The U.S. Court of Appeals for the Seventh Circuit recently rendered a decision deeming that a class action case, which accuses Country Mutual Insurance of improperly amassing and retaining $3.5 billion in fiduciary duties and other legal obligations, should be tried in state court. The appellate court ruled that two exceptions to the
Class Action Fairness Act (CAFA) apply in this instance.
The widely-followed case, Sudholt v. Country Mutual Insurance, raised questions regarding the jurisdiction and the possible applicability of exceptions under CAFA, a federal law that influences the jurisdiction of class actions. The potential implications of the lawsuit led to its remand to Illinois state court.
The original lawsuit, filed by policyholders in the U.S. District Court for the Southern District of Illinois, made allegations suggesting that the insurance company had unduly profited by retaining $3.5 billion excess of premium revenues over the cost of claimed expenses,
as per the court’s opinion.