ROBERT L. CARTER, District Judge
Plaintiffs Adrian W. Selby and Jill Selby ("the Selbys") and defendant Principal Life Insurance Company f/k/a Principal Mutual Life Insurance Company ("Principal") move for reconsideration of the court's September 14, 2000 opinion, docketed September 15, 2000, ("September 15, 2000 opinion" or "opinion"), certifying two classes of plaintiffs against defendant Principal for various alleged errors in the processing of health insurance claims.
BACKGROUND
The background of this case has been documented in detail in the court's September 15, 2000 opinion, reported at Selby v. Principal Mutual Life Ins. Co., 197 F.R.D. 48 (S.D.N.Y. 2000) (Carter, J.). ("Selby II".) Familiarity with that opinion is presumed. It is sufficient to note that the September 15, 2000 opinion granted plaintiffs' motion for class certification as to Class I, granted plaintiffs' motion for class certification as to Class IV, conditional upon identification of a proper class representative, and denied plaintiffs' motion to certify Classes II and III. Plaintiffs now move pursuant to F.R. Civ. P. 60(b) and Local Civil Rule 6.3 ("Local Rule 6.3") for the court to reconsider its decision to certify Class I under F.R. Civ. P. 23(b)(3) ("Rule 23(b) (3)"), its decision to deny certification to Class III, and its holding that the Selbys lack standing to represent Class IV. Defendant opposes this motion. Defendant moves pursuant to Local Rule 6.3 for the court to reconsider its decision to certify Class I and conditionally certify Class IV. Plaintiffs oppose this motion. The court considers each motion in turn.
In Selby v. Principal Mutual Life Ins. Co., 2000 WL 178191 (S.D.N.Y. Feb. 16, 2000) (Carter, J.), the court reviewed plaintiffs' first class action complaint. ("Selby I".) Plaintiffs subsequently filed the First Amended Class Complaint ("Am. Cplt."), which formed the subject of the court's opinion in Selby II.
I.
Relief from a judgment or order under F.R. Civ. P. 60(b) is "extraordinary judicial relief" and can be granted "only upon a showing of exceptional circumstances." Nemaizer v. Baker, 793 F.2d 58, 61 (2d Cir. 1986). To prevail on such a motion, plaintiff must show that one of the six possible bases outlined in F.R. Civ. P. 60(b), such as a manifest error of law or newly discovered evidence, has been met. "Such a motion is addressed to the sound discretion of the court." Joblon v. Solow, 1997 WL 158357, at *3 (S.D.N.Y. Apr. 3, 1997) (Sweet, J.).
Similarly, in order to be successful on their separate motions for reconsideration under Local Rule 6.3, plaintiffs and defendant must present "matters or controlling decisions the court overlooked that might materially have influenced its earlier decision." Morser v. ATT Info. Sys., 715 F. Supp. 516, 517 (S.D.N.Y. 1989) (Sweet, J.). Local Rule 6.3 "is to be narrowly construed and strictly applied so as to avoid repetitive arguments on issues that have been considered fully by the court." Ades v. Deloitte Touche, 843 F. Supp. 888, 892 (S.D.N.Y. 1994) (Sweet, J.). The decision to grant or deny a motion for reargument is within the sound discretion of the court. See Schaffer v. Soros, 1994 WL 592891, at *1 (S.D.N Y Oct. 31, 1994) (McKenna, J.).
II. A.
Plaintiffs move for reconsideration on several grounds. In their Memorandum in Support of their Motion for Reconsideration ("Pls.' Mem."), plaintiffs assert that the court wrongfully certified Class I pursuant to Rule 23(b)(3) as opposed to F.R. Civ. P. 23(b)(1) or 23 (b)(2) ("Rules 23(b)(1) or 23(b)(2)"). (Pls.' Mem. pp. 1-3.) Plaintiffs first contend that Class I should be certified under Rules 23 (b)(1) or 23(b)(2) because different courts could reach different conclusions as to Principal's obligations to input all of a physician's diagnoses. (Pls.' Mem. p. 3.) The court has already dealt with this issue, holding that because Class I members have small financial interests in their claims, they have little incentive to bring costly separate actions, rendering the risk of inconsistent adjudications minimal. See Selby II, 197 F.R.D. at 59, n. 16.
