# Valdez v. Metropolitan Property & Casualty Insurance

> District Court, D. New Mexico · March 19, 2012 · 867 F. Supp. 2d 1143

URL: https://www.frixlaw.com/law-library/cases/8699336

## Case

- **Full name:** Michael VALDEZ, Kim Dressel, Dressel Construction, Inc., Freddie Sue Gatewood, Mary Jo Vaughn, and Marcus Perkins v. METROPOLITAN PROPERTY & CASUALTY INSURANCE COMPANY, Colorado Casualty Insurance Company A Subsidiary Of Liberty Mutual Insurance Company, Pacific Indemnity Insurance Company, Travelers Insurance Company, d/b/a The Travelers Home and Marine Insurance Company, 21st Century Insurance Company, and Desert Mountain Agency
- **Court:** District Court, D. New Mexico
- **Decided:** March 19, 2012
- **Citations:** 867 F. Supp. 2d 1143; 2012 U.S. Dist. LEXIS 56581; 2012 WL 1132374
- **Precedential status:** Published
- **Opinion:** Opinion of the court by Jamesbrowning
- **Judges:** Browning, James
- **Cited by:** 27 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/8699336

## How later opinions describe it (automated extraction)

- concluding that the plaintiffs failed to establish that the local defendant — the only insurance agency named as a defendant with six insurance companies — was “a defendant from whom significant relief is sought and whose alleged conduct forms a basis for the claims asserted,”…
- finding CAFA’s amount-in-controversy requirement *1244 met when the plaintiffs requested injunctive and declaratory relief that would require the defendants to extend coverage, giving the plaintiffs the monetary benefit in the value of the added coverage
- finding CAFA’s amount-in-controversy requirement met when the plaintiffs requested injunctive and declaratory relief that would require the defendants to extend coverage, giving the plaintiffs the monetary benefit in the value of the added coverage
- explaining Jordan’s requirements “must” be met “for a written rejection of [UM] coverage to be valid”

## Opinion text

MEMORANDUM OPINION AND ORDER
JAMES 0. BROWNING, District Judge.
THIS MATTER comes before the Court on the Plaintiffs’ Memorandum Motion to Remand to State Court for Lack of Federal Jurisdiction, filed June 24, 2011 (Doc. 55)(“Motion”). The Court held a hearing on March 7, 2012. The primary issues are: (i) whether the Court has subject-matter jurisdiction under the Class Action Fairness Act, 28 U.S.C. § 1332 (d)(4)(A) (“CAFA”) or the traditional diversity-jurisdiction analysis, under 28 U.S.C. § 1332 ; and (ii) if the Court has jurisdiction, whether the Court should decline to exer *1147 cise that jurisdiction. The Court will deny the Motion. The Court has jurisdiction under CAFA, and no CAFA exception applies. Additionally, the Court concludes that there is no reason to decline to exercise that jurisdiction, because no party challenges a final state court judgment, there is no pending state proceeding, and federal review of this matter will not interfere with New Mexico’s ability to oversee its laws regulating insurance.
FACTUAL BACKGROUND
All of the Plaintiffs are New Mexico residents. See Petition for Declaratory Judgment and Injunctive Relief ¶¶ 1-6, at 1-2 (dated April 15, 2011), filed June 10, 2011 (Doc. 4)(“Complaint”). Defendants Metropolitan Property & Casualty Insurance Company (“Metropolitan Casualty”), Colorado Casualty Insurance Company (“Colorado Casualty”), Pacific Indemnity Insurance Company (“Pacific Indemnity”), The Travelers Insurance Company d/b/a The Travelers Home & Marine Insurance Company (“Travelers Insurance”), 21st Century Insurance Company (“21st Century Insurance”), and Arnica Mutual Insurance Company (“Arnica Insurance”) are foreign insurance companies authorized to issue automobile liability insurance policies within the State of New Mexico in compliance with all the rules and regulations promulgated by the Superintendent of Insurance as well as the applicable New Mexico statutes and case law. See Complaint ¶¶ 10-16, at 3-4. Defendant Desert Mountain Agency (“Desert Mountain”) is a New Mexico corporation authorized to sell automobile insurance policies in New Mexico. See Complaint ¶¶ 17-18, at 4-5.
Plaintiff Michael Valdez is a named insured in an insurance policy with Metropolitan Casualty, policy number 045192877-3, whose policy provides uninsured motorist coverage with limits that are less than the relevant liability limits in the same policy without a valid written rejection of equal uninsured motorist coverage. See Complaint ¶ 29, at 7. Plaintiff Kim Dressel is a named insured in an insurance policy with Pacific Indemnity, policy number 12714973-03, whose policy provides uninsured motorist coverage with limits that are less than the relevant liability limits in the same policy without a valid written rejection of equal uninsured motorist coverage. See Complaint ¶ 31, at 7. Plaintiff Dress Construction, Inc. is a named insured in an insurance policy with Colorado Casualty, policy number CBP08431076, whose policy provides uninsured motorist coverage with limits that are less than the relevant liability limits in the same policy without a valid written rejection of equal uninsured motorist coverage. See Complaint ¶ 33, at 8. Plaintiff Freddie Sue Gatewood is a named insured in an insurance policy with Travelers Insurance, policy number 979038Q62-1011, whose policy provides uninsured motorist coverage with limits that are less than the relevant liability limits in the same policy without a valid written rejection of equal uninsured motorist coverage. See Complaint ¶ 35, at 8. Plaintiff Mary Jo Vaughn is a named insured in an insurance policy with 21st Century Insurance, policy number 979038Q62-1011, whose policy provided uninsured motorist coverage with limits that were less than the relevant liability limits in the same policy without a valid written rejection of equal uninsured motorist coverage. See Complaint ¶ 38, at 9. Plaintiff Marcus Perkins is a named insured in an insurance policy with Arnica Insurance, policy number 910730-20FF, whose policy provides uninsured motorist coverage with limits that are less than the relevant liability limits in the same policy without a valid written rejection of equal uninsured motorist coverage. See Complaint ¶ 39, at 9.
*1148
PROCEDURAL BACKGROUND
The Plaintiffs initiated this action by filing the Complaint against six insurance companies and one New Mexico Insurance Agency in the First Judicial District Court, Santa Fe County, State of New Mexico. The Plaintiffs allege that the Defendants have failed to comply with the Supreme Court of New Mexico’s decisions in Progressive Northwestern Insurance Co. v. Weed Warrior Services, 149 N.M. 157 , 245 P.3d 1209 (2010), and in Jordan v. Allstate Insurance Co., 149 N.M. 162 , 245 P.3d 1214 (2010), because they failed to provide the Plaintiffs with full and adequate information about their legal options, at the point of sale, when buying uninsured motorist coverage. See Complaint ¶¶ 7, 46, at 2, 10. The Plaintiffs allege:
In Jordan and Weed Warrior, the Supreme Court [of New Mexico] established, as a matter of New Mexico public policy, the following retroactive rules regulating all MFRAf 1 ] policies and [uninsured or underinsured motorist] coverages issued in New Mexico since May 20, 2004: a) the purchase of less than equal limits [uninsured or underinsured motorist] coverage constitutes a “rejection” by the insured of the available equal limited [uninsured or underinsured motorist] coverage; b) an insured’s rejection of [uninsured or underinsured motorist] coverage or equal limits [uninsured or underinsured motorist] coverage under a New Mexico MFRA policy must be in writing and must be attached to, endorsed upon, or otherwise made a part of the MFRA/[uninsured or underinsured motorist] policy; c) every written rejection of [uninsured or underinsured motorist] coverage in New Mexico must include a “menu” showing each vehicle insured, each limit of [uninsured or underinsured motorist] coverage available for purchase for that vehicle (up to the policy’s limits for that type of coverage whether [uninsured or underinsured motorist] or [property damage]), and the premium prices for each available limit of [uninsured or underinsured motorist] coverage for each vehicle (hereinafter “the Jordan menu”); d) if an insurer does not, or did not after May 20, 2004, comply with these requirements for a written rejection, then any [uninsured or underinsured motorist] policy issued in New Mexico that provides, or provided, less than equal limits [uninsured or underinsured motorist] coverage must be retroactively reformed as a matter of law to provide equal limits [uninsured or under-insured motorist] coverage regardless of the payment of any premium or the intent of the parties so that all similarly situated insureds will be treated equally.
Complaint ¶ 27, at 6-7. The Plaintiffs assert that the Defendants are violating a retroactive duty to provide them with “full and complete information about all [uninsured or underinsured motorist] coverage available to them.” Complaint ¶ 42, at 9-10. The Plaintiffs assert that the Defendants engaged in “unconscionable trade *1149 practices” under the New Mexico Unfair Trade Practices Act, N.M.S.A.1978, § 57-12-2 to 58-12-10 (“UTPA”). Complaint ¶ 48, at 11. They allege that the Defendants have issued and renewed thousands of policies which did not comply with Jordan v. Allstate Insurance Co. and that none of the Defendants will comply with the Supreme Court of New Mexico’s mandate unless ordered to do so. See Complaint ¶¶ 50, 52, at 11. With respect to the class allegations, the Plaintiffs assert that each of the Defendants has faded: (i) “to affirmatively offer their insured equal limits [uninsured or underinsured motorist] coveragef — together with a Jordan menu[ — ]at the time of the sale of the policy”; (ii) “to obtain written rejections of all [uninsured or underinsured motorist] coverage or of equal limits [uninsured or underinsured motorist] coverage as retroactively mandated by Jordan”; (iii) “to unilaterally and retroactively reform every ... policy issued, or renewed, with less than equal limits [uninsured or underinsured motorist] coverage as retroactively mandated by Jordan ”; and (iv) “to unilaterally notify each insured to whom [a] ... policy was issued providing no [uninsured or underinsured motorist] coverage or less than equal limits [uninsured or underinsured motorist] coverage of their entitlement to have such policies reformed.” Complaint ¶ 68, at 15-16.
The Plaintiffs request the following relief against the insurer Defendants:
a) a Declaratory Judgment retroactively reforming all the [uninsured or underinsured motorist] policies issued in New Mexico to Plaintiffs and the class members since May 20, 2004, so as to provide equal limits [uninsured or underinsured motorist] coverage, where the policy did not already do so, without the payment of any premiums by the class members and regardless of the intent of the parties; b) injunctive relief ordering each Defendant to immediately notify all its insureds who were issued less than equal limits [uninsured or underinsured motorist] policies since May 20, 2004, that their policies have been retroactively reformed to provide equal limits [uninsured or underinsured motorist] coverage together with an explanation of the effect of this retroactive reformation that can be easily understood by the hypothetical average insured — including notice to seek independent legal advice or contract the Defendant if they have any questions about the legal impact of this retroactive reformation of their MFRA/[uninsured or underinsured motorist] policies, and especially if any insureds have been involved in an auto accident since May 20, 2004; and c) injunctive relief ordering each Defendant to adopt and immediately implement a [uninsured or underinsured motorist] selection form for use in New Mexico that fully and substantially complies with the retroactive requirements of Jordan .
Complaint ¶ 1, at 18. The Plaintiffs also separately ask for the following relief against Desert Mountain:
For the Court’s Order granting injunctive relief pursuant to the UTPA and/or [New Mexico Unfair Claims Practices Act, N.M.S.A.1978, § 59A-16-20] and/or the common law in equity ordering Defendant Agent in the future to affirmatively provide all applicants for a New Mexico MFRA policy with a written Jordan menu at the time the original policy is sold and again whenever one of Agent’s insureds requests a change in his or her MFRA policy including, but not limited to, a change in liability or [uninsured or underinsured motorist] limits or the addition of a vehicle.
Complaint ¶ 2, at 19.
1. Notice of Removal.
On June 10, 2011, the Defendants filed their Notice of Removal. See Doc. 1. They *1150 assert that removal is based upon CAFA and, alternatively, the diversity of citizenship of the parties pursuant to 28 U.S.C. § 1332 (a). See Notice of Removal ¶ 3, at 3. The Defendants assert that the Court has jurisdiction pursuant to CAFA, because the proposed class: (i) has at least 100 putative class members; (ii) the class asserts an aggregate amount in controversy of $5,000,000.00 or more; (iii) minimal diversity exists, because any one of the Plaintiffs is a citizen of a State different from any Defendant; and (iv) no CAFA exceptions apply. See Notice of Removal ¶ 4, at 3 (citing 28 U.S.C. § 1332 (d)). They assert that the Court likewise has diversity jurisdiction pursuant to 28 U.S.C. § 1332 (a), because, among the Defendants, six are foreign insurance carriers writing automobile policies in New Mexico and the seventh — Desert Mountain — does not defeat diversity, despite being an in-state Defendant, because the Plaintiffs have failed to assert a valid cause of action against Desert Mountain. See Complaint ¶ 5, at 3.
The Defendants argue that CAFA was intended to “expand significantly the jurisdiction of the federal courts over class action lawsuits as well as to limit what were seen as typical abuses of the class action system at the state level.” Notice of Removal ¶ 14, at 5 (citing Kearns v. Ford Motor Co., No. 05-5644, 2005 WL 3967998 , at *14 (C.D.Cal. Nov. 21, 2005)). The Defendants contend that there is minimal diversity, because the Plaintiffs are citizens of New Mexico which are completely diverse from six of the seven Defendants: (i) Metropolitan Casualty is incorporated under the laws of and has its principal place of business in Rhode Island; (ii) Colorado Casualty is incorporated under the laws of New Hampshire and maintains its principal place of business in Massachusetts; (iii) Travelers Insurance is incorporated under the law of and maintains its principal place of business in Connecticut; (iv) 21st Century Insurance is incorporated under the laws of New York and maintains its principal place of business in Delaware; (v) Arnica Insurance is incorporated under the laws of and maintains its principal place of business in Rhode Island; and (vi) Pacific Indemnity is incorporated under the law of Wisconsin and maintains its principal place of business in New Jersey. See Notice of Removal ¶¶ 15-16, at 6. They assert that the proposed class has at least 100 members, because the putative class for Colorado Casualty alone is approximately 4,799 policyholders — individuals whose policies were issued on or after May 20, 2004 where uninsured motorist coverage was less than the policy limits or rejected in its entirety. See Notice of Removal ¶ 20, at 7 (citing Affidavit of Brigitte Coulson ¶¶ 9-10, at 2 (executed June 9, 2011), filed June 10, 2011 (Doc. 21)(“Coulson Aff.”)). They contend that the putative class for 21st Century Insurance is 4,882 policyholders. See Notice of Removal ¶ 20, at 7 (citing Declaration of Jessica Schmidt ¶ 10, at 2-3 (executed June 10, 2011), filed June 10, 2011 (Doc. 14)(“Schmidt Decl.”)). The Defendants also note that the Complaint alleges that the members of the putative class are “so numerous that joinder of all class member policyholders is impracticable.” Notice of Removal ¶ 19, at 7 (citing Complaint ¶ 70, at 16).
