Coastal Neurology, Inc. v. State Farm Mutual Automobile Insurance Company , 458 F. App'x 793 ( 2012 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 10-15837 JANUARY 25, 2012
________________________ JOHN LEY
CLERK
D.C. Docket No. 0:10-cv-60354-UU
COASTAL NEUROLOGY, INC.,
individually and on behalf of all others similarly situated,
llllllllllllllllllllllllllllllllllllllll Plaintiff - Appellant,
versus
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,
llllllllllllllllllllllllllllllllllllllll Defendant - Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(January 25, 2012)
Before CARNES and HULL, Circuit Judges, and ROTHSTEIN,* District Judge.
PER CURIAM:
Coastal Neurology, Inc., appeals the district court’s order denying its
*
Honorable Barbara Jacobs Rothstein, United States District Judge for the Western
District of Washington, sitting by designation.
motion for class certification. The district court reasoned that individual issues of
fact would predominate over the general issues of law and fact during the
adjudication of this case, and on that basis determined that Coastal failed to satisfy
the predominance, superiority, and typicality requirements of Federal Rule of Civil
Procedure 23. After carefully reviewing the record, reading the briefs, and hearing
oral argument from Coastal and defendant State Farm Mutual Automobile
Insurance Company, we conclude that the district court did not abuse its discretion
in entering the November 30, 2010 order denying class certification and the
resulting December 12, 2010 order dismissing Coastal’s complaint for lack of
subject matter jurisdiction.
The district court applied the correct legal standard from Rule 23. Coastal
contends that the court misapplied Klay v. Humana, Inc., 382 F.3d 1241 (11th Cir.
2004), and our other class certification precedent. We disagree, and in any event,
“as long as the district court’s reasoning stays within the parameters of Rule 23’s
requirements . . ., the district court decision will not be disturbed.” Babineau v.
Fed. Express Corp., 576 F.3d 1183, 1189 (11th Cir. 2009) (quotation marks
omitted). It did.
In performing its Rule 23(b)(3) predominance analysis, the district court did
not err in considering the individualized defenses that State Farm would have to
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the proposed class members’ claims. As this Court noted in the Klay decision,
“[i]n determining whether class or individual issues predominate in a putative
class action suit, we must take into account the claims, defenses, relevant facts,
and applicable substantive law . . . .” Klay, 382 F.3d at 1254 (quotation marks
omitted). Although a district court may not resolve the merits of a case when
ruling on a Rule 23 motion, see Heffner v. Blue Cross and Blue Shield of Ala.,
Inc., 443 F.3d 1330, 1337 (11th Cir. 2006), the court may, and sometimes must,
inquire into the merits in order to determine whether the requirements of Rule 23
have been satisfied, see Valley Drug Co. v. Geneva Pharms., Inc., 350 F.3d 1181,
1188 n.15 (11th Cir. 2003). That kind of limited inquiry is all that the district
court undertook in this case. See also Walmart Stores, Inc. v. Dukes, — U.S. —,
131 S.Ct. 2541, 2551–52 (2011) (“[S]ometimes it may be necessary for the court
to probe behind the pleadings before coming to rest on the certification question . .
. [, which] generally involves considerations that are enmeshed in the factual and
legal issues comprising the plaintiff’s cause of action.” (quotation marks and
citations omitted)); Babineau, 576 F.3d at 1191 (“The predominance inquiry
requires an examination of the claims, defenses, relevant facts, and applicable
substantive law . . . .” (quotation marks omitted)); Heaven v. Trust Bank Co., 118
F.3d 735, 738 (11th Cir. 1997) (stating that the existence of “individual defenses”
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for each case in the proposed class “is a proper factor for consideration” in the
Rule 23(b) analysis); Huff v. N.D. Cass Co. of Ala., 485 F.2d 710, 714 (5th Cir.
1973) (en banc) (“It is inescapable that in some cases there will be overlap
between the demands of [Rule] 23(a) and (b) and the question of whether [a]
plaintiff can succeed on the merits.”).1
We are not persuaded by Coastal’s claim that State Farm waived its right to
assert individualized defenses by not listing them in an “itemized specification”
during the claims review process. Fla. Stat. § 627.734(4)(b). Florida’s Motor
Vehicle No-Fault Law explicitly states that insurers may, “at any time,” assert that
a claim for benefits “was unrelated, was not medically necessary, or was
unreasonable.” Id. Because State Farm can raise those defenses “at any time,”
they were properly considered in the district court’s Rule 23 analysis.
Finally, we reject Coastal’s contention that the district court resolved the
merits of the legal dispute at the heart of this case by using language about
“permissible” and “impermissible” edits. While the district court’s language was
not as precise as it could have been, we are not convinced that the court meant to,
or did, use that language to announce a resolution of the merits. Instead, we think
1
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), we
adopted as binding precedent all decisions of the former Fifth Circuit handed down before
October 1, 1981.
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the district court used that language to differentiate between those cases in which
State Farm might have some individualized, non-edits defense to a claim for
benefits from those cases in which State Farm might not have such a defense. By
doing so, the court recognized that the question of whether individualized, non-
edits defenses could be raised by State Farm was an unresolved issue.
AFFIRMED.
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