Court Opinion

ID: 4030667
Source: CourtListenerOpinion
Date Created: 2016-09-01 17:00:49.080633+00
Date Added: 2024-06-11T14:35:35.117108
License: Public Domain

PRECEDENTIAL
      UNITED STATES COURT OF APPEALS
           FOR THE THIRD CIRCUIT
                _____________

                    No. 15-2080
                   _____________

     AUTO-OWNERS INSURANCE COMPANY

                          v.

            STEVENS & RICCI INC.;
         HYMED GROUP CORPORATION

         HYMED GROUP CORPORATION,
                     Appellant
              _______________

    On Appeal from the United States District Court
       for the Eastern District of Pennsylvania
               (D.C. No. 5-12-cv-07228)
       Magistrate Judge: Hon. Henry S. Perkin
                  _______________

                       Argued
                   January 20, 2016

Before: JORDAN, HARDIMAN, and GREENAWAY, JR.,
                 Circuit Judges.
            (Opinion Filed: September 1, 2016)
                    _______________

Jeffrey A. Berman
David M. Oppenheim [ARGUED]
Anderson & Wanca
3701 Algonquin Road, Suite 500
Rolling Meadows, IL 60008

Phillip A. Bock
Bock & Hatch, LLC
134 N. LaSalle Street, Suite 1000
Chicago, IL 60602

Ann M. Caldwell
Caldwell Law Office, LLC
108 W. Willow Grove Avenue, Suite 300
Philadelphia, PA 19118
      Counsel for Appellant

Robert S. Stickley
Langsam Stevens Silver & Hollaender, LLP
1818 Market Street, Suite 3400
Philadelphia, PA 19103

Timothy P. Tobin [ARGUED]
Gislason & Hunter LLP
701 Xenia Ave. South
Suite 500
Minneapolis, MN 55416
      Counsel for Appellee
                    _______________

                              2
                OPINION OF THE COURT
                    _______________

JORDAN, Circuit Judge.

       In this insurance coverage dispute, Auto-Owners
Insurance Company (“Auto-Owners”) seeks a declaration that
it has no obligation to defend or indemnify its insured,
Stevens & Ricci, Inc. (“Stevens & Ricci”), in connection with
a $2,000,000 judgment entered against Stevens & Ricci as
part of the settlement of a class action lawsuit. In that class
action, the Hymed Group Corporation (“Hymed”) alleged, as
representative of the class, that Stevens & Ricci had violated
the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C.
§ 227, by sending unsolicited fax advertisements. While that
class action was pending, Auto-Owners filed this declaratory
judgment action in the United States District Court for the
Eastern District of Pennsylvania against both Stevens & Ricci
and Hymed.1 Auto-Owners and Hymed filed cross-motions
for summary judgment. In its motion, Auto-Owners argued
that the terms of the insurance policy did not obligate it to
indemnify or defend Stevens & Ricci in the class action;
Hymed argued, to the contrary, that the policy required Auto-
Owners to pay the judgment on behalf of its insured.2 The

      1
        By agreement of the parties, the declaratory judgment
action was heard before a magistrate judge, who was thus
empowered to enter final judgment. 28 U.S.C. § 636(c).
      2
         As more fully explained herein, Hymed, rather than
Stevens & Ricci, ended up making these coverage arguments
because Stevens & Ricci settled its stake in the coverage
dispute in a manner that effectively made Hymed the party

                              3
District Court concluded that the sending of unsolicited fax
advertisements in violation of the TCPA did not fall within
the terms of the insurance policy, and thus granted Auto-
Owners’s motion for summary judgment and denied Hymed’s
cross-motion. Because we agree that the insurance policy
does not cover the judgment in the underlying class action,
we will affirm.

I.    BACKGROUND

       This case began with the improper use of what now
seems an old-fashioned method of communication: fax
machines. Stevens & Ricci was solicited by an advertiser
claiming to have a fax advertising program that complied
with the TCPA. Relying on that representation, Stevens &
Ricci allowed the advertiser to fax thousands of
advertisements to potential customers on its behalf. The
advertiser sent 18,879 unsolicited advertisements by fax in
February 2006.

       Much later, on June 1, 2012, Hymed filed a class
action lawsuit in the United States District Court for the
Eastern District of Pennsylvania against Stevens & Ricci,
claiming that the advertisements actually did violate the
TCPA, see Hymed Grp. Corp. v. Stevens & Ricci, Inc., Civil
Action No. 12-CV-3093 (the “Underlying Action”), which
prohibits the “use [of] any telephone facsimile machine,
computer, or other device to send, to a telephone facsimile
machine, an unsolicited advertisement … .” 47 U.S.C.
§ 227(b)(1)(C). Hymed asserted that it and other class

most interested in securing coverage. See infra at pp. 6-7, 9
n.7.

                             4
members – numbering, per the complaint, “more than 39
other recipients” (J.A. at 545) – had not invited or given
permission to Stevens & Ricci to send the faxes. Hymed’s
complaint further charged that the unsolicited faxes had
damaged the recipients by causing them to waste paper and
toner consumed in the printing process and to lose the use of
their fax machines when the advertisements were being
received. In Hymed’s words, the “junk faxes” had also
interrupted the class members’ “privacy interest in being left
alone.” (J.A. at 549-50.) For relief, Hymed sought actual or
statutory damages, whichever was greater, and an injunction
against future violations. Given the volume of faxes sent, a
finding of liability to the class under the TCPA, with statutory
damages of $500 per fax, 47 U.S.C. § 227(b)(3)(B), could
have resulted in a damage award in the Underlying Action of
$9,439,500, before trebling.3 Such a judgment could have
bankrupted Stevens & Ricci and caused the dissolution of its
business.

       During the time that Stevens & Ricci had the
unsolicited faxes sent to Hymed and other class members, it
was covered by a “Businessowners Insurance Policy” (the
“Policy”) issued by Auto-Owners. (J.A. at 555.) The Policy
obligates Auto-Owners to “pay those sums that the insured
becomes legally obligated to pay as damages because of
‘bodily injury’, ‘property damage’, ‘personal injury’ or
‘advertising injury’ to which this insurance applies.” (J.A. at
563.) The present dispute centers on whether the sending of
unsolicited faxes inflicted two of those four types of injury on

       3
         The TCPA permits trebling of statutory damages if
the defendant acted “willfully or knowingly” in violating the
statute. 47 U.S.C. § 227(b)(3).

                               5
the members of the class: property damage and advertising
injury.

       The term “property damage” is defined in the Policy as
“[p]hysical injury to tangible property, including all resulting
loss of use of that property.” (J.A. at 576.) For “property
damage” to be covered under the Policy, it must be caused by
an “occurrence” (J.A. at 563), which the Policy defines as an
“accident, including continuous or repeated exposure to
substantially the same general harmful conditions” (J.A. at
575). Despite its use of the term, the Policy does not
separately define an “accident,” though it does exclude from
coverage any property damage “expected or intended from
the standpoint of the insured.” (J.A. at 564-65.)

       The Policy defines “advertising injury” as injury
arising out of one or more of the following events:

       a. Oral or written publication of material that
       slanders or libels a person or organization or
       disparages a person’s or organization’s goods,
       products or services;

       b. Oral or written publication of material that
       violates a person’s right of privacy;

       c. Misappropriation of advertising ideas or style
       of doing business; or

       d. Infringement of copyright, title or slogan.

                               6
(J.A. at 573.) To be covered, an “advertising injury” must
also be inflicted “in the course of advertising [the insured’s]
goods, products or services.” (J.A. at 563.)

       Auto-Owners agreed to defend Stevens & Ricci in the
Underlying Action, but reserved its right to later challenge
whether the alleged misconduct (i.e., the sending of
unsolicited faxes) fell within the terms of the insurance
policy’s coverage. In November 2013, Hymed, Stevens &
Ricci, and Auto-Owners reached an agreement to
compromise and settle the Underlying Action. Among other
things, the parties agreed to entry of judgment in favor of the
class, and against Stevens & Ricci, in the amount of
$2,000,000. Hymed and the class also agreed to seek
recovery to satisfy the judgment only from Auto-Owners
under the Policy. On December 4, 2014, the District Court in
the Underlying Action entered an order and final judgment
approving the settlement and entering the judgment against
Stevens & Ricci. In its order, the Court specifically found
that Stevens & Ricci “did not willfully or knowingly violate
the TCPA.” (J.A. at 24.)

       By that time, Auto-Owners had already filed this case
to clarify its obligations under the Policy. In particular, on
December 28, 2012, Auto-Owners filed the present
declaratory judgment action, pursuant to 28 U.S.C. § 2201,
against Stevens & Ricci and Hymed, seeking a declaration
that the Policy did not provide coverage for Hymed’s claims
in the Underlying Action and that Auto-Owners thus did not
owe Stevens & Ricci any duty to defend or indemnify.4 It

       4
        Hymed had previously filed a declaratory judgment
action on the coverage question in the United States District

                              7
filed an amended complaint on January 3, 2013. Stevens &
Ricci never entered an appearance or filed a response.5 Auto-
Owners and Hymed each moved for summary judgment, and
the District Court concluded that the sending of unsolicited
faxes to Hymed and other class members did not cause the
sort of injury that falls within the Policy’s definition of either
“property damage” or “advertising injury.” Accordingly, the
Court granted Auto-Owners’s motion for summary judgment

Court for the Eastern District of Michigan. That case was
dismissed for improper venue, because venue was proper in
the United States District Court for the Eastern District of
Pennsylvania, where the Underlying Action was then
pending. See Hymed Grp. Corp. v. Auto Owners Ins. Co., No.
12-12519, 2012 WL 6642645 (E.D. Mich. Dec. 20, 2012).
On the day that case was dismissed, Hymed filed another
declaratory judgment action, this time in the Western District
of Michigan. That case was then transferred to the Eastern
District of Pennsylvania and consolidated with the instant
case in April 2014 by agreement of the parties. The parties
stipulated that Hymed’s declaratory judgment complaint
would be treated as a counterclaim in the case filed by Auto-
Owners.
       5
         It appears that, despite having been served, Stevens
& Ricci never filed an answer to Auto-Owners’s amended
complaint seeking a declaratory judgment. The District Court
did not issue a default judgment against it, however, opting
instead to dismiss Auto-Owners’s motion for a default
judgment without prejudice to Auto-Owners’s opportunity to
argue later, in its motion for summary judgment, that
declaratory relief should be granted against all defendants,
including the absent Stevens & Ricci.

                                8
and denied Hymed’s cross-motion.            Hymed promptly
appealed.

