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Doe v. Aetna, Inc.

United States District Court, N.D. California

April 4, 2018

JOHN DOE, Plaintiff,
v.
AETNA, INC., Defendant.

          ORDER GRANTING PLAINTIFF'S MOTION TO REMAND DOCKET NO. 18

          EDWARD M. CHEN, UNITED STATES DISTRICT JUDGE.

         Plaintiff John Doe has filed suit against Defendant Aetna, Inc., asserting claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and violation of California Business and Professions Code § 17200. Aetna removed the case from state court to this Court pursuant to diversity jurisdiction. See 28 U.S.C. § 1332. Currently pending before the Court is Doe's motion to remand the action back to state court. Having considered the parties' briefs and accompanying submissions, as well as the oral argument of counsel, the Court hereby GRANTS the motion to remand.

         I. FACTUAL & PROCEDURAL BACKGROUND

         Doe initiated this case against Aetna in state court. Doe's claims are related to the settlement of a separate putative class action that included Doe as a plaintiff. See Compl. ¶¶ 2-4; 28-31. The putative class action concerned an Aetna policy that required enrollees diagnosed with HIV/AIDS to fill their prescriptions for HIV medications by mail order, as opposed to obtaining the medications at their local pharmacies. See Compl. ¶ 1. The policy also made purchases of these medications in local pharmacies "out of network." See Compl. ¶ 1. Ultimately, the putative class action settled. See Compl. ¶ 4. Under the settlement agreement, Aetna was required to send letters, in July 2017, to approximately 12, 000 individual Aetna enrollees nationwide. See Compl. ¶ 6. As Doe alleges in the instant case, Aetna ultimately sent the letters in envelopes that had clear "windows" so large that text within the letter was visible; that text included language disclosing that members had been prescribed "HIV Medications."[1] See Compl. ¶¶ 8-10.

         Subsequently, Doe filed suit against Aetna, asserting that it breached the settlement agreement by sending the letters in the way that it did. See Compl. ¶¶ 43-45. Doe's theory is predicated on the fact that the settlement agreement includes provisions requiring Aetna to comply with relevant state and federal law, see Settlement Agreement ¶ 11, including the California Confidentiality of Medical Information Act ("CMIA") and the Health Insurance Portability and Accountability Act ("HIPAA"). See Compl. ¶ 12. In addition to his claim for breach of contract, Doe asserts a related claim for breach of the implied covenant of good faith and fair dealing and a claim for violation of California Business and Professions Code § 17200. See Compl. ¶¶ 46-47; 51-57. As relief, Doe seeks compensatory damages, equitable relief, injunctive relief, and attorney's fees and other costs. See Compl. at 14 (prayer for relief).

         On December 18, 2017, Aetna removed Doe's case from state court to this Court pursuant to diversity jurisdiction. See 28 U.S.C. § 1332. The parties do not contest that there is complete diversity of citizenship. However, they dispute whether the amount in controversy exceeds $75, 000, as required by § 1332. Doe now moves to remand, arguing that (1) Aetna did not timely remove the case to federal court and (2) there is no diversity jurisdiction because the amount in controversy does not exceed $75, 000.

         II. DISCUSSION

         A. Timeliness of Removal

         A notice of removal shall be filed within thirty days after the receipt of the complaint by the defendant through service or otherwise. See 28 U.S.C. § 1446(b). The Supreme Court has held that the "clock" on the date of removal begins to run on the date formal service was effected. See Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 356 (1999) (finding that faxing a "courtesy copy" of the complaint to one of the defendant company's vice presidents did not trigger the removal period because it did not constitute proper service under applicable state law); see also BigB Auto. Warehouse Distribs., Inc. v. Cooperative Computing, Inc., No. 00-2602, 2000 U.S. Dist. LEXIS 16363, (N.D. Cal. Oct. 31, 2000) (finding that plaintiffs must demonstrate compliance with the requirements of service, and that proof by plaintiffs that defendants actually received a copy of the complaint by a particular date was not sufficient).

         Aetna argues that it was not formally served until November 21, 2017, which thereby makes its removal on December 18, 2017, timely. In support of its position, Aetna notes that the parties initially had a dispute about whether Aetna was properly served on October 25, 2017, which was ultimately resolved when the parties entered into a stipulation - on November 21 - that "Aetna agrees to accept service of the Complaint effective November 21, 2017, " and that "Aetna's responsive pleading is due December 21, 2017." Docket No. 1 (Stip. ¶¶ 1-2).

         The Court finds Aetna's position meritorious. There is no evidence that Aetna was properly served (as Doe contends) on October 25, 2017. For example, there is no evidence that CT Corporation (California), upon whom Doe personally delivered the summons and complaint, is in fact Aetna's authorized agent for service of process. See Neugebauer Decl. ¶¶ 4-5 (testifying that Aetna's agent for service of process is CT Corporation in East Hartford, Connecticut, and that CT Corporation in Los Angeles, California, is not an authorized agent for service of process). Furthermore, the evidence reflects that Doe's mail service on Aetna was deficient in that the mailing was addressed to Aetna and not any specific individual. Serving a corporate defendant by mail at an address outside the state requires a plaintiff to mail the summons to & person to be served on behalf of the corporation, i.e., to one of the individuals specified in Code Civ. Proc, § 416.10. Simply naming the company, instead of an individual, is not sufficient. See Dill v. Berquist Construction Co., 24 Cal.App.4th 1426 (1994) (finding that plaintiffs mailing to corporate defendant did not constitute proper service because plaintiff addressed the mailing to the corporation rather than to any of the individuals enumerated under Code Civ. Proc, § 416.10).

         Moreover, the clear intent of the stipulation was to resolve any dispute about the date of service. Doe contends that the stipulation only extended the date by which Aetna had to respond to the complaint because it said nothing about extending the time to remove. But this argument is unavailing because the full text of the stipulation - reflecting that "Aetna agrees to accept service of the Complaint effective November 21, 2017" - establishes otherwise. Docket No. 1 (Stip. ¶ 1).

         Because Aetna filed its notice of removal on December 18, 2017, within 30 days from the date of service of November 21, 2017, its removal of the case to federal court was timely.

         B. Amount in Controversy

         As noted above, diversity jurisdiction requires, inter alia, that the amount in controversy exceed $75, 000. See Urbino v. Orkin Services of Cal, 726 F.3d 1118, 1121 (9th Cir. 2013). Doe did not allege a specific dollar amount for damages in his complaint. "Where ... 'it is unclear or ambiguous from the face of a state-court complaint whether the requisite amount in controversy is pled, ' the 'removing defendant bears the burden of establishing, by a preponderance of the evidence, that the amount in controversy exceeds' the jurisdictional threshold." Id; see also Guglielmino v. McKee Foods, Inc., 506 F.3d 696, 699 (9th Cir. 2007) (stating the same); cf. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (stating that "[t]he 'strong presumption' against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper").

         In the instant case, Aetna argues that it has met its burden because, per his complaint, Doe seeks as relief compensatory damages, injunctive relief, and attorney's fees, each of which is enough to bring the amount in controversy over $75, 000. As discussed below, the Court does not agree.

         1. Compen ...


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