In Anderson v. Wilco Life Ins. Co., 2019 WL 6242199 (11th Cir. Nov. 22, 2019), the Eleventh Circuit reversed the district court’s order remanding to state court a putative class action against a life insurance company. The case had been properly removed under the Class Action Fairness Act (“CAFA”), the appeals court held, because the plaintiff’s request for an order requiring reinstatement of life insurance policies put in controversy the face value of those policies, which far exceeded $5 million.
Anderson filed the action in state court, alleging that Wilco had improperly raised premiums on life insurance policies. She sought to represent a class including all Georgia residents who owned or own Wilco policies with the same cost of insurance (“COI”) language as her policy, and whose rates were increased after December 6, 2012. In addition to money damages, she sought declaratory and injunctive relief requiring Wilco to reverse prior rate increases and to reinstate all life insurance policies that were surrendered or lapsed as a result of the increased premiums. Wilco timely removed the case to federal court. The plaintiff filed a motion to remand, claiming that Wilco could not meet CAFA’s requirement that the amount in controversy exceed $5 million. In response, Wilco submitted declaration testimony from one of the company’s operational managers asserting that the plaintiff’s policy was a “CIUL2” policy; that 581 CIUL2 policies owned by Georgia residents had lapsed or were surrendered since the effective date of the complained-of rate increase; and that the aggregate face value of those 581 policies was over $75 million. The district court granted the motion to remand, holding that (1) the complaint’s request for reinstatement of policies did not put the policies’ face value at issue because it was too speculative to assume that Wilco would have to pay face value on those policies; and (2) Wilco failed to show that the total amount of increased premium exceeded $5 million. Wilco petitioned under 28 U.S.C. § 1453(c) for permission to appeal the remand order, and the Eleventh Circuit granted the petition for interlocutory appeal.
In an opinion written by Judge Hull and joined by Judges Marcus and Grant, the Eleventh Circuit reversed the order of the district court. The court began by noting that “[u]nlike in ordinary cases, there is no presumption against removal in CAFA cases”; that analysis of the amount in controversy “focuses on how much is in controversy at the time of removal, not later”; and that injunctive or declaratory relief is valued, for amount-in-controversy purposes, as “the ‘value of the object of the litigation’ measured from the plaintiff’s perspective.” “While absolute certainty is not required,” the court continued, “‘the value of declaratory or injunctive relief must be sufficiently measurable and certain to satisfy the amount-in-controversy requirement.”
Turning to the facts of the case before it, the court observed that “[t]his Court has long held that when the validity of a life insurance policy is at issue in a case, the face value of the insurance policy is the amount in controversy.” As death is “bound to happen,” a life insurer’s obligation to pay face value on a valid policy is “an ever present-liability.” “Accordingly, where a plaintiff insured seeks equitable relief to restore a lapsed life insurance policy, the continuing validity of the policy is at stake and the face value of the policy is the amount in controversy.” The district court had determined that the aggregate face value of the 581 lapsed policies exceeded $75 million, and the plaintiff had not shown that finding to be clearly erroneous. The plaintiff argued that it was too speculative to assume that Wilco would have to pay benefits under the 581 policies, even if the policies were reinstated. Some policyholders might surrender or fail to maintain their policies in the future, the plaintiff argued, and some policies might mature before the relevant insureds’ deaths (for the plaintiff this would be at age 100). The Court of Appeals rejected these arguments as inconsistent with the principle that amount in controversy is analyzed as of the time of removal: “The problem with this argument is that the amount in controversy for jurisdictional purposes is not subject to increase or decrease based on conjecture as to future events.”
The court also distinguished its prior decision in Mann v. Unum Life Ins. Co. of Am., 505 F. App’x 854 (11th Cir. 2013) (unpublished), noting that the policy in Mann was a long-term care policy that was never terminated, not a life insurance policy the plaintiff sought to reinstate. The fact that the $75 million face value of the 581 policies far exceeded $5 million also bolstered the court’s conclusion: “[E]ven assuming the unlikely outcome that 90% of [the $75 million] would not be collected by class members due to one contingency or another, more than $7.5 million would be at stake.”