II.    DISCUSSION

       A.     Jurisdiction

       This is an action under the Declaratory Judgment Act,
28 U.S.C. § 2201. That Act does not itself create an
independent basis for federal jurisdiction but instead provides
a remedy for controversies otherwise properly within the
court’s subject matter jurisdiction. Skelly Oil Co. v. Phillips
Petroleum Co., 339 U.S. 667, 671-72 (1950). In bringing its
action, Auto-Owners invoked the District Court’s diversity
jurisdiction under 28 U.S.C. § 1332, which has two
requirements for the establishment of jurisdiction. First, the
parties must be completely diverse, meaning that “no plaintiff
can be a citizen of the same state as any of the defendants.”
Grand Union Supermarkets of the V.I., Inc. v. H.E. Lockhart
Mgmt., Inc., 316 F.3d 408, 410 (3d Cir. 2003). For
jurisdictional purposes, “a corporation is a citizen of both its
state of incorporation and the state ‘where it has its principal
place of business.’” Johnson v. SmithKline Beecham Corp.,
724 F.3d 337, 347 (3d Cir. 2013) (quoting 28 U.S.C.
§ 1332(c)(1)). Here, there is no dispute that the parties are
completely diverse: Auto-Owners is based and incorporated
in Michigan, while Stevens & Ricci is based and incorporated
in Arizona, and Hymed is based and incorporated in
Pennsylvania.6

       6
        We need not address the citizenship of the various
unnamed members of the class. For one, those unnamed
individuals are not parties to this declaratory judgment action.

                               9
       The second requirement for federal jurisdiction under
the diversity statute is that the “matter in controversy exceeds
the sum or value of $75,000 … .” 28 U.S.C. § 1332(a).
Meeting that requirement here is not as straightforward as it
may first appear. Although Auto-Owners and Hymed are
ultimately fighting over the insurer’s need to pay a
$2,000,000 judgment against its insured, that judgment is
based on the settlement of an underlying class action lawsuit
in which the individual claims of each class member fell well
below the $75,000 amount-in-controversy threshold. In
general, the distinct claims of separate plaintiffs cannot be
aggregated when determining the amount in controversy.
Werwinski v. Ford Motor Co., 286 F.3d 661, 666 (3d Cir.
2002).     Given that anti-aggregation rule, we solicited
supplemental briefing from the parties to address “whether
and how the amount-in-controversy requirement for federal
diversity jurisdiction is met in this case.” 7 Hymed now

Even if this were the Underlying Action, “in a federal class
action only the citizenship of the named class representatives
must be diverse from that of the defendants.” In re Sch.
Asbestos Litig., 921 F.2d 1310, 1317 (3d Cir. 1990).
       7
          We also solicited supplemental briefing on the
question of whether Hymed has proper Article III standing, as
required for jurisdiction, “to participate in an action seeking a
declaration of rights under an insurance contract to which it is
not a party.” On that issue, the parties agree – correctly – that
Hymed does have standing. That standing is rooted in our
previous recognition that, in a declaratory judgment action
concerning the scope of an insurance policy, “the injured
party has an independent right to present its case upon the
ultimate issues, apart from that of the insured, because ‘in

                               10
argues that the District Court’s exercise of diversity
jurisdiction ran afoul of the anti-aggregation rule, and the
Court thus acted without jurisdiction in granting Auto-
Owners’s motion for summary judgment.8

       As the party invoking diversity jurisdiction, Auto-
Owners bears the burden to prove, by a preponderance of the
evidence, that the amount in controversy exceeds $75,000.
Judon v. Travelers Prop. Cas. Co. of Am., 773 F.3d 495, 506-
07 (3d Cir. 2014). But that burden is not especially onerous.
In reviewing the complaint, “the sum claimed by the plaintiff
controls if the claim is apparently made in good faith. It must
appear to a legal certainty that the claim is really for less than
the jurisdictional amount to justify dismissal.” St. Paul

many of the liability insurance cases, the most real dispute is
between the injured third party and the insurance company,
not between the injured and oftentimes impecunious
insured.’” Am. Auto. Ins. Co. v. Murray, 658 F.3d 311, 319
(3d Cir. 2011) (quoting Fed. Kemper Ins. Co. v. Rauscher,
807 F.2d 345, 354 (3d Cir. 1986)).
       8
         It is perhaps not a coincidence that Hymed only
discovered its concern about the District Court’s jurisdiction
after losing in that Court. But, because the amount-in-
controversy issue goes to jurisdiction, it is immaterial that it
only arose on appeal. As we have previously held, “if it
develops that the requisite amount in controversy was never
present, even if that fact is not established until the case is on
appeal, the judgment of the District Court cannot stand.”
Meritcare Inc. v. St. Paul Mercury Ins. Co., 166 F.3d 214,
218 (3d Cir. 1999), abrogated on other grounds by Exxon
Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546 (2005).

                               11
Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-89
(1938). “Accordingly, the question whether a plaintiff’s
claims pass the ‘legal certainty’ standard is a threshold matter
that should involve the court in only minimal scrutiny of the
plaintiff’s claims.” Suber v. Chrysler Corp., 104 F.3d 578,
583 (3d Cir. 1997).

        In making that assessment, “[t]he temporal focus of the
court’s evaluation … is on the time that the complaint was
filed.” Id.; see also Kaufman v. Allstate N.J. Ins. Co., 561
F.3d 144, 152 (3d Cir. 2009) (“[U]nder a long-standing rule,
federal diversity jurisdiction is generally determined based on
the circumstances prevailing at the time the suit was filed.”).
Subsequent events cannot reduce the amount in controversy
so as to deprive the district court of jurisdiction, St. Paul
Mercury Indem., 303 U.S. at 293, nor can later events
increase the amount in controversy and give rise to
jurisdiction that did not properly exist at the time of the
complaint’s filing. For our purposes, that means we assess
whether Auto-Owners met the amount-in-controversy
threshold by considering only the circumstances that existed
in January 2013, when Auto-Owners filed its amended
complaint in this case. Because that was long before the
parties reached their $2,000,000 settlement of the Underlying
Action, we must determine whether the amount in
controversy exceeded $75,000 before the settlement made
clear the value of Hymed’s underlying claims.

       In its amended complaint, Auto-Owners alleged that
the amount in controversy exceeded $75,000. Typically,
“[s]uch a general allegation when not traversed is sufficient,
unless it is qualified by others which so detract from it that
the court must dismiss sua sponte or on defendants’ motion.”

                              12
Gibbs v. Buck, 307 U.S. 66, 72 (1939). Auto-Owners based
its allegation on averments in the then-pending Underlying
Action,9 which claimed that Stevens & Ricci had violated the
TCPA, that statutory damages were $500 per violation, and
that “more than 39 other recipients” had received the faxes
without their permission. (J.A. at 545.) Thus, at a minimum,
Auto-Owners’s potential financial exposure when it filed its
amended complaint was $20,000, i.e., $500 statutory damages
for each of 40 fax recipients. But the complaint in the
Underlying Action also noted that damages could be trebled,
further increasing that minimum to $60,000. Again, that sum
represents the minimum exposure, given trebling, and the
complaint in the Underlying Action specifically noted that
“more than 39” other individuals received the disputed faxes,
with no limitation. (J.A. at 545 (emphasis added).) Using the
statutory measure of damages and considering the potential
for trebling, only eleven additional faxes would be necessary
for damages to exceed $75,000.10 Importantly, the $60,000

      9
           In assessing whether the amended complaint
sufficiently alleged jurisdiction, we may also consider
“documents referenced therein and attached thereto.” Gould
Elecs. Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000).
Here, that includes Hymed’s complaint in the Underlying
Action, as the amended complaint in the instant case
repeatedly relies upon Hymed’s own allegations.
      10
          As it turned out, thousands of unsolicited faxes had
been sent to a like number of recipients, so that the actual
amount of the purported damages at the time the complaint
was filed was plainly adequate, even if not known at the time.
See State Farm Mut. Auto. Ins. Co. v. Powell, 87 F.3d 93, 97
(3d Cir. 1996) (distinguishing between subsequent events that

                              13
minimum does not include the expense Auto-Owners would
certainly incur in providing a legal defense against Hymed’s
class action, as the Policy imposes on Auto-Owners a “duty to
defend” its insured. (J.A. at 563.) That cost of defense in the
Underlying Action, which can fairly be assumed to be well in
excess of the $15,000 difference between $60,000 and the
$75,000 jurisdictional threshold, is properly included in
determining the amount in controversy here. See State Farm
Mut. Auto. Ins. Co. v. Powell, 87 F.3d 93, 98 (3d Cir. 1996)
(“[W]here the underlying instrument or contract itself
provides for their payment, costs and attorneys’ fees must be
considered in determining the jurisdictional amount” (internal
quotation marks omitted).).11

change the amount in controversy and subsequent revelations
that clarify whether the amount in controversy was in fact met
at the time the action was filed, and permitting the latter to be
considered for assessing the “factual reality” underlying
jurisdiction).
       11
          Attorney’s fees do not generally constitute part of
the amount in controversy because the successful party
typically does not collect its attorney’s fees. As an exception
to that rule, however, courts include attorney’s fees in the
amount-in-controversy calculation when, as in this case, their
payment is provided for by the terms of an underlying
contract. See 14AA Charles Alan Wright et al., Federal
Practice & Procedure § 3712 (4th ed. 2016) (“[T]he amount
expended for attorney’s fees are a part of the matter in
controversy for subject matter jurisdiction purposes when
they are provided for by contract … , since these are part of
the liability being enforced. … The same is true when the
action is for indemnification for a prior judgment plus the

                               14
       We have previously recognized that “the amount in
controversy is not measured by the low end of an open-ended
claim, but rather by a reasonable reading of the value of the
rights being litigated.” Angus v. Shiley Inc., 989 F.2d 142,
146 (3d Cir. 1993). Here, in light of the costs that Auto-
Owners would incur if required to defend the Underlying
Action and the plausibility of there being a few additional fax
recipients, we cannot say to a legal certainty that Auto-

attorney’s fees incurred in defending the earlier action.”);
Springstead v. Crawfordsville State Bank, 231 U.S. 541, 541-
42 (1913) (“Could such an attorney’s fee be considered in
determining whether the jurisdictional amount was involved?
We think so. … [T]he moment suit was brought the liability
to pay the fee became a ‘matter in controversy,’ and as such
to be computed in making up the required jurisdictional
amount … .”); see also Farmers Ins. Co. v. McClain, 603
F.2d 821, 823 (10th Cir. 1979) (holding that an insurer’s
potential losses for amount-in-controversy purposes can
include the cost of its defense of its insured in an underlying
suit); Stonewall Ins. Co. v. Lopez, 544 F.2d 198, 199 (5th Cir.
1976) (per curiam) (“The pecuniary value of the obligation to
defend the separate lawsuit is properly considered in
determining the existence of the jurisdictional amount … .”).
Here, Auto-Owners seeks a declaration of its rights under an
insurance policy that provides for both indemnification and
defense. Thus, at the time Auto-Owners filed this declaratory
judgment case, its possible losses were not limited only to the
value of any potential judgment that might have arisen out of
the Underlying Action. Those losses also included the costs it
would incur if required to represent Stevens & Ricci in that
case.

