Justia Class Action Opinion Summaries

Defendants United Services Automobile Association and USAA General Indemnity Company (“USAA”) contract with insureds to pay “Actual Cash Value” (“ACV”) for totaled vehicles. USAA calculates ACV using the CCC One Market Valuation Report (“CCC”) rather than, e.g., the National Automobile Dealers Association guidebook (“NADA”) or Kelley Blue Book (“KBB”). Plaintiffs are USAA-insureds whose vehicles were totaled and who received ACV as determined by CCC. Plaintiffs alleged that CCC violates Louisiana statutory law, that they would have been paid more if USAA used NADA, and that they are owed the difference. Plaintiffs sought certification for a class of USAA-insureds who were paid less under CCC, and the district court granted it. USAA appealed class certification. On appeal, the parties dispute, among other things, whether common questions across the class involving damages and liability predominate over individual differences between class members, as required for class certification under Rule 23(b)(3).   The Fifth Circuit vacated and remanded. The court held that Plaintiffs failed to show injury and therefore failed to establish USAA’s liability on a class-wide basis because they failed to demonstrate entitlement to the NADA values for their totaled vehicles. The court held that with respect to Plaintiffs’ breach of contract claim, the district court’s choice of NADA is not simply an arbitrary choice among imperfect damages models. It is an arbitrary choice of a liability model, and a district court’s wide discretion to choose an imperfect estimative-damages model at the certification stage does not carry over from the context of damages to the context of liability. View "United Svcs Automobile v. Sampson" on Justia Law

Current and former policyholders filed a class action lawsuit in Illinois against Country Mutual and 46 of its current and former officers and directors. Every member of the proposed class is an Illinois citizen under the Class Action Fairness Act, CAFA, 28 U.S.C. 1332(d)(2), as are Country Mutual and 45 of the individuals. The 46th defendant, Bateman, is a citizen of Massachusetts. The plaintiffs alleged that the firm accumulated and retained excess surplus of over $3.5 billion from premium revenues exceeding the cost of claims and thereby failed to supply those policies at cost. They claimed breach of contract, violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, unjust enrichment, and breach of fiduciary duty.Based on putative class size, the amount in controversy, and the minimal diversity created by Bateman, Country Mutual removed this case to federal district court, 28 U.S.C. 1332(d); 1453(b). The Seventh Circuit remanded to state court. Under CAFA’s internal affairs exception, each claim sounds in allegations of corporate mismanagement that cannot be adjudicated without immersion into the boundaries of the discretion afforded by Illinois law to officers and directors of a mutual insurance company to set capital levels and make related decisions about surplus distributions to policyholder members. The case is also within CAFA’s home-state controversy exception, 28 U.S.C. 1332(d)(4)(B), as Bateman, who creates minimal diversity, is not a “primary defendant.” View "Sudholt v. Country Mutual Insurance Co." on Justia Law

United Behavioral Health (“UBH”) appeals from the district court’s judgment finding it liable to classes of Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 1001 et seq. (“ERISA”) Plaintiffs under 29 U.S.C. Sections 1132(a)(1)(B) and (a)(3), as well as several pre- and posttrial orders, including class certification, summary judgment, and a remedies order. UBH contends on appeal that Plaintiffs lack Article III standing and that the district court erred at class certification and trial in several respect.   The Ninth Circuit reversed in part. The panel held that Plaintiffs had Article III standing to bring their claims. Plaintiffs sufficiently alleged a concrete injury as to their fiduciary duty claim because UBH’s alleged violation presented a material risk of harm to plaintiffs’ interest in their contractual benefits. Plaintiffs also alleged a concrete injury as to the denial of benefits claim. Further, plaintiffs alleged a particularized injury as to both claims because UBH’s Level of Care Guidelines and Coverage Determination Guidelines for making medical necessity or coverage determinations materially affected each Plaintiff. And Plaintiffs’ alleged injuries were “fairly traceable” to UBH’s conduct. The panel held that the district court did not err in certifying the three classes to pursue the fiduciary duty claim, but the panel reversed the district court’s certification of the denial of benefits classes. The panel held that, on the merits, the district court erred to the extent it determined that the ERISA plans required the Guidelines to be coextensive with generally accepted standards of care. View "DAVID WIT, ET AL V. UNITED BEHAVIORAL HEALTH" on Justia Law

Plaintiff Gene Moran, who was a patient at Huntington Beach Hospital (the Hospital) three times in 2013, sued defendants Prime Healthcare Management, Inc., Prime Healthcare Huntington Beach, LLC, Prime Healthcare Services, Inc., and Prime Healthcare Foundation, Inc. (collectively defendants) under various theories in 2013. In a prior opinion, the Court of Appeal found that while most of Moran’s claims lacked merit, he had sufficiently alleged facts supporting standing to claim the amount that self-pay patients were charged was unconscionable, and reversed the trial court’s dismissal of the case. Moran’s sixth amended complaint included both the allegations regarding unconscionability and a new theory of the case: defendants had violated the Unfair Competition Law (UCL), and the Consumer Legal Remedies Act (CLRA) by failing to disclose Evaluation and Management (EMS) fees charged in the emergency room through signage or other methods. The complaint sought relief under both the old and new theories for violations of the UCL, CLRA, and for declaratory relief. Defendants moved to strike the allegations regarding EMS fees, arguing their disclosure obligations were defined by statