Opinion ID: 2668900
Heading Depth: 3
Heading Rank: 1

Heading: Claim of Allen Feingold

Text: Feingold claims that the District Court erred in dismissing his complaint for lack of standing. Feingold maintains that he has standing pursuant to a partial assignment agreement, which stipulated that Feingold is entitled to forty percent of Quinn’s claim against Liberty Mutual. (App. 16a.) On appeal, Feingold contends that there is no prohibition against the assignment of bad faith claims under Pennsylvania law. Federal courts sitting in diversity apply the substantive law of the state whose law governs the action. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938). Our review of the District Court’s prediction and application of state law is plenary. Clark v. Modern Grp. Ltd., 9 F.3d 321, 327 (3d Cir. 1993). When ascertaining Pennsylvania law, the decisions of the Pennsylvania Supreme Court are the authoritative source. State Farm Mut. Auto. Ins. Co. v. Coviello, 233 F.3d 710, 713 (3d Cir. 2000). In the absence of a controlling decision by the Pennsylvania Supreme Court, “we must predict how it would 4 rule if faced with the issue.” Spence v. ESAB Grp., Inc., 623 F.3d 212, 216 (3d Cir. 2010). We need not repeat the District Court’s comprehensive and well-reasoned analysis that claims under the Pennsylvania’s bad faith statute are not assignable in this context. The Pennsylvania Supreme Court has determined that Pennsylvania law does not “permit the assignment of a cause of action to recover for personal injuries.” Hedlund Mfg. Co., Inc. v. Weiser, Stapler & Spivak, 539 A.2d 357, 359 (Pa. 1988). Contrary to his assertion, Feingold does not belong to the class of plaintiffs allowed to pursue a claim under § 8371. See Ash v. Cont’l Ins. Co., 932 A.2d 877, 882 (Pa. 2007) (explaining that § 8371 “only permits a narrow class of plaintiffs to pursue the bad faith claim against a narrow class of defendants”). Federal courts must apply substantive state law, as interpreted by the state courts, when applying that law in diversity. Federal courts cannot confer broader rights under a state’s law than that state court would itself recognize. Erie, 304 U.S. at 78; see also F. Andrew Hessick, Standing in Diversity, 65 Ala. L. Rev. 417, 418 (2013) (“As has been clear since Erie . . . [f]ederal courts cannot . . . confer broader rights under state law than the state court [itself] recognize[s].”). Therefore, the District Court did not err in granting Liberty Mutual’s motion to dismiss for lack of standing.