The Defendants assert that they need only “make it possible ” that the threshold is satisfied and that the United States Court of Appeals for the Tenth Circuit considers the higher of the “value to the plaintiff or the cost to the defendant” when determining the amount in controversy. Notice of Removal ¶¶ 23-24, at 8-9 (emphasis original) (citing Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333, 347 , 97 S.Ct. 2434 , 53 L.Ed.2d 383 (1977); McPhail v. Deere & Co., 529 F.3d 947, 955 (10th Cir.2008)). They further assert that *1151 the amount in controversy under CAFA is determined by aggregating the claims of putative class members. See Notice of Removal ¶ 27, at 10 (citing 28 U.S.C. § 1332 ). The Defendants argue that the aggregate increase in insurance coverage which the putative class seeks exceeds $1.5 billion. See Notice of Removal ¶¶ 31-33, at 13-14 (citing Coulson Aff. ¶ 11, at 2-3; Schmidt Decl. ¶ 11, at 3). The Defendants also contend that they can aggregate lost insurance premiums to meet the amount in controversy requirement, see Notice of Removal ¶ 36, at 14 (citing Toller v. Sagamore Ins. Co., 558 F.Supp.2d 924 (E.D.Ark.2008), and that applying the lost premium method the amount in controversy is at least $6.94 million, see Notice of Removal ¶ 39-40, at 16 (citing Coulson Aff. ¶ 12, at 3); Schmidt Decl. ¶ 16, at 5; Affidavit of Jodi Ebersole in Support of Removal ¶ 7, at 3 (executed June 10, 2011), filed June 10, 2011 (Doc. 17)(“Ebersole Aff.”); Affidavit of Benjamin J. Mellino in Support of Notice of Removal ¶ 8, at 3 (executed June 10, 2011), filed June 10, 2011 (Doc. 16)(“Mellino Aff.”)). They argue that aggregate claims for class members seeking additional uninsured motorist payments could cost approximately $1.38 million. See Notice of Removal ¶ 44, at 18 (citing Declaration of Angelo Palazzolo ¶ 7, at 3 (executed June 10, 2011), filed June 10, 2011 (Doc. 19)(“Palazzolo Decl.”); Schmidt Decl. ¶ 17, at 5). They also assert that the administrative costs related to implementing the injunctive relief requested would be more than $493,358.00. See Notice of Removal ¶ 46, at 18 (citing Coulson Aff. ¶ 13, at 3; Schmidt Decl. ¶ 19, at 6; Mellino Aff. ¶ 10, at 3; Palazzolo Decl. ¶ 14, at 5).
The Defendants argue that no CAFA exceptions apply and that the Plaintiffs bear the burden of establishing that a statutory exception applies. See Notice of Removal ¶ 48, at 19 (citing Coffey v. Freeport-McMoran Copper & Gold, Inc., 623 F.Supp.2d 1257, 1263 (W.D.Okla.) aff'd, 581 F.3d 1240 (10th Cir.2009)). The Defendants assert that they, out of an abundance of caution, will address the “local controversy exception,” which applies only if at least one local defendant — citizen of the forum state — is a defendant: (i) “from whom significant relief is sought by members of the plaintiff class”; and (ii) “whose alleged conduct forms a significant basis for the claims asserted by the proposed plaintiff class.” Notice of Removal ¶ 49, at 19-20 (emphasis original) (citing 28 U.S.C. § 1332 (d)(4)(A)). The Defendants argue that only four of the eighty-two paragraphs in the Complaint are directed towards Desert Mountain, that the relief sought against it is not significant, and that its conduct does not form a significant basis of the claims asserted. See Notice of Removal ¶¶ 50-54, at 21-22. They similarly assert that the “home state exception” does not apply, because “the primary defendants” are not New Mexico citizens. Notice of Removal ¶ 55, at 22-23 (citing 28 U.S.C. § 1332 (d)(4)(B); Anthony v. Small Tube Mfg. Corp., 535 F.Supp.2d 506, 515 (E.D.Pa.2007)).
Finally, the Defendants assert that, under a traditional diversity jurisdiction analysis, the Court also has subject-matter jurisdiction, because the Court can sever Desert Mountain from the case. The Defendants argue that the Tenth Circuit has recognized that courts “frequently employ Rule 21 to preserve diversity jurisdiction over a ease by dropping a non-diverse party if his presence is not required under Rule 19.” Notice of Removal ¶ 62, at 25 (quoting Miller v. Leavenworth-Jefferson Elec. Coop., Inc., 653 F.2d 1378, 1382 (10th Cir.1981)). They contend that Desert Mountain is not a necessary party, because: (i) it is the only agency named; (ii) it only has a relationship with one insurer — Travelers Insurance; and (iii) severing Desert Mountain would not pre *1152 vent the Plaintiffs from obtaining the requested declaratory relief. See Notice of Removal ¶¶ 64-65, at 25-26. The Defendants assert that severing Desert Mountain will not prejudice the Defendants or the Plaintiffs. See Notice of Removal ¶ 69, at 27. In the alternative, the Defendants argue that the Court could sever or dismiss Desert Mountain on the basis of fraudulent joinder, because the Plaintiffs failed to state a claim against Desert Mountain. See Notice of Removal ¶ 77, at 30. They further assert that the Court could sever or dismiss Desert Mountain on the basis of fraudulent misjoinder, under rule 20, because the claims against Desert Mount have no relation to the other claims. See Notice of Removal ¶¶ 78-84, at 31-32.
2. Answers to the Complaint.
After removing the case to federal court, three of the insurer Defendants filed answers to the Complaint. 21st Century Insurance lists several affirmative defenses, including that: (i) the Plaintiffs fail to state a claim upon which relief can be granted; (ii) the Plaintiffs lack standing to pursue, for themselves or on behalf of the putative class, the relief sought; (iii) the Plaintiffs lack privity of contract with the purported entity “21st Century Insurance Company,” 2 which does not exist; and (iv) the Plaintiffs’ claims, to the extent they ever existed, are moot. Answer of Defendant 21st Century North America Insurance Company ¶ 85, at 13, filed June 16, 2011 (Doc. 35)(“21st Century Answer”). Metropolitan Casualty also asserts several affirmative defenses, including that: (i) the Complaint fails to state a claim upon which relief may be granted; (ii) the Plaintiffs lack standing to pursue, for themselves or on behalf of the putative class, the relief sought; (iii) the Plaintiffs’ claims, to the extent any claims ever existed, are moot; (iv) the applicable statute of limitations may bar the Plaintiffs’s claims, in whole or in part; and (v) the doctrine of laches may bar the Plaintiffs’ claims, in whole or in part. See Answer of Defendant Metropolitan Property and Casualty Insurance Company at 12-13, filed June 17, 2011 (Doc. 43)(“Metropolitan Casualty Answer”). Pacific Indemnity raises the following affirmative defenses: (i) that Dressel’s insurance policy with Pacific Indemnity, at all relevant times, provided equal limits uninsured motorist coverage; (ii) that the Complaint fails to state a cause of action, because Dressel has not been in an automobile accident with an uninsured motorist in which he sought and was denied equal limits uninsured motorist coverage; (iii) that the class alleged fails to satisfy the numerosity requirement; (iv) that the applicable statute of limitations bar the Plaintiffs’s claims; (v) that Pacific Indemnity breached no duty to Dressel; (vi) that the doctrine of unjust enrichment bars any damages the Plaintiffs seek; (vi) that Dressel’s claims, to the extent that they ever existed, are moot; (vii) the doctrine of laches bars Dressel’s claims; and (viii) that the Plaintiffs have not met the requirements of rule 23 of the Federal Rules of Civil Procedure. See Defendant Pacific Indemnity Insurance Company’s Answer to Plaintiffs’ Petition for Declaratory Judgment and Injunctive Relief at 16-17, filed July 14, 2011 (Doc. 68)(“Pacific Indemnity Answer”). These Defendants have not raised any constitutional challenges to the Supreme Court of New Mexico’s decision in Jordan v. Allstate Ins. Co. or questioned that it is governing law in New Mexico.
*1153 3. Motion to Remand.
The Plaintiffs move the Court to remand this case to state court for lack of federal jurisdiction. See Motion at 1. The Plaintiffs contend that the Notice of Removal fails to confer jurisdiction upon the Court, because there is a lack of complete diversity of citizenship as 28 U.S.C. § 1332 requires, or fraudulent joinder. See Motion at 1. In support of this argument, the Plaintiffs argue that: (i) the Notice of Removal fails to show that the CAFA applies; (ii) the Plaintiffs seek equitable relief only — and no monetary relief — to complete and enforce the Supreme Court of New Mexico’s retroactive mandate in Jordan v. Allstate Ins. Co.; and (iii) jurisdiction would violate the well-established rule in Wilton v. Seven Falls Co., 515 U.S. 277 , 115 S.Ct. 2137 , 132 L.Ed.2d 214 (1995), which establishes that the Court should not exercise jurisdiction where such exercise would amount to unnecessary interference with the orderly and comprehensive disposition of state court litigation. See Motion at 1.
The Plaintiffs note that a removing party carries a “heavy burden of persuasion” to show that a non-diverse party was fraudulently joined. Motion at 3 (citing B., Inc. v. Miller Brewing Co., 663 F.2d 545, 549 (5th Cir.1981)). They assert that “CAFA did not change, lessen or shift the burden of proving fraudulent joinder,” and that the Defendants’ failure to meet their heavy burden to demonstrate that Desert Mountain was fraudulently joined is “fatal to Defendants’ Notice of Removal.” Motion at 4. The Plaintiffs argue that, “where there is any ambiguity about the State law or disputed questions of fact, the resolution of whether the [Complaint] states possibly viable claims against non-diverse defendants ‘should be left to the state court where the action was commenced.’ ” Motion at 5 (emphasis original) (quoting Montano v. Allstate Indemnity, 211 F.3d 1278 , 2000 WL 525592 , at *1 (10th Cir.2000)(unpublished table decision)). The Plaintiffs contend that the Complaint alleges that Desert Mountain participated in actions which could constitute a violation of the UTPA and that the “Defendants’ denials or assertions that there are no viable claims that can be asserted against [Desert Mountain] must be resolved by the state court first.” Motion at 5. They assert that the Court lacks “federal diversity jurisdiction mandating remand to the State court for further determination of the availability of claims against the non-diverse Defendant joined in this case.” Motion at 6. The Plaintiffs further assert that remand is required if there is a reasonable basis for the district court to predict that the plaintiff might be able to recover against an instate defendant or that any one of the claims against Desert Mountain is possibly viable. See Motion at 7 (citing Zufelt v. Isuzu Motors Am., LCC, 727 F.Supp.2d 1117, 1124 (D.N.M.2009)(Browning, J.)). They argue that the claims against Desert Mountain are not wholly frivolous or insubstantial, and that, because there is a colorable claim under state law against Desert Mountain, the Court should remand. See Motion at 7 (citing Batoff v. State Farm Ins. Co., 977 F.2d 848, 851 (3d Cir.1992)). The Plaintiffs contend that they have asked for injunctive relief against Desert Mountain under the UTPA, and that the Plaintiffs are “ ‘persons’ likely to be damaged by [Desert Mountain’s] alleged unfair, deceptive, or unconscionable trade practices and thus have standing to assert their equitable UTPA claims against [Desert Mountain.]” Motion at 8.
The Plaintiffs also argue that CAFA’s local-controversy exception requires that the Court remand the case to state court. They assert that the Court “shall decline to exercise jurisdiction” where: (i) greater than two-thirds of the proposed class members are citizens of the State in which *1154 the action was filed; (ii) significant relief is sought against at least one non-diverse defendant whose alleged conduct forms a significant basis for the claims asserted; (iii) the principal conduct of all defendants occurred in the State in which the action was filed; and (iv) no other class action has been filed asserting the same or similar factual allegations against the same defendants within the past three years. Motion at 8. The Plaintiffs represent that the local-controversy exception applies to a “truly local controversy [which is] a controversy that uniquely affects a particular locality to the exclusion of all others.” Motion at 9 (quoting Evans v. Walter Indus., Inc., 449 F.3d 1159, 1164 (11th Cir.2006)). They argue that this case presents a local controversy within the exception, because the
granting of declaratory and injunctive relief to ensure that these named Defendants adhere in New Mexico to the unique holding of the New Mexico Supreme Court in Jordan , — which by definition will only apply to New Mexico [uninsured or underinsured motorist] policies and New Mexico policyholders— is a matter that uniquely affects the locality of New Mexico to the exclusion of all others.
Motion at 9 (emphasis original). The Plaintiffs assert that they meet each of the local-controversy exception requirements. The Plaintiffs contend that: (i) all class members are New Mexico residents; (ii) Desert Mountain is a New Mexico Corporation; (iii) the conduct involves uninsured motorist coverage in New Mexico; and (iv) they are aware of no similar actions being filed against the Defendants within the last three years. See Motion at 9.