Plaintiffs next contend that Class I should be certified under Rule 23 (b)(2) because an Employee Retirement Income Security Act ("ERISA") case, in which plaintiffs seeks reprocessing of claims which were previously improperly processed, is an action for equitable relief. (Pls.' Mem. p. 2.) The plaintiffs' contention in no way alters the court's analysis. "Regardless of whether the award of money damages under ERISA is considered equitable or legal, Rule 23(b)(2) does not extend to cases where the appropriate final relief is predominantly money damages."See Burke v. Local 710 Pension Fund, 2000 WL 336518, at *5 (N.D.Ill. March 28, 2000) (citing Harper-Wyman Co. v. Connecticut Gen. Life Ins. Co., No. 86 C 9595, 1991 WL 18467, at *3 (N.D.Ill. Feb. 8, 1991).
Count I requests relief pursuant to 29 U.S.C. § 1132 (a)(1) (B). See Selby I, 2000 WL 178191, at *1. The plaintiffs assert that they were never reimbursed for medical expenses allegedly covered by their plan, (Am. Cplt. p. 3), and request "declaratory, injunctive and other relief, including the recalculation of benefits," but never "damages" per se. (Am. Cplt. p. 24.) Cf. Turner v. Fallon Community Health Plan, 127 F.3d 196, 197-98 (1st Cir. 1997) (denying plaintiff's claim for damages for wrongful withholding of treatment, holding that the "relief expressly provided [in 29 U.S.C. § 1132 (a)(1)(B)] is to secure benefits under the plan rather than damages for breach of the plan")
This is the rationale followed by Medicare Beneficiaries' Defense Fund v. Empire Blue Cross Blue Shield, 938 F. Supp. 1131 (E.D.N Y 1996), relied on by the court in its opinion. See Selby II, 197 F.R.D. at 59, n. 16. Plaintiffs assert that the court improperly relied onMedicare, since in Medicare plaintiffs sought both damages and injunctive relief, and pursued their claim not only under ERISA, but also pursuant to 42 U.S.C. § 1935y (b)(1)(A)(i) and N.Y. Gen. Bus. L. § 349(h). See Medicare, 938 F. Supp. at 1135. (Pls.' Mem. p. 2.) This distinction does not appear to have factored into the Medicare court's opinion. In certifying the class under Rule 23(b)(3), the court did not distinguish between claims under ERISA and the other causes of action. The court's analysis centered on the fact that plaintiffs sought recalculation of past benefits, but had not produced any evidence of an ongoing harm. See Medicare, 938 F. Supp. at 1146.
In this case, plaintiffs have not produced any evidence of an ongoing harm. The court found that plaintiffs "only presented proof that they were injured by Principal's on-line review during the three years between 1995 and 1997." Selby II, 197 F.R.D. at 55-56. Moreover, the Selbys left Principal in 1997, making them unlikely to benefit from any declaratory or injunctive relief in the future. Under these facts, any declaratory or injunctive relief requiring Principal to reprocess claims is a conduit to monetary compensation. Therefore, certification under Rule 23(b) (2) is inappropriate.
These facts serve to differentiate the instant case from Fuller v. Fruehauf Trailer Corp., 168 F.R.D. 588, 603, n. 26 (E.D.Mich. 1996), cited by the plaintiffs for the proposition that certification under Rule 23 (b)(2) is appropriate in an ERISA case even where monetary damages are sought. In Fuller, plaintiff-retirees sought a declaration that their former employer violated ERISA by ceasing to provide them with lifetime medical benefits. There, plaintiffs stood to benefit from the declaratory relief for the rest of their lives, for medical needs present and future. The court explicitly found the plaintiffs' claim for monetary relief to be "ancillary" to the "fundamental claim [for declaratory relief]." Id. In the instant case the Selbys have left Principal. Other than reimbursement for past expenses, they do not stand to benefit from any new Principal policies.