                              15
Owners’s declaratory judgment action was valued at or below
$75,000 when it was filed. We likewise cannot conclude that
the complaint’s allegation that the amount in controversy
exceeded $75,000 was made in bad faith.

        Consistent with that conclusion, Hymed does not argue
that Auto-Owners claimed more than $75,000 in bad faith.12
Instead, it contends that, by adding up the potential damages
owed to each of the various class members, Auto-Owners is
improperly aggregating those claims to cross the
jurisdictional threshold. Again, the “claims of several
plaintiffs, if they are separate and distinct, cannot be
aggregated for purposes of determining the amount in
controversy.” Werwinski, 286 F.3d at 666 (internal quotation
marks omitted).13 Although declaratory judgment actions do
not directly involve the award of monetary damages, “it is
well established that the amount in controversy [in such

       12
          It would be awkward for Hymed to even imply there
was less than good faith, given that, in both of the declaratory
judgment actions it filed in Michigan federal courts, see supra
note 4, it had itself invoked federal diversity jurisdiction and
alleged that the amount in controversy exceeded $75,000.
       13
          The Supreme Court has recognized one limitation on
the anti-aggregation rule, which is inapplicable here. See
Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546
(2005) (holding that the supplemental jurisdiction statute
permits the exercise of diversity jurisdiction over additional
plaintiffs who fail to satisfy the minimum amount-in-
controversy requirement, as long as the other elements of
diversity jurisdiction are present and at least one named
plaintiff does satisfy the amount-in-controversy requirement).

                              16
actions] is measured by the value of the object of the
litigation.” Hunt v. Wash. State Apple Advert. Comm’n, 432
U.S. 333, 347 (1977); see also 14AA Charles Alan Wright et
al., Federal Practice & Procedure § 3708 (4th ed. 2016)
(“With regard to actions seeking declaratory relief, the
amount in controversy is the value of the right or the viability
of the legal claim to be declared, such as a right to
indemnification or a duty to defend.”).

        Hymed argues that the “object of the litigation” here is
resolution of a dispute between the many members of the
class and the insurer, and that Auto-Owners can thus only
satisfy the amount-in-controversy requirement by improperly
aggregating those various claims. To Hymed, “this action
always has been a multi-party dispute between Auto-Owners
and the multiplicity of class claimants.” (Hymed Jan. 8, 2016
Letter Br. at 9.) Unsurprisingly, Auto-Owners disagrees,
viewing the case as a unitary controversy between it and its
insured. Taking that perspective, Auto-Owners argues that,
“in coverage litigation commenced by an insurer, the focus is
on the amount the insurer will owe to its insured or the value
of its coverage obligation.” (Auto-Owners Jan. 4, 2016 Letter
Br. at 1.) Given those two competing positions, we must
decide whether this case is properly viewed as a dispute
between Auto-Owners and the many class members – which
would give rise to aggregation problems – or as a dispute
between Auto-Owners and its insured concerning its overall
obligation to defend and indemnify under the Policy.

                              17
       Although we have never before spoken precedentially
on this question,14 we find persuasive the opinion of the
United States Court of Appeals for the Seventh Circuit in
Meridian Security Insurance Company v. Sadowski, 441 F.3d
536 (7th Cir. 2006) (Easterbrook, J.). There, much like here,
an insurer sought a declaratory judgment against its insured to
avoid any obligation to defend a class action alleging that the
insured had sent unsolicited fax advertisements in violation of
the TCPA. Id. at 537. Also as here, the underlying class
action was still pending at the time the declaratory judgment
action was filed. Id. at 538. In concluding that the district
court indeed had diversity jurisdiction, the Seventh Circuit
rejected the very argument that Hymed now advances.
According to that court, “[the insurer] has not aggregated
multiple parties’ claims. From its perspective there is only
one claim – by its insured, for the sum of defense and
indemnity costs.” Id. at 539. The Seventh Circuit thus held
that “the anti-aggregation rule does not apply … just because
the unitary controversy between these parties reflects the sum
of many smaller controversies. No more need be said on this
subject.” Id. 15

      14
           We have previously concluded, in a pair of non-
precedential opinions, that the district court does have
jurisdiction under such circumstances, though we did not
address the amount-in-controversy requirement in any detail.
Nationwide Mut. Ins. Co. v. David Randall Assocs., Inc., 551
F. App’x 638, 639 n.1 (3d Cir. 2014); St. Paul Fire & Marine
Ins. Co. v. Brother Int’l Corp., 319 F. App’x 121, 124 (3d
Cir. 2009).
      15
         Each case that Hymed cites to the contrary is readily
distinguishable. It primarily relies on two cases – Siding &

                              18
Insulation Co. v. Acuity Mut. Ins. Co., 754 F.3d 367 (6th Cir.
2014), and Travelers Prop. Cas. v. Good, 689 F.3d 714 (7th
Cir. 2012). Although Siding also involved class claims
against an insured based on the TCPA, the declaratory
judgment action in that case was commenced by a class
representative, not the insurer, and that action did not include
the insured. 754 F.3d at 368. The Sixth Circuit, looking at
the case from the perspective of the plaintiff class
representative, dismissed the case for lack of jurisdiction,
holding that the only way the class members could meet their
amount-in-controversy burden was by aggregating their
claims. Id. at 371-72. Here, Auto-Owners commenced the
declaratory judgment action. Following the logic of Siding
and taking the case from the perspective of the plaintiff –
here, the insurer rather than the class – the amount in
controversy is properly regarded as the entire sum Auto-
Owners could owe under the Policy.
       At first glance, Good more closely resembles the
present suit. The insurer in that case filed the declaratory
judgment action against its insured, but did so only after the
settlement of the underlying class action for $16 million.
Good, 689 F.3d at 716-17. That settlement agreement
assigned to the class members all of the insured’s claims
against and rights to payment from the insurer. Id. at 716. As
a result, the indemnity rights that the insurer was litigating
had been functionally parceled by the terms of the settlement,
thus requiring the court to aggregate the insurer’s obligation
to each member of the class to reach the jurisdictional
minimum. The Seventh Circuit declined to do so. And
because it had previously issued Sadowski, the court
distinguished that prior case on the very grounds we also now
rely upon:

                              19
        The decisive difference between this case and
        [Sadowski] is that at the time the insurer filed
        the declaratory judgment action in that case, the
        insured’s arguable right to recover under its
        policy was still completely its own.           No
        assignment had been made. By the time [the
        insurer] filed this action, however, [the insured]
        had already assigned its claims to the members
        of the Good class, and no individual class
        member had a claim for more than $75,000. …
        Once [the insured] made the assignment of
        rights, this was no longer a “unitary
        controversy” between the insurer and its
        insured. It had become a multi-party dispute
        between [the insurer] and thousands of class
        claimants. [Sadowski] is inapposite.
Id. at 718. Here, as in Sadowski, Stevens & Ricci’s right to
recovery had not been divided among the class members at
the time the declaratory judgment complaint was filed. The
subsequent settlement in the Underlying Action did not
revoke the jurisdiction that had been established.
        We recognize that this results in a situation in which
an insurer can invoke federal jurisdiction in a declaratory
judgment action while class members cannot. Echoing that
notion, the Dissent says we are taking an “insurance-company
viewpoint approach” to the amount-in-controversy question.
(Dissent Op. at 10.) But our decision reflects no partiality.
The fact that Auto-Owners can invoke federal jurisdiction
simply follows from application of the amount-in-controversy
requirement and its accompanying anti-aggregation rule. To
Auto-Owners, the amount in controversy exceeds $75,000;
we need not aggregate claims to cross that threshold. To each

                             20
        We agree and now adopt Sadowski’s reasoning as our
own. Viewing this case from the perspective of the insurer at
the time of filing of the declaratory judgment complaint,
Auto-Owners’s quarrel was with Stevens & Ricci regarding
its indemnity obligation under the Policy. The only “amount
in controversy” that the insurer was then concerned with was
its total indemnity and defense obligation; it presumably had
no interest in the way the indemnity sum might later be
divided among the various class members. Its dispute was
thus with its insured, not the class. And its overall liability
(as established above) was not legally certain to fall below the
jurisdictional minimum.

member of the class, the amount in controversy falls short.
Only one party may invoke our diversity jurisdiction because
only that party has the requisite amount at stake. We note,
however, that any concern about one-sidedness should be
mitigated by the Class Action Fairness Act (“CAFA”), 28
U.S.C. § 1332(d), which vests district courts with jurisdiction
over class actions where the aggregate amount in controversy
exceeds $5,000,000 and the parties are minimally diverse. As
a consequence, class action plaintiffs may satisfy the amount-
in-controversy requirement necessary for federal jurisdiction
if their individual claims exceed $75,000 or if the total
aggregate claims of the class exceed $5,000,000. Here, the
aggregate statutory damages of the class, as subsequent
revelations have made clear, see supra note 10, perhaps
exceeded the CAFA threshold. In future cases, if class
members cannot satisfy either amount, they are not then
entirely without any opportunity for declaratory relief; they
just need to proceed in state court.

                              21
       Our dissenting colleague disagrees, and would dismiss
this case for lack of subject-matter jurisdiction. He first
points out that “Hymed, not Stevens & Ricci, Inc., has been
defending the suit from the beginning,” and “Stevens & Ricci
has not so much as entered an appearance in the matter.”
(Dissent Op. at 1-2.) But that is not something we may
consider, because – as already noted – “federal diversity
jurisdiction is generally determined based on the
circumstances prevailing at the time the suit was filed.”
Kaufman, 561 F.3d at 152.           Auto-Owners filed this
declaratory judgment action against both Stevens & Ricci and
Hymed at a time when the Underlying Action was still
pending. The fact that only Hymed is now defending this
case does not alter the circumstances that existed at the time it
was filed.

