Stacking Class Actions Removed from State to Federal Court

stacking class actions removed Three defendants involved in a Pennsylvania Supreme Court ruling on insurance stacking have decided to remove the cases against them from state to federal court. In January, five insurance companies were sued in state court after the Pennsylvania Supreme Court ruled that household vehicle exclusions cannot prevent injured victims from recovering stacked coverage.

Geico, Allstate and USAA have each removed the lawsuits (Stockdale v. Allstate, Koehler v. USAA, and Butta v. Geico) to the U.S. District Court for the Eastern District of Pennsylvania. The companies have argued that the cases should be handled in federal court due to complete diversity of citizenship between each party.

Diversity of citizenship exists when opposing parties in a lawsuit are citizens of different states. While the plaintiffs involved reside in the state of Pennsylvania, the defendants argued that they are citizens of different states. Geico is based in Maryland, Allstate in Illinois and USAA in Texas. These discrepancies place the case under federal court jurisdiction pursuant to Article III, section 2 of the U.S. Constitution.

Pennsylvania-based companies Donegal Mutual Insurance Company and Pennsylvania National Mutual Casualty Insurance also involved in the suit have yet to remove their cases to federal court.

The class action lawsuits were filed after the Pennsylvania’s Supreme Court’s ruling in Gallagher v. Geico in late January. The court ruled 5-2 that a household vehicle inclusion in a policy issued by Geico violated the Motor Vehicle Financial Responsibility Law. Unless an insurer chooses to waive stacking, the insurance coverage should be readily available to anyone who needs it.

Gallagher v. Geico involved a man who was denied additional coverage by Geico after being injured in a motorcycle crash even though he had previously purchased stacked coverage for multiple vehicles.

Representatives of the victim, including Schmidt Kramer attorney Scott Cooper, agree that this ruling is not limited just to cases involving motorcycle policies. It opens up the door for any injured victim to seek justice and compensation after being denied stacked benefits he or she is entitled.

The ruling has also reversed a long-standing Supreme Court decision. Two previous decisions on the case failed to achieve a majority. Cooper in a statement with The Legal Intelligencer believes the plaintiffs who have filed suits against the insurance companies will likely not dispute the change in venue.

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Several Insurance Companies Remove Stacking Class Actions to Federal Court

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