Similarly, Walsh v. Nortrop Grunman Corp., 162 F.R.D. 440, 448 (E.D.N.Y. 1995), cited by the plaintiffs, is inapposite, since there plaintiffs primarily sought reinstatement of their former employment positions, and damage relief was secondary.
B.
Plaintiffs next contend that the court improperly ruled on the merits of plaintiffs' theories of recovery for Class III in calling the theories "novel interpretations" of New York law, and thereby declining to exercise supplemental jurisdiction. (Pls.' Mem. pp. 4-5.) In fact, the court merely found that given the novelty of the claims, a state court would be the more appropriate forum for a ruling on the merits. See 28 U.S.C. § 1367 (c)(1). Refusal to exercise jurisdiction does not amount to a ruling on the merits.
Moreover, to the extent that the court has looked behind the allegations to the merits, such review is a necessary part of the certification analysis. Cf. Sirota v. Solitron Devices, Inc., 673 F.2d 566, 571 (2d. Cir. 1982) ("[T]here can be no doubt that it is proper for a district court, prior to certification of a class, to allow discovery and to conduct hearings to determine whether the prerequisites of Rule 23 are satisfied")
Plaintiffs further assert that the court should consider the jurisdictional issue separate from the certification issue and should permit parties the opportunity to brief the jurisdiction issue before deciding on it. (Pls.' Mem. p. 5.) It is well settled that federal courts may rule sua sponte on issues relating to their exercise of supplemental jurisdiction at any time during the course of a lawsuit, see F.R. Civ. P. 12(h)(3), and may, but need not, provide the parties with an additional opportunity to brief the issue. Cf. Transource Int'l v. Trinity Indus., 725 F.2d 274, 285, n. 16 (5th Cir. 1984) (explaining that the issue of pendent jurisdiction "was not briefed by the parties, but it is jurisdictional and we must decide it"); Brown v. District of Columbia, 638 F. Supp. 1479, 1486 (D.D.C. 1986) (dismissing pendent claim sua sponte).
C.
Next, plaintiffs insist that the court misunderstood its theories of recovery for Class III. Plaintiffs explain that they did not allege that Principal was obligated to affirmatively publish information about N.Y. Ins. L. § 3221(k)(6)(A) (B) and its effect on the company's infertility policies, as implied by the September 15, 2000 opinion. See Selby II, 197 F.R.D. at 61. Rather, plaintiffs alleged that Principal could not mislead customers by asserting in its booklets that it complied with New York law. (Pls.' Mem. p. 4). The plaintiffs' explanation is no more than an artful rephrasing of the court's understanding. Part and parcel of not "misleading customers" is taking the affirmative steps necessary to ensure customers' complete understanding of their rights.
D.
The plaintiffs' last argument is that the Selbys are adequate representatives of Class IV. (Pls.' Mem. pp. 6-8.) Plaintiffs claim that even though the Selbys are no longer members of a Principal plan and they are not likely to re-enroll in a Principal plan, they still stand to benefit from an injunction, requiring Principal to provide new notice letters regarding their old claims with sufficient claims denial information to satisfy ERISA and Department of Labor regulations, and with a new period of time to appeal. (Pls.' Mem. p. 7, Pls.' Reply Mem. p. 15.) The court has already found that the Selbys have not presented any evidence that the letters they challenge relate to bills still pending, making any such injunctive relief inappropriate as to them. See Selby II, 197 F.R.D. at 64.
Plaintiffs cite to Counts v. American Gen. Life Acc. Inc. Co., 111 F.3d 105, 108 (11th Cir. 1997) ("[T]he consequence of an inadequate benefits termination letter is that the normal time limits for administrative appeal may not be enforced against the claimant"); Rakoczy v. Travelers Ins. Co., 914 F. Supp. 166, 172 (E.D.Mich. 1996) (holding that where insurer's notification of non-coverage failed to adequately state the reasons for denial, remedy was to remand case back to defendant for a full and fair review of its denial of plaintiff's claim, and to require defendant to give proper notification in new letter).