       Next, the Dissent says there is tension between our
standing jurisprudence, “in which we have stressed that
parties like Hymed have a significant stake” in insurance
coverage actions, and our amount-in-controversy conclusion
that “parties like Hymed cannot assert federal jurisdiction in
declaratory actions seeking similar relief.” (Dissent Op. at 2.)
There is no such tension.            Standing and amount-in-
controversy are two distinct inquiries. Hymed certainly had
standing to participate in this insurance coverage action, see
supra note 7, but that does not alter the $75,000 amount-in-
controversy threshold that it must meet in order for the
dispute to fall within our jurisdiction.

      The Dissent then cites In re Ford Motor Co./Citibank
(South Dakota), N.A., 264 F.3d 952, 958 (9th Cir. 2001) for
the proposition that we should look directly “to Hymed’s
underlying suit to determine the amount in controversy.”

                               22
(Dissent Op. at 6.) But Ford involved multiple plaintiffs who
each sought injunctive relief. 264 F.3d at 955-56. In
dismissing that case, the United States Court of Appeals for
the Ninth Circuit took the same plaintiff-focused approach
that we now take and held that the amount at stake “depend[s]
upon the nature and value of the right asserted” by each
plaintiff. Id. at 959. Our approach here is thus entirely
consistent with Ford.16 The Dissent nonetheless labors to
create an aggregation problem. Indeed, its approach to
determining the amount in controversy in declaratory
judgment cases – to effectively ignore the declaratory
judgment action altogether and look only at the Underlying
Action – is unprecedented.17 We must look to the Underlying

       16
           Despite the Dissent’s charge to the contrary, our
approach is also consistent with our opinion in Packard v.
Provident National Bank, 994 F.2d 1039 (3d Cir. 1993).
Packard involved a claim by various class members against a
bank, and the parties sought to avoid aggregation problems by
arguing that the jurisdictional amount should be measured by
the costs to the bank rather than the damages of each plaintiff.
994 F.2d at 1050. We held that permitting that method of
measurement would create aggregation problems. Id. But
that is not what happened here. In this case, Auto-Owners
filed suit against its one insured and Hymed. Were the case
reversed, Packard might prove relevant. As it stands, the
plaintiff in the declaratory judgment action (Auto-Owners) is
not aggregating claims to meet the amount-in-controversy
requirement.
       17
          Our dissenting colleague takes issue with this
characterization but cites no cases that have ever taken his
view.

                              23
Action to discern the value of the right being litigated here,
but we cannot, and do not, ignore party status when
determining whether the plaintiff in the case before us is
improperly aggregating claims to reach the jurisdictional
threshold.    From Auto-Owners’s perspective, the basic
dispute is one between it and its insured over the scope of
overall insurance coverage. Principles of anti-aggregation
thus remain intact.

        The Dissent goes on to change tack, arguing that “the
total amount potentially owed by Auto-Owners [in the
Underlying Action] also falls short of the $75,000 threshold.”
(Dissent Op. at 6.) On that score, we simply disagree. It is
difficult for us to say to a legal certainty that less than
$75,000 is at stake in this case, where damages from the faxes
alone were known to be at least $60,000, the complaint
specifically said that more individuals received the faxes in
question, and only eleven additional faxes would be necessary
to cross the jurisdictional threshold. In apparent recognition
of those facts, neither party has even raised this argument.
And, of course, subsequent revelations show that, at the time
of the complaint, over 18,000 faxes had actually been sent,
placing a great deal more than $75,000 at issue. See Powell,
87 F.3d at 97; supra note 10. In any event, we are attuned to
the admonition that “the amount in controversy is not
measured by the low end of an open-ended claim, but rather
by a reasonable reading of the value of the rights being
litigated.” Angus v. Shiley Inc., 989 F.2d 142, 146 (3d Cir.
1993). The Supreme Court has likewise instructed that we
may only dismiss if it appears “to a legal certainty that the
claim is really for less than the jurisdictional amount.” St.
Paul Mercury Indem. Co., 303 U.S. at 288-89. We do not
share our dissenting colleague’s certainty.

                             24
       Finally, the Dissent would not take into account
potential attorney’s fees when determining the amount in
controversy here, and faults us for an “unnecessary expansion
of our jurisprudence” on the subject. (Dissent Op. at 8-9.)
Even if we were to set attorney’s fees aside entirely, that
would not change our conclusion that the amount in
controversy exceeds $75,000, for the reasons just set forth.
But we ought not discount those costs. As we have
endeavored to explain, supra note 11, Auto-Owners is
seeking a declaration of its rights and responsibilities with
respect to a contract that requires it to pay its insured’s
defense costs.       Our precedent on the subject is
straightforward: “costs and attorneys’ fees should be
considered part of the amount in controversy for jurisdictional
purposes when they are mandated by underlying instruments
or contracts.” Powell, 87 F.3d at 98.18 Here, the underlying

       18
           Our dissenting colleague says we are “tak[ing]
Powell out of context,” and uses a block quotation from that
case to shed light on its reasoning. (Dissent Op. at 7.) One
could read that block quote, as the Dissent does, as expressing
some doubt about the rule of law discussed in the case. But
that is not so. Powell recognized the common-sense notion
that if the payment of attorney’s fees is provided for by an
underlying contract, then those fees should be considered for
amount-in-controversy purposes. 87 F.3d at 98. The
prevailing party will be awarded those fees, so they are quite
clearly “in controversy.” In support of that proposition, the
Powell Court cited the same two cases, Springstead and
McClain, which we have also cited. See Powell, 87 F.3d at
98; supra note 11. Until today, there was no debate about
that rule. Indeed, after collecting some thirty cases to that
effect, a leading treatise describes the law on this question as

                              25
insurance contract mandates that Auto-Owners pay its
insured’s defense costs, including fees. As the Dissent points
out, Auto-Owners’s duty to defend Steven & Ricci “only
applies to suits that fall within coverage.” (Dissent Op. at 7.)
That is exactly right, which means that the obligation to pay
attorney’s fees rises and falls with the outcome of this
coverage dispute. That obligation is thus an inseparable part
of the “amount in controversy” between Auto-Owners and
Stevens & Ricci. To ignore those costs is to ignore the reality
of what is at stake in this litigation.

“now quite settled.” 14AA Charles Alan Wright et al.,
Federal Practice & Procedure § 3712 (4th ed. 2016).
        The problem we identified in Powell was that a
previous district court opinion on which a party to the case
had relied – Nationwide Mut. Ins. Co. v. Rowles, 818 F. Supp.
852 (E.D. Pa. 1993) – had used that correct rule of law and
applied it in an improper context. In Rowles, the arbitration
provision in the underlying contract provided that the costs of
arbitration would be shared evenly by the parties. Powell, 87
F.3d at 98. Thus, the amount was not “in controversy” at all;
it would be borne equally regardless of the outcome of the
arbitration or litigation. So, when Powell “question[ed] the
reasoning of the district court’s decision in Rowles,” 87 F.3d
at 98, it did not call into doubt a settled rule of law. Instead,
the Powell Court took issue with whether Rowles had
correctly applied that rule of law to the case at hand – a case
in which the underlying contract did not make the payment of
fees depend upon the outcome of the litigation. Here, by
contrast, the insurance coverage dispute also resolves the fee
payment dispute; if the claim is covered, then Auto-Owners
will pay the fees, and vice-versa. The present case thus fits
easily into the settled rule the Powell Court discussed.

                               26
        Accordingly, satisfaction of the amount-in-controversy
requirement in this case does not violate the anti-aggregation
rule, and the District Court had diversity jurisdiction under 28
U.S.C. § 1332.

       B.     Standard of Review

       Both parties moved for summary judgment under Rule
56 of the Federal Rules of Civil Procedure. Summary
judgment is proper when, viewing the evidence in the light
most favorable to the nonmoving party and drawing all
inferences in favor of that party, there is no genuine issue of
material fact and the moving party is entitled to judgment as a
matter of law. Fed. R. Civ. P. 56(a); Appelmans v. City of
Phila., 826 F.2d 214, 216 (3d Cir. 1987). “This standard does
not change when the issue is presented in the context of cross-
motions for summary judgment.” Appelmans, 826 F.2d at
216. When both parties move for summary judgment, “[t]he
court must rule on each party’s motion on an individual and
separate basis, determining, for each side, whether a judgment
may be entered in accordance with the Rule 56 standard.”
10A Charles Alan Wright et al., Federal Practice &
Procedure § 2720 (3d ed. 2016). On appeal, “[w]e exercise
plenary review over an order resolving cross-motions for
summary judgment,” Tristani ex rel. Karnes v. Richman, 652
F.3d 360, 366 (3d Cir. 2011), applying the same standard that
the lower court was obligated to apply under Rule 56,
Smathers v. Multi-Tool, Inc., 298 F.3d 191, 194 (3d Cir.
2002).

                              27
      C.     Analysis

       A federal court sitting in diversity must apply state
substantive law. Chamberlain v. Giampapa, 210 F.3d 154,
158 (3d Cir. 2000). Here, the ultimate merits question is
whether the sending of faxes in the described circumstances
fell under the Policy’s definition of either “property damage”
or “advertising injury,” as a matter of state law.19 But before
reaching that question, we must determine which state’s law
to apply. The parties disagree on that point. Auto-Owners
urges Pennsylvania law, given Pennsylvania’s role as the
forum state for both this declaratory judgment case and the
Underlying Action. Hymed, on the other hand, says that
Arizona law should apply.           It emphasizes the many
connections between the Policy and that state: Stevens &
Ricci is based and incorporated there; the underwriting file on

      19
          Hymed makes no argument concerning the scope of
Auto-Owners’s duty to defend Stevens & Ricci, as distinct
from its duty to indemnify. Hymed argues only that Auto-
Owners must indemnify its insured per the Policy, and thus
pay the $2,000,000 settlement. Subject to the terms of the
insurance policy, an insurer’s duty to defend may be broader
than its duty to indemnify. Kvaerner Metals Div. of Kvaerner
U.S., Inc. v. Commercial Union Ins. Co., 908 A.2d 888, 896
n.7 (Pa. 2006). But we need not consider the extent of Auto-
Owners’s duty to defend its insured given the absence of any
argument on this issue. Albrecht v. Horn, 485 F.3d 103, 113
n.3 (3d Cir. 2007) (“An issue that is not discussed in the
briefs is waived.”). We thus address only the scope of Auto-
Owners’s duty to indemnify under the Policy – that is, its
obligation to pay the $2,000,000 judgment.

