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Myrick v. Wellpoint, Inc.

United States Court of Appeals, Seventh Circuit

August 19, 2014

BOB MYRICK and CHARLOTTE PHILLIPS, Plaintiffs-Appellants,
v.
WELLPOINT, INC., et al., Defendants-Appellees

Argued January 24, 2014

Petition for certiorari filed at, 01/15/2015

Appeals from the United States District Court for the Southern District of Illinois. No. 10-cv-00357-JPG-SCW -- J. Phil Gilbert, Judge.

For BOB MYRICK, individually and on behalf of all others similarly situated, Plaintiff - Appellant (12-3882, 13-2230): Kenneth T. Goldstein, Attorney, Chicago, IL; Clinton A. Krislov, Attorney, Krislov & Associates, Chicago, IL.

For Wellpoint Incorporated, Unicare National Services Incorporated, Unicare Illinois Services, Incorporated, Unicare Health Insurance Company of The Midwest, Rightchoice Managed Care, Incorporated, Rightchoice Insurance Company, Defendants - Appellees (12-3882, 13-2230): Jerome McDonald, Attorney, Black, Hedin, Ballard, Mcdonald, P.C., Mt. Vernon, IL; Margo Weinstein, Attorney, Miller, Shakman & Beem Llp, Chicago, IL.

For Charlotte Phillips, Plaintiff - Appellant (13-2230): Kenneth T. Goldstein, Attorney, Chicago, IL; Clinton A. Krislov, Attorney, Krislov & Associates, Chicago, IL.

Before BAUER, EASTERBROOK, and WILLIAMS, Circuit Judges.

OPINION

Page 663

Easterbrook, Circuit Judge.

During 2001 the insurance regulators of Illinois permitted WellPoint (through a subsidiary) to acquire RightCHOICE Managed Care, Inc., which offered health insurance through its subsidiary RightCHOICE Insurance Company. WellPoint caused RightCHOICE Insurance to withdraw from the Illinois market in 2002; this cancelled all RightCHOICE policies. WellPoint offered the policyholders costlier UniCare policies as substitutes. Persons who elected not to pay the higher premiums had to shop for policies from different insurers, which usually declined to cover pre-existing conditions. Contending that the cancellation of RightCHOICE policies violated Illinois law, Greg Cima and several others filed suit and asked the district court to certify a class of all former RightCHOICE policyholders. The district court declined, Cima v. WellPoint Health Networks, Inc., 250 F.R.D. 374 (S.D. Ill. 2008), and later entered judgment against plaintiffs on the merits, Cima v. WellPoint Health Networks, Inc., (S.D. Ill. Oct. 22, 2008). No one appealed.

Because Cima had not been certified as a class action, the judgment bound only the named plaintiffs. The law firm behind Cima found another set of former policyholders and filed a new suit, this time in state court, making the same substantive contentions and again proposing certification as a class action. The federal decision

Page 664

not to certify a class did not prevent state courts from reaching a contrary decision, see Smith v. Bayer Corp., 131 S.Ct. 2368, 180 L.Ed.2d 341 (2011), but the federal decision on the merits remained. Defendants removed the suit under 28 U.S.C. § 1453, part of the Class Action Fairness Act. Section 1453 incorporates the requirements of 28 U.S.C. § 1332(d), which makes this suit removable because the proposed class has at least 100 members, the amount in controversy exceeds $5 million, and at least one class member has a citizenship different from at least one defendant.

Plaintiffs asked the district judge to remand the suit under § 1332(d)(4), which says that the court shall " decline to exercise" the jurisdiction created under § 1332(d)(2) if at least two-thirds of the class's members are citizens of the state in which the suit began and at least one defendant from which " significant relief" is sought is a citizen of the same state. It is agreed that the complaint seeks " significant relief" from an Illinois defendant. Plaintiffs observed that the RightCHOICE policy was offered only to persons who represented that they live in Illinois (or, for group policies, to employers who represented that most beneficiaries live in Illinois). The policies were cancelled in 2002, and plaintiffs maintained that, if their former holders left Illinois at the normal rate (the Census Bureau estimates that roughly 2% of the nation's population changes states each year), about 87% of the class would have been Illinois residents when the suit was removed. But the district judge denied the motion to remand. Phillips v. WellPoint, Inc., (S.D. Ill. Nov. 23, 2010). It then again declined to certify a class, Phillips v. WellPoint, Inc., (S.D. Ill. Oct. 15, ...


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