Federal Court Finds No Jurisdiction Over Insurance Company Existed Under Claims Asserted

In the case of Abira Medical Laboratories, LLC v. Freedom Life Insurance Co., No. 2:24-CV-02110-JHS (E.D. Pa. Jan. 10, 2025 Slomsky, J.), the Eastern District Federal Court of Pennsylvania, addressing a question of first impression, held that a Defendant foreign insurance company did not consent to general personal jurisdiction in Pennsylvania to be sued by a private party on its own behalf for any cause of action simply based on the fact that the carrier obtained a Certificate of Authority issued pursuant to 40 Pa. C.S.A. § 46 in order to conduct business in Pennsylvania.

According to the Opinion, the Plaintiff was a medical testing laboratory that provided testing services to the Defendant insurance company’s insured members as an out-of-network provider.

When the Plaintiff had a billing dispute with the insurance company regarding services performed, the Plaintiff sued the Defendant in a Pennsylvania Court of Common Pleas.

The Defendant carrier removed the action to federal court on the basis of diversity and then filed this Motion to Dismiss. The Defendant carrier asserted, in part, that the court lacked personal jurisdiction over the insurance company.

The Plaintiff argued that the Defendant carrier had consented to general personal jurisdiction on any claim because the Defendant had applied for and received a Certificate of Authority to do insurance business in Pennsylvania pursuant to 40 Pa. C.S.A. § 46.

The court noted that the referenced statute did not provide for general jurisdiction over foreign insurance companies conducting business in Pennsylvania.

Rather, the court noted that, under the plain language of § 46 foreign insurance companies wishing to conduct business in Pennsylvania must obtain a Certificate of Authority from Pennsylvania’s Department of Insurance. The statute further provides that, upon obtaining a Certificate of Authority, § 46 allows for any action arising out of a violation of § 46 that is instituted by or on behalf of the insurance commissioner to be brought against the foreign insurance company in Pennsylvania.

Here, given that the current action was not commenced by the insurance commissioner arising out of a violation of § 46, but rather was an action brought by a private party, the grant of jurisdiction provided under § 46 over a foreign insurance company was not found not to be implicated.

The court also held that the Defendant insurance company had no otherwise consented to personal jurisdiction in Pennsylvania.

Given that the court found that it lacked general personal jurisdiction, as well as specific personal jurisdiction over the Defendant insurance company, the court granted the carrier’s Motion to Dismiss.

Anyone wishing to review a copy of this decision may click this LINK.  The Court's companion Order can be viewed HERE.


Source: The Legal Intelligencer Federal Case Alert, www.Law.com (Jan. 30, 2025).