The cases cited by the plaintiff for the proposition that former plan participants are entitled to injunctive relief under ERISA are inapposite. See Varity Corp. v. Howe, 516 U.S. 489, 507-515 (1996) (holding that former plan participants may bring equitable suit for reinstatement into employer's ERISA plan); Firestone Tire Rubber Co. v. Bruch, 489 U.S. 101, 115-16 (1989) (holding that former employees are entitled to disclosure of benefit plan information). The court never disputed the fact that former plan participants or employees may be entitled to injunctive relief; in fact, such persons are directly covered by ERISA. See 29 U.S.C. § 1002 (7). The court merely held that injunctive relief would be inappropriate in the case of the Selbys.
E.
Given the absence of "exceptional circumstances" suggesting that the decision should be altered, the court finds no grounds for relief under F.R. Civ. P. 60(b) from its September 15, 2000 decision. Moreover, plaintiffs have failed to set forth any factual matters or controlling authority that the court overlooked in reaching its decision. Therefore, they have failed to demonstrate that they are entitled to reconsideration of the court's judgment pursuant to Local Rule 6.3.
II. A.
Defendant Principal also moves for reconsideration on several grounds. Defendant first takes issue with the court's grant of standing to the Selbys as representatives of Class I. In making this determination, defendant asserts that the court, in footnote twelve of its opinion, relied on the claims of Drs. Rainbow and Rodman and the fact that such claims were "automatically denied during on-line review." Selby II, 197 F.R.D. at 56, n. 12. Defendant, in its Memorandum of Law in Support of Motion for Reconsideration ("Def.'s Mem."), asserts that these claims were "not automatically denied during on-line review, nor were they denied for reasons related to diagnosis." (Def.'s Mem. p. 5.) Rather, defendant asserts that the Dr. Rodman bill was denied after review by a human analyst, because some of the treatments seemed duplicative of similar treatments received on the same day. (Id.) The Dr. Rainbow bill was denied because Principal requested additional information from the Selbys which it never received. (Def.'s Mem. p. 6.) The defendant asserts that it had no chance to raise this defense earlier since the claims of Drs. Rainbow and Rodman were "never at issue in the case" until mentioned in plaintiffs' reply papers. (Def.'s Mem. pp. 5-6.)
Second, defendant asserts that any claims brought on the Rodman and Rainbow bills are time barred. (Def.'s Mem. p. 6.) Here, the ERISA plan in question established a statute of limitations of three years. Since the Rodman bill was dated 1995, and the Rainbow bill was dated 1996, defendant asserts that these claims are barred by the statute of limitations. Again, defendant asserts that it had no chance to raise this affirmative defense earlier since the claims of Drs. Rainbow and Rodman were first mentioned in plaintiffs' reply papers.
The Second Circuit generally applies a six-year statute of limitations to ERISA claims. See Miles v. New York State Teamsters Conf. Pension Retirement Fund Employee Pension Benefit Plan, 698 F.2d 593 (2d. Cir. 1983). However, parties to an employee benefit plan governed by ERISA may contract in a written agreement for a shorter limitations period pursuant to N.Y. C.P.L.R. § 201.
Third, defendant asserts that plaintiffs never exhausted administrative remedies available to them as regards the Rodman and Rainbow claims, and that it has not had a chance to raise this challenge. (Def.'s Mem. p. 6.) The court has addressed this issue in its opinion as regards class members in general. See Selby II, 197 F.R.D. at 56, n. 10. The court explained that since defendant did not present any evidence indicating that it informed insureds of its on-line review procedures or that it maintained proper administrative challenge procedures, the court "will not require the class members to satisfy the exhaustion requirement." The same equitable consideration extends to the Selbys as representatives of the class.
Overall, the above three claims may be dismissed by two considerations. First, the case as a whole, as opposed to footnote twelve, does not rely exclusively on the Rainbow and Rodman claims. Rather, it uses the Rainbow and Rodman claims only as examples, citing to them in the "see, e.g." fashion. Selby II, 197 F.R.D. 48, 57.