                              28
the Policy indicates that the insurance quote was by an
agency based in Tucson; the application for insurance was
submitted to the Auto-Owners branch in Mesa and reviewed
by an underwriter there; and the decision to insure Stevens &
Ricci was made entirely within the Mesa branch. Essentially,
Hymed argues that Arizona law should apply because that is
where the insurance contract was formed.20

        Because the Policy itself did not contain a choice-of-
law provision, to determine which state’s substantive law
applies we “must apply the choice of law rules of the forum
state.” Kruzits v. Okuma Mach. Tool, Inc., 40 F.3d 52, 55 (3d
Cir. 1994) (citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313
U.S. 487, 497 (1941)). As in all applications of state law, our
task “is to predict how the [state] Supreme Court would rule
if it were deciding this case.” Norfolk S. Ry. Co. v. Basell
USA Inc., 512 F.3d 86, 91-92 (3d Cir. 2008). This action was
filed in the Eastern District of Pennsylvania, so we apply
Pennsylvania choice-of-law rules. In contract cases, those
rules are not entirely settled. Before 1964, Pennsylvania
courts applied the law of the place where the contract was
formed (“lex loci contractus”). That stood in contrast to the
rule in tort cases, which required application of the law of the
place where the injury occurred (“lex loci delicti”). In
Griffith v. United Air Lines, Inc., the Pennsylvania Supreme
Court abandoned the “lex loci delicti” rule for torts “in favor
of a more flexible rule which permits analysis of the policies

       20
         Neither party has argued in favor of applying the law
of Michigan, the state where Auto-Owners is based and
where Hymed previously filed two declaratory judgment
actions of its own, see supra note 4. We therefore do not
consider Michigan in our choice-of-law analysis.

                              29
and interests underlying the particular issue before the court.”
203 A.2d 796, 805 (Pa. 1964). The Griffith court did not
address whether its new flexible approach to choice-of-law
questions would also apply to contract claims, thus also
displacing the “lex loci contractus” rule. Nor, in the years
since, has the Supreme Court of Pennsylvania had occasion to
answer that question.

        But we have, twice. Almost 40 years ago, we
“predict[ed] that Pennsylvania w[ould] extend its Griffith
methodology to contract actions.” Melville v. Am. Home
Assurance Co., 584 F.2d 1306, 1312 (3d Cir. 1978). More
recently, in Hammersmith v. TIG Insurance Co., we
thoroughly analyzed subsequent precedent and again
concluded that Pennsylvania would apply Griffith’s flexible
approach to choice-of-law questions in contract cases. 480
F.3d 220, 226-29 (3d Cir. 2007).           In particular, we
emphasized that, in Budtel Associates, LP v. Continental
Casualty Company, the Pennsylvania Superior Court had
concluded “[a]fter careful reflection” that the “spirit and
weight of th[e] Commonwealth’s precedents mandate we
follow the Griffith rule in the contract law context.” Id. at
228 (quoting Budtel Assocs., LP v. Cont’l Cas. Co., 915 A.2d
640, 644 (Pa. Super. Ct. 2006)). Although Hymed argues that
the previous “lex loci contractus” rule should control – and
thus we should apply Arizona law – it cites no intervening
Pennsylvania authority that calls our prediction in
Hammersmith into question. Accordingly, we will continue
to follow our previous prediction and apply Griffith’s flexible
choice-of-law analysis.

      Under the Griffith approach, “the first step in a choice
of law analysis under Pennsylvania law is to determine

                              30
whether a conflict exists between the laws of the competing
states.” Budtel Assocs., 915 A.2d at 643. If there are no
relevant differences between the laws of the two states, the
court need not engage in further choice-of-law analysis, and
may instead refer to the states’ laws interchangeably.
Hammersmith, 480 F.3d at 229-30. To determine whether a
conflict exists, we must decide whether Arizona and
Pennsylvania law disagree on the proper scope of the
coverage applicable here.

        Hymed cites “two significant conflicts” between
Arizona and Pennsylvania substantive law. (Opening Br. at
17.) First, it contends that a basic Pennsylvania principle of
contract interpretation – that courts enforce unambiguous
policy language – does not apply to the interpretation of
insurance contracts under Arizona law. Instead, as Hymed’s
argument goes, Arizona courts interpret insurance contracts
by looking to the “reasonable expectations of the insured.”
(Id. at 18 (internal quotation marks omitted).) According to
Hymed, “in Arizona, even clear and unambiguous boilerplate
language is ineffective if it contravenes the insured’s
reasonable expectations.” (Id.)

       We reject that argument. To begin with, we do not
agree that there is a conflict; both states, with limited
exceptions not applicable here, give dispositive weight to
clear and unambiguous insurance contract language.21 But,

      21
         Pennsylvania and Arizona generally apply clear and
unambiguous language in an insurance contract. See Erie Ins.
Exch. v. Conley, 29 A.3d 389, 392 (Pa. Super. Ct. 2011);
D.M.A.F.B. Fed. Credit Union v. Emp’rs Mut. Liab. Ins. Co.
of Wis., 396 P.2d 20, 23 (Ariz. 1964). Indeed, both states

                             31
recognize that the written policy itself manifests the intention
of the parties. See Madison Constr. Co. v. Harleysville Mut.
Ins. Co., 735 A.2d 100, 106 (Pa. 1999); Fireman’s Fund Ins.
Co. v. New Zealand Ins. Co., 439 P.2d 1020, 1021 (Ariz.
1968). As a narrow exception, Arizona does rely on the
reasonable expectations of the parties to refuse enforcement
of “even unambiguous boilerplate terms in standardized
insurance contracts,” but only in a “limited variety of
situations.” Gordinier v. Aetna Cas. & Sur. Co., 742 P.2d
277, 283 (Ariz. 1987) (emphasis in original). Those limited
situations involve either unambiguous language that is not
sufficiently understandable to a reasonably-intelligent
consumer, unusual terms that emasculate apparent coverage,
or situations where the insurer’s previous conduct created a
mistaken impression of coverage despite clear language to the
contrary. Id. at 283-84. That exception, contrary to Hymed’s
argument, is in line with Pennsylvania law, which also
recognizes and protects the reasonable expectations of the
insured “regardless of the ambiguity, or lack thereof, inherent
in a given set of insurance documents” where policy terms
may not be readily understandable, Collister v. Nationwide
Life Ins. Co., 388 A.2d 1346, 1353 (Pa. 1978), or to protect
the insured from deception or unilateral changes to policy
terms by the insurer, Tonkovic v. State Farm Mut. Auto. Ins.
Co., 521 A.2d 920, 925-26 (Pa. 1987).
        That narrow exception is irrelevant here, however, as
Hymed makes no argument that this case falls into any of
those categories. Instead, Hymed seems to suggest that
Arizona’s law concerning insurance contract interpretation
simply traces the expectations of the insured, and Arizona
courts conclude that an insured has coverage if it reasonably
thinks it has coverage. (See Reply Br. at 11 n.2 (arguing that,

                              32
even if a conflict existed on that broad interpretive principle,
Hymed makes no effort to detail how or why the use of the
“reasonable expectation” test would give rise to a relevant
conflict in the substantive law applicable here. As best we
can tell, Hymed is using the “reasonable expectation” test to
empower it to conduct a fifty-state legal survey and to
advocate that Arizona’s law must be whatever the prevailing
legal theory is across the country since that prevailing law is –
given its popularity – inherently “reasonable.” In Hymed’s
words, “to suggest that its proffered policy interpretation is
consistent with a reasonable insured’s expectations, Auto-
Owners must demonstrate that the interpretation adopted
explicitly or implicitly by courts nationwide is unreasonable.”
(Opening Br. at 18.) That argument misperceives the nature
of our inquiry. When sitting in diversity and conducting a
choice-of-law analysis pursuant to Pennsylvania conflict
principles, our job is only to evaluate any conflict between the
laws of Arizona and Pennsylvania. In its first purported
“conflict,” Hymed makes no argument that those two states’
laws are different in any way that actually changes the
meaning of either of the relevant terms of the Policy:
“property damage” or “advertising injury.” Its argument is
thus not only wrong on the law – the states’ laws do not
conflict in how they interpret insurance contracts – but is also
irrelevant because Hymed fails to connect the purported
conflict to the law we must apply in this case.

under Arizona law, “the reasonable expectation of the insured
is controlling” (original emphasis)).) That would allow the
exception to swallow the rule, would be oddly one-sided, and
is not the law of Arizona.

                               33
       Hymed’s second alleged conflict is more tenable and
relates to differing interpretations of Arizona and
Pennsylvania courts as to the meaning of “property damage.”
The Policy requires that any covered “property damage” be
caused by an “occurrence” (J.A. at 563), which is defined as
an “accident” (J.A. at 575). The Policy does not define the
term “accident,” though it does separately exclude from
coverage any property damage “expected or intended from
the standpoint of the insured.” (J.A. at 565.) Hymed
contends that the two states define an “accident” differently.
Specifically, it says that the two states’ laws are in conflict
over whether an insurance policy that covers “accidents”
would extend to the “unintended consequences of intentional
acts,” in this instance, damage to a fax recipient from an
intentionally-sent fax. (Opening Br. at 19.)

       Hymed argues that “a construction of Pennsylvania
law” results in such damages being excluded from coverage.
(Opening Br. at 19.) We agree. In Donegal Mutual
Insurance Co. v. Baumhammers, the Supreme Court of
Pennsylvania said that, when “accident” is undefined in an
insurance policy, Pennsylvania courts should treat the term as
“refer[ing] to an unexpected and undesirable event occurring
unintentionally ….” 938 A.2d 286, 292 (Pa. 2007).

      [T]he key term in the definition of the
      “accident” is “unexpected” which implies a
      degree of fortuity. An injury therefore is not
      “accidental” if the injury was the natural and
      expected result of the insured’s actions. … See
      also Minnesota Fire and Cas. Co. v. Greenfield,
      855 A.2d 854, 870 (Pa. 2004) (“‘Accident’ has
      been defined in the context of insurance

                              34
       contracts as an event or happening without
       human agency or, if happening through such
       agency, an event which, under circumstances, is
       unusual and not expected by the person to
       whom it happens.”)

Id. (internal citations omitted). That definition comports with
the basic purpose of insurance: “to cover only fortuitous
losses.” United Servs. Auto. Ass’n v. Elitzky, 517 A.2d 982,
986 (Pa. Super. Ct. 1986).

