private relief into federal court through a state 

cause of action when a federal private right of action is unavailable” (citing Merrell Dow, 478 

U.S. at 812)).

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Accordingly, the Court concludes that Defendants have not met their burden to show that 

federal question jurisdiction exists over this action.

IV. CONCLUSION

For the foregoing reasons, the Court hereby GRANTS Plaintiffs’ motion to remand the 

case to the Circuit Court of St. Louis City, Missouri.

IT IS SO ORDERED.

Dated: September 9, 2015

______________________________________

LUCY H. KOH

United States District Judge

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