United States District Court, D. Montana, Missoula Division
THE DEPOT, INC., a Montana Corporation, UNION CLUB BAR, INC., a Montana Corporation, and TRAIL HEAD, INC., a Montana Corporation, on behalf of themselves and all those similarly situated, Plaintiffs,
CARING FOR MONTANANS, INC., F/K/A BLUE CROSS AND BLUE SHIELD OF MONTANA, INC., HEALTH CARE SERVICE CORP., and JOHN DOES I-X, Defendants.
OPINION AND ORDER
W. MOLLOY, DISTRICT JUDGE.
before this Court are Defendants' Motion to Dismiss (Doc.
4) and Plaintiffs' Motion for Remand (Doc. 12). For the
reasons discussed below, this matter is remanded to the
Montana's Fourth Judicial District Court, Missoula
The Depot, Inc., Union Club Bar, Inc., and Trail Head, Inc.
are small Missoula businesses and members of the Montana
Chamber of Commerce. They are also representatives of a
putative class of similarly-situated employers. Plaintiffs
also originally included Ed Wells and Doug Hutcheon,
employees of the business plaintiffs, and representatives of
a putative class of similarly-situated employees. Defendants
Caring for Montanans, Inc., £fc/a Blue Cross and Blue
Shield of Montana, Inc. and Health Care Service Corp. are
health insurance companies that marketed "Chamber
Choices" insurance plans to Plaintiffs through the
Montana Chamber of Commerce. Plaintiffs purchased and
provided their employees with Defendants' "Chamber
Choices" health insurance plans from 2006 until 2014.
Plaintiffs allege, and the Montana Commissioner of Securities
and Insurance found, that Defendants padded "Chamber
Choices" insurance premiums with undisclosed surcharges
used to provide monetary kickbacks to the Montana Chamber of
Commerce. The Commissioner fined Defendants $250, 000.00 for
illegal insurance practices under Montana law.
parallel case involving the same parties and stemming from
the same set of facts, Plaintiffs sued Defendants alleging
violations of the Employee Retirement Income Security Act
("ERISA") and state insurance law. See Depot,
Inc. v. Caring for Montanans, Inc. ("Depot T), 915
F.3d 643 (9th Cir. 2019). The Ninth Circuit affirmed Judge
Christensen's dismissal of the ERISA claims as
unactionable for failure to request equitable remedies.
Depot I, 915 F.3d at 650, 652. However, the Ninth
Circuit reversed the dismissal of state law claims for
failing to comply with Federal Rule of Civil Procedure
9(b)'s particularity requirement for fraud allegations
and allowed Plaintiffs to amend their complaint. Id.
at 668. Defendants petitioned the United States Supreme Court
for a writ of certiorari, which was denied on October 7,
2019. Caring For Montanans, Inc. v. Depot, Inc.,
____s. Ct. ___, 2019 WL 4922669 (Oct. 7, 2019). On
October 23, 2019, Judge Christensen issued an order declining
to exercise supplemental jurisdiction over the remaining
state law claims, see 28 U.S.C. § 1367(c), and
dismissed Depot I without prejudice. (See
Notice, Doc. 24.)
filed this case, Depot II, with the Fourth Judicial
District Court of Montana on June 16, 2016, three days after
they filed the parallel case in Judge Christensen's
court. (Doc. 7.) Plaintiffs explain they filed the parallel
state court case to preserve their claims in case the federal
district court found Plaintiffs' claims could not be
asserted under ERISA. (Doc. 21 at 6.)
3, 2019, Defendants removed that parallel state case to this
Court on the ground that Plaintiffs' Amended Complaint
alleged ERISA violations. (Doc. 1); see 28 U.S.C.
§ 1331. On August 2, 2019, Plaintiffs voluntarily
dismissed the individual employee plaintiffs, which
effectively dismissed all federal law claims. (Doc. 11.)
Plaintiffs filed their notice of dismissal simultaneously
with their motion to remand. (Doc. 12.)
Defendants failed to establish injury in fact sufficient to
confer subject matter jurisdiction at the time of removal,
remand is appropriate. See 28 U.S.C. § 1447(c).
Even if that were not the case, this Court would, as Judge
Christensen has, decline to exercise supplemental
jurisdiction over the remaining state law claims.
See 28 U.S.C. § 1367(c).
seek dismissal of this suit, arguing Plaintiffs failed to
allege injury in their amended complaint and therefore lack
standing to pursue their case under Article III. Plaintiffs
do not disagree with the legal standard under Rule 12(b)(1)
of the Federal Rules of Civil Procedure, but counter that
they have alleged "a very specific injury."
Further, Plaintiffs note Defendants removed this case to
federal court (over Plaintiffs' objection) asserting the
Court has jurisdiction, but now assert the opposite. (Doc. 21
III standing requires plaintiffs to allege they have
suffered, are suffering, or will imminently suffer (1) an
injury in fact (2) caused by the defendant (3) that is likely
to be redressed by an award of the requested relief.
Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016).
The party invoking federal jurisdiction bears the burden of
establishing these three elements. Id. But, contrary
to Defendants' motion, the remedy for a case in which a
plaintiff lacks Article III standing on removal is not
dismissal but remand to the state court, for lack of Article
III standing does not necessarily preclude a plaintiff from
vindicating even a federal right in state court. 28 U.S.C.
§ 1447(c) ("If at any time before final judgment it
appears that the district court lacks subject matter
jurisdiction, the case shall be remanded."; see
Moore v. UPS, No. 18-cv-07600-VC, 2019 WL 2172706, at *2
(N.D. Cal. May 13, 2019) (citing Collier v. SP Plus
Corp., 889 F.3d 894, 897 (7th Cir. 2018)).
because Defendants invoked federal jurisdiction by removing
the case, they have the burden of establishing that all
elements of jurisdiction, including standing, existed at the
time of removal. Defendants admit they have not met this
burden. Further, Plaintiffs objected to Defendants'
removal of this case. Because Defendants have failed to meet
their burden and both parties agree this case should not be
heard in this Court, the proper remedy is to remand the case
to state court. Judicial economy also favors remand as
Defendants' removal followed shortly thereafter by a
claim that this Court lacks subject matter jurisdiction is
precisely the strategy the Seventh Circuit has previously
characterized as a "dubious strategy ... result[ing] in
a significant waste of federal judicial resources, much of
which was avoidable." Collier, 889 F.3d at 897.
the lack of subject matter is dispositive, the Court need not
address the ...