Second, the defendant had ample opportunity to bring any new facts mentioned in the reply brief to the court's attention, and to request additional time to challenge them before an opinion was issued. Cf. Seateam and Exmar N.V. v. Texaco Panama Inc. and Texaco Overseas Tankship, Ltd., 1997 WL 256949, at *2 (S.D.N Y May 16, 1997) (Mukasey, J.) ("[P]etitioners requested an opportunity to respond to the new exhibits and affidavits included in Texaco's reply brief"); AAA Plumbing Pottery Corp. v. St. Paul Ins. Co. of Ill., 1995 WL 745837, at *2 (N.D.Ill. Dec. 13, 1995) ("On a motion to reconsider, it is improper for a party to present new facts, unless the information could not have been discovered earlier despite reasonable diligence"). Therefore, reconsideration is unmerited here.
While raising a new substantive issue of law for the first time in a reply brief is improper, plaintiffs are not guilty of this impropriety. Plaintiffs' attention to the Rainbow and Rodman claims merely drew the court's attention to two examples of denied claims in files that had always been at issue and in the defendant's possession. Plaintiffs provided evidence of other claims in their file, such as that of Dr. David, that may have been relied on by the court to grant certification. The court did not reach the merits of the Dr. David claim, or the Drs. Rainbow and Rodman claims.
If pursuant to greater discovery it becomes clear that no claim submitted by the Selbys meets the class definition, the court remains free, "[e]ven after [the] certification order is entered, . . . to modify it in the light of subsequent developments in the litigation. For such an order, particularly during the period before any notice is sent to members of the class, `is inherently tentative.'" General Tel. Co. v. Falcon, 457 U.S. 147, 160 (citing Coopers Lybrand v. Livesay, 437 U.S. 463, 469, n. 11). See F. R. Civ. P. 23(c)(1).
B.
Next, defendant asserts that since the court certified Class I under Rule 23(b)(3) and not any of the grounds urged by the plaintiff, Principal should be given an opportunity to brief the Rule 23(b)(3) issue. (Def.'s Mem. p. 7.) Specifically, defendant wishes to contend that whether any particular claim was denied because only one diagnosis was reviewed even though multiple diagnoses were submitted, must be determined on a case-by-case basis. It is well settled that a court may fashion a class under a different section of Rule 23 than that which the parties request. See, e.g., Medicare Beneficiaries' Defense Fund v. Empire Blue Cross Blue Shield, 938 F. Supp. 1131, 1146 (E.D.N.Y. 1996) (fashioning class under Rule 23(b)(3) rather than Rule 23(b)(2), as requested by plaintiffs). Moreover, defendant's alleged grounds for reconsideration have already been addressed and denied in the court's opinion. The court held that class members may be automatically identified "based on fact determinations already made and contained in defendant's computer and microfilm files." Selby II, 197 F.R.D. at 55. Therefore, reconsideration is unmerited here.
C.
Defendant asserts that the conditional definition of Class IV is defective because it does not require plaintiffs to be prejudiced by the allegedly defective notice. (Def.'s Mem. p. 9.) Defendant cites to First Circuit case law holding that mere receipt of an inadequate claim denial letter is not an injury giving rise to a claim under ERISA. Rather, plaintiff must show that he or she was prejudiced by receipt of the letter and that a "different outcome would have resulted had the notice been in formal compliance with the regulations." Terry v. Bayer Corp., 145 F.3d 28, 39 (1st Cir. 1998). See also Recupero v. New England Tel. Tel. Co., 118 F.3d 820, 840 (1st. Cir. 1997).