        The intentional conduct of third parties may still be a
covered “accident” under that definition. By way of example,
Baumhammers involved a killing spree perpetrated by the son
of the insured. 938 A.2d at 288. The estates of several of the
victims sued both the son and his parents, alleging, among
other claims, negligence on the part of the parents “in failing
to take possession of [his] gun and/or alert law enforcement
authorities or mental health care providers about [their son’s]
dangerous propensities.” Id. at 291. The parents sought
coverage under their insurance, which covered claims for
bodily injury caused by an “accident.” Id. at 288. The
Supreme Court of Pennsylvania held that, with respect to the
insured parents, the shootings qualified as an “accident”
under the policy. Id. at 293. “The extraordinary shooting
spree embarked upon by [the son] resulting in injuries to [the
victims] cannot be said to be the natural and expected result
of [his parent’s] alleged acts of negligence.” Id. The
“injuries were caused by an event so unexpected, undesigned
and fortuitous as to qualify as accidental within the terms of
the policy.” Id.

                              35
        Here, in contrast, Hymed’s claimed injury is the use of
ink, toner, and time that was caused by the receipt of junk
faxes. Those injuries are the natural and expected result of
the intentional sending of faxes, a far cry from Pennsylvania’s
definition of an “accident.” Though it did not intend injury,
Stevens & Ricci clearly intended for the third-party advertiser
to send the fax advertisements to the members of the class.
Barring a problem with the communication devices, the
sending of faxes necessarily results in the receipt of faxes,
and any sender of a fax knows that its recipient will need to
consume paper and toner and will temporarily lose the use of
its fax line. That does not happen by accident. While the
Supreme Court of Pennsylvania has not addressed whether
unintended damages from faxes sent in violation of the TCPA
constitute an “accident,” we predict that the court would
reject coverage under the “property damage” provision of the
Policy.22

       In its effort to manufacture a conflict, Hymed next
claims that Arizona law would cover its claim as an
“accident.” Unfortunately for Hymed, Arizona law defines
an “accident” much the same way as does Pennsylvania law:

      22
          In reaching that conclusion, we are guided and
persuaded by the extensive analysis of the United States
District Court for the Eastern District of Pennsylvania, which
applied Pennsylvania law in the closely analogous case of
Melrose Hotel Co. v. St. Paul Fire & Marine Insurance Co.,
432 F. Supp. 2d 488 (E.D. Pa. 2006) (rejecting coverage
under “accident” provision of insurance policy when a third-
party vendor sent unsolicited fax advertisements in violation
of the TCPA), aff’d, 503 F.3d 339 (3d Cir. 2007) (judgment
order).

                              36
       [A]n effect which was or should have been
       reasonably anticipated by an insured person to
       be the natural or probable result of his own
       voluntary acts is not accidental. Or to put it in
       the affirmative form, if the result is one which
       in the ordinary course of affairs would not be
       anticipated by a reasonable person to flow from
       his own acts, it is accidental. The test is, what
       effect should the insured, as a reasonable man,
       expect from his own actions under the
       circumstances.

Cal. State Life Ins. Co. v. Fuqua, 10 P.2d 958, 960 (Ariz.
1932); see Lennar Corp. v. Auto-Owners Ins. Co., 151 P.3d
538, 547 (Ariz. Ct. App. 2007) (“Whether an event is
accidental is evaluated from the perspective of the insured. …
[A]n accident is anything that happens or is the result of that
which is unanticipated and takes place without the insured’s
foresight or expectation or intention.” (citations and internal
quotation marks omitted)). Following that definition, as a
matter of Arizona law just as under Pennsylvania law, the use
of ink, toner, and time can be regarded as the natural result of
the intentional sending of faxes.23

       23
         Hymed primarily relies on two cases in its effort to
demonstrate that the unintentional damage from the sending
of the faxes is covered by the Policy as interpreted under
Arizona law – Transamerica Insurance Group v. Meere, 694
P.2d 181 (Ariz. 1984), and Phoenix Control Systems, Inc. v.
Insurance Co. of North America, 796 P.2d 463 (Ariz. 1990).
The question in Transamerica was whether an insurance
contract that excluded intentional injury would cover
damages inflicted by an insured acting in self-defense. The

                              37
Supreme Court of Arizona held that, when an insured acts
properly in self-defense, resulting injury will be covered
because, although “[t]he law presumes he intended the result
which was the natural consequence of his intentional act,”
one acting in self-defense is “confronted with a risk over
which he ha[s] little control.” 694 P.2d at 188-89. The court
thus relied partly on the underlying purpose of insurance:
protecting “against risks that are outside [the insured’s]
control.” Id. at 185. It would be inconsistent with that
purpose to exclude coverage for an insured who is simply
“attempting to avoid a ‘calamity’ which has befallen him.”
Id. at 186. But insurance is not meant to allow an insured to
act wrongfully “with the security of knowing that his
insurance company will ‘pay the piper’ for the damages.” Id.
        Similarly, Phoenix Control involved a situation in
which the insured acted under a claim of right or justification.
There, the insured intended to use copyrighted material, but
did so under a belief “that he had the ‘legal right’ to use the
information because it was in the public domain.” 796 P.2d
at 468-69. That belief “was based on advice of counsel.” Id.
at 469. Following Transamerica, the Supreme Court of
Arizona held that summary judgment in favor of the insurer
was improper because the insured’s subjective intent in using
the materials was a disputed fact. Id. at 469-70. In reaching
that holding, the court noted that, “[b]efore a court may
inquire into the insured’s subjective intent, the facts must
indicate that the insured was provoked, privileged, or justified
in acting.” Id. at 468. Contrary to Hymed’s argument,
Transamerica and Phoenix Control do not require coverage
for all insureds who merely assert that they did not intend the
injury caused. Where no “affirmative claim of [a] privilege”
exists, Transamerica, 694 P.2d at 183, Arizona law demands

                              38
        We conclude that there is no conflict between
Pennsylvania and Arizona law on the question of whether the
damage to the class members is covered under the Policy’s
definition of “property damage.” Under either states’ law,
there is no coverage because the alleged injury was not the
result of an “accident.” It was, instead, the foreseeable result
of the intentional sending of faxes to the class recipients.

       Finally, Hymed argues that coverage is available
because the damage to class members from receipt of the junk
faxes qualifies as “advertising injury” under the Policy.
Because Hymed does not contend that the Arizona definition
of “advertising injury” differs from that of Pennsylvania, we
look to Pennsylvania law to answer that question.24 We again

that an insured be held responsible for the foreseeable results
of his or her actions. Insurance coverage does not insulate an
insured who “claim[s] that he did not intend the precise injury
– in character or magnitude – that in fact occurred.” Id. at
189.
       24
           As previously discussed, Hymed relies on its
misapprehension of Arizona law regarding the “reasonable
expectations of the insured” exception as a way to survey the
nationwide legal landscape and to argue that Arizona law has
incorporated Hymed’s preferred definition of “advertising
injury.” Although Hymed cites law from a number of
jurisdictions to support its argument that “advertising injury”
coverage exists here, it omits any citations from one notable
jurisdiction: Arizona. Given the absence of any proper
argument or even citation to Arizona law, we apply the law of
Pennsylvania.

                              39
conclude, as did the District Court, that the claimed injury
falls outside of the scope of the Policy’s coverage.

       The Policy defines “advertising injury” as, among
other things: “Oral or written publication of material that
violates a person’s right of privacy.” (J.A. at 573.)25
Although the Policy does not define the term “privacy,”
numerous state and federal courts have considered whether
violations of the TCPA are covered by insurance policies that
include similar or identical language to that at issue here. Of
particular note is the decision of the Pennsylvania Superior
Court in Telecommunications Network Design v. Brethren
Mutual Insurance Co. (“Brethren”), which collects cases that
organize the covered “right of privacy” into two broad
categories: the privacy interest in secrecy and the privacy
interest in seclusion. 5 A.3d 331, 335-36 (Pa. Super. Ct.
2010).     Secrecy- based privacy rights protect private
information, while seclusion-based privacy rights protect the
right to be left alone. The TCPA protects only the latter
category of privacy interest, by shielding people from
unsolicited messages. The content of the messages (i.e.,
whether they include private information) is immaterial under
the TCPA. “Congress took aim at unsolicited advertisements,

       25
          The Policy also defines “advertising injury” as:
“Oral or written publication of material that slanders or libels
a person or organization or disparages a person’s or
organization’s      goods,     products       or     services”;
“Misappropriation of advertising ideas or style of doing
business”; and “Infringement of copyright, title or slogan.”
(J.A. at 573.) Hymed does not argue that its damages fall
under any of those three definitions, so we do not address
them, except in the comparative way noted hereafter.

                              40
not the content of those advertisements.” Melrose Hotel Co.
v. St. Paul Fire & Marine Ins. Co., 432 F. Supp. 2d 488, 502
(E.D. Pa. 2006), aff’d, 503 F.3d 339 (3d Cir. 2007) (judgment
order). The sending of unsolicited faxes does not necessarily
result in the dissemination of confidential information.
Rather, “an unsolicited fax intrudes upon the right to be free
from nuisance.” Id. at 501. “Accordingly, the TCPA seeks to
protect privacy interests in seclusion, not secrecy.” Id. That
purpose is consistent with the type of injury that Hymed
alleged in its complaint, saying, “[t]he [Stevens & Ricci]
faxes unlawfully interrupted the … class members’ privacy
interests in being left alone.” (J.A. at 550.)

        The Policy does not cover that injury. Read in context,
the Policy provides coverage only for violations of the
privacy interest in secrecy, and thus does not cover violations
of a right to seclusion. This is amply demonstrated by the
other three offenses that the Policy includes within the
definition of “advertising injury”: “Oral or written publication
of material that slanders or libels a person or organization or
disparages a person’s or organization’s goods, products or
services”; “Misappropriation of advertising ideas or style of
doing business”; and “Infringement of copyright, title or
slogan.” (J.A. at 573.) All three of those offenses – slander,
misappropriation, and infringement – “focus on harm arising
from the content of an advertisement rather than harm arising
from mere receipt of an advertisement.” Auto-Owners Ins.
Co. v. Websolv Computing, Inc., 580 F.3d 543, 551 (7th Cir.
2009) (interpreting an identical “advertising injury” provision
to exclude coverage for the sending of unsolicited faxes).
That content-dependent coverage clarifies the scope of the
Policy’s “advertising injury” provision: it protects against
injuries caused by the improper content of a published

                              41
advertisement.26 The Policy’s protection of the “right of
privacy” is thus logically limited to a privacy interest the
infringement of which depends upon the content of the
advertisements: in other words, the privacy right to secrecy.