The Plaintiffs assert that, because this case seeks only equitable relief, the Court should decline to accept jurisdiction. See Motion at 10. The Plaintiffs argue that the Supreme Court of the United States has repeatedly characterized the Declaratory Judgment Act, 28 U.S.C. § 2201 , as “an enabling Act which confers a discretion on the courts rather than an absolute right upon the litigant.” Motion at 11 (quoting Pub. Serv. Comm’n v. Wycoff Co., Inc., 344 U.S. 237, 241 , 73 S.Ct. 236 , 97 L.Ed. 291 (1952)). They contend that it would be “uneconomical as well as vexatious for a federal court to proceed in a declaratory judgment suit where another suit is pending in a state court presenting the same issues,” and that “[gratuitous interference with the orderly and comprehensive disposition of a state court litigation should be avoided.” Motion at 11 (quoting Brillhart v. Excess Ins., Co., 316 U.S. 491, 495 , 62 S.Ct. 1173 , 86 L.Ed. 1620 (1942)). The Plaintiffs assert that it is well settled that the existence of an independent basis for federal jurisdiction does not deprive the Court of its right and duty to exercise its independent discretion to decline jurisdiction in a case involving the “enforcement of a state court’s declaratory judgment.” Motion at 12. They argue that, when parallel proceedings are pending in state court, a federal court must determine whether to abstain from exercising jurisdiction using a variety of factors. See Motion at 13. The Plaintiffs state that there is no need for the Court to expend its resources on a matter which is “nothing more than a ministerial exercise in enforcement of a fully litigated state court action.” Motion at 15.
On July 25, 2011, the Defendants filed the Insurer Defendants’ Joint Opposition to Motion to Remand. See Doc. 70 (“Response”). The Defendants assert that the Plaintiffs conceded in the Motion that CAFA’s requirements are met. See Response at 1. The Defendants emphasize that, under CAFA, the requirement is minimal diversity and not complete diversity. See Response at 2. They argue that the Plaintiffs are trying to “circumvent CAFA jurisdiction by asking this Court to make *1155 an exception that is not based in fact or law.” Response at 2. The Defendants assert that the local-controversy exception does not apply when “the allegations against the in-state defendant pale in scope and number to those against the out-of-state defendants.” Response at 2. They further assert that, because the Plaintiffs seek the same relief against Travelers Insurance and Travelers Insurance is the proper party to comply with Jordan v. Allstate Insurance Co., the allegations against Desert Mountain do not meet the local-controversy requirements. See Response at 2. The Defendants argue that there is no basis to abstain absent a parallel state proceeding and that, because the Plaintiffs seek more than only declaratory relief, Wilton v. Seven Falls Co., does not apply. See Response at 2. The Defendants also make arguments, similar to those in the Notice of Removal, that the Court has jurisdiction under the traditional diversity analysis, because the Court should sever or dismiss Desert Mountain from the case. See Response at 2-3.
The Defendants assert that fraudulent joinder is irrelevant under CAFA. They argue that CAFA jurisdiction exists when the proposed class contains at least one-hundred persons, the amount in controversy exceeds $5,000,000.00 and there is minimal diversity. See Response at 5. They contend that the presence of a non-diverse defendant does not defeat jurisdiction under CAFA. See Response at 6. The Defendants further assert that CAFA’s local-controversy exception does not apply, because Desert Mountain is not a party from whom significant relief is sought and whose alleged conduct forms a significant basis for the claims alleged. See Response at 6. The Defendants argue that the Plaintiffs bear the burden of establishing that an exception to CAFA jurisdiction applies and that the local-controversy exception is narrow, with all doubts resolved in favor of jurisdiction. See Response at 7 (citing Kaufman v. Allstate N.J. Ins. Co., 561 F.3d 144, 153-54 (3d Cir.2009); Evans v. Walter Indus., 449 F.3d at 1164-65 ). They contend that the Plaintiffs do not seek “significant relief’ from Desert Mountain and that its alleged conduct does not form a “significant basis” of the claims asserted, because only four paragraphs, out of the eighty-two in the Complaint, are directed at Desert Mountain. Response at 7. They assert that the requested relief against Desert Mountain, provision of a menu under Jordan v. Allstate Ins. Co., would not originate with Desert Mountain, but that Travelers Insurance would prepare and disseminate such a menu, and that the Plaintiffs seek the same relief from Travelers Insurance. Response at 7. The Defendants assert that, in contrast, the Plaintiffs seek a variety of significant relief from the out-of-state insurer Defendants, including: (i) a declaration ordering them to reform automobile insurance policies retroactively; (ii) an injunction requiring notices to insureds about that reformation and the attendant consequences; and (iii) an injunction ordering the insurers to develop and implement new uninsured motorist selection/rejection forms which local agents will use. See Response at 7-8 (citing Complaint ¶¶ 65-66, at 14-15, 18-19). They contend that relief is significant only if it is a significant portion of the entire relief sought “by the class,” and assert that the Plaintiffs have not identified anyone, other than Gatewood, who may have a relationship with Desert Mountain. Response at 8 (quoting Evans v. Walter Indus., 449 F.3d at 1167 ). The Defendants argue that the cases they cite in the Notice of Removal reject the tactic of naming a local insurance agent to invoke the local-controversy exception and that the Plaintiffs’ Motion did not discuss or distinguish those cases. See Response at 9. The Defendants point to the Senate Committee Report on CAFA, which states: “[I]n a *1156 consumer fraud case alleging that an insurance company incorporated and based in another state misrepresented its policies, a local agent of the company named as a defendant presumably would not fit [the ‘significant defendant’] criteria.” Response at 9 (citing Senate Report on CAFA, S.Rep. No. 109-14 at 40, 2005 U.S.C.C.A.N. 3, 38, 2005 WL 627977 , at *34 (Feb. 28, 2005)). They assert that CAFA is not limited to multi-state class actions and that allowing the Plaintiffs to avoid federal jurisdiction, because the Plaintiffs named Desert Mountain, would undermine CAFA’s purpose. See Response at 10.
The Defendants also argue that the Plaintiffs’ reliance on the Court’s discretion under the Declaratory Judgment Act is misplaced. They assert that this situation is not one where abstention is appropriate, because there is not a parallel state proceeding and because the Plaintiffs are seeking more than declaratory relief. See Response at 11. The Defendants contend that abstention arises more appropriately when a plaintiff sues a defendant in state court, and when the defendant subsequently sues the plaintiff in federal court in a competing and parallel action seeking declaratory relief on the same core issues. See Response at 11 (citing Brillhart v. Excess Ins. Co., 316 U.S. at 494-95 , 62 S.Ct. 1173 ; Wilton v. Seven Falls Co., 515 U.S. at 282 , 115 S.Ct. 2137 ; Amanatullah v. Colo. Bd. of Med. Exam’rs, 187 F.3d 1160, 1163 (10th Cir.1999)). They assert that, when there is no pending state proceeding, abstention is not warranted. See Response at 12 (citing United States v. City of Las Cruces, 289 F.3d 1170, 1183 (10th Cir.2002); Hartford Ins. Co. of the Midwest v. Estate of Tollardo, Nos. 04-0997, 04-1120, 2005 WL 3662914 , at *2 (D.N.M. Nov. 20, 2005)(Browning, J.)). They argue that the rule permitting abstention from a declaratory judgment action does not apply where the defendant removed the action from state court instead of filing a declaratory relief action in federal court during the pendency of the state court action. See Response at 12. The Defendants further assert that the Court lacks discretion to decline jurisdiction, because the Plaintiffs seek injunctive and monetary relief, and because abstention under the Declaratory Judgment Act is not permitted when coercive claims are present. See Response at 13. They contend that it is well-settled that, where a complaint seeks injunctive as well as declaratory relief, abstention under Brillhart v. Excess Ins. Co. is not appropriate. See Response at 13. The Defendants also argue that a claim for reformation of insurance policies is more like a request for class-wide monetary relief than a declaratory action. See Response at 14 (citing Fincher v. Prudential Prop. & Cas. Ins. Co., No. 00-2098, 2007 WL 891371 (D.Colo. Mar. 22, 2007)(Blackburn, J.), aff'd 374 Fed.Appx. 833 (10th Cir.2010)(unpublished)). The Defendants point to the Motion and to the Plaintiffs’ comment that class members “may be entitled to new or additional [uninsured or underinsured motorist] benefits” as an admission that the requested relief is more akin to monetary relief. Response at 14 (citing Motion at 15). With respect to their traditional diversity jurisdiction analysis, the Defendants made substantially the same arguments in their Response as they did in the Notice of Removal. See Response at 15-17.
On August 8, 2011, the Plaintiffs filed their Reply on Motion to Remand to State Court for Lack of Federal Jurisdiction. See Doc. 75 (“Reply”). The Plaintiffs assert that the Defendants “treat this case as if it were an ordinary insurance action brought to enforce some unresolved rule of law concerning [uninsured or underinsured motorist] insurance coverage.” Reply at 1 (emphasis original). The Plaintiffs argue that this case is unique, because *1157 it is “an equitable action for declaratory-relief brought to ensure enforcement of an affirmative mandate of the New Mexico Supreme Court.” Reply at 1 (emphasis original). They emphasize that Jordan v. Allstate Ins. Co. is more than a judicial holding — it is a “judicial act of insurance regulation.” Reply at 2 (emphasis original). They assert that, in Jordan v. Allstate Ins. Co., the Supreme Court of New Mexico ordered every insurer in New Mexico to retroactively reform its nonconforming uninsured motorist policies and that such a broad sweeping reform distinguishes this case from the cases which the Defendants cite. See Reply at 2. The Plaintiffs argue that the “Defendants’ unified opposition to this action more than amply demonstrates their united refusal to fully comply with the Supreme Court’s regulatory mandate,” and that this opposition “is directly relevant to whether the Supreme Court’s regulatory Order should be enforced in the New Mexico State courts or in the federal courts.” Reply at 3. They contend that the Defendants are attempting to “try to reform Plaintiffs’ pleadings to suit their arguments” and that the Defendants’ presumption that the “Plaintiffs’ ‘ultimate’ objective in this ease is the payment of money is simply false.” Reply at 4. The Plaintiffs assert that they seek no monetary damages and that what “happens after Plaintiffs achieve the equitable relief sought in this case will be left for other cases.” Reply at 4.
With respect to the local-controversy exception to CAFA, the Plaintiffs argue that: (i) the premium disclosure requirements of Jordan v. Allstate Ins. Co. is the most “substantial” element of that decision; and (ii) their request to enforce compliance with the premium disclosure ruling is the most “significant” relief sought against every Defendant. Reply at 5. The Plaintiffs assert that these facts establish that they seek significant relief from Desert Mountain. See Reply at 6. They contend that there is no statutory definition of “significant relief,” and that whether significant relief is sought is determined through a comparison of relief sought between all Defendants. Reply at 5-6. They argue that, because the same relief is sought against each Defendant, they have sought significant relief against Desert Mountain. Reply at 6. The Plaintiffs further assert that there is not support in the record for the Defendants’ allegation that Travelers Insurance is responsible for promulgating the uninsured motorist selection/rejection forms. See Reply at 7. They state that they specifically allege that Gatewood “seeks injunctive relief ... to affirmatively provide all applicants for a New Mexico MFRA policy with a written Jordan menu” and that the Defendants’ argument that “Gatewood seeks relief only against Travelers” is incorrect, because their allegations refer to every Desert Mountain customer. Reply at 9.
On March 7, 2012, the Court held a hearing. The Plaintiffs argued that the state courts have exclusive jurisdiction to enforce the state insurance regulations that were mandated in Montano v. Allstate Indem. Co., 135 N.M. 681 , 92 P.3d 1255 (2004) and Jordan v. Allstate Ins. Co. See Transcript of Hearing at 8:22-9:2 (March 7, 2012)(Berardinelli)(“Tr.”). 3 They also asserted that the Court should consider the McCarran-Ferguson Act, 15 U.S.C. § 1012 , abstention under Burford v. Sun Oil Co., 319 U.S. 315 , 63 S.Ct. 1098 , 87 L.Ed. 1424 (1943) 4 or Brillhart v. Excess *1158 Ins. Co., and the Rooker-Feldman 5 doctrine. See Tr. at 9:3-8 (Berardinelli). The Plaintiffs stated that this is a rare case and argued that the Court should remand to the state court, because the Plaintiffs are attempting to enforce the Supreme Court of New Mexico’s universal mandate regulating automobile insurance. See Tr. at 9:9-16 (Berardinelli). They pointed to Quackenbush v. Allstate Ins. Co., 517 U.S. 706 , 116 S.Ct. 1712 , 135 L.Ed.2d 1 (1996), where the Supreme Court held that abstention under Burford v. Sun Oil Co. allows a federal court to abstain if it presents difficult questions of state law bearing on policy problems of substantial public import. See Tr. at 10:6-17 (Berardinelli). The Plaintiffs argued that the policies announced in Jordan v. Allstate Ins. Co. represent regulations of substantial public concern and that enforcement should take place in state court, because the Supreme Court of New Mexico prescribed certain procedures in the manner of a regulation. See Tr. at 10:17-11:6 (Berardinelli). They emphasized that abstention under Burford v. Sun Oil Co. stems from the discretion courts of equity traditionally enjoy, and from principles of federalism and comity, which are equally important in this case. See Tr. at 11:7-19 (Berardinelli). The Plaintiffs asserted that the state’s interests in this case are paramount and that the dispute would best be adjudicated in a state forum. See Tr. at 11:20-12:6 (Berardinelli). They also contended that the MeCarran-Ferguson Act preserves the state’s right to regulate the business of insurance, and the relationships between an insurer and the insured. See Tr. at 12:22-13:13 (Berardinelli). The Plaintiffs asserted that the Supreme Court of New Mexico addressed that relationship in Jordan v. Allstate Ins. Co. See Tr. at 14:10-15 (Berardinelli). The Plaintiffs cited Safety National Casualty Corporation v. Certain Underwriters at Lloyd’s London, 587 F.3d 714 (5th Cir.2009), for the proposition that the MeCarran-Ferguson Act allows state law to reverse preempt an otherwise applicable federal statute. See Tr. at 17:12-25 (Berardinelli). Extending this principle, the Plaintiffs argued that CAFA cannot invalidate, impair, or supersede the Supreme Court of New Mexico’s regulatory, retroactive ruling in Jordan v. Allstate Ins. Co. See Tr. at 18:4-14 (Berardinelli). They contended that the Defendants have the burden of proving that the MeCarranFerguson Act does not reverse preempt CAFA. See Tr. at 18:15-20 (Berardinelli).
