From March to July of 2016, MSP Recovery Law Firm (“MSP Recovery”) reached landmark achievements winning seven favorable orders, against various auto insurers, remanding its cases from federal court back to state court. There were two types of cases overall, removal to federal court based on Plaintiff’s: (1) state law claims and (2) amended complaint under the “revival exception.”
In all seven actions, an enrollee was involved in an accident resulting in injuries arising from the use, maintenance, or operation of a motor vehicle. Ultimately, Plaintiff paid the medical expenses when the defendant auto insurer was supposed to pay and failed to do so. Plaintiff sufficiently alleged in its pleadings that the facts and law supported its authority to bring its state law claims and, particularly in Allstate II, a private cause of action pursuant to 42 U.S.C. § 1395y(b)(3)(A).
The State Law Actions
Plaintiff filed its state law claims in Florida state court, but the defendant auto insurers removed the action. Although removal was timely, they ineffectively argued that Plaintiff’s state law claims were masking a private cause of action pursuant to 42 U.S.C. § 1395y(b)(3)(A) due to the complaints’ references to federal law. However, Plaintiff’s arguments prevailed, since although its standing is based on federal law, it presented no federal law claims.
The federal courts addressed the following, whether: (1) a substantial question of federal law was present in the complaint; (2) the claims were completely preempted by federal law; and (3) there was diversity jurisdiction.
Particularly, the federal courts held that, although “Plaintiff relie[d] on Part C of the Medicare Act to explain why FHCP made conditional payments” on its enrollee’s behalf, the “reference to a federal statute, without more, is insufficient to confer original jurisdiction.” Relying on the Supreme Court case, Grable & Sons Metal Products, Inc. v. Thompson, it explained that Plaintiff’s state law claims did not raise a federal issue that a “federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities.”
Markedly, in Allstate I, the auto insurer relied on Humana v. Reale to justify complete preemption of the state law claims; however, Reale “never  addressed complete preemption, only ordinary preemption, and is[,] therefore[,] unavailing.” While relying on Bolden v. Healthspring of Ala., it explained that “Part C of the Medicare Act does not completely preempt state law.”
Further, only the Liberty Mutual court addressed diversity jurisdiction, whereby the auto insurer conceded that it was lacking. In pertinent part, it stated that “if the attorney’s fees are attributed pro rata among all potential class members . . . the amount in controversy likely would not be met.” Hence, MSP Recovery victoriously established that although Plaintiff references federal law, its state law claims belong in state court.
Amended State Law Actions
In these cases, the defendant auto insurers argued that the “revival exception” created a basis to remove Plaintiff’s amended complaint. The auto insurers “attempt[ed] to circumvent the removal statute by relying on the narrow judicially created exception of revival.” However, the federal courts held, even for a second time in IDS II, that the removal was untimely. The Eleventh Circuit had yet to endorse the “revival exception”; and assuming it did apply, it was inapplicable in Plaintiff’s cases. Therefore, MSP Recovery prevented auto insurers from using the “revival exception” as a second-opportunity to avoid an untimely removal, and solidified seven victories.