Dispute centers on whether federal court has authority over healthcare coalition’s claims.
Newark, NJ – A federal judge is considering whether a lawsuit involving major health insurers should remain in federal court or be sent back to New Jersey state court, following a prolonged dispute over jurisdiction and corporate citizenship.
The case, brought by Healthcare Justice Coalition NJ, LLC against UnitedHealth Group and related entities, has focused heavily on whether the federal court has proper authority to hear the claims. The defendants removed the case from state court in January 2024, arguing both federal question and diversity jurisdiction applied.
Plaintiff Healthcare Justice Coalition NJ has challenged that move, asserting that no federal statutes are implicated and that complete diversity between the parties does not exist.
Jurisdiction dispute hinges on corporate structure
At the center of the dispute is the ownership structure of Healthcare Justice Coalition NJ. Defendants initially argued that diversity jurisdiction existed because the company’s sole member was a New York citizen, based on its original certificate of formation.
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However, the plaintiff countered that its sole member is actually a Delaware entity, which would destroy diversity because some defendants are also citizens of Delaware.
Key Points
- Lawsuit removed to federal court in January 2024 by UnitedHealth entities
- Plaintiff argues case should return to state court due to lack of jurisdiction
- Dispute centers on corporate membership and diversity of citizenship
Court orders discovery to resolve key questions
The case has involved multiple procedural filings, including requests for remand, motions to dismiss, and disputes over evidence. The court ordered targeted discovery to determine the citizenship of the parties at the time of removal.
Federal law requires that diversity jurisdiction be assessed at the time a case is removed, and the burden falls on the party invoking federal jurisdiction to prove it.
The court is now evaluating whether complete diversity existed when the case entered federal court, as well as whether any federal statutes cited by the defendants—such as ERISA or the No Surprises Act—apply to the claims.
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The outcome of the motion to remand will determine whether the case proceeds in federal court or returns to New Jersey’s state court system for further litigation.
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