Lee v. American National Insurance

260 F.3d 997
CourtCourt of Appeals for the Ninth Circuit
DecidedAugust 8, 2001
DocketNo. 99-15846
StatusPublished
Cited by1 cases

This text of 260 F.3d 997 (Lee v. American National Insurance) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lee v. American National Insurance, 260 F.3d 997 (9th Cir. 2001).

Opinions

Opinion by Judge BERZON; Partial Concurrence by Judge KOZINSKI

BERZON, Circuit Judge:

This case presents the question whether, in a diversity action removed from state court, the entire case must be remanded if the plaintiff lacks Article III standing as to one of several defendants. We conclude that the case need not be remanded, and therefore affirm the district court’s denial of plaintiff Howard Lee’s motion to remand his suit, in its entirety, to state court.

I. Background

Howard Lee purchased several life insurance policies for himself and members of his family from American National Insurance Company (“ANI”). In exchange for fixed premium payments for a preset number of years, these policies promised a specific schedule of increasing dividends. According to Lee’s complaint, however, these benefits were never realized. Similar life insurance policies were issued by the American National Life Insurance Company of Texas (“ANTEX”), a wholly owned subsidiary of ANI, but Lee never bought one of these policies.

On March 26, 1997, Lee filed a complaint in California Superior Court on behalf of himself and all other buyers of similar ANI and ANTEX life insurance policies since January 1, 1988. Lee’s complaint alleged that because ANI and AN-TEX sold policies promising dividends they failed to deliver, their marketing practices violated the California Unfair Business Practices Act, Cal. Bus. & Prof. Code §§ 17200 and 17500. Lee also alleged common law causes of action for fraud, breach of the covenant of good faith and fair dealing, negligent misrepresentation, negligence, and unjust enrichment. Asserting that the parties were diverse, ANI and ANTEX promptly removed the case to district court. Lee did not contest the removal.

Over the ensuing months, Lee twice moved unsuccessfully for class certification, each time narrowing the scope of the putative class. At the hearing on Lee’s second motion for class certification, the district court explained that because Lee had not purchased an ANTEX policy, he could not demonstrate that he had suffered an actual injury and therefore could not establish standing to bring suit in federal court. Even though the California unfair business practices statute requires no such [1000]*1000actual injury to pursue a claim in state court, said the district court, Article III of the Constitution “takes priority” in federal court over the California statute’s more liberal standing rules.

Lee then moved to remand the case to state court.1 The crux of Lee’s argument was that because subject matter jurisdiction was lacking over some of his claims, remand of those claims was mandatory under 28 U.S.C. § 1447(c), and that remand of the justiciable claims together with the non-justiciable claims served the interests of judicial economy and convenience.

This motion, too, was denied.2 Although Lee’s claims against ANTEX had not been dismissed, the district court’s ruling on the remand motion was premised on its previous holding that the court lacked jurisdiction under Article III over Lee’s claims against ANTEX. The district court noted that the propriety of removal generally turns upon whether the case is within the district court’s original jurisdiction, that there is original jurisdiction over Lee’s case because there is complete diversity of the parties, and that dismissal of some but not all claims ordinarily does not affect a district court’s original jurisdiction as long as there is jurisdiction over the remaining claims. Dismissal of some claims for lack of Article III standing, the district court reasoned, therefore provides no basis for concluding that removal was improper or that remand of the entire case is appropriate, as long as the remaining claims are within the court’s subject matter jurisdiction and justiciable under Article III.

The district court certified its denial of Lee’s remand motion for interlocutory appeal under 28 U.S.C. § 1292(b), stating its view that the requirements of that section were met.3 In particular, the court acknowledged in its certification order that there was substantial ground for difference of opinion on the question whether the court’s conclusion “that plaintiff has no Article III standing as to two of the removed state law causes of action against one defendant ] requires that the entire case be remanded to state court.” This court agreed that interlocutory appeal was appropriate and granted Lee’s petition for interlocutory review of the district court’s certified order. We therefore have jurisdiction over Lee’s appeal under 28 U.S.C. § 1292(b).

Our jurisdiction under § 1292(b), it is worth noting, is not limited to deciding the precise question the district court certified to us. Rather, we are reviewing the district court’s order refusing to remand the case, and may address any issue fairly included within that order. Yamaha Motor Corp. USA v. Calhoun, 516 U.S. 199, 205, 116 S.Ct. 619, 138 L.Ed.2d 578 (1996). We review de novo the district court’s order denying Lee’s motion to remand. ARCO Envtl. Remediation L.L.C. v. Dept. of Health & Envtl. Quality, 213 F.3d 1108, 1111 (9th Cir.2000).

[1001]*1001II. Discussion

Lee, a California resident, originally filed this action in California Superior Court. Both defendants, ANI and AN-TEX, are Texas corporations whose principal place of business is Texas. The complaint states a claim by Lee for compensatory and punitive damages that will not to a “legal certainty” amount to less than the jurisdictional threshold of $75,000. St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289, 58 S.Ct. 586, 82 L.Ed. 845 (1938). On the face of things, then, the defendants’ removal of this action to the district court was proper. See 28 U.S.C. §§ 1332, 1441.

After removing Lee’s action to federal court, however, the defendants contended that Lee cannot meet federal standing requirements with respect to the claims against ANTEX. Lee now appears to accept that proposition as well, as did the district court, and argues that because he therefore cannot proceed in federal court with certain aspects of his case, the entire case must be remanded.

1. Standing

Although the parties now agree that the plaintiffs lack standing to prosecute the claims stated in the complaint against AN-TEX, the district court never actually dismissed any claims in this case for lack of standing. Instead, the district court ruled on standing in the context of the class action motions and then necessarily assumed, for purposes of the remand motion, that the claims against ANTEX would eventually be dismissed for lack of standing if the case remained in federal court.

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Related

Lee v. American National Insurance Company
260 F.3d 997 (Ninth Circuit, 2001)

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Bluebook (online)
260 F.3d 997, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lee-v-american-national-insurance-ca9-2001.