On March 7, in Steinberg v. Nationwide Mutual Insurance Co., United States District Judge for the Eastern District of New York Arthur D. Spatt denied Nationwide's motion to dismiss for lack of subject matter jurisdiction a class action filed on behalf of all those insured by Nationwide who were involved in accidents and had a "betterment charge", not included in the insurance contract, deducted from their claim award.
A parallel claim was filed on November 24, 1999 and, after a series of procedural maneuvers, ended up in New York state court, where it was still pending at the time of this decision. On July 15, 2005, Plaintiff filed the instant action, which was "parallel to the pending state court action in form and in substance, in that it is based on the same transactions and occurences; alleges identical claims; and seeks identical relief." Finding that the issue of commencement and subject matter jurisdiction in the instance of such an existing parallel claim had "not yet been addressed at any level in any circuit," the court gave a detailed accounting of the legislative history of CAFA and analogous precedent. The court found "no compelling reason under CAFA, or any other federal law, to dismiss the Plaintiff's action solely based on the similar action pending in state court," and held that a new and independent action was commenced on July 15 and was thus eligible under CAFA.
The court also held that "claim splitting does not apply to parallel state and federal actions." Finally, the Court weighed the Colorado River factors, found that no "exceptional" circumstances warranted dismissal of the case, and denied Defendant's motion to abstain.- A.S.