Avent v. Progressive Casualty Insurance Company
- John Koeltl
- 1:19-cv-10907
- U.S. District Court · Southern District of New York
- 17
In Avent v. Progressive, Judge Koeltl granted Progressive’s dismissal motion, allowed amendment of federal claims, and dismissed state claims without prejudice for lack of jurisdiction.
Reuben Avent’s federal and state claims against Progressive Casualty Insurance Company and the other named defendants were affected. The federal claims could be amended within 30 days, while the state-law claims were dismissed without prejudice for lack of subject-matter jurisdiction.
What happened
In Avent v. Progressive Casualty Insurance Company, Reuben Avent, representing himself, sued Progressive, two employees, and unknown company representatives. He alleged racial discrimination, constitutional violations, contract violations, fraud, unfair business practices, and violations of New York civil-rights law based on insurance decisions involving his claims, premiums, and coverage.
The court ruled that Progressive was not a government actor, so Avent could not pursue his constitutional claims under the federal civil-rights statute. It also found that his race-discrimination claim did not allege enough specific facts showing racial intent or that race was the necessary cause of Progressive’s actions. The court further found no diversity jurisdiction over the state-law claims and declined to keep them in federal court after dismissing the federal claims.
Judge John G. Koeltl granted the motion to dismiss without prejudice and allowed Avent 30 days to file an amended complaint. The state-law claims were dismissed without prejudice for lack of subject-matter jurisdiction, and Progressive’s motion to revise the service order was granted.
The detailed version
- Avent v. Progressive Casualty Insurance Company · No. 1:19-cv-10907
- John Koeltl
- Jan. 19, 2021
Background
Reuben Avent, proceeding without a lawyer, sued Progressive Casualty Insurance Company, Steven Jones, Danielle Barror, and unknown company representatives. Avent alleged that Progressive mishandled insurance claims involving his cars, increased his premiums, canceled his policies, and treated him differently because he is African-American. He sought more than $19 million in compensatory damages, more than $32 million in punitive damages, and an injunction requiring changes to his insurance coverage and records.
The complaint asserted a claim under 42 U.S.C. § 1981 for racial discrimination; three claims under 42 U.S.C. § 1983 for alleged violations of due process and equal protection; a contract claim; fraud and unfair-business-practices claims; and a New York civil-rights claim. Progressive moved to dismiss for failure to state a legally sufficient claim.
Section 1983 claims
The court granted the motion to dismiss the § 1983 claims because the complaint did not plausibly allege that the defendants acted under state law. Section 1983 requires both a violation of a federal right and action by a person acting as a state actor. The court explained that being heavily regulated by the state does not by itself turn a private insurance company into a state actor.
The court found no allegation that the state coerced or significantly encouraged Progressive’s decisions, or that Progressive exercised a power traditionally reserved exclusively to the state. The decisions to assign responsibility for the accident, increase premiums, and discontinue coverage were alleged to be private business decisions. Accordingly, the motion to dismiss the § 1983 claims was granted.
Section 1981 claim
The court also granted the motion to dismiss Avent’s § 1981 claim, without prejudice to his ability to file an amended complaint. A § 1981 claim requires facts supporting racial discrimination involving an activity protected by the statute, such as making or enforcing a contract. The court further explained that Avent had to allege facts making it plausible both that Progressive acted with racial intent and that race was the necessary cause of the alleged loss of a protected right.
The court found that Avent’s allegations that similarly situated white people were treated better and that defendants acted with racial bias were conclusory. His allegation that defendants made disparaging racial remarks did not provide enough detail about what was said. The court also noted that the complaint identified nonracial explanations for the challenged actions, including the accident determination, multiple claims, policy lapses, and nonpayment. Those allegations did not support a plausible inference that race was the necessary cause of Progressive’s conduct.
State-law claims and jurisdiction
The remaining claims arose under state law. The court rejected diversity jurisdiction because the individual defendants were residents of New York, like Avent, and the opinion found no basis to conclude that their permanent homes differed from their residence. Complete diversity therefore was absent.
The court also declined to exercise supplemental jurisdiction, which is the authority to hear related state-law claims after federal claims are brought in the same case. Because the federal claims had been dismissed and the case was still at the pre-discovery stage, the court concluded that judicial economy, convenience, fairness, and respect for state courts favored declining jurisdiction. The state-law claims were dismissed without prejudice for lack of subject-matter jurisdiction.
Disposition
The court granted the motion to dismiss without prejudice. Avent could file an amended complaint within 30 days. If he did not do so, the federal claims would be dismissed with prejudice. If he filed an amended complaint, Progressive would have 21 days after receiving it to respond by motion or answer. The court also granted Progressive’s motion to revise the service order and directed the Clerk to close Docket Nos. 13 and 15.
Read the full 17-page opinion on CourtListener, the free public archive maintained by the Free Law Project.