       None of the allegations in the Underlying Action relate
in any way to the content of the faxed advertisements. The
faxes caused the alleged damage because they were received
without permission, not because of their content. At no point
did Hymed allege that those unsolicited faxes included
confidential or otherwise secret information about any of the
class members. Because the Policy’s “advertising injury”
deals only with the publication of private information, it
strongly suggests that the injury alleged in the Underlying
Action falls outside of the scope of that protection.

       And what the provision’s context suggests its plain
text confirms. Again, as relevant here, the Policy defines
“advertising injury” to include “[o]ral or written publication
of material that violates a person’s right of privacy.” (J.A. at
573 (emphasis added).) In that definition, the phrase “that
violates a person’s right of privacy” modifies the term
“material.” See Pa. Dep’t of Banking v. NCAS of Del., LLC,

       26
         See Riccio v. Am. Republic Ins. Co., 705 A.2d 422,
426 (Pa. 1997) (“[A]n insurance policy, like every other
written contract, must be read in its entirety and the intent of
the policy is gathered from consideration of the entire
instrument.”); Northway Vill. No. 3, Inc. v. Northway Props.,
Inc., 244 A.2d 47, 50 (Pa. 1968) (“[T]he meaning of words
may be indicated or controlled by those words with which
they are associated. Words are known by the company they
keep.”).

                              42
948 A.2d 752, 760 (Pa. 2008) (“[T]he last antecedent rule …
advises that a proviso usually is construed to apply only to the
provision or clause immediately preceding it.”); Buntz v. Gen.
Am. Life Ins. Co., 7 A.2d 93, 95 (Pa. Super. Ct. 1939)
(applying rule of the last antecedent to the interpretation of an
insurance contract).27 Thus, it must be the “material” itself,
rather than its “publication,” that violates a person’s right of
privacy. See ACS Sys., Inc. v. St. Paul Fire & Marine Ins.
Co., 53 Cal. Rptr. 3d 786, 796 (Cal. Ct. App. 2007)
(construing analogous provision and concluding “that
‘material’ is not only the last antecedent of ‘that’ but is also
its only antecedent”). That “would be the case only if the
material contained confidential information and violated the
victim’s right to secrecy.” State Farm Gen. Ins. Co. v. JT’s
Frames, Inc., 104 Cal. Rptr. 3d 573, 586 (Cal. Ct. App. 2010)
(using the rule of the last antecedent to construe identically-
worded provision). The text of the relevant provision of the
Policy, as well as its broader context, thus compels a content-
dependent view of the privacy interest meant to be protected.

       Of course, our ultimate endeavor is to apply
Pennsylvania law to determine the scope of the Policy’s
“advertising injury” provision. Although the Supreme Court
of Pennsylvania has not addressed that question, the Superior
Court in Brethren interpreted verbatim contract language and
reached the same conclusion as we do here, for largely the

       27
          We recognize that the rule of the last antecedent is
“not an absolute and can assuredly be overcome by other
indicia of meaning ... .” Barnhart v. Thomas, 540 U.S. 20, 26
(2003). But here, those other indicia of meaning – the
surrounding language already described – confirm the rule’s
applicability rather than undermine it.

                               43
reasons we have addressed. Brethren, 5 A.3d at 337. We
regard decisions of an intermediate appellate court as
“indic[ative] of how the state’s highest court might decide the
issue.” McGowan v. Univ. of Scranton, 759 F.2d 287, 291
(3d Cir. 1985) (internal quotation marks omitted). Such
decisions can even constitute “presumptive evidence” of state
law. Nat’l Sur. Corp. v. Midland Bank, 551 F.2d 21, 30 (3d
Cir. 1977). We emphasize that this case raises the exact same
question as did Brethren – the policy language is identical,
the underlying TCPA violation is identical, and the claimed
damages for that violation are identical.28 We thus defer to
the intermediate appellate court’s decision as a well-reasoned
interpretation of Pennsylvania state law.29

      28
          Brethren also represents a validation of the earlier
prediction of state law made by the Eastern District of
Pennsylvania in Melrose Hotel, “which applied Pennsylvania
policy interpretation rules to an insurance policy containing a
nearly identical clause to that in the instant matter and
concluded that there was no duty to defend.” Brethren, 5
A.3d at 336 (citing Melrose Hotel, 432 F. Supp. 2d 488).
      29
         Hymed argues that the Policy’s “advertising injury”
definition “provides coverage for violations of all rights of
privacy.” (Opening Br. at 26.) It does so by contrasting the
Policy’s coverage for “publication of material that violates a
person’s right of privacy” (J.A. at 573 (emphasis added)),
with the “advertising injury” language in Melrose Hotel,
which extended coverage to the act of “[m]aking known to
any person or organization covered material that violates a
person’s right to privacy,” 432 F. Supp. 2d at 491 (emphasis
added). According to Hymed, the “making known to”
formulation makes abundantly clear the content-dependent

                              44
III.   CONCLUSION

       For the foregoing reasons, we will affirm the judgment
of the District Court.

nature of the insurance coverage, whereas the “publishing”
language of the Policy here requires coverage by virtue of the
mere act of sending a fax, regardless of its content. Hymed
finds support for this distinction primarily in a First Circuit
decision applying Massachusetts law. See Cynosure, Inc. v.
St. Paul Fire & Marine Ins. Co., 645 F.3d 1, 3-4 (1st Cir.
2011) (Souter, J., retired). That distinction is unpersuasive as
a matter of Pennsylvania law, however, in light of the
Commonwealth’s definition of “publication” with respect to
claims of invasion of privacy, which requires dissemination to
the public at large. OneBeacon Am. Ins. Co. v. Urban
Outfitters, Inc., 21 F. Supp. 3d 426, 436-37 (E.D. Pa. 2014),
aff’d, 625 F. App’x 177, 180 (3d Cir. 2015). And, given
Brethren’s contrary conclusion interpreting Pennsylvania law,
the First Circuit’s view of Massachusetts law provides scant
support for Hymed’s argument. Were that not enough, we
also note that the Seventh Circuit has twice concluded that the
same “publication” language covers only invasions of the
privacy interest in secrecy. Auto-Owners Ins. Co. v. Websolv
Computing, Inc., 580 F.3d 543, 551 (7th Cir. 2009); Am.
States Ins. Co. v. Capital Assocs. of Jackson Cty., Inc., 392
F.3d 939, 942-43 (7th Cir. 2004), declined to follow by Valley
Forge Ins. Co. v. Swiderski Elecs., Inc., 860 N.E.2d 307, 323
(Ill. 2006).

                              45
GREENAWAY, JR., Circuit Judge, dissenting,

        I would dismiss for lack of subject matter jurisdiction.
In deciding that the amount-in-controversy threshold is
satisfied, the majority adopts the reasoning in Meridian
Security Insurance Company v. Sadowski, 441 F.3d 536, 539
(7th Cir. 2006), to conclude that the rule against aggregation
does not apply to this declaratory judgment action because “at
the time of filing of the declaratory judgment complaint,
Auto-Owners’s quarrel was with Stevens & Ricci regarding
its indemnity obligation under the Policy . . . [and] [i]ts
dispute was thus with its insured, not the class.” Majority Op.
at 21. I write separately because I am unconvinced that this
approach is permissible in light of the anti-aggregation rule,
and believe that, in reaching its conclusion, the majority
obfuscates our jurisprudence in two important areas.

        First, the majority’s view that the instant controversy is
“unitary” is questionable as a practical matter and creates
tension with our previous decisions. Plaintiff-Appellee Auto-
Owners Insurance Company named Appellant Hymed Group
Corporation as a defendant in its declaratory action “in the
hope of attaining a binding judgment against both the insured
and the injured party,” American Automobile Insurance
Company v. Murray, 658 F.3d 311, 319 (3d Cir. 2011);
moreover, Hymed, not Stevens & Ricci, Inc., has been
defending the suit from the beginning. In other words, we
are not presented with a unitary controversy between Auto-
Owners and Stevens & Ricci because, in reality, the presence
of Hymed reflects the fact that a “controversy exist[s]
between the insurance company and the injured [parties].” Id.
at 319.
       It is hard to conceive of what controversy actually
exists between Auto-Owners and Stevens & Ricci given the
fact that Stevens & Ricci has not so much as entered an
appearance in the matter. As Auto-Owners itself states in its
Brief: “Hymed and Auto-Owners are the parties currently
engaged in the ‘real dispute’ that has reached this Court on
appeal . . . and Hymed (and the class members) are the only
ones that have a financial interest in the coverage issue . . . .”
Appellee’s Supp. Br. at 12.

        The notion that insurance coverage disputes occur only
between the insurance company and its insured fits uneasily
with our Article III standing decisions in which we have
stressed that parties like Hymed have a significant stake. See
Murray, 658 F.3d at 319 (explaining that an injured party has
a “particularized interest” in an insurance coverage suit
“because a determination of . . . coverage would dictate its
ability to receive the full benefit of the . . . lawsuit”); see also
Federal Kemper Ins. Co. v. Rauscher, 807 F.2d 345, 354 (3d
Cir. 1986) (“Concluding that the injured party has an
independent, and not a derivative right, to be heard, is not
only jurisprudentially sound, but is also realistic[.]”).

        As the majority notes, the import of its decision is that
parties like Hymed cannot assert federal jurisdiction in
declaratory actions seeking similar relief. In my view, this
retreats from our previous decisions emphasizing the
particularized interest of the injured party. The majority
observes that “[s]tanding and amount-in-controversy are two
distinct inquiries.” Majority Op. at 22. It misses the point.
My uneasiness with the majority’s characterization of
coverage disputes arises from the practical anomaly of the
real party in interest losing part of its stake in the suit.

                                 2
       Further, I believe that the majority’s approach is
essentially a run around the anti-aggregation rule. We have
prohibited measuring the amount-in-controversy by the
defendant’s total cost on the basis that it violates anti-
aggregation principles. In Packard v. Provident National
Bank, 994 F.2d 1039, 1050 (3d Cir. 1993) we stressed that
“allowing the amount in controversy to be measured by the
defendant’s cost would eviscerate Snyder [v. Harris, 394 U.S.
332 (1969)]’s holding that the claims of class members may
not be aggregated in order to meet the jurisdictional
threshold,” and thus declined to do so.

        The majority’s response to this reasoning is that it is
not aggregating but rather assessing the amount-in-
controversy as the total “value of the right being litigated”
from the perspective of Auto-Owners. Majority Op. at 24.
On this point, the majority invokes the plaintiff’s viewpoint
rule, under which the test for determining the amount-in-
controversy relies solely on the value of the benefit to the
plaintiff. In other words, the majority believes that because
the defendant in the underlying action is now the plaintiff, the
reasoning in Packard does not apply.

