Lax v. APP of N.M. ED, PLLC

Lax v. APP of N.M. ED, PLLC

Opinion

MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFFS' AMENDED MOTION TO REMAND

This proposed class action case arises from alleged over-billing practices by Lovelace Health System, LLC ("Lovelace") and APP of New Mexico ED, PLLC ("APP"). Plaintiffs are former patients who sought treatment at a Lovelace facility and allege they were overbilled by APP, a company that provides emergency room physician and nurse practitioner staffing for Lovelace [*2]  facilities. Presently before the Court is the parties' dispute over whether the Court should decline jurisdiction under the Class Action Fairness Act's ("CAFA") local controversy exception. Finding that Plaintiffs have met their burden to establish all four elements of the local controversy exception, the Court grants Plaintiffs' Amended Motion to Remand (Doc. 70).

BACKGROUND

Plaintiffs filed a class action complaint against Lovelace and APP in the New Mexico Second Judicial District Court on February 11, 2020. Doc. 1-1. The Complaint brings claims for violations of the New Mexico Unfair Practices Act, conversion, willful breach of contract, unjust enrichment, and civil conspiracy. Id. Plaintiffs' proposed class includes "all New Mexico residents who, beginning four years prior to the filing of this lawsuit, were billed by APP for amounts greater than the in-network amount permitted by their insurance provider for medical services provided at Lovelace facilities." Id. ¶ 93. On March 23, 2020, Defendant APP removed the action to federal court, citing diversity jurisdiction under the CAFA. Doc. 1. Defendant Lovelace consented to removal. Doc. 6.

In response, Plaintiffs filed a motion to [*3]  remand, asserting this case should be remanded to state court because: (1) Defendants have failed to establish that greater than $5 million is in controversy and (2) even assuming more than $5 million is in controversy, the "local controversy exception" mandates that this lawsuit remain in state court. Doc. 25. The Court entered a Memorandum Opinion and Order finding that Defendants had met their burden to show that more than $5 million was in controversy and so remand was not appropriate on that ground. Doc. 39. The Court also found that Plaintiffs failed to meet their burden to show that the local controversy exception applied because they failed to show that greater than two-thirds of the proposed class are citizens of New Mexico. Id. However, the Court took the Motion to Remand under advisement and provided Plaintiffs the opportunity to conduct limited discovery on the question of class citizenship. Id.

Judge Robbenhaar thereafter entered a scheduling order for limited discovery regarding class citizenship. As part of this discovery, each party obtained expert opinions.¹ Doc. 47. Following the limited discovery period, Plaintiffs filed the present Amended Motion to Remand on October [*4]  8, 2021 (Doc. 70), and the parties fully briefed it by November 22, 2021 (Docs. 77, 78, 82). The Court held a hearing on this Motion on January 27, 2022. Doc. 86. Pursuant to 28 U.S.C. § 636(c) and Fed. R. Civ. P. 73(b), the parties have consented to me serving as the presiding judge and entering final judgment. Docs. 9, 14, 15, 16. Supplementing its previous Memorandum Opinion and Order (Doc. 39), the Court now addresses whether this matter should be remanded under the local controversy exception.

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