On July 19, 2016, U.S. District Court Judge Susan Davis Wigenton, dismissed Florence Hanson’s Complaint against Allstate New Jersey Insurance Company for violating the New Jersey’s Insurance Trade Practices Act, citing a lack of subject matter jurisdiction.

First, a bit of background:

Plaintiff is a resident of New Jersey. [] Defendant is an insurance company with a principal place of business in Bridgewater, New Jersey. [] In 2013, Plaintiff settled a personal injury claim with an Allstate policy holder, and on or about November 20, 2013, executed and forwarded a General Release for the claim to Allstate. [] Allstate paid Plaintiff’s claim on December 9, 2013. [] On December 28, 2015, Plaintiff filed suit in this Court alleging that Allstate failed to pay the claim within a statutorily required ten-day window. Plaintiff amended her Complaint on January 26, 2016, and brings suit on her own behalf and on behalf of “all other similarly situated Allstate New Jersey Insurance Company [ ] policy beneficiaries in the State of New Jersey….”1

New Jersey’s Insurance Trade Practices Act, N.J. Stat. Ann. 17:29B-1, “defin[es], or provid[es] for the determination of, all such practices in this State which constitute unfair methods of competition or unfair or deceptive acts or practices and by prohibiting the trade practices so defined or determined.”2 N.J.A.C. 11:2-17.7 defines unfair claims settlement practices and the rules for prompt investigation and settlement of claims concerning auto damage claims. It includes the following, “[u]nless otherwise provided by law, every insurer shall pay any amount finally agreed upon in settlement of all or part of any claim not later than 10 working days from either the receipt of such agreement by the insurer or the date of the performance by the claimant of any conditions set by such agreement, whichever is later.”3

The Amended Complaint filed by Hanson alleges, among other things, that Allstate, “universally, regularly, and intentionally, fails to comply with the Regulation in that Allstate does not pay settled claims within the mandated ten-working-day period.”4 In Hanson’s case, Allstate took twenty days to issue payment.5

On April 19, 2016, Allstate filed a Motion to Dismiss arguing there is no private cause of action under the Insurance Trades Practices Act and the “only appropriate recourse for a violation of the regulations is to make a complaint to the Department of Banking and Insurance.”6

Before looking to the merits of Plaintiff’s Complaint or Defendant’s Motion, Judge Wigenton, sua sponte, reviewed the court’s jurisdiction:

Under 28 § 1332(d)(10), “an unincorporated association shall be deemed to be a citizen of the State where it has its principal place of business and the State under whose laws it is organized. Here, Defendant’s principal place of business is in Bridgewater, New Jersey. [] Consequently, Defendant is a New Jersey citizen for purposes of diversity jurisdiction.

Parties “who are natural persons are deemed citizens of the state in which they are domiciled, which is typically the state where the person lives.” [] Plaintiff, therefore, is a citizen of New Jersey. [] Plaintiff identifies the proposed class members as “all other similarly situated Allstate New Jersey Insurance Company [ ] policy beneficiaries in the State of New Jersey” and “all other New Jersey policyholders and beneficiaries who settled their claims with Defendant….” [] Technically, under either description, the class members are persons located in New Jersey or New Jersey policyholders who reside in and/or are citizens of New Jersey. Consequently, the parties are not diverse and this Court does not have subject matter jurisdiction over Plaintiff’s claims…7

Judge Wigenton granted the Defendant’s Motion to Dismiss based upon the District Court’s lack of subject matter jurisdiction. While in the footnotes, Judge Wigenton notes that the Plaintiff’s claims would be “unlikely to survive Defendant’s Motion to Dismiss,”8 it provides the reader and next possible Plaintiff with a roadmap of what to plea (or what not to) and how to plead it. Something tells me we’ll see this issue come up again, but for now Allstate skates away.

As always, I’ll leave you with a (mildly) related tune, here’s Melanie with Brand New Key (The Rollerskate Song):

1 Hanson v. Allstate New Jersey Ins. Co., 2:15-cv-08882, 2016 WL 3912025 at 1 (D.N.J. July 19, 2016).
2 N.J. Stat. Ann. 17:29B-1
3 N.J.A.C. 11:2-17.7
4 Hanson v. Allstate New Jersey Ins. Co., First Amended Class Action Complaint, 2:15-cv-08882, 2016 WL 1054016 (D.N.J. January 26, 2016).
5 Id.
6 Hanson v. Allstate New Jersey Ins. Co., Defendant, Allstate New Jersey Insurance Company’s Brief in Support of Motion to Dismiss Plaintiff’s First Amended Class Action Complaint, 2:15-cv-08882, 2016 WL 2940385 (D.N.J. April 19, 2016).
7 Hanson, 2016 WL 3912025 at 2.
8 Id.