Class-Action Plaintiff Lacks Standing to Challenge Policy Interpretation After Exhaustion of Personal Insurance Benefits

Citing a lack of standing, the Eleventh Circuit threw out an insurance class action that had been pending for several years in A&M Gerber Chiropractic LLC v. GEICO General Insurance Co., 2019 WL 1746869 (11th Cir. Apr. 19, 2019), leaving unsettled an “important issue” related to personal-injury-protection (PIP) benefits under Florida’s Motor Vehicle No-Fault Law.

The named plaintiff, Gerber, purported to represent a class of healthcare providers that had been assigned PIP benefits under an “80/20 policy” subject to varying limits on reimbursement for beneficiaries with or without an “emergency medical condition.” Gerber sought a declaratory judgment—but no damages—to clarify whether the policy at issue required the insurer to pay 100% of certain charges below the applicable limit.

Gerber’s assignor, Carruthers, had not been diagnosed with an emergency medical condition when the case was filed, and it was undisputed that the insurer had already paid more than the applicable policy limits on that particular claim. But despite the absence of any monetary injury with respect to Carruthers, Gerber argued that the proposed class would experience recurring harm in future disputes about the insurer’s responsibility for similar charges.

On appeal from a summary judgment in Gerber’s favor, the Eleventh Circuit remanded with instructions to dismiss for lack of jurisdiction. “[A] case or controversy that satisfies Article III’s standing requirement when a plaintiff is seeking declaratory relief—as opposed to seeking damages for past harm”—requires a “reasonable expectation of future injury.” And “[w]hether and to what extent Gerber might be injured” was “beside the point.” Gerber was suing as an assignee, so its rights turned on “the potential future injury to Carruthers, not to Gerber or other members of the class.” Because the risk that Carruthers would suffer another injury entitling him to PIP benefits under a similar policy with the same insurer was “too contingent to constitute a ‘substantial likelihood’ of future injury,” the court held that Gerber, as his assignee, lacked standing to pursue a declaratory judgment.

Judge Lisa Branch, concurring in part, would have ended the analysis there. But the majority of the panel, in an opinion by District Judge C. Roger Vinson (siting by designation from the Northern District of Florida), further explained that “when insurance benefits are fully exhausted, . . . there is no case or controversy because no money is owed regardless of how the case is ultimately decided.” The majority opinion thus emphasized that because Carruthers had already exhausted his benefits when the case was originally filed—and regardless of the fact that he was later diagnosed with an emergency medical condition—Gerber’s attempt to obtain declaratory relief as “a precursor to a claim for money damages in subsequent cases” did not confer subject-matter jurisdiction on the federal courts.

Posted by Lee Peifer.

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