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Civil Procedure Keyed to Subrin
Shady Grove Orthopedic Associates v. Allstate Insurance Co.
Citation:
559 US 393 (2010)Facts
Plaintiff provided medical care to Sonia Galvez who sustained injuries in a car accident. As partial payment for the medical care, Galvez assigned to Plaintiff her rights to insurance benefits under a policy by Defendant. Although Defendant paid Plaintiff, it failed to do so within the statutorily required time and also refused to pay the statutory interest that had accrued on the late payment. Plaintiff brought a class action against Defendant in the Eastern District of New York under diversity jurisdiction to recover the statutory interest owed to it and similarly situated parties. The district court dismissed the lawsuit for lack of jurisdiction, holding that the statutory interest sought was a penalty and, consequently, New York Civil Practice Law § 901(b) precluded a class action suit in federal court to recover a “penalty” despite FRCP Rule 23 which permits class actions. Plaintiff appealed and the court of appeals affirmed and held that FRCP Rule 23 and § 901(b) addressed different issues and thus did not conflict. The U.S. Supreme Court granted certiorari.
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3m 37sTopic Outline 