Opinion ID: 1192075
Heading Depth: 2
Heading Rank: 2

Heading: Proceedings in the State and Federal Courts

Text: The state court initially dismissed Count I of the complaint (breach of contract) because of insufficient evidence that the rights under the contract had been assigned to Dr. Bemis, but granted leave to amend. Dr. Bemis then filed a first amended complaint that contained the required assignment as an exhibit, but Safeco concedes that, in all other material respects, this pleading was identical to the initial complaint. Later, Dr. Bemis voluntarily dismissed the consumer fraud and unjust enrichment causes of action; only the breach of contract claim remains. On March 25, 2009, long after the effective date of the Class Action Fairness Act of 2005, Pub.L. 109-2, 119 Stat. 4 (2005) (CAFA), Dr. Bemis sought, and was granted, class certification. The state court certified a class of: All persons insured by Safeco property and casualty insurance companies in [14 states] (and their assignee medical providers), who (a) during the period from January 1, 1997, to the date of this Order, submitted one or more claims for payment of medical expenses pursuant to an automobile policy's medical payments coverage; (b) had their claim(s) adjusted and reviewed by computer bill review software incorporating Ingenix MDR modules; and (c) received or were tendered payment in an amount less than the submitted medical expenses due to charges purportedly exceeding the usual, customary or reasonable amount based on the Ingenix MDR modules. S.A. 270. [5]
Safeco then removed the action to the district court. The notice of removal explained that removal was premised on our decision in Knudsen v. Liberty Mutual Insurance Co., 435 F.3d 755 (7th Cir.2006) ( Knudsen II ), which had held that a certified class definition that adds new claims which do not relate back to the original complaint may commence a new action for purposes of removal jurisdiction under CAFA. Dr. Bemis moved to remand, maintaining that no new action was commenced because the class definition related back to the initial complaint. He contended that the original complaint had provided notice that the claims were based on Safeco's role in adjusting the policies of the Safeco affiliates. The district court granted the motion to remand. Noting that CAFA's grant of subject matter jurisdiction is available only for actions commenced after CAFA's effective date, February 18, 2005, the district court concluded that it lacked subject matter jurisdiction; in its view, the certified class definition related back to the pre-CAFA complaint. Applying Illinois' relation-back rule, 735 ILCS 5/2-616(b), the court concluded that SICA and SICI were on notice that Dr. Bemis intended to hold them liable for their role in the adjustment of claims based on the policies of affiliate companies prior to the effective date of CAFA. In ruling that the new claims commenced by the class certification related back to the original pre-CAFA complaint, the court pointed to the language of the complaint and to several instances in the state court record. The district court concluded that it is disingenuous for [Safeco] to pretend that prior to the state court's grant of class certification [it] had no reason to believe that [Dr. Bemis] intended to try to hold [it] liable for the acts of affiliated companies. Bemis v. Safeco Ins. Co. of America, Civil No. 09-315, 2009 WL 1972169, at  (S.D.Ill. July 8, 2009). Accordingly, the district court remanded the action to the state court. Safeco then sought leave to appeal the district court's remand ruling under 28 U.S.C. § 1453(c).