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Order Granting Remand Based on Supreme Court Precedent

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On September 23, 2021, the Honorable William H. Orrick, U.S. District Judge for the Northern District of California, issued an Order granting motion to remand based on a century-old principle and Supreme Court precedent, despite the case having been removed under the Class Action Fairness Act (CAFA).

The case, Guthrie v. Transamerica Life Insurance Company (No. 3:21-cv-04688-WHO), was filed in Alameda County Superior Court, asserting three claims.  These claims are all under California’s Unfair Competition Law (UCL), seeking equitable restitution on behalf of Californians who purchased TLIC’s Trendsetter LB individual term life insurance policies who paid for life insurance riders purportedly provided at “no cost.”  Transamerica removed the case to federal court in June 2021 based on CAFA subject matter jurisdiction.

Plaintiffs’ attorneys, FDPK Partners Joe Kravec and Wyatt Lison, and Ben Blakeman of Blakeman Law, moved to remand the case back to the Superior Court of California based on the Ninth Circuit’s recent decision in Sonner v. Premier Nutrition Corp., 971 F.3d 834 (2020).  Sonner held that a federal court does not have jurisdiction over a plaintiff’s UCL claim for restitution when the plaintiffs do not allege they lack an adequate remedy at law after the plaintiffs in that case dismissed their legal claim on the eve of trial.  In opposing Plaintiffs’ motion, Transamerica argued that remand was inappropriate because the Court had subject matter jurisdiction under CAFA,  and that was all it needed to adjudicate the merits of Plaintiffs’ UCL claims.

Plaintiffs’ attorneys used the same rationale stated in Sonner in moving to remand, arguing that federal court lacked equitable jurisdiction over the UCL claim and must remand the matter to state court under long-standing Supreme Court precedent, including Cates v. Allen, 149 U.S. 451 (1893).  After reciting the history of the distinction between actions in law and actions in equity and the United States Constitution, Judge Orrick agreed with Plaintiffs and remanded the case to state court. Judge Orrick commented, “no matter how long ago decided, [Cates] is as binding as any Supreme Court precedent.” He concluded that the Court did not have equitable jurisdiction over the claim and, based on the lack of equitable jurisdiction, ordered that the case could be remanded based on Cates.

If you have any questions regarding whether you were sold life insurance improperly, contact us.

 

 

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