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LLC v. Covington Specialty Insurance Co.

United States District Court, D. New Hampshire

March 21, 2019

MSPA Claims 1, LLC
v.
Covington Specialty Insurance Company

          Cecilia H. MacIntyre, Esq. John W.Van Lonkhuyzen, Esq. Paul W. Shaw, Esq. Tawny L. Alvarez, Esq. Ashley Kellgren, Esq. Michael K. Kiernan, Esq. Sarah S. Murdough, Esq.

          MEMORANDUM ORDER

          JOSFEPH N. LAPLANTE UNITED STATES DISTRICT JUDGE

         Whether this Medicare-secondary-payer case should be transferred to the Southern District of Florida turns primarily on the location of the operative facts and convenience of potential witnesses, but is also informed by that district's resolution of a previous lawsuit between these parties. Plaintiff MSPA Claims 1, LLC alleges that defendant Covington Specialty Insurance Company systematically avoided repaying Medicare Advantage Organizations (“MAOs”) for secondary payments as required under the Medicare Secondary Payer Act (“MSP Act”), 42 U.S.C. § 1395y(b)(2)(A). MSPA seeks to represent a nationwide class of MAOs based on a representative claim involving an accident in Florida. MSPA's standing to bring this representative claim depends on whether it was validly assigned the rights of a now-defunct Florida-based MAO. Covington moves under 28 U.S.C. § 1404(a) to transfer the case to the Southern District of Florida. After reviewing the parties' written submissions and conducting oral argument, the court grants Covington's motion to transfer.

         Several private-interest and public-interest factors weigh in favor of transfer, including the important factor of the convenience of potential witnesses. Only MSPA's choice of forum and the relative congestion of the courts weigh against transfer. And MSPA's choice is entitled to lesser weight here because it is bringing a class action, is not a resident of New Hampshire, and previously filed an extremely similar lawsuit against Covington in Florida. Transfer under § 1404(a) is justified.

         I. Applicable legal standard

         “[A] district court may transfer any civil action to any other district where it may have been brought ‘[f]or the convenience of parties and witnesses, in the interest of justice.'” Coady v. Ashcraft & Gerel, 223 F.3d 1, 11 (1st Cir. 2000) (quoting 28 U.S.C. § 1404(a)). “The burden of proof rests with the party seeking transfer; there is a strong presumption in favor of the plaintiff's choice of forum.” Id. at 11.

         “A properly grounded motion to transfer venue is committed to the discretion of the transferor court, which has wide latitude in determining whether to grant it.” Jackson Nat. Life Ins. Co. v. Economou, 557 F.Supp.2d 216, 220 (D.N.H. 2008) (citing Auto Europe, LLC v. Conn. Indem. Co., 321 F.3d 60, 64 (1st Cir. 2003)).

         II. Background

         MSPA is a Florida limited liability company with its principal place of business in Miami, Florida.[1] Covington is a New Hampshire-registered insurance company with a principal place of business in New Hampshire and an administrative office in Atlanta, Georgia.[2]

         MSPA alleges that Covington has repeatedly failed to make payments required by the MSP Act. It alleges that the Act requires Covington to reimburse MAOs for accident-related expenses paid out to enrollees in the MAOs' Medicare Advantage health plans if those enrollees were also covered by a Covington no-fault insurance policy.[3] MSPA brings a nationwide class action against Covington on behalf of harmed MAOs.[4]

         MSPA outlines a “representative claim” against Covington arising from an accident in Florida.[5] MSPA alleges that the injured party was both enrolled in a Medicare Advantage plan administered by a now-defunct MAO, Florida Health Care Plus (“FHCP”), and covered by a Covington-issued policy on the premises where the accident occurred.[6] FHCP paid medical expenses to the injured party, but MSPA argues that Covington was responsible for these expenses under the MSP Act.[7]

         MSPA claims it is the assignee of FHCP.[8] FHCP assigned certain recovery rights to La Ley Recovery, Systems, Inc.[9] La Ley in turn purported to assign rights to MSPA.[10]

         The Florida Department of Financial Services was appointed receiver of FHCP.[11] The validity and scope of the purported assignments to MSPA depend in part upon a settlement agreement between the Department of Financial Services, La Ley, MSPA, and other related companies.[12]