The two cases cited by the defendant, Terry and Recupero, do not demand reconsideration of the present case for several reasons. First, both are First Circuit cases and are not controlling. The "prejudice test" set forth in these First Circuit cases has not been followed by the Second Circuit, see, e.g., Alternative Care Systems v. Metropolitan Life Ins. Co., 1996 WL 67737 (S.D.N.Y. Feb. 16, 1996) (Patterson, J.), (applying "substantial compliance" test), and has come under criticism by other circuits. The D.C. Circuit has recently held that a prejudice requirement as laid out in Recupero would be inconsistent with the largely accepted "substantial compliance" test generally used to determine whether denial notices comply with 29 U.S.C. § 1133 and the accompanying regulations. See White v. Aetna Life Ins. Co., 210 F.3d 412, 418 (D.C. Cir. 2000). Second, both cases deal with motions for summary judgement on individual claims. The present case deals only with class certification and not the merits of the claims. Third, the plaintiffs in both cases received individualized letters explaining why their claims were denied. In the present case, Class IV is alleged to have received generic denial letters. Fourth, in both cases, the plaintiffs were arguably informed of the critical issue leading to denial of their claims. In the present case, the denial letters "did not identify any specific plan exclusion or coverage area as the basis for [denial]." Selby II, 197 F.R.D. at 62. Since Terry and Recupero are neither controlling, nor analogous, reconsideration is unmerited here.
Explaining the "substantial compliance" test, the White court instructed that "[t]echnical noncompliance will be excused as long as the notice substantially complies with the statute and the regulation." White v. Aetna Life Ins. Co., 210 F.3d 412, 414 (D.C. Cir. 2000). Similarly, the Seventh Circuit has held that "substantial compliance with the regulations is sufficient," emphasizing the importance of a statement of reasons. Donato v. Metropolitan Life Ins. Co., 19 F.3d 375, 382 (7th. Cir. 1994).
The White court noted in dicta, however, that a prejudice test may be worthwhile in cases such as Recupero, where a claimant has already received a full and fair review of the decision denying his or her claim, before restarting the review process. See White, 210 F.3d at 418. "Otherwise . . . `remand would represent a useless formality.'" Id. (citing Kent v. United Omaha Life Ins. Co., 96 F.3d 803, 807 (6th Cir. 1996)). Such mitigating factors are not present when dealing with a class as a whole.
D.
Defendant also asserts that Class IV should not be certified because a determination of Principal's compliance with 29 U.S.C. § 1133 requires a case-by-case analysis. (Def.'s Mem. p. 10). In support of this position, defendant cites to Donato v. Metropolitan Life Ins. Co., 19 F.3d 375, 382 (7th Cir. 1994), wherein the Seventh Circuit looked to the "circumstances of the case" to determine if there had been substantial compliance with 29 U.S.C. § 1133. However, Donato is a Seventh Circuit case and is not controlling. Furthermore, Donato, as well as other cases applying a "circumstances of the case" analysis, are distinguishable because they generally deal with individual defendants bringing individual claims. See Donato, 19 F.3d 375. See also White v. Aetna Life Ins. Co., 210 F.3d at 414. Class IV, on the other hand, deals solely with the content of generic claim denial letters. The court's September 15, 2000 opinion makes clear that this inquiry does "not require fact-specific inquiries" into the circumstances surrounding individual plaintiffs. Selby II, 197 F.R.D. at 63.
In reaching this conclusion, the court relied on Sutton v. Medical Service Assoc. of Pa., 1993 WL 273429, at *5 (E.D.Pa. July 20, 1993). Like the case at hand, Sutton dealt with a motion for reconsideration where the district court certified a class challenging boilerplate claim denial letters. There, the court upheld the class, explaining that individual questions of reliance and prejudice were not relevant at the class certification stage, and that the adequacy of the generic letter provided a sufficient common question.
E.
Defendant next asserts that "[t]his court's ruling — that an initial notice that does not specify the precise plan provision under which a particular service is excluded from coverage is per se defective and gives rise to liability — conflicts with the Second Circuit's recent opinion in Juliano v. The Health Maintenance Orgs. of N.J., Inc., 221 F.3d 279 (2d Cir. 2000)." (Def. Mem. p. 10). This assertion is a misstatement of the court's position. The court, as yet, has not held anything. Rather it has certified the above question, to be resolved later. Moreover, Juliano is eminently distinguishable from the facts of the present case. Juliano establishes the right of an insurance provider to "assert in court reasons for declining coverage that were not asserted at the time reimbursement was declined." Id. at 288. In other words,Juliano stands for the proposition that claim denial letters need not catalog every conceivable basis for exclusion. This holding does not eliminate the obligation of an insurance provider to set forth minimally sufficient information in claim denial letters to allow an insured to determine whether he can and should appeal his claim.
