Manrique v. State Farm Mutual Automobile Insurance Company

Background

Jose Manrique brought a proposed class action against State Farm Mutual Automobile Insurance Company. He sought damages, declarations about the parties’ rights, and an injunction based on alleged violations of New York Insurance Law, alleged violations of New York General Business Law, and breach of contract concerning automobile insurance policies issued by State Farm.

On December 2, 2021, the court granted in part and denied in part State Farm’s motion to dismiss. The court denied the motion as to Manrique’s claim under New York Insurance Law § 5102 and his breach-of-contract claim. It granted the motion as to his claims under New York General Business Law § 349 and for declaratory and injunctive relief.

State Farm then moved under 28 U.S.C. § 1292(b) to amend the earlier order to permit an interlocutory appeal—an appeal before the case reaches a final judgment. The motion concerned the portion of the earlier order that denied State Farm’s motion to dismiss.

Legal Standard

Section 1292(b) permits a district court to certify an interlocutory appeal when the order involves a controlling question of law, there is substantial ground for disagreement about that question, and an immediate appeal may materially advance the end of the litigation. The party seeking certification must establish all three requirements. Even when those requirements are met, the district court has discretion to deny certification because interlocutory appeals are generally disfavored.

The court also considered whether exceptional circumstances justified departing from the usual rule that appellate review should wait until after final judgment. It explained that this procedure is aimed at avoiding unusually lengthy and expensive litigation, not simply at obtaining early review of an important or difficult issue.

Analysis

The court found the first and third requirements satisfied. It treated the controlling-question requirement and the requirement that an appeal materially advance the litigation as met because Manrique did not respond to State Farm’s arguments on those points. The court did not find that State Farm had established the second requirement: a substantial ground for disagreement.

State Farm argued that federal and New York state courts had reached conflicting conclusions about the relevant legal issue. The court rejected that argument, reasoning that State Farm had not identified a genuine conflict but had instead repeated arguments and case-law interpretations that the court had previously rejected. The court agreed with the reasoning of a similar Eastern District of New York case, which had found that the state cases relied on by the insurer were not applicable.

The court also found no exceptional circumstances. It rejected State Farm’s argument that the existence of other similar federal cases and the proposed class-action format made early review necessary. The court observed that the discovery and potential trial in this case were not likely to be unusually long or costly. It further explained that the possible broader effect of an appellate ruling was a factor for the Court of Appeals when deciding whether to accept a properly certified appeal, not by itself an exceptional circumstance supporting certification by the district court.

Disposition

Judge Karas denied State Farm’s motion to permit an interlocutory appeal and directed the clerk to terminate the pending motion. The court noted Manrique’s death and stated that it would schedule a status conference after counsel moved to substitute his administrator in his place.