         MSPA previously brought an extremely similar lawsuit against Covington that was removed to the Southern District of Florida. MSPA Claims 1, LLC v. Covington Specialty Ins. Co., 212 F.Supp.3d 1250 (S.D. Fla. 2016).[13] That case was dismissed for lack of standing, but the dismissal turned in part on the fact that standing is determined as of the time when a complaint is filed. Id. at 1257-58. The complaint in that case was filed before the settlement agreement was entered, and the court did not decide whether that agreement would give MSPA standing in a new lawsuit. Id. MSPA argues here that it has standing as a result of the settlement agreement.[14]

         Covington moves to transfer this action to the Southern District of Florida, Miami Division.[15] In addition to the previous case between these parties, Covington claims that MSPA and related entities have brought numerous other lawsuits involving similar claims against other insurers in the Middle or Southern Districts of Florida, many of which remain pending.[16]

         III. Analysis

         The parties agree that this case “may have been brought” in the proposed transferee district. See 28 U.S.C. § 1404(a). Indeed, MSPA previously filed suit against Covington and the case was removed to the Southern District of Florida. MSPA Claims 1, 212 F.Supp.3d 1250 (S.D. Fla. 2016).

         Transfer therefore turns on whether it would promote “the convenience of parties and witnesses, in the interest of justice, ” 28 U.S.C. § 1404(a), which is assessed by weighing private-interest and public-interest factors. Jackson, 557 F.Supp.2d at 220. The private-interest factors are:

[T]he plaintiff's choice of forum; the location of the operative events in the case; the convenience of the parties; the convenience of the witnesses; the cost of obtaining witnesses; the location of counsel; the ability to compel the attendance of witnesses; the accessibility and location of sources of proof; the possibility of a jury view; and the existence of a contractual forum selection clause.

Id. (citing Coady, 223 F.3d at 11).

         “The public-interest factors . . . include: administrative difficulties caused by court congestion; local interest in the controversy and the burden of jury duty; and the proposed forum's familiarity with the governing law.” Id. at 223 (citing Coffey v. Van Dorn Iron Works, 796 F.2d 217, 220-221 (7th Cir. 1986)). These factors are a “helpful starting point, but ‘not every item applies in every case and, in the last analysis, the list of factors is illustrative rather than all-inclusive.'” Jackson, 557 F.Supp.2d at 220 (quoting Iragorri v. Int'l Elevator Inc., 203 F.3d 8, 12 (1st Cir. 2000). Both types of factors weigh in favor of transfer here.

         A. Private-interest factors

         1. MSPA's choice of forum

         “[T]here is a strong presumption in favor of the plaintiff's choice of forum.” Coady, 223 F.3d at 11 (citing Gulf Oil Co. v. Gilbert, 330 U.S. 501, 508 (1947). But courts have deemed that choice “less significant in particular situations” including “class actions, ” “if the plaintiff is not a resident of the forum, ” and if the plaintiff “appears to be forum shopping.” 15 Charles Alan Wright & Arthur R. Miller Federal Practice and Procedure § 3848 (4th ed. 2018); see also Bowen v. Elanes New Hampshire Holdings, LLC, 166 F.Supp.3d 104, 108 (D. Mass. 2015) (Casper, J.) (“Where the forum has no obvious connection to the case or where the plaintiff is not a forum resident, the plaintiff's presumption carries less weight.”); Johnson v. New York Life Ins. Co., No. 12-11026-MLW, 2013 WL 1003432 at *3 (D. Mass. Mar. 14, 2013) (Wolf, J.) (“A plaintiff's choice of forum is less significant . . . in the context of class actions” or where “it would abet a form of forum shopping that should not be encouraged.”); Close v. American Honda Motor Co., No. 94-365-SD, 1994 WL 577266 at *2 (D.N.H. Oct. 18, 1994) (deference accorded the plaintiff's choice of forum diminished even further when plaintiff brought suit in forum which was not its “home turf.”).

         MSPA has alleged few connections between this case and New Hampshire. Covington is a New Hampshire corporation, and MSPA's broad class allegations might, speculatively, involve events in New Hampshire. But ...


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