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Civil Procedure Keyed to Glannon
Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Co.
Citation:559 U.S. 393 (2010)
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Shady Grove provided medical care to Galvez, a third party who was injured in an auto accident. Galvez, who was insured by Allstate, assigned her rights under her insurance policy to Shady Grove. Allstate paid on Shady Grove’s claim, apparently not on time and without interest that accrued on overdue benefits. Shady Grove sued Allstate on behalf of itself and a class of others in federal district court, with jurisdiction based on diversity of citizenship, to recover unpaid statutory interest. The district court dismissed the lawsuit, for lack of jurisdiction, based on the applicability of a New York law that prohibited the use of a class action lawsuit to recover a “penalty.” The court of appeals affirmed, finding no conflict between the New York law and Federal Rule of Civil Procedure 23, which pertains to class action lawsuits. The Supreme Court granted certiorari.
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