Class Claims for Declaratory and Supplemental Relief Remanded to State Court

In Mack v. USAA Casualty Insurance Co., 2021 WL 1572709 (11th Cir. Apr. 22, 2021), the Eleventh Circuit dismissed for lack of an Article III “case or controversy” a putative class action in which the plaintiff sought a declaration that his insurer’s adjustment of total loss claims violates Florida law and money damages as corresponding “supplemental relief.”  

Leroy Mack brought an action against USAA in Florida state court following adjustment of his insurance claim for a totaled vehicle, seeking a declaration that the methodology USAA used to adjust his claim violated Florida law; a declaration that USAA was required to pay dealer fees as part of its settlement of the claim; and damages for unpaid title and license fees. USAA removed the case, and the district court stayed the case pending appraisal under the terms of the insurance policy. Mack appealed that decision, and while the appeal was pending, the parties settled the claim for money damages. After that, the Eleventh Circuit requested supplemental briefing addressing whether Mack had Article III standing to pursue his remaining claims in federal court.

In an opinion written by Judge Brasher and joined by Judges Wilson and Lagoa, the court dismissed the case for lack of subject-matter jurisdiction. USAA, having invoked federal jurisdiction by removing the case, had the burden to establish the existence of a cognizable “case or controversy.” The court “easily dispense[d] with the possibility that Mack has standing for prospective relief,” because his allegation that he and other class members “could reasonably anticipate suffering another total loss in the future” fell short of establishing a “substantial likelihood of future harm.”

Turning to the question of standing to seek retrospective relief, the court held that Mack hadn’t sought any such relief: “We will not construe Mack’s declaratory judgment claims as claims for retrospective relief for the purpose of assessing his standing. . . . Mack chose to frame his claims as seeking prospective relief through requests for declaratory judgments; he specifically chose not to pursue damages for the retrospective harm that he has also arguably alleged.” This was unchanged by the fact that Mack would seek money damages as supplemental relief if his requested declaration were entered: “[T]he possibility of supplemental relief does not convert Mack’s declaratory judgment claims into an effort to remedy past injuries.”

The court distinguished its decision in AA Suncoast Chiropractic Clinic, P.A. v. Progressive American Insurance Co., 938 F.3d 1170 (11th Cir. 2019), which held that a claim seeking an injunction “restoring” insurance coverage limits should not have been certified for class treatment under Fed. R. Civ. P. 23(b)(2) because the requested relief was “not an injunction at all”: “Here, unlike in AA Suncoast, our inquiry is unrelated to whether Mack is entitled to the declaratory relief he seeks. . . . The issue before us now is whether Mack has alleged the type of harm necessary to establish his standing to bring declaratory judgment claims.” Citing the principle that “all doubts about jurisdiction should be resolved in favor of remand to state court,”—a rule open to question, at least in CAFA cases, under Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. 81 (2014)—the court remanded the case with instructions that the unsettled claims be sent back to state court.   

Posted by Valerie Sanders.

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