Oct. 30, 2009

Right to Bring Class Actions Should Be Protected, Public Citizen Attorney to Tell U.S. Supreme Court

Maryland Medical Provider Sued Allstate Insurance Over Nonpayment of Bills  

WHAT: Public Citizen attorney Scott Nelson will argue before the U.S. Supreme Court in Shady Grove Orthopedic Associates v. Allstate Insurance Company (No. 08-1008). The outcome of the case could have implications nationwide for the ability of consumers to file class action lawsuits in federal courts, which are often the only legal remedy for people who are owed small sums of money by large corporations.

 

In the case, a Maryland woman, Sonia Galvez, was injured in a crash while driving a car registered in New York. She was treated at Shady Grove Orthopedic Associates and submitted the bills to Allstate, her insurance company. However, Allstate didn’t pay the bills on time and claimed it had not received them. Allstate also refused to pay interest on its late payments as called for by New York state law. Galvez and Shady Grove sued Allstate in federal court, saying that Allstate routinely failed to pay claims within 30 days, as required under New York law, and made a habit of claiming it had not received the bills then failing to pay interest. Shady Grove and Galvez sought to have the case certified as a class action on behalf of all people insured by Allstate who had the same experience.

 

Allstate contended that the case should be dismissed because New York state procedural rules would not permit such a class action in a New York state court. The federal district court agreed with Allstate, and Shady Grove appealed (Galvez by this point was no longer involved in the case). The U.S. Court of Appeals for the Second Circuit affirmed the district court’s decision. Represented by Public Citizen, Shady Grove contends that state procedural rules do not govern actions in federal court and that longstanding case law provides federal courts with the authority to apply their own rules to certify class actions such as this one, whether or not a class action could proceed in a state court.

 

WHEN: 11 a.m. EST, Monday, Nov. 2

 

WHERE:  One First Street, NE, Washington, D.C.

 

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