F.
Defendant next contends that the court should not sua sponte have certified Class IV. (Def.'s Rep. Mem. pp. 11-12.) Defendant asserts that this decision upset "the normal rules of procedure, exempted plaintiffs from their usual burden of proving class allegations, and denied defendant a fair opportunity to oppose class certification." (Id. at 12.) Specifically, defendant takes issue with the court's finding that "[p]laintiffs' pleading indicates that insureds automatically receive the challenged claim denial letters as a consequence of on-line processing . . . and no proof was offered to refute this finding." (Id.) Defendant presents this as evidence that the court has "elevated pleading to proof," and dispensed with the plaintiffs' burden to meet the requirements for certification. (Id.) Defendant asserts that there is "no evidence in the record with respect to generation of explanation of benefits notices on a class-wide basis." (Id.)
Certainly, a court's authority to certify or modify a class sua sponte is indisputable. See, e.g., Texas Peace Officers Ass'n v. City of Galveston, Tex., 944 F. Supp. 562, 565 (S.D.Tex. 1996) ("[W]hile Plaintiffs have not formally moved for class action certification, the Court has decided to consider the issue on its own initiative"). Nonetheless, a district court should not rush to certify a class without paying sufficient attention to the strictures of Rule 23. See Ford v. United States Steel Corp., 638 F.2d 753, 757 (5th Cir. 1981). See also Yassini v. Crosland, 613 F.2d 219, 220 (9th Cir. 1980) ("The trial court, in essence, sua sponte rushed to certify a (b)(2) class, without prior notice to counsel, and over plaintiffs' objections"). Here the court has not rushed to certify a class. In fact, the court declined to certify Class IV, giving the plaintiffs thirty days to name an appropriate class representative. Moreover, the defendant had ample time to raise its objections to Class IV, which is in essence Count IV, in its pleadings.
G.
Lastly, defendant urges the court to reconsider its position on the adequacy of the Selbys as representatives of any class because of the high likelihood of counterclaims against them based on misleading bills submitted to the defendant by their doctor. (Def.'s Mem. p. 11). Defendant cites to Heaven v. Trust Co. Bank, 118 F.3d 735, 737-38 (11th Cir. 1997), in which the Eleventh Circuit upheld a denial of class certification due to a high likelihood of counterclaims. However, Heaven is not controlling authority. More importantly, the Court of Appeals was careful to limit its holding in Heaven, noting that "if this panel had faced the class certification issue . . . we may well have found it appropriate to certify the class," and that "[w]e do not intend to suggest that compulsory counterclaims should preclude the maintenance of class actions under the [Consumer Leasing Act] as a general rule." Id. at 739, n. 7.
Defendant contends that the Selbys are subject to the defense of fraud. Defendant takes issue with the court's position that the Selbys' correspondence with their doctor over how to characterize their claims was "the kind of behavior many insureds engage in." Selby II, 197 F.R.D. at 58. Defendant asserts that miscoding of bills is qualitatively different from "the kind of behavior many insureds engage in," which defendant describes as working together with one's doctor to convince an insurer that a certain treatment should be covered. The defendant's characterization of "most insureds" behavior as "innocent," and the Selbys' behavior as "fraud," creates a false dichotomy, one the court has already dispensed with adequately.
Similarly, the Fifth Circuit has noted in dicta that "the potential assertion of counterclaims against [a] few members of the proposed class cannot be allowed to defeat an otherwise valid class action when to do so would effectively deprive thousands of class members of the relief to which they are entitled." Roper v. Consurve, Inc., 578 F.2d 1106, 1116 (5th Cir. 1978), aff'd, 445 U.S. 326 (1980)
H.
Nothing in defendant's motion merits reconsideration of the court's September 15, 2000 opinion pursuant to Local Rule 6.3.
CONCLUSION
For the foregoing reasons, the plaintiffs' and defendant's motions for reconsideration are denied.
IT IS SO ORDERED.