Wednesday, October 30, 2019

Eastern District Court Uses Its Discretionary Power to Punt UIM Issues Back to State Court

Best Punter Ever?

The Federal District Courts of Pennsylvania flexed their discretionary muscles in two recent cases in which they punted two cases back to the state court that involved novel and/or unsettled questions under Pennsylvania's Motor Vehicle Financial Responsibility Law (MVFRL).

In the case of Lambert v. State Farm Mut. Auto. Ins. Co., NO.19-0816 (E.D. Pa. Oct. 16, 2019 Slomsky, J.) the Easter District Federal Court of Pennsylvania granted a motion to remand a Declaratory Judgment action involving underinsured motorist (UIM) benefit under Section 1738 of the MVFRL.

The Plaintiff originally filed the case in the Court of Common Pleas of Philadelphia County and State Farm removed it to federal court based upon diversity.

The Plaintiff then filed a motion to remand and argued that the case involved an unsettled and novel issue of Pennsylvania law such that the case should be remanded pursuant to the discretionary nature of the federal Declaratory Judgment Act. State Farm argued that even though the case involved primarily issues of state law, there was no indication the case involves unsettled and novel issues of state law.

The Court noted that the question involved in this case was whether the Section 1738 rejection of stacking form only involves the rejection of intra-policy stacking and not inter-policy stacking as well.

The District Court reviews the motion to remand under the applicable standard of review. The District Court first looked at whether there was a parallel state court proceeding. There was none but the Court noted that was not dispositive.

Then the District Court reviewed a “non-exhaustive” list of factors to be applies as set forth by the Third Circuit Court of Appeals in the case of Reifer v. Westport Ins. Co., 751 F.3d 129 (3d Cir. 2014). Applying of the Reifer factors, the Court found no impediment to request for a remand.

The District Court in Lambert ultimately found that the issue presented did involve an unsettled and novel area of the MVFRL and and as such remanded to case to the state court.

Anyone wishing to review a copy of this decision may click this LINK.

I send thanks to Attorney Scott B. Cooper of the Harriburg, PA law office of Schmidt Kramer for bringing this case to my attention.


In another case with a similar result, the District Court for the Eastern District of Pennsylvania also granted a motion to remand in Sherer v. Federated Mut. Ins. Co., NO.19-2530 (E.D. Pa. Oct. 22, 2019 DuBois, J.) involving a motion to remand a Declaratory Judgment action involving underinsured motorist (UIM) benefit under Section 1731 of the Pennsylvania Motor Vehicle Financial Responsibility Law (MVFRL).

The Plaintiff had filed the original case in the Court of Common Pleas of Philadelphia County and the carrier removed the matter to federal court based upon diversity.

The Plaintiff then filed a motion to remand and argued that the case involved an unsettled and novel issue of Pennsylvania law so the case should be remanded pursuant to the discretionary nature of the federal Declaratory Judgment Act.

The carrier argued that even though the case involves primarily issues of state law, there is no indication the case involves unsettled and novel issues of state law.

The issue more specifically involved whether the Section 1731 rejection of underinsured motorist coverage form is valid. Also, another potential issue was what obligation (if any) the Plaintiff's employer had to advise that there was no UIM coverage on the vehicle the Plaintiff was operating at the time of this accident.

In deciding the motion to remand, the District Court primarily reviewed whether there was a parallel state court proceeding currently pending.  The Court found that there no such parellel case but also noted that is not dispositive.

The District Court then looked to “non-exhaustive” list of factors to be applies as set forth by the Third Circuit in Reifer v. Westport Ins. Co., 751 F.3d 129 (3d Cir. 2014). 

Applying of the Reifer factors, the Court found that there was no impediment to remand. The District Court more specifically found that the issue presented is an unsettled and novel area of the MVFRL and that remand of the case to the state court was appropriate.

Anyone wishing to review a copy of this decision may click this LINK.

I send thanks to Attorney Scott B. Cooper of the Harriburg, PA law office of Schmidt Kramer for bringing this case to my attention.

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