District of Maryland: Diversity Destroyed by Policyholders in the Absence of a Class Action | Practical Law

District of Maryland: Diversity Destroyed by Policyholders in the Absence of a Class Action | Practical Law

In Erie Insurance Exchange v. Potomac Electric and Power Company, the US District Court for the District of Maryland held that a reciprocal insurance exchange is a citizen of every state in which its policyholders live, and thus granted a motion for remand on the basis that complete diversity did not exist among the parties. The court indicated, however, that had the case been a class action, the result would have been different under the Class Action Fairness Act of 2005 (CAFA).

District of Maryland: Diversity Destroyed by Policyholders in the Absence of a Class Action

by Practical Law Litigation
Published on 07 May 2014 • USA (National/Federal)
In Erie Insurance Exchange v. Potomac Electric and Power Company, the US District Court for the District of Maryland held that a reciprocal insurance exchange is a citizen of every state in which its policyholders live, and thus granted a motion for remand on the basis that complete diversity did not exist among the parties. The court indicated, however, that had the case been a class action, the result would have been different under the Class Action Fairness Act of 2005 (CAFA).