After settling with the original defendant, the plaintiffs in a class action sued the defendant’s insurance company over a $2 million policy. The insurer won summary judgment and the plaintiffs appealed. In The Siding and Insulation Co. v. Acuity Mutual Ins. Co., the Sixth Circuit held that the claims of individual plaintiffs could not be aggregated to meet the $75,000 threshold for diversity jurisdiction. Judge Cook’s opinion adopted Travelers Prop. Cas. v. Good, 689 F.3d 714 (7th Cir. 2012), to hold that a class of individual plaintiffs lacks a joint interest in an insurance fund sufficient to aggregate the claims. The Court described the fund as “a single pool of money to pay class members’ individual claims against the underlying defendant” and distinguished cases where the plaintiffs had a pre-existing interest in the fund.
The Court also held that the amount in jurisdiction could not be considered from the insurer’s perspective under the “either viewpoint rule,” the subject of a current circuit split. Declining to take a position on the split, the opinion found that the rule does not apply to class actions, including cases brought by a single plaintiff against multiple defendants. Finally, the Court rejected the parties’ attempt to use ancillary jurisdiction because the underlying class action did not involve insurance claims. Its opinion emphasizes that ancillary jurisdiction does not apply to a subsequent lawsuit on a new theory of liability or a suit enforcing a federal judgment against a third-party.
The panel then remanded to the district court with instructions to dismiss for lack of jurisdiction. Note that this interesting jurisdictional issue was raised sua sponte by the Panel; both parties argued in favor of jurisdiction in supplemental briefs.