With respect to the Rooker-Feldman doctrine, the Plaintiffs argued that there can be no re-litigation of issues that are inextricably intertwined with Jordan v. Allstate Ins. Co. and cited DePasquale v. Allstate Ins. Co., 179 F.Supp.2d 51 (E.D.N.Y.2002), for the proposition that the Rooker-Feldman bars federal courts from exercising jurisdiction over cases that seek review of “inextricably intertwined” state-court judgments. Tr. at 20:2-22 (Berardinelli). They asserted that for this Court to do anything other than enforce the mandate in Jordan v. Allstate Ins. Co. would mean that the Court was determining that the Supreme Court of New Mexi *1159 co was wrong. See Tr. at 20:23-21:5 (Berardinelli).
The Plaintiffs then discussed several New Mexico cases related to automobile insurance policies. See Tr. at 21:17-30:11 (Berardinelli). They argued that the Supreme Court of New Mexico’s objective in Jordan v. Allstate Ins. Co. is that all insurance companies operating in New Mexico offer the menu that Jordan v. Allstate Ins. Co. mandated, which the Plaintiffs asserted has been universally ignored. See Tr. at 30:12-31:7 (Berardinelli). The Plaintiffs contended that the Superintendent of Insurance has not issued a regulation with respect to the Jordan v. Allstate Ins. Co. menu and stated that the only viable vehicle to enforce the Supreme Court of New Mexico’s mandate is through the state judicial courts. See Tr. at 35:19-37:7 (Berardinelli). They asserted that no insurance company has complied with Jordan v. Allstate Ins. Co. See Tr. at 39:8-40:1 (Berardinelli). The Plaintiffs stated that they seek equitable relief only: (i) a declaratory judgment stating that all insurance policies are retroactively reformed to provide equal-limits coverage; (ii) notice to the insureds of the policy changes; and (iii) a court order that the insurers must provide the menu that Jordan v. Allstate Ins. Co. requires. See Tr. at 40:2-14 (Berardinelli). The Plaintiffs argued that the only viable remedy is in state court and, under principles of comity and in deference to the regulatory system, the Court should find that it does not have jurisdiction. See Tr. at 41:23-42:7 (Berardinelli). They asserted that the Court must determine whether there is reverse preemption and noted that all of their claims apply equally to all of the Defendants, including Desert Mountain. See Tr. at 43:4-10 (Berardinelli).
The Court asked whether the purpose of the McCarran-Ferguson Act was to determine what law applies and whether it would deprive the Court of jurisdiction. See Tr. at 43:11-18 (Court). The Plaintiffs responded that the McCarran-Ferguson Act is jurisdictional and intended to bar the federal courts from exercising jurisdiction when a case involves state regulation of insurance. See Tr. at 43:19-25 (Berardinelli). They argued that this issue is one of extreme public interest which goes to the very essence of the Court’s jurisdiction and that Congress intended to withdraw federal jurisdiction from matters related to the regulation of insurance. See Tr. at 44:12-24 (Berardinelli). They further asserted that the Supreme Court of New Mexico has already determined that all insurers must provide this menu and coverage, and that the case before the Court is an attempt to enforce the Jordan v. Allstate Ins. Co. mandate. See Tr. at 44:24-45:22 (Berardinelli). The Plaintiffs explained that their argument is that, because CAFA is a federal statute, the Court cannot assume jurisdiction under CAFA in an insurance case if that exercise of jurisdiction would interfere with the State’s right to regulate insurance. See Tr. at 46:4-14 (Berardinelli). They clarified that there is not an insurance exception to CAFA and conceded that a case involving insurance would not divest the Court of CAFA jurisdiction. See Tr. at 46:24-47:16 (Berardinelli). The Court then asked about the Plaintiffs’ references to Rooker-Feldman and whether it would apply, because the Court is not being asked to determine the correctness of a state court judgment. See Tr. at 47:17-23 (Court). The Plaintiffs responded that they brought Rooker-Feldman up because the Defendants are arguing that they do not have to obey the Jordan v. Allstate Ins. Co. mandate and, if the Court agreed, the Court would be overruling the Supreme Court of New Mexico on an issue of New Mexico law. See Tr. at 47:24-18:10 (Berardinelli). They argued that, when the Supreme Court of New Mexico remands a case or *1160 dering insurance companies to comply with a decision, the federal courts do not get to take jurisdiction of that case. See Tr. at 48:16^49:8 (Berardinelli). The Court agreed that assessment would be true if the Defendants were trying to remove Jordan v. Allstate Ins. Co., but asked whether that assessment hold true where there is a different case and involved different parties. See Tr. at 49:9-12 (Court). The Plaintiffs responded that the Court’s point was a distinction without a difference, because the Supreme Court of New Mexico chose to make a universal holding in Jordan v. Allstate Ins. Co. See Tr. at 49:13-50:2 (Berardinelli). The Court then asked, with respect to abstention, for what action it would be abstaining. See Tr. at 50:3-6 (Court). The Plaintiffs asserted that the Court would be abstaining to allow the state court to address these issues, but conceded that there is not a separate state court action. See Tr. at 50:7-10 (Berardinelli). They reiterated that the only way to have a uniform insurance policy is to have the state court deal with these cases. See Tr. at 51:11-52:13 (Berardinelli). They further asserted that the case before the Court is a continuation of Jordan v. Allstate Ins. Co. and that the Court should send it back to the state courts for enforcement. See Tr. at 53:3-10 (Berardinelli).
The Defendants then argued in opposition. The Defendants argued that the intent of Congress in adopting CAFA was to expand federal jurisdiction and that all doubts in interpreting the statute were to be resolved in favor of jurisdiction, with the exceptions construed narrowly. See Tr. at 55:6-10 (Strong). They argued that the Tenth Circuit has held that the Court has an unflagging obligation to exercise jurisdiction where it has it. See Tr. at 55:10-15 (Strong). The Defendants asserted that none of the Plaintiffs’ arguments regarding abstention under Burford v. Sun Oil Co., McCarran-Ferguson Act preemption, or Rooker-Feldman abstention were properly briefed. See Tr. at 55:16-56:6 (Strong). The Defendants then argued that this is not the type of complicated case that calls for abstention under Burford v. Sun Oil Co., because this case is an enforcement action and the Plaintiffs are taking the position that it is not a difficult question of state law. See Tr. at 56:7-24 (Strong). They contended that the case law is clear that the value of declaratory or injunctive relief include all benefits that logically flow from that relief. See Tr. at 56:25-57:7 (Strong). They asserted that the Senate Committee Report on CAFA commented that the value of the matter in litigation can be determined from the viewpoint of the plaintiff or defendant. See Tr. at 57:7-13 (Strong). They represented that the Senate Committee also stated that, in assessing declaratory relief, a court should include in its assessment the value of all relief and all benefits that would logically flow from the granting of the relief. See Tr. at 57:19-58:12 (Strong). The Defendants contended that the Plaintiffs have not disputed that billions of dollars could be at issue. See Tr. at 58:11-15 (Strong). They argued that the relief that the Plaintiffs seek has a monetary value, and that there will be lost premiums and administrative costs. See Tr. at 59:19-60:13 (Strong). The Defendants stated that they do not contest that Jordan v. Allstate Ins. Co. applies or its constitutionality. See Tr. at 60:18-61:11 (Strong).
With respect to the local-controversy exception to CAFA, the Defendants argued that an attorney’s affidavit and allegations do not establish that significant relief was sought against a non-diverse defendant. See Tr. at 61:11-25 (Strong). The Defendants asserted that the Plaintiffs bear the burden of establishing that a CAFA exception applies and that the Plaintiffs have not met that burden. See Tr. at 62:4-12 *1161 (Strong). They explained that the local-controversy exception envisions a scenario where the local defendant is the primary focus of the plaintiffs claims. See Tr. at 62:11-15 (Strong). They argued that, under the statute’s language, the Court must determine whether significant relief is sought against a non-diverse defendant whose conduct forms a significant basis for the claims asserted and contended that Desert Mountain was not the Complaint’s focus. See Tr. at 62:16-63:4 (Strong). They represented that, in Evans v. Walter Indus., Inc., the United States Court of Appeals for the Eleventh Circuit held that the significant-relief prong is not established where only one of eighteen defendants was local and was alleged to have contributed to contamination. See Tr. at 63:5-11 (Strong). The Defendants noted that Desert Mountain was the only insurer agent who had been sued and that the Plaintiffs seek only one form of relief against it. See Tr. at 63:12-23 (Strong). The Defendants also noted that the Complaint mentions only one Plaintiff to whom Desert Mountain issued a policy. See Tr. at 64:7-17 (Strong). The Defendants asserted that abstention under Brillhart v. Excess Ins. Co. also does not apply, because the Plaintiffs are not seeking pure declaratory relief and there is no pending state ease. See Tr. at 65:7-66:2 (Strong). With respect to the traditional diversity jurisdiction analysis, the Defendants argued that the Court should sever or dismiss Desert Mountain from this case, because it is an anomalous Defendant and does not fit easily into the case. See Tr. at 67:16-68:8 (Rohback). The Defendants emphasized that the Court has discretion to sever a party to preserve diversity jurisdiction and the Court could remand the case against Desert Mountain to state court. See Tr. at 68:25-69:14 (Rohback). They reiterated that none of the paragraphs that refer to Desert Mountain state a cause of action and that the Plaintiffs had admitted that the Superintendent of Insurance approved the forms used, establishing the applicability of an exception from the UTPA. See Tr. at 69:15-71:8 (Rohback).
Regarding CAFA’s specific requirements, the Defendants asserted that: (i) there are at least one-hundred putative class members; (ii) that the aggregated amount in controversy is in excess of $5,000,000.00; and (iii) no exceptions apply. See Tr. at 73:10-21 (Spano). Focusing on the amount in controversy, the Defendants argued that the relief sought would be costly, because the Plaintiffs seek to reform all policies issued after May 2004, to have the Defendants notify all insureds of this change, and to have the insurers develop and implement a new uninsured motorist coverage selection form. See Tr. at 74:8-14 (Spano). The Defendants contended that they need show only that it is possible that the cost of relief would satisfy the amount in controversy standard, and that the Court should look at the benefits or costs of the relief sought. See Tr. at 74:15-75:21 (Spano). The Defendants then discussed the costs that they calculated in their Response and argued that they have met the amount-in-controversy requirement. See Tr. at 75:22-78:11 (Spano). The Defendants asserted that reverse preemption under the McCarran-Ferguson Act is not a jurisdictional issue, and that a federal court retains jurisdiction to adjudicate the rights of policyholders and insureds. See Tr. at 78:12-79:11 (Spano). The Court asked whether the Defendants had a response to the Plaintiffs’ argument that the McCarran-Ferguson Act affects congressional statutes and that CAFA is a congressional statute. See Tr. at 79:12-19 (Court). The Defendants responded that, for the McCarran-Ferguson Act to apply, CAFA would have to conflict with a state law that is designed to regulate insurance and ar *1162 gued that CAFA does not conflict with state law. See Tr. at 79:20-81:2 (Spano). The Defendants also contended that the McCarran-Ferguson Act cannot preempt CAFA, because the McCarran-Ferguson Act applies only to state-enacted laws regulating insurance, and this case deals with a judicial decision. See Tr. at 82:4-21 (Kohls).
The Court then asked the Plaintiffs whether they conceded the amount in controversy requirement under CAFA is met. See Tr. at 83:24-84:9 (Court). The Plaintiffs asserted that they did not concede the amount in controversy issue and argued that, beyond the estimated $500,000.00 in administrative costs, the amount in controversy calculations are entirely speculative. See Tr. at 84:15-85:2 (Berardinelli). The Plaintiffs stated that they are not asking for payment of premiums. See Tr. at 85:3-4 (Berardinelli). The Court asked whether the Plaintiffs would agree that the relief they seek will, as a practical matter, have a financial impact and that the Court can look at the impact of these changes. See Tr. at 85:12-20 (Court). The Plaintiffs responded that whether policyholders can collect under the policies is not the Plaintiffs’ objective and argued that all the relief they seek is compliance with Jordan v. Allstate Ins. Co., See Tr. at 85:20-86:7 (Court, Berardinelli). They argued this case involves a regulatory action and the question is whether the federal court should be involved in telling insurance companies what is appropriate under the Supreme Court of New Mexico’s case law. See Tr. at 86:8-17 (Berardinelli). The Plaintiffs asserted that Desert Mountain is wrong when it argues that the Plaintiffs do not seek significant relief against it, because the Plaintiffs want insurance agents to have to comply with the law as well. See Tr. at 86:17-19 (Berardinelli). They also contended that there is no evidence to support the assertion that Desert Mountain cannot promulgate a form. See Tr. at 86:20-25 (Berardinelli). The Plaintiffs argued that comity, in its purest form, is at stake in this action and that, if the Court decides the case, then purpose of the McCarran-Ferguson Act will be defeated. See Tr. at 87:5-10 (Berardinelli). The Plaintiffs conceded that the only aspects of CAFA that they are challenging is the amount in controversy requirement and application of the local-controversy exception. See Tr. at 89:6-22 (Court, Berardinelli). The Plaintiffs asserted that they have satisfied the local-controversy exception, because the most significant relief is to obtain compliance and this case is dealing with significant public policy interests. See Tr. at 89:23-90:12 (Berardinelli). They also argued that, if the Court finds jurisdiction under CAFA, it will be in direct conflict with the McCarran-Ferguson Act. See Tr. at 90:13-22 (Berardinelli).