       But the majority’s approach does not actually elude the
aggregation of class members’ claims. This becomes clear if
we consider courts’ treatment of the “either viewpoint”
approach, under which the amount-in-controversy is based on
the pecuniary result to either party that would be produced by
the judgment. See 14AA Charles A. Wright et al., Federal
Practice and Procedure § 3702.5 (4th ed. 2016).

       Courts addressing the either-viewpoint approach have
declined to adopt the rule in suits involving class actions, for
the simple fact that total cost is the same as aggregation. See

                               3
In re Ford Motor Co./Citibank (South Dakota), N.A., 264
F.3d 952, 958 (9th Cir. 2001). This is exactly what we
explained in Packard: aggregation is not avoided by shifting
perspective or semantics—whether one calls it “total cost” or
“total detriment,” or “value of the right being litigated,” if one
arrives at that total through aggregation of individual claims,
it violates Snyder. Concluding otherwise, we explained,
disturbs long-standing anti-aggregation principles.

        The Ninth Circuit Court of Appeals has made the same
point. In Ford Motor Co., 264 F.3d at 958, class-action
plaintiffs seeking injunctive relief invoked the “either
viewpoint” rule and argued that the amount-in-controversy
should be viewed as the total detriment to the defendant. The
court rejected this approach, because of the “inherent
conflict” between the application of the approach and the
anti-aggregation rule, explaining that “‘total detriment’ is
basically the same thing as aggregation, and . . . where the
equitable relief sought is but a means through which the
individual claims may be satisfied, the ban on aggregation
applies with equal force to the equitable as well as the
monetary relief.” Id. at 959.

      Here, the relief requested is different but the
implications are the same. Auto-Owners asks us to view the
amount-in-controversy as its total detriment on the
presumption that this eludes application of the anti-
aggregation rule. But the “inherent conflict” noted in Ford
does not really disappear simply by assessing the amount-in-
controversy from the plaintiff-insurance company’s
viewpoint. This is because in a declaratory action, the court
looks to the underlying suit to determine the amount in
controversy. See e.g., Jumara v. State Farm Ins. Co., 55 F.3d
873, 877 (3d Cir. 1995) (“[T]he amount in controversy in a

                                4
petition to compel arbitration or appoint an arbitrator is
determined by the underlying cause of action that would be
arbitrated.”).1 That means, regardless of party status in the
declaratory action, the plaintiff’s claim in the underlying suit
still provides the basis from which we calculate the amount in
controversy. Put differently: merely labeling the amount as
the “total amount the insurance company will owe” does not
sidestep the fact that, practically speaking, we are deriving
that amount by aggregating the individual claims of the class
members in the underlying suit.2

       The majority believes that its approach is “consistent”
with Ford. Majority Op. at 23. I disagree. Ford
straightforwardly explained that it would not consider the
total detriment of the defendant in reaching the amount in
controversy because “total detriment” and “aggregation” are
one and the same. Here, the majority concludes that total
detriment and aggregation are not the same simply because

1
       The majority calls this approach unprecedented. But
we have clearly suggested as much in Jumara. Further, the
proposition that we look to the underlying suit to determine
the amount in controversy is apparent as a matter of common
sense.

2
        This is so even if we adopt the fiction that because
declaratory relief is sought, the controversy becomes unitary,
only involving the insurer and its insured. Even viewing this
suit in this way, we do not derive the amount of controversy
out of thin air—rather, we must look to the value of damages
sought in the underlying suit.

                               5
the insurance company is the plaintiff in the declaratory
action. Rather than being consistent with Ford, the majority
skirts the relevant point of Ford through a narrow focus on
party status.

        Thus to calculate the amount-in-controversy, I would
do what our precedents suggest: look to Hymed’s underlying
suit to determine the amount in controversy. In doing so, it is
clear to a legal certainty that the amount-in-controversy is not
met. No single class member’s claim would exceed, or even
come close to, the $75,000 threshold.

       To be sure, the total amount potentially owed by Auto-
Owners also falls short of the $75,000 threshold. The
majority attempts to overcome this problem by tacking onto
the amount the cost of hypothetical attorneys’ fees. I also
depart from this approach. Generally, attorneys’ fees are not
considered a part of the amount-in-controversy. 28 U.S.C. §
1332(a); see also 14AA Charles A. Wright et al., Federal
Practice and Procedure § 3712 (4th ed. 2016). We have
referenced a narrow exception to this rule when “the contracts
at issue called for the payment of attorneys’ fees and costs by
the party breaching the contract.” State Farm Mut. Auto Ins.
Co. v. Powell, 87 F.3d 93, 98 (3d Cir. 1996). The policy
between Auto-Owners and Stevens & Ricci (the “Policy”) is
not an instrument of this sort.

        The majority relies on Powell in concluding that
attorneys’ fees are duly included here, but that case provides
only apparent support. In Powell, we declined to include
arbitration costs in the amount-in-controversy because the
policy at issue did “not specifically impose a duty to pay on
the part of the [insurance company].” Id. Similarly, the
Policy contains no provision specifically imposing on Auto-

                               6
Owners a duty to pay attorneys’ fees and costs. While the
majority points out that the Policy imposes on Auto-Owners a
general “duty to defend,” this duty only applies to suits that
fall within coverage. Thus, it is not an unconditional
requirement from which we could comfortably speculate as to
costs that may be incurred.

      The way the majority presents it, it might appear that
Powell straightforwardly adopts the position it embraces. Not
so. The full text of the language cited by the majority is as
follows:

      As an initial matter, we question the reasoning
      of the district court’s decision in [Nationwide
      Mutual Insurance Company v. Rowles by
      Rowles, 818 F. Supp. 852 (1993)]. In arriving
      at its conclusion, the Rowles court relied upon
      two cases, [Springstead v. Crawfordsville State
      Bank, 231 U.S. 541 (1913)] and [Farmers
      Insurance Company v. McClain, 603 F.3d 821
      (10th Cir. 1979)] which held that costs and
      attorneys’ fees should be considered part of the
      amount in controversy for jurisdictional
      purposes when they are mandated by underlying
      instruments or contracts. In those two cases,
      however, the contracts at issue called for the
      payment of attorneys’ fees and costs by the
      party breaching the contract.

Id. at 98. What should be readily apparent is that the majority
takes Powell out of context. There, we did not hold that
“costs and attorneys’ fees should be considered part of the
amount in controversy for jurisdiction purposes when they are
mandated by underlying instruments or contracts;” we merely

                              7
cited a district court case that made a conclusion to that
effect. The upshot of Powell’s holding is more limited—it is,
where an underlying instrument does not “specifically impose
a duty to pay” fees and costs, such costs are not duly included
in the amount in controversy. Id.

       To be clear, I would agree that where a contract
requires a breaching party to pay attorneys’ fees, those may
be considered part of the amount in controversy—after all, in
those contexts, “the costs [are] essentially additional damages
to be assessed against the party found to have breached the
instrument.” Id. This narrow exception to the general
prohibition does not apply here. Whatever fees and costs
flowed from Auto-Owners’s duty to defend in its subsequent
defense of Stevens & Ricci are entirely forward-looking—and
as the majority opines, “federal diversity jurisdiction is
generally determined based on the circumstances prevailing at
the time the suit was filed.” Majority Op. at 22 (citing
Kaufman v. Allstate N.J. Ins. Co., 561 F.3d 144, 152 (3d Cir.
2009).      And these costs are not “essentially additional
damages” Auto-Owners owes to Stevens & Ricci or vice
versa, especially not as it relates to the declaratory judgment
action. It would be a different scenario if Stevens & Ricci
sued Auto-Owners for breach of the Policy’s duty to defend.
But that is not the situation we are presented with here.

       In sum, the inclusion of attorneys’ fees here is an
unnecessary expansion of our jurisprudence for which the
majority articulates no basis.3 The majority believes that

3
      The majority cites an influential treatise for the
proposition that the law in this area is “quite settled.”
Majority Op. at 25–26 n.18. However, one treatise does not
law make. And, a closer look at the cases collected in that

                              8
those fees are an “inseparable” part of the controversy and to
ignore them is to “ignore the reality of what is at stake in this
litigation.” Majority Op. at 26. But in my view, by including
these fees, the majority ignores the express language of 28
U.S.C. § 1332(a) in the absence of any support from our
Court.

       “It is axiomatic that federal courts are courts of limited
jurisdiction, and as such are under a continuing duty to satisfy
themselves of their jurisdiction before proceeding to the
merits of any case.” Packard, 994 F.2d at 1049 (citations
omitted). Here, I am afraid the majority has “ben[t] over

treatise demonstrates that what is “quite settled” is that where
an underlying contract contains a fee-shifting provision,
attorneys’ fees may be included in the amount-in-controversy,
a point I do not dispute. See 14AA Charles Alan Wright et
al., Federal Practice & Procedure § 3712 (4th ed. 2016).
What is less settled, and has received less circuit attention, is
the context we are presented with here—with only one circuit
sharing the majority’s view and other circuits employing a
similar approach only where the relevant defense or
indemnification occurs before the declaratory suit is brought.
See Stonewall Ins. Co. v. Lopez, 544 F.2d 198, 199 (5th Cir.
1976) (per curiam) (cost of insurer’s prospective defense of
insured provides basis for including attorneys’ fees); S. Ariz.
York Refrigeration Co. v. Bush Mfg. Co., 331 F.2d 1, 18 (9th
Cir. 1964) (attorneys’ fees included when defense has already
occurred and indemnitor refused to defend); Farmers Ins. Co.
v. McClain, 603 F.2d 821, 823 & 823 n.3 (10th Cir. 1979)
(attorneys’ fees included when defense has already occurred).
Far from settled then, the circuit law addressing this particular
question is limited and inconclusive.

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backwards . . . to persuade itself that subject matter
jurisdiction exists.” Travelers Prop. Cas. v. Good, 689 F.3d
714, 718 (7th Cir. 2012).

       Thus, because of the difficult fit between the
majority’s reasoning and our Article III standing
jurisprudence in similar contexts, the tension between the
insurance-company viewpoint approach and the anti-
aggregation rule, and my reservations regarding the inclusion
of the attorneys’ fees to reach the amount-in-controversy, I
am not satisfied of our jurisdiction over this dispute. I would
dismiss the appeal on that ground and therefore respectfully
dissent.

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