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Civil Procedure Keyed to Marcus
Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Co.
Citation:
559 U.S. 393 (2010)Facts
Shady Grove Orthopedic Associates provided medical care to a patient who assigned the practice rights to receive payment from the patient’s insurer, Allstate. Allstate paid the claim but allegedly did so late and refused to pay the statutory interest that accrued on the overdue payment. Shady Grove filed a class action in federal court under diversity jurisdiction, seeking to recover unpaid statutory interest on behalf of itself and a class of all others to whom Allstate owed interest on late payments. The amount Shady Grove individually sought was approximately $500, but the aggregate claims of the class exceeded the $5 million threshold for federal jurisdiction under the Class Action Fairness Act. Allstate moved to dismiss the class action, arguing that N.Y. CPLR § 901(b), which prohibits class actions for claims seeking statutory penalties unless specifically authorized, applied in federal court and barred the class action.
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