On March 14, 2012, Metropolitan Casualty and Travelers Insurance filed the Supplemental Memorandum of Defendants Metropolitan Property and Casualty Insurance Company and Travelers Home and Marin Insurance Company in Support of Their Joint Opposition to Motion to Remand. See Doc. 111 (“Sur-Reply”). Metropolitan Casualty and Travelers Insurance note that the Plaintiffs “never mentioned the McCarran-Ferguson Act, ‘reverse-preemption’ or the Burford Doctrine” in the Motion. Sur-Reply at 1. They argue that the McCarran-Ferguson Act does not divest federal courts of jurisdiction over cases involving the insurance industry. See Sur-Reply at 2 (citing Grimes v. Crown Life Ins., 857 F.2d 699 (10th Cir.1988); Atl. & Pac. Ins. Co. v. Combined Ins. Co. of Am., 312 F.2d 513, 515 (10th Cir.1962)). They assert that, although Grimes v. Crown Life Ins. was remanded under the Burford v. Sun Oil Co. abstention doctrine, Grimes v. Crown Life Ins. is distinguishable from the one before the Court, because, there, the plain *1163 tiff was the Oklahoma Insurance Commissioner, the subject of the litigation related to state court insolvency proceedings, and the Oklahoma statute provided for exclusive jurisdiction in the state district court. See Sur-Reply at 2-3 (citing Grimes v. Crown Life Ins., 857 F.2d at 705). Metropolitan Casualty and Travelers Insurance also refer the Court to the numerous cases that they cite in the Notice of Removal to refute the argument that there is an insurance exception to CAFA. See Sur-Reply at 3-4 (citing Notice of Removal ¶¶ 51-52, at 20-21). They note that the Plaintiffs are not claiming that the Insurance Division of the New Mexico Public Regulation Commission has exclusive jurisdiction “to resolve the submission and approval of form language,” because that would remove jurisdiction from the state courts as well and argue that the Plaintiffs “are simply attempting to deprive out-of-state insurance company defendants from being able to defend themselves in federal court.” SurReply at 5. They contend that there is no insurance exception for CAFA jurisdiction nor any case law or other authority that would deprive the Court of jurisdiction. See Sur-Reply at 5.
LAW REGARDING CAFA
CAFA jurisdiction exists when the proposed class contains at least one-hundred persons, the amount in controversy exceeds $5,000,000.00, and there is minimal diversity. See 28 U.S.C. § 1332 (d)(2) and (5). “CAFA was enacted to respond to perceived abusive practices by plaintiffs and their attorneys in litigating major class actions with interstate features in state courts.” Coffey v. Freeport McMoran Copper & Gold, 581 F.3d 1240, 1243 (10th Cir.2009).
1. Amount in Controversy.
The amount-in-controversy requirement is “an estimate of the amount that will be put at issue in the course of the litigation.” McPhail v. Deere & Co., 529 F.3d 947, 956 (10th Cir.2008). 6 “In actions seeking declaratory or injunctive relief, it is well established that the amount in controversy is measured by the value of the object of the litigation.” Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333, 347 , 97 S.Ct. 2434 , 53 L.Ed.2d 383 (1977). The Tenth Circuit follows the “either viewpoint rule,” which considers either the value to the plaintiff, or the cost *1164 to the defendant of injunctive and declaratory relief, as the measure of the amount in controversy. Lovell v. State Farm Mut. Auto. Ins. Co., 466 F.3d 893, 897 (10th Cir.2006). The Senate Report on CAFA also provides that the amount in controversy shall be determined from the viewpoint either of the plaintiff or of the defendant. See S.Rep. No. 109-14 at 42-43, 2005 WL 627977 , at *37. The Senate Report states: “[T]he Committee intends that a matter be subject to federal jurisdiction under this provision if the value of the litigation exceeds $5,000,000.00 either from the viewpoint of the plaintiff or the viewpoint of the defendant, regardless of the type of relief sought.” S.Rep. No. 109-14 at 42-43, 2005 U.S.C.C.A.N. 3, 40, 2005 WL 627977 , at *37.
The Senate Report also provides that, “in assessing the jurisdictional amount in declaratory relief cases, the federal court should include in its assessment the value of relief and benefits that would logically flow from the granting of the declaratory relief sought.” S.Rep. No. 109-14 at 42-43, 2005 U.S.C.C.A.N. 3, 41, 2005 WL 627977 , at *37. In Keeling v. Esurance Ins. Co., 660 F.3d 273 (7th Cir.2011)(Easterbrook, J.), the United States Court of Appeals for the Seventh Circuit began its CAFA analysis of the amount in controversy with the “value of the injunctive relief that the class demands,” and held that “the cost of prospective relief cannot be ignored in the calculation of the amount in controversy.” 660 F.3d at 274 . The United States District Court for the Western District of Oklahoma has also held that the value of injunctive relief sought is determined “by ‘the pecuniary effect an adverse declaration will have on either party to the lawsuit.’ ” Cox v. Allstate Ins. Co., No. 07-1449, 2008 WL 2167027 , at *3 (W.D.Okla. May 22, 2008)(Leonard, J.) (quoting City of Moore v. Atchison, Topeka, & Santa Fe Ry. Co., 699 F.2d 507, 509 (10th Cir.l983))(addressing CAFA’s amount-in-controversy requirement). See Toller v. Sagamore Ins. Co., 558 F.Supp.2d 924, 930-31 (E.D.Ark.2008)(addressing CAFA’s amount-in-controversy requirement).
In determining the value of litigation which increases insurance coverage, several courts have held that the proper measure of the amount in controversy is the increase in coverage limits of the policy. In Whitehead-Rojas v. American Family Mutual Ins. Co., No. 08-0103, 2008 WL 1924899 (D.Colo. Apr. 28, 2008), the United States District Court for the District of Colorado calculated the amount in controversy, in a case where the plaintiff sought reformation of an insurance policy, by looking at the enhanced benefits that the plaintiff would receive through the increase in coverage. See 2008 WL 1924899 , at *3. Accordingly, where the plaintiff alleged that the policy limits should increase from $130,000.00 to $200,000.00, the District of Colorado determined that $70,000.00 was in controversy. See Whitehead-Rojas v. Am. Family Mut. Ins. Co., 2008 WL 1924899 , at *3. See also Henderlong v. Allstate Ins. Co., No. 10-0698, 2010 WL 3843324 , at *2 (D.Colo. Sept. 24, 2010)(finding that, where the plaintiff sought an increase in coverage in excess of the policy limits, the amount in controversy was the value of the additional coverage); Robinson v. Home Indem. Co., 316 F.Supp. 129, 131 (E.D.Ark.1970)(holding that amount in controversy, where plaintiffs sought to reform insurance policy, was the increased exposure to the insurance company that would result from increasing coverage to the insured). The United States Court of Appeals for the Sixth Circuit has held that, where the plaintiffs sought a declaratory judgment regarding their uninsured motorist coverage, the amount in controversy is the difference between the coverage they seek and the coverage that they currently have. See Freeland v. Liberty Mut. Ins. Co., 632 *1165 F.3d 250, 254 (6th Cir.2011). The Seventh Circuit has held that, “when the validity of a policy is in dispute, the face-value of that policy is a proper measure of the amount-in-controversy.” Hawkins v. Aid Ass’n for Lutherans, 338 F.3d 801, 805 (7th Cir.2003).
Federal courts have also held that a court can calculate the costs associated with the relief sought for the defendants to determine the amount in controversy. The Seventh Circuit has held that, where an insurer-defendant would either have to “stop charging a premium or change the terms so that policyholders receive indemnity more frequently, it will suffer a financial loss” and that the $1,500,000.00 in lost premiums was part of the amount in controversy. Keeling v. Esurance Ins. Co., 660 F.3d at 274 . In Armour v. Transamerica Life Ins. Co., No. 10-2136, 2010 WL 4180459 (D.Kan. Oct. 20, 2010)(Melgren, J.), the Honorable Eric F. Melgren, United States District Judge for the District of Kansas, held that the amount in controversy requirement was satisfied where the insurer-defendant “identified the total number of in-force LTC policies owned by Kansas residents as 4,683, and the amount of premium increases, over the lifetime of those policies, as $6,441,652,” and where the plaintiffs challenged all premium increases. 2010 WL 4180459 , at *4. Another district court within the Tenth Circuit has also applied the lost-premium method of calculating the amount in controversy. In Cox v. Allstate Ins. Co., the Honorable Tim Leonard, United States District Judge for the Western District of Oklahoma, held that the insurer-defendant presented uneontroverted evidence that, in 2006, it received $70,000,000.00 in premium payments for replacement cost policies sold in Oklahoma and that disgorgement of those premiums, which the plaintiff sought in their complaint, exceeded CAFA’s jurisdictional minimum. See 2008 WL 2167027 , at *3. The United States District Court for the Eastern District of Arkansas agreed with an insurer-defendant that the amount that class members would have had to pay to purchase the coverage they sought in the litigation was an appropriate measure for the amount in controversy. See Toller v. Sagamore Ins. Co., 558 F.Supp.2d at 929 . There, the Honorable J. Leon Holmes, United States District Judge for the Eastern District of Arkansas, held that, because “the value of the insurance coverage — measured by the amount that Sagamore charged for the coverages at issue — exceeds $10,000,000,” the amount in controversy requirement was met and denied the motion to remand. Toller v. Sagamore Ins. Co., 558 F.Supp.2d at 931 . In Lohr v. United Financial Casualty Co., No. 09-752, 2009 WL 2634204 (W.D.Pa. Aug. 25, 2009), the United States District Court for the Western District of Pennsylvania held that, where the insurer-defendant established that “Progressive could incur over $7.7 billion in coverage requirements for which it has received no premiums, would have to rewrite all of its 517,-403 Pennsylvania policies, and would need to notify all policyholders of the change in coverage,” the amount in controversy requirement was met. 2009 WL 2637204 , at *7. The federal courts have also held that a court could look to prospective claim costs to determine the amount in controversy. In Rasberry v. Capitol County Mutual Fire Insurance Co., 609 F.Supp.2d 594 (E.D.Tex.2009), the United States District Court for the Eastern District of Texas held that “one realistic measure of the value of all relief and benefits that could logically flow from the granting of the declaratory relief sought by the claimants is the remaining limits on 6,643 policies ($166,324,177) considering that Rasberry alleges that Capitol County systematically mishandled all Hurricane Rita claims.” 609 F.Supp.2d at 601 . See Stanforth v. Farmers Ins. Co. of Ariz., No. 09-1146, *1166 Memorandum Opinion and Order Denying Plaintiffs’ Motion to Remand at 5, filed April 22, 2010 (Doc. 40)(“Stanforth Order”)(Puglisi, M.J.)(finding that the amount in controversy requirement is met, where the defendants calculated, based on the previous year’s uninsured motorist claims, that they would pay an extra $5,435,052.00 if coverage were extended in the manner sought).
2. Local-Controversy Exception.
Congress created an exception to CAFA for those cases that “consist of primarily local, intrastate matters, which it characterized as the ‘Local Controversy Exception.’ ” Coffey v. Freeport McMoran Copper & Gold, 581 F.3d at 1243 . A district court shall decline to exercise jurisdiction when a plaintiff shows that:
(I) greater than two-thirds of the members of all proposed plaintiff classes in the aggregate are citizens of the State in which the action was originally filed;
(II) at least 1 defendant is a defendant—
(aa) from whom significant relief is sought by members of the plaintiff class;
(bb) whose alleged conduct forms a significant basis for the claims asserted by the proposed plaintiff class; and
(cc) who is a citizen of the State in which the action was originally filed; and
(III) principal injuries resulting from the alleged conduct or any related conduct of each defendant were incurred in the State in which the action was originally filed....
28 U.S.C. § 1332 (d)(4)(A)(i). A plaintiff must also show that, during the three years preceding the filing of the class action, no other class action was filed asserting the same or similar allegations against any of the defendants. See 28 U.S.C. § 1332 (d)(4)(A)(ii).
In Coffey v. Freeport McMoran Copper & Gold, the Tenth Circuit upheld the district court’s interpretation of 28 U.S.C. § 1332 (d)(4)(A)(i)(II)(aa) that the significant relief requirement of the local-controversy exception is satisfied where the complaint “claims that every potential plaintiff is entitled to recover from [the local defendant] and the proposed class seeks to recover damages from all defendants jointly and severally.” 581 F.3d at 1244 . The Tenth Circuit held that a district court should focus the complaint when addressing subsection (aa). See Coffey v. Freeport McMoran Copper & Gold, 581 F.8d at 1245. In Cox v. Allstate Ins. Co., the Western District of Oklahoma held that, where the local defendant received less than two-tenths of one percent of the amount paid to the out-of-state defendants in premiums for coverage that the plaintiffs were seeking to disgorge, the plaintiffs were not seeking significant relief from the local defendant. See 2008 WL 2167027 , at *4. The Eleventh Circuit, in Evans v. Walter Industries, Inc., held that courts can compare the relief sought against the local defendant to the relief sought against the other defendants and that, where the plaintiffs gave no insight into the comparative significance of the relief sought against the local defendant, the significant relief prong is not met. See 449 F.3d at 1167 ,
With respect to subsection (bb), the United States Court of Appeals for the Fifth Circuit, in Opelousas General Hospital Authority v. FairPay Solutions, Inc., 655 F.3d 358 (5th Cir.2011), held that the plaintiff failed to meet the local-controversy exception requirements, because the allegations against the sole local defendant did not form a significant basis of claims of the potential class. See 655 F.3d at 361 - *1167 62. The Fifth Circuit held that the plaintiffs’ allegations contained no information about the local defendant’s conduct relative to the other defendants’ conduct, and that the plaintiffs’ claims against the local defendant rested on the allegation that the local defendant relied on the non-local defendant’s calculations. See Opelousas Gen. Hosp. Auth. v. FairPay Solutions, Inc., 655 F.3d at 362 . The United State Court of Appeals for the Third Circuit, when addressing the local-controversy exception, held that the significant-basis prong “means the claims asserted by all the class members in the action,” although not every member of the proposed plaintiff class need assert a claim against the local defendant. Kaufman v. Allstate N.J. Ins. Co., 561 F.3d 144, 155 (3d Cir.2009). It held that, “[i]n relating the local defendant’s alleged conduct to all the claims asserted in the action, the significant basis provision effectively calls for comparing the local defendant’s alleged conduct to the alleged conduct of all the Defendants.” Kaufman v. Allstate N.J. Ins. Co., 561 F.3d at 156 . The Third Circuit also rejected “the assumption that the local defendant’s conduct is significant as long as it is ‘more than trivial or of no importance.’ ” Kaufman v. Allstate N.J. Ins. Co., 561 F.3d at 157 (citations omitted). In Lafalier v. Cinnabar Service Co., Inc., No. 10-0005, 2010 WL 1486900 (N.D.Okla. Apr. 13, 2010), the United States District Court for the Northern District of Oklahoma held that the local defendants’ conduct formed a significant basis for the plaintiffs’ claims, because the plaintiffs asserted claims against each local defendant and many plaintiffs did not have claims against the out-of-state defendants. See 2010 WL 1486900 , at *7-8. In Cox v. Allstate Ins. Co., the Western District of Oklahoma also held that the plaintiffs failed to establish that the local defendant’s conduct formed a significant basis of the claims asserted, because its conduct was the basis for only one of the claims asserted, it did not write any of the policies, and it had a limited role in the class claims. See 2008 WL 2167027 , at *4. In Evans v. Walter Industries, Inc., the Eleventh Circuit held that the plaintiff offered no insight into the role that the local defendant played in the alleged conduct and that the limited facts before the court gave rise to an inference that the local defendant was not a significant defendant, because numerous defendants were more closely related to: the alleged harm. See 449 F.3d at 1167-68 .
THE ROOKER-FELDMAN DOCTRINE
Although it has a complex history and was for a long time shrouded in mystery, the Rooker-Feldman doctrine embodies the simple principle that federal district courts have no jurisdiction to sit as courts of appeal to state courts. “The Rooker-Feldman doctrine prevents the lower federal courts from exercising jurisdiction over cases brought by ‘state-court losers’ challenging ‘state-court judgments rendered before the district court proceedings commenced.’ ” Lance v. Dennis, 546 U.S. 459, 460 , 126 S.Ct. 1198 , 163 L.Ed.2d 1059 (2006)(quoting Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 , 125 S.Ct. 1517 , 161 L.Ed.2d 454 (2005)). See Erlandson v. Northglenn Mun. Court, 528 F.3d 785, 788-89 (10th Cir.2008); Mann v. Boatright, 477 F.3d 1140, 1146 (10th Cir.2007). The elements, thus, are: (i) a state-court loser; (ii) who is asking a federal district court; (iii) to review the correctness of a judgment rendered by a state court; and (iv) which judgment was rendered before the commencement of the federal proceeding. See Guttman v. Khalsa, 446 F.3d 1027, 1032 (10th Cir.2006)(“The Rooker-Feldman doctrine ... is confined to cases of the kind from which the doctrine acquired its name: cases brought by state-court losers *1168 complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those judgments.”)(quoting Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. at 284 , 125 S.Ct. 1517 ). The Tenth Circuit has made clear that “the Rooker-Feldman doctrine is confined to cases brought after the state proceedings have ended.” Mann v. Boatright, 477 F.3d at 1146 (internal quotation marks omitted). See Guttman v. Khalsa, 446 F.3d at 1031-32 (holding that Rooker-Feldman doctrine applies only where state court appeals process has run its full course).
LAW REGARDING EXERCISE OF DISCRETIONARY JURISDICTION OVER DECLARATORY JUDGMENT ACTIONS
In Brillhart v. Excess Insurance Co. of America, the Supreme Court explained that district courts are “under no compulsion to exercise ... jurisdiction” under the Declaratory Judgment Act, 28 U.S.C. §§ 2201 to 2202. 316 U.S. at 494 , 62 S.Ct. 1173 . The Supreme Court explained:
Ordinarily it would be uneconomical as well as vexatious for a federal court to proceed in a declaratory judgment suit where another suit is pending in a state court presenting the same issues, not governed by federal law, between the same parties. Gratuitous interference with the orderly and comprehensive disposition of a state court litigation should be avoided.
Brillhart v. Excess Ins. Co. of Am., 316 U.S. at 495 , 62 S.Ct. 1173 . A court should determine whether the lawsuit “can be better settled in the proceeding pending in the state court.” Brillhart v. Excess Ins. Co. of Am., 316 U.S. at 495 , 62 S.Ct. 1173 .
The Tenth Circuit has adopted a five-factor test for evaluating whether a district court should exercise its discretionary jurisdiction over a declaratory judgment action. See St. Paul Fire and Marine Ins. Co. v. Runyon, 53 F.3d 1167, 1169 (10th Cir.1995). These factors include:
whether a declaratory action would settle the controversy; [2] whether it would serve a useful purpose in clarifying the legal relations at issue; [3] whether the declaratory remedy is being used merely for the purpose of “procedural fencing” or “to provide an arena for a race to res judicata”; [4] whether use of a declaratory action would increase friction between our federal and state courts and improperly encroach upon state jurisdiction; and [5] whether there is an alternative remedy which is better or more effective.
St. Paul Fire and Marine Ins. Co. v. Runyon, 53 F.3d at 1169 (alterations original)(quoting State Farm Fire and Cas. Co. v. Mhoon, 31 F.3d 979, 983 (10th Cir.1994)). The Tenth Circuit has held that a district court’s dismissal of a declaratory judgment action is an abuse of discretion when there is no pending state proceeding. See United States v. City of Las Cruces, 289 F.3d 1170, 1183 (10th Cir.2002) (citing ARW Exploration Corp. v. Aguirre, 947 F.2d 450, 454 (10th Cir.1991)). In St. Paul Fire and Marine Insurance Co. v. Runyon, the plaintiff, an insurance company, sought a declaratory judgment holding that it had no obligation to defend the defendant under the terms of a professional-liability insurance policy. See 53 F.3d at 1168 . The defendant sought indemnification and argued that the plaintiff had a duty to defend him against claims brought by his coworkers. See St. Paul Fire and Marine Ins. Co. v. Runyon, 53 F.3d at 1168 . The insurance-company plaintiff refused to provide a defense. See St. Paul Fire and Marine Ins. Co. v. Runyon, 53 F.3d at 1168 . The district court in St. *1169 Paul Fire and Marine Ins. Co. v. Runyon had abstained from exercising jurisdiction, “because the same issues were involved in the pending state proceeding, and therefore, there existed a more effective alternative remedy.” 53 F.3d at 1169 .
The Tenth Circuit in St. Paul Fire and Marine Insurance Co. v. Runyon explained:
The parties have a pending state contract action, which incorporates the identical issue involved in the declaratory judgment action. [The defendant’s] state breach of contract complaint against [the insurance-company plaintiff] alleges the coworkers’ lawsuit is a “covered claim” pursuant to the insurance policy. In resolving the insurance contract, the state court will necessarily determine rights and obligations under the contract. [The insurance-company plaintiff] is seeking a declaration by the federal court that the coworkers’ lawsuit is not a covered claim. The issue in the federal declaratory judgment action is identical to what would be a defense to the state court contract action — whether [the defendant’s insurance contract with [the insurance-company plaintiff] protects him from the coworkers’ lawsuit. Because the state court will determine, under state contract law, whether the tort action is covered by the insurance contract, it is not necessary for the federal court to issue a declaration on the insurance contract.
St. Paul Fire and Marine Ins. Co. v. Runyon, 53 F.3d at 1169 . A federal court is not required to refuse jurisdiction, but it “should not entertain a declaratory judgment action over which it has jurisdiction if the same fact-dependent issues are likely to be decided in another pending proceeding.” St . Paul Fire and Marine Ins. Co. v. Runyon, 53 F.3d at 1170 . See Schering Corp. v. Griffo, 872 F.Supp.2d 1220, 1245-47 , 2012 WL 394603, at *24-25 (D.N.M.2012)(Browning, J.).
LAW REGARDING THE McCARRANFERGUSON ACT AND FEDERAL JURISDICTION
The McCarran-Ferguson Act provides: “No Act of Congress shall be construed to invalidate, impair, or supersede any law enacted by any State for the purposes of regulating the business of insurance, or which imposes a fee or tax upon such business, unless such Act specifically relates to the business of insurance.” 15 U.S.C. § 1012 (b). In Grimes v. Crown Life Ins. Co., 857 F.2d 699 (10th Cir.1988), the Tenth Circuit held that “we are hesitant to accept the proposition that a state statute, even when buttressed by the federal policy expressed in the McCarranFerguson Act, can affect the invocation of federal diversity jurisdiction.” 857 F.2d at 702 (citing Atl. & Pac. Ins. Co. v. Combined Ins. Co. of Am., 312 F.2d 513, 515 (10th Cir.1962)). It found that the policy of “the McCarran-Ferguson Act was to leave the regulation of insurers to the states, it did not intend to divest federal courts of the right to apply state law regarding the regulation of insurers in appropriate diversity proceedings.” Grimes v. Crown Life Ins. Co., 857 F.2d at 702 . “The McCarran Act serves to limit the authority of federal regulatory agencies as to practices in the insurance business in the face of state acts and in the absence of specific federal law, but it does not follow that there is thereby a modification of diversity jurisdiction of the federal courts.” Atl. & Pac. Ins. Co. v. Combined Ins. Co. of Am., 312 F.2d at 515 . In Safety National Casualty Corp. v. Certain Underwriters at Lloyd’s London, the Fifth Circuit held that “we look skeptically on a claim that the McCarran-Ferguson Act intended to deny diversity jurisdiction or federal question jurisdiction to federal *1170 courts in the state of Louisiana.” 587 F.3d at 724 n. 39 (citing Grimes v. Crown Life Ins. Co., 857 F.2d at 702-03 ). The United States Court of Appeals for the Fourth Circuit, in Gross v. Weingarten, 217 F.3d 208 (4th Cir.2000), held:
We are skeptical that Congress intended, through the McCarran-Ferguson Act, to remove federal jurisdiction over every claim that might be asserted against an insurer in state insolvency proceedings. If nothing else, the argument proves too much, for it would operate to divest exclusively federal jurisdiction as effectively as it would diversity jurisdiction, leaving many plaintiffs with no forum in which to assert their federal rights. In any event, we do not believe that concurrent federal jurisdiction over the defendants’ counterclaims threatens to “invalidate, impair, or supersede” (as those terms are used in the McCarranFerguson Act) Virginia’s efforts to establish a single equitable proceeding to liquidate or rehabilitate insolvent insurers.
217 F.3d at 222 . The United States Court of Appeals for the Ninth Circuit, in Hawthorne Savings F.S.B. v. Reliance Ins. Co. of Illinois, 421 F.3d 835 (9th Cir.2005), followed the Fourth Circuit and Tenth Circuit. See 421 F.3d at 843 . In United States v. Wisconsin State Circuit Court for Dane County, 767 F.Supp.2d 980 (W.D.Wisc.2011), however, the United States District Court for the Western District of Wisconsin held that the McCarranFerguson Act reverse preempts jurisdictional statutes, such as 28 U.S.C. § 1332 , when application of the federal removal statutes would impair the operation of a state law regulating insurance, which gave jurisdiction to state rehabilitation courts. See 767 F.Supp.2d at 983-84 .
LAW REGARDING ABSTENTION UNDER BURFORD V. SUN OIL CO.
In Burford v. Sun Oil Co., the Supreme Court held that the federal proceedings should have been dismissed where the lawsuit’s subject matter in the federal district court involved a state agency’s review of oil drilling permits, because the state had established its own review system for the permits and a federal court ruling would have an impermissibly disruptive affect on state policy for management of the oil fields. See 319 U.S. at 316-35 , 63 S.Ct. 1098 . The Supreme Court found that Texas provided a “unified method for the formation of policy and determination of cases by the Commission and by the state courts,” and that conflicts “in interpretation of state law, dangerous to the success of state policies, are almost certain to result from the intervention of the lower federal courts.” Burford v. Sun Oil Co., 319 U.S. at 333-34 , 63 S.Ct. 1098 . The Tenth Circuit has noted that “Burford ‘is concerned with protecting complex state administrative processes from undue federal interference.’ ” Heavy Petroleum Partners, LLC v. Atkins, 457 Fed.Appx. 735 , 744 n. 8 (10th Cir.2012)(unpublished)(citing New Orleans Pub. Serv., Inc. v. Council of New Orleans, 491 U.S. 350, 362 , 109 S.Ct. 2506 , 105 L.Ed.2d 298 (1989)). In New Orleans Public Service, Inc. v. Council of City of New Orleans, the Supreme Court held that, under the “Burford doctrine,” a federal district court, sitting in equity, must decline to interfere with the proceedings or orders of state administrative agencies: (i) when there are “difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the result in the case then at bar”; or (ii) where the “exercise of federal review of the question in a case and in similar cases would be disruptive of state efforts to es *1171 tablish a coherent policy with respect to a matter of substantial public concern.” 491 U.S. at 361 , 109 S.Ct. 2506 .
Professors Charles Wright and Arthur Miller have commented that
the Court appears to sanction Burford type abstention where, as in the Burford and Alabama Public Service [Commission v. Southern Railway Co., 341 U.S. 341 , 71 S.Ct. 762 , 95 L.Ed. 1002 (1951) ] cases themselves, the state has a unified scheme for review of its administrative orders and federal intervention in cases in which diversity is present would have a disruptive effect on the state’s efforts to establish a coherent policy on a matter of substantial public concern.
17A Federal Practice & Procedure, Jurisdiction § 4244 (3d ed.2011). “While Bur-ford is concerned with protecting complex state administrative processes from undue federal interference, it does not require abstention whenever there exists such a process, or even in all cases where there is a ‘potential for conflict’ with state regulatory law or policy.” New Orleans Pub. Serv., Inc. v. Council of City of New Orleans, 491 U.S. at 362 , 109 S.Ct. 2506 . The Supreme Court has noted that an analysis of Burford will “only rarely” favor abstention, and that “the power to dismiss recognized in Burford represents an extraordinary and narrow exception to the duty of the District Court to adjudicate a controversy properly before it.” Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 728 , 116 S.Ct. 1712 , 135 L.Ed.2d 1 (1996). The United States Court of Appeals for the First Circuit has held that “Burford is normally implicated only “when the federal courts are asked to interfere with state processes by reviewing the proceedings or orders of state administrative agencies.’ ” Guillemard-Ginorio v. Contreras-Gomez, 585 F.3d 508, 525 (1st Cir.2009). The United States Court of Appeals for the Ninth Circuit has determined that “Bur-ford abstention is improper where state law provides for judicial review in any state court of general jurisdiction rather than concentrating review in a ‘particularized or specialized’ court.” Cingular Wireless, LLC v. Thurston Cnty., 150 Fed.Appx. 633, 635 (9th Cir.2005)(unpublished).
In Grimes v. Crown Life Ins. Co., the Tenth Circuit held that the McCarranFerguson Act becomes relevant to Burford abstention, because it encourages the states to formulate their own systems to regulate insurers doing business in their states. See 857 F.2d at 703 . It found that,
in instances where states have responded to this congressional policy by formulating complex and specialized administrative and judicial to regulate insurers, especially the liquidation of insolvent insurers, it becomes increasingly possible that the exercise by a federal court of its jurisdiction will prove to be “disruptive of state efforts to establish a coherent policy with respect to a matter of substantial public concern.”
Grimes v. Crown Life Ins. Co., 857 F.2d at 703 . The Tenth Circuit explained that a number of factors are relevant to whether the exercise of jurisdiction is proper when states formulate comprehensive schemes for insurance regulation, including: (i) whether the suit is based on a cause of action which is exclusively federal; (ii) whether the suit requires the court to determine issues which are directly relevant to the liquidation proceeding or state policy in the regulation of the insurance industry; (iii) whether state procedures indicate a desire to create special state forums to regulate and adjudicate these issues; and (iv) whether difficult or unusual state laws are at issue. See Grimes v. Crown Life Ins. Co., 857 F.2d at 704-05 . In Hawthorne Savings F.S.B. v. Reliance Insurance Co. of Illinois, the Ninth Circuit held *1172 that, when looking at Burford abstention in the insurance context, a court should consider whether resolution of the dispute would entail any more federal intrusion into state policy than any other diversity case. See 421 F.3d at 848 . The Fifth Circuit has noted that the insurance solvency context presents the “classic example” of when a court should abstain under Burford. Callon Petroleum Co. v. Frontier Ins. Co., 351 F.3d 204, 209 (5th Cir.2003).
SUPREME COURT OF NEW MEXICO CASES ON UNINSURED MOTORIST COVERAGE
N.M.S.A.1978, § 66-5-301(A) and (C), in relevant part, state:
A. No motor vehicle or automobile liability policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person and for injury to or destruction of property of others arising out of the ownership, maintenance or use of a motor vehicle shall be delivered or issued for delivery in New Mexico with respect to any motor vehicle registered or principally garaged in New Mexico unless coverage is provided therein or supplemental thereto in minimum limits for bodily injury or death and for injury to or destruction of property as set forth in Section 66-5-215 NMSA 1978 and such higher limits as may be desired by the insured, but up to the limits of liability specified in bodily injury and property damage liability provisions of the insured’s policy, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death, and for injury to or destruction of property resulting therefrom, according to the rules and regulations promulgated by, and under provisions filed with and approved by, the superintendent of insurance.
C. [T]he named insured shall have the right to reject uninsured motorist coverage as described in Subsections A and B of this section; provided that unless the named insured requests such coverage in writing, such coverage need not be provided in or supplemental to a renewal policy where the named insured has rejected the coverage in connection with a policy previously issued to him by the same insurer.
N.M. Stat. § 66-5-30KA) & (C)(emphasis added). Regulation 13.12.3.9, which elaborates § 66-5-301, provides: “The rejection of the provisions covering damage caused by an uninsured or unknown motor vehicle as required in writing by the provisions of Section 66-5-301 NMSA 1978 must be endorsed, attached, stamped, or otherwise made a part of the policy of bodily injury and property damage insurance.” N.M.A.C. § 13.12.3.9.
The Supreme Court of New Mexico has recognized that § 66-5-301 “embodies a public policy of New Mexico to make uninsured motorist coverage a part of every automobile liability insurance policy issued in this state, with certain limited exceptions,” and that the statute is “intended to expand insurance coverage and to protect individual members of the public against the hazard of culpable uninsured motorists.” Romero v. Dairyland Ins. Co., 111 N.M. 154, 156 , 803 P.2d 243, 245 (1990). Based upon those observations, the Supreme Court of New Mexico considers § 66-5-301 a remedial statute and, thus, maintains that it be liberally interpreted to further its purpose, construing exceptions to uninsured motorist coverage strictly to protect the insured. See Romero v. Dairyland Ins. Co., 111 N.M. at 156 , 803 P.2d at 245 . The Supreme Court of *1173 New Mexico has noted that an insured may reject uninsured motorist coverage, but that such rejection must satisfy the applicable regulations. See Romero v. Dairyland Ins. Co., 111 N.M. at 156 , 803 P.2d at 245 . To be valid, a rejection of uninsured motorist coverage must be made a part of the policy by endorsement on the declarations sheet, by attachment of the written rejection to the policy, or by some other means that makes the rejection a part of the policy so as to clearly and unambiguously call to the insured’s attention that UM coverage has been waived. See Romero v. Dairyland Ins. Co., 111 N.M. at 156 , 803 P.2d at 245 . With respect to the regulation requiring that the rejection be made a part of the policy delivered to the insured, the Supreme Court of New Mexico has stated:
[Regulation 13.12.3.9] ensurefs] that the insured has affirmative evidence of the extent of coverage. Upon further reflection, consultation with other individuals, or after merely having an opportunity to review one’s policy at home, an individual may well reconsider his or her rejection of uninsured motorist coverage. Providing affirmative evidence of the rejection of the coverage comports with a policy that any rejection of the coverage be knowingly and intelligently made. Any individual rejecting such coverage should remain well informed as to that decision. We find that the regulation of the superintendent of insurance furthers a legislative purpose to provide for the inclusion of uninsured motorist coverage in every automobile liability policy unless the insured has knowingly and intelligently waived such coverage.
Romero v. Dairyland Ins. Co., 111 N.M. at 156-57 , 803 P.2d at 245-46 . Based upon that assessment of § 66-5-301 and N.M.A.C. § 13.12.3.9, the Supreme Court of New Mexico has held that, unless the named insured rejects UM coverage in a manner consistent with statutory and ad-
ministrative requirements, UM coverage shall be read into an insured’s policy regardless of the parties’ intent or the fact that a premium has not been paid. See Kaiser v. DeCarrera, 122 N.M. 221, 223 , 923 P.2d 588, 590 (1996)(quoting Romero v. Dairyland Ins. Co., 111 N.M. at 155 , 803 P.2d at 244 ). In Kaiser v. DeCarrera, the Supreme Court of New Mexico ruled that a valid rejection of uninsured motorist coverage did not take place and, therefore, read uninsured motorist coverage into the policy. The plaintiff had signed a rejection as part of the application for insurance, and the insurance company sent an amended policy reflecting the rejection to the address on the application that was returned to sender. See Kaiser v. DeCarrera, 122 N.M. at 223 , 923 P.2d at 590 . The Supreme Court of New Mexico found that the plaintiff was never provided a policy with the rejection included and that, as a result, uninsured motorist coverage should be read into the policy. See Kaiser v. DeCarrera, 122 N.M. at 223 , 923 P.2d at 590 .
In Montano v. Allstate Indemnity Co., 135 N.M. 681 , 92 P.3d 1255 (2004), the Supreme Court of New Mexico addressed the stacking of insurance coverage, noting that its cases had “expressed a public policy in favor of stacking,” and that “it is unfair not to allow stacking when multiple premiums are paid or when the policy is otherwise ambiguous.” 135 N.M. at 685 , 92 P.3d at 1259 (emphasis original). The Supreme Court of New Mexico indicated that it would take the opportunity to “chart a new course.” Montano v. Allstate Indem. Co., 135 N.M. at 686 , 92 P.3d at 1260 . Interpreting § 66-5-301(A) and (C), the Supreme Court of New Mexico held that “an insurance company should obtain written rejections of stacking in order to limit its liability based on an anti-stacking provision” and that, with “written waivers, insureds will know exactly what coverage *1174 they are receiving and for what cost.” Montano v. Allstate Indem. Co., 135 N.M. at 686-87 , 92 P.3d at 1260-61 . The Supreme Court of New Mexico also illustrated its holding:
[I]n a multiple-vehicle policy insuring three cars, the insurer shall declare the premium charge for each of the three [uninsured or underinsured motorist] coverages and allow the insured to reject, in writing, all or some of the offered coverages. Thus, hypothetically, in the case of a $25,000 policy, if the premium for one [uninsured or underinsured motorist] coverage is $65, two coverages is an additional $60, and three coverages $57, the insured who paid all three (for a total premium of $182) would be covered up to $75,000 in [uninsured or underinsured motorist] bodily injury coverage. However, the insured may reject, in writing, the third available coverage and pay $125 for $50,000 of uninsured motorist coverage; or the insured may reject, in -writing, the third available coverage and pay $65 for $25,000 of [uninsured or underinsured motorist] coverage; or the insured may reject all three [uninsured or underinsured motorist] coverages. In any event, the coverage would not depend on which vehicle, if any, was occupied at the time of the injury. Thus, the insured’s expectations will be clear, and an insured will only receive what he or she paid for.
Montano v. Allstate Indem. Co., 135 N.M. at 687 , 92 P.3d at 1261 .
In Marckstadt v. Lockheed Martin Corp., 147 N.M. 678 , 228 P.3d 462 (2009), the Supreme Court of New Mexico consolidated cases before it, including a case that the Tenth Circuit certified to it, to answer the question of what is required under § 66-5-301 and N.M.A.C. § 13.12.3.9 to effectively reject uninsured motorist coverage. See 147 N.M. at 683 , 228 P.3d at 467 . 7 The Supreme Court of New Mexico held that, “in order for the offer and rejection requirements of Section 66-5-301 to effectuate the policy of expanding [uninsured or underinsured motorist] coverage, the insurer is required to meaningfully offer such coverage and the insured must knowingly and intelligently act to reject it before it can be excluded from a policy.” Marckstadt v. Lockhead Martin Corp., 147 N.M. at 684 , 228 P.3d at 468 (emphasis original). It found that “the rejection which the regulation requires to be in writing must be the act of rejection described in the statute” and held that an insured must reject uninsured motorist coverage in writing. Marckstadt v. Lockhead Martin Corp., 147 N.M. at 687 , 228 P.3d at 470 . In Progressive Northwestern Insurance Co. v. Weed Warrior Services, the Supreme Court of New Mexico answered
in the affirmative the question, certified to us by the United States Court of Appeals for the Tenth Circuit, of whether election by an insured to purchase [uninsured or underinsured motorist] coverage in an amount less than the policy limits constitutes a rejection of the maximum amount of [uninsured or *1175 underinsured motorist] coverage permitted under Section 66-5-301.
149 N.M. at 158, 245 P.3d at 1210. 8 It found that § 66-5-301 provides that insurers must offer uninsured motorist coverage, or underinsured motorist coverage, in an amount greater than the mínimums required. See Progressive N.W. Ins. Co. v. Weed Warrior Servs., 149 N.M. at 160, 245 P.3d at 1212. The Supreme Court of New Mexico held that the “Legislature intended for drivers to have the option of carrying [uninsured or underinsured motorist] coverage equal to their policy limits,” and rejected “any suggestion that Section 66-5-301 places a burden on the insured to request [uninsured or underinsured motorist] coverage.” Progressive N.W. Ins. Co. v. Weed Warrior Servs., 149 N.M. at 161, 245 P.3d at 1213. It noted that the right to reject coverage cannot be meaningfully exercised without an offer of coverage equal to policy limits, and that it would not “impose on the consumer an expectation that she or he will be able to make an informed decision as to the amount of [uninsured or underinsured motorist] coverage desired or required without first receiving information from the insurance company.” Progressive N.W. Ins. Co. v. Weed Warrior Servs., 149 N.M. at 161, 245 P.3d at 1213.
In Jordan v. Allstate Ins. Co., the Supreme Court of New Mexico held that “a rejection of [uninsured or underinsured motorist] coverage equal to the liability limits in an automobile insurance policy must be made in writing and must be made a part of the insurance policy delivered to the insured.” 149 N.M. at 165, 245 P.3d at 1217. It then further found that:
In order to honor these requirements effectively, insurers must provide the insured with the premium charges corresponding to each available option for [uninsured or underinsured motorist coverage] so that the insured can make a knowing and intelligent decision to receive or reject the full amount of coverage to which the insured is statutorily entitled. If an insurer fails to obtain a valid rejection, the policy will be reformed to providing [uninsured or underinsured motorist] coverage equal to the limits of liability.
Jordan v. Allstate Ins. Co., 149 N.M. at 165, 245 P.3d at 1217. It noted that “insurers continue to offer [uninsured or under-insured motorist] coverage in ways that are not conducive to allowing the insured to make a realistically informed choice,” and found it “necessary to prescribe workable requirements for a valid and meaningful rejection of [uninsured or underinsured motorist] coverage in amounts authorized by statute.” Jordan v. Allstate Ins. Co., 149 N.M. at 169, 245 P.3d at 1221. The Supreme Court of New Mexico then provided that:
When issuing an insurance policy, an insurer must inform the insured that he *1176 or she is entitled to purchase [uninsured or underinsured motorist] coverage in an amount equal to the policy’s liability limits and must also provide the corresponding premium charge for that maximum amount of [uninsured or underinsured motorist] coverage. The premium cost for the minimum amount of [uninsured or underinsured motorist] coverage allowed by Section 66-5-301(A) must also be provided, as well as the relative costs for any other levels of [uninsured or underinsured motorist] coverage offered to the insured. The insured must be informed that he or she has a right to reject [uninsured or underinsured motorist] coverage altogether. Providing the insured with a menu of coverage options and corresponding premium costs will enable the insured to make an informed decision....
Jordan v. Allstate Ins. Co., 149 N.M. at 169, 245 P.3d at 1221. It held that, unless these requirements are met, the “policy will be reformed to provide [uninsured or underinsured motorist] coverage equal to the liability limits.” Jordan v. Allstate Ins. Co., 149 N.M. at 169, 245 P.3d at 1221. The Supreme Court of New Mexico also found that the rules that it announced should be retroactive, because, on balance, “we deem it more equitable to let the financial detriments be borne by insurers, who were in a better position to ensure meaningful compliance with the law” and retroactive application “will ensure that all insureds will be treated equally.” Jordan v. Allstate Ins. Co., 149 N.M. at 171, 245 P.3d at 1223.
ANALYSIS
The Court will deny the Motion. The Defendants appropriately removed this case under CAFA, because the amount in controversy exceeds $5,000,000.00 and no exception applies. Furthermore, there is no basis on which the Court should decline to exercise jurisdiction.
I. THE COURT HAS JURISDICTION UNDER CAFA.
The Court finds that the McCarranFerguson Act does not reverse preempt CAFA, because the Court’s exercise of jurisdiction does not impair, supersede, or invalidate a state insurance statute. The Court concludes that the Defendants have proved, by a preponderance of the evidence, that the amount in controversy exceeds $5,000,000.00. Finally, the local-controversy exception to CAFA does not apply.
A. THE MCCARRAN-FERGUSON ACT DOES NOT REVERSE PREEMPT CAFA.
The Plaintiffs argued that the McCarran-Ferguson Act allows state law to reverse preempt an otherwise applicable federal statute, and that CAFA cannot invalidate, impair, or supersede the Supreme Court of New Mexico’s regulatory, retroactive ruling in Jordan v. Allstate Ins. Co. See Tr. at 17:12-18:14 (Berardinelli). They asserted that the McCarran-Ferguson Act is jurisdictional and intended to bar the federal courts from exercising jurisdiction when a case involves state regulation of insurance. See Tr. at 43:19-25 (Berardinelli).
Four circuit courts of appeals, including the Tenth Circuit, have held that the McCarran-Ferguson Act does not reverse preempt jurisdictional statutes or expressed skepticism that the McCarranFerguson Act would do so. See Safety National Casualty Corp. v. Certain Underwriters at Lloyd’s London, 587 F.3d at 724 n. 39; Hawthorne Savings F.S.B. v. Reliance Ins. Co. of Illinois, 421 F.3d at 843 ; Gross v. Weingarten, 217 F.3d at 222 ; Grimes v. Crown Life Ins. Co., 857 F.2d at 702 ; Atl. & Pac. Ins. Co. v. Combined Ins. Co. of Am., 312 F.2d at 515 . Although none of these cases addressed the potential *1177 impact of the McCarran-Ferguson Act on CAFA, the Tenth Circuit held that the McCarran-Ferguson Act is not “a modification of diversity jurisdiction of the federal courts.” Atl. & Pac. Ins. Co. v. Combined Ins. Co. of Am., 312 F.2d at 515 . At bottom, CAFA is another means of obtaining diversity jurisdiction. It is part of the same statute, 28 U.S.C. § 1332 , as the traditional diversity jurisdiction requirements and was enacted with the same purpose in mind — to protect out-of-state defendants from the perceived biases of state courts in favor of in-state plaintiffs. See Coffey v. Freeport McMoran Copper & Gold, 581 F.3d at 1243 . As the Fourth Circuit noted, in Gross v. Weingarten, the Plaintiffs’ argument that the McCarranFerguson Act applies to jurisdictional statutes proves too much, because “it would operate to divest exclusively federal jurisdiction as effectively as it would diversity jurisdiction, leaving many plaintiffs with no forum in which to assert their federal rights.” 217 F.3d at 222 . Moreover, the Plaintiffs advanced no arguments explaining how the Court, exercising jurisdiction under CAFA, would — without more — be construing CAFA to “invalidate, impair, or supersede any law enacted by any State for the purposes of regulating the business of insurance.” 15 U.S.C. § 1012 (b). To say that the Court lacks jurisdiction because it might rule against the Plaintiffs would be to confuse jurisdiction and the merits. It is difficult to perceive how the Court’s exercise of jurisdiction — without more — invalidates or impairs any New Mexico law respecting insurance, because the Court is required, under the precepts of Erie Rail Road v. Tompkins, 304 U.S. 64, 78 , 58 S.Ct. 817 , 82 L.Ed. 1188 (1938), to apply state substantive law when exercising diversity jurisdiction. The Plaintiffs did not argue that any state statute grants a state court exclusive jurisdiction to address this type of insurance issue, which is the basis on which the Western District of Wisconsin held that the McCarran-Ferguson Act reverse preempted the federal removal and jurisdictional statutes. See United States v. Wisc. State Circuit Court for Dane Cnty., 767 F.Supp.2d at 983-84 .
In this case, there is an absence of any argument that CAFA would impair or supersede any state insurance jurisdictional statute. 9 In any case, the Court follows the Tenth Circuit’s holdings in Grimes v. Crown Life Ins. Co. and Atlantic & Pacific Insurance Co. v. Combined Insurance Co. of America. Accordingly, the Court finds that the McCarran-Ferguson Act does not reverse preempt CAFA, and the Court will analyze CAFA to determine whether it has jurisdiction over this case.
B. THE DEFENDANTS HAVE MET CAFA’S JURISDICTIONAL REQUIREMENTS.
At the hearing, the Plaintiffs conceded that the only aspects of CAFA that they are challenging is the amount-in-controversy requirement and the local-controversy exception. See Tr. at 89:6-22 (Court, Berardinelli). The Plaintiffs also conceded that CAFA only requires minimal diversity. See Tr. at 89:6-13 (Court, Berardinel *1178 li). Accordingly, the Plaintiffs admit that this action involves at least one-hundred persons and that there is minimal diversity. See 28 U.S.C. § 1332 (d)(2) and (5). The Plaintiffs argue that this case is unique, because it is “an equitable action for declaratory relief brought to ensure enforcement of an affirmative mandate of the New Mexico Supreme Court.” Reply at 1 (emphasis original). The Plaintiffs assert that they seek no monetary damages and that what “happens after Plaintiffs achieve the equitable relief sought in this case will be left for other cases.” Reply at 4. The Plaintiffs asserted that they did not concede the amount-in-controversy issue and argued that, beyond the estimated $500,000.00 in administrative costs, the amount-in-controversy calculations are entirely speculative. See Tr. at 84:15-85:2 (Berardinelli). 10 The Plaintiffs stated that they are not asking for payment of premiums. See Tr. at 85:3-4 (Berardinelli). They argued that whether policyholders can collect under the policies is not the Plaintiffs’ objective and argued that all the relief they seek is compliance with Jordan v. Allstate Ins. Co., See Tr. at 85:20-86:7 (Court, Berardinelli).
The amount in controversy requirement is “an estimate of the amount that will be put at issue in the course of the litigation.” McPhail v. Deere & Co., 529 F.3d 947, 956 (10th Cir.2008). “In actions seeking declaratory or injunctive relief, it is well established that the amount in controversy is measured by the value of the object of the litigation.” Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. at 347 , 97 S.Ct. 2434 . The Senate Report on CAFA also provides that the amount in controversy shall be determined from the viewpoint of either the plaintiff or the defendant. See S.Rep. No. 109-14 at 42-43, 2005 WL 627977 , at *37. See also Lovell v. State Farm Mut. Auto. Ins. Co., 466 F.3d at 897 (holding that the Tenth Circuit follows the “either viewpoint rule”). Under CAFA, a court aggregates the class claims to determine the amount in controversy. See 28 U.S.C. § 1332 (d)(2). Accord Lafalier v. State Farm Fire & Cas. Co., 391 Fed.Appx. 732, 734 (10th Cir.2010) (“Thus, under CAFA a defendant may remove an action if it involves the claims of at least 100 persons that are worth at least $5,000,000 in the aggregate, so long as there is minimal diversity between the parties.”).
1. The Plaintiffs Seek Relief Which Will Have a Monetary Impact, Even Though They Do Not Seek Monetary Damayes.
The Plaintiffs seek: (i) a declaratory judgment which retroactively reforms each of the insurer Defendants’ uninsured motorist policies, without the payment of *1179 any premiums; (ii) an injunction ordering the insurer Defendants to notify all of their insureds of these changes; (iii) an injunction ordering each insurer Defendant to adopt and implement a form containing the menu of uninsured motorist coverage options that the Supreme Court of New Mexico discussed in Jordan v. Allstate Ins. Co.; and (iv) an injunction ordering Desert Mountain to adopt and implement a form containing the menu of uninsured motorist coverage options discussed in Jordan v. Allstate Ins. Co. See Complaint ¶¶ 1-2, at 18-19. Accordingly, the Plaintiffs ask that the Court apply Jordan v. Allstate Ins. Co. to these Defendants, who were not a part of that case. 11 In Jordan v. Allstate Ins. Co., the Supreme Court of New Mexico established a specific menu of options and information that an insurer must provide to the insured for a written rejection of uninsured motorist coverage to be valid and that, unless those requirements are met, the “policy will be reformed to provide [uninsured or underinsured motorist] coverage equal to the liability limits.” 149 N.M. at 169, 245 P.3d at 1221. Thus, the Court will have to determine whether these Defendants’ insurance policies meet the Jordan v. Allstate Ins. Co. and § 66-5-301 requirements. If the Court, for the first time, determines that these Defendants are not complying with the law as stated in Jordan v. Allstate Ins. Co., such that Jordan v. Allstate Ins. Co. mandates that their policies should be retroactively reformed, then there will be an immediate benefit conferred onto the Plaintiffs in terms of increased coverage, without a resulting increase in premiums, and an assortment of costs imposed on the Defendants.
2. CAFA’S Amount-in-Controversy Requirement is Met When the Court Examines the Benefits of the Relief Sought to the Plaintiffs.
The Court first analyzes the amount in controversy from the Plaintiffs’ viewpoint. Athough the Plaintiffs assert that they do not seek any monetary damages, there is a monetary benefit to the equitable relief that they seek. See Reply at 4. The Senate Report instructs that the federal court should “include in its assessment the value of all relief and benefits that would logically flow from the granting of the declaratory relief sought by the claimants.” S.Rep. No. 109-14 at 42-43, 2005 U.S.C.C.A.N. 3, 41, 2005 WL 627977 , at *37. Two cases within the Tenth Circuit have determined that, when litigations seeks to increase insurance coverage, the proper measure of the amount in controversy is the increase in coverage limits of the policy. See Whitehead-Rojas v. Am. Family Mut. Ins. Co., 2008 WL 1924899 , at *3; Henderlong v. Allstate Ins. Co., No. 10-0698, 2010 *1180 WL 3843324 , at *2. Additionally, the Sixth Circuit has calculated the amount in controversy in a similar case by subtracting the existing policy coverage from the coverage sought. See Freeland v. Liberty Mut. Ins. Co., 632 F.3d at 254 (holding that the amount in controversy was $75,000.00 where the plaintiffs sought “a declaratory judgment that their insurance policy provides [uninsured or underinsured motorist] coverage up to $100,000 per accident, instead of the $25,000 per accident maximum that appears on the policy’s face”). The Court agrees that the value of the litigation, viewed from the Plaintiffs’ perspective, is the total increase in additional uninsured motorist coverage. No court has determined that these Defendants’ insurance policies fail to comply with § 66-5-301, and it is only when an insurer’s policies fail to comply that a court should retroactively reform the policy. See Jordan v. Allstate Ins. Co., 149 N.M. at 169, 245 P.3d at 1221 (stating that, “if an insurer” does not comply with the rules the Supreme Court of New Mexico set forth, “the policy will be reformed”). The injunction and declaratory judgment that the Plaintiffs seek would reform the putative class’ insurance policies to ensure that their uninsured motorist coverage is equal to the limits of the policy and this confers a benefit on the Plaintiffs, extending their coverage. If the Plaintiffs are successful they receive a declaration increasing their uninsured motorist coverage to the limits of their liability; accordingly, the Court will look to the difference between existing uninsured motorist limits and bodily injury limits in policies within the putative class. See Freeland v. Liberty Mut. Fire Ins. Co., 632 F.3d at 253 (“The ‘value of the consequences which may result from the litigation,’ ... — that is, the monetary consequence that would result from a victory for the Freelands — is the difference between $100,000 and $25,000.”); Liberty Mut. Fire Ins. Co. v. Yoder, 112 Fed.Appx. 826, 828 (3d Cir.2004) (“[I]t is evidence from Yoder’s notice to Liberty Mutual of his claim for benefits, which was incorporated by reference into the complaint, that the $2 million liability limits of the insurance policy were also at issue.”). Although the Defendants will likely not have to pay out the full amount of coverage on each putative class members’ policy, the Court is examining the benefits to the Plaintiffs and, even if they never use it, increased coverage provides a benefit in the form of peace of mind as well as added protection should the coverage be needed. See Apartment Inv. and Mgmt. Co. (AIMCO) v. Nutmeg Ins. Co., 593 F.3d 1188, 1193 (10th Cir.2010)(discussing the “peace of mind that insurance promises”).
The Defendants assert that the aggregate increase in insurance coverage exceeds $1,500,000,000.00, because the increase in uninsured motorist coverage for Colorado Casualty alone is $1,470,000,000.00. See Notice of Removal ¶ 32, at 13. Brigitte Coulson, an Underwriting Consultant with Colorado Casualty, swore that she identified 4,799 Colorado Casualty policies that were issued or were in force after May 20, 2004, where uninsured motorist coverage was less than bodily injury coverage or rejected in its entirety. See Coulson Aff. ¶ 9, at 2. She calculated that the total coverage benefit to the putative class of an increase in uninsured motorist coverage would be “no less than $1.47 billion” and that when the increase in coverage is stacked per vehicle, the increase in coverage would be a benefit of “over $9 billion.” Coulson Aff. ¶ 11, at 2. She asserted that these figures represent the “total difference” between uninsured motorist and bodily injury coverage limits “as set forth in approximately one-half of the policies that would be encompassed in the putative class (those policies in force before 2008) and would be signifi *1181 cantly higher if the pol

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/8699336. Public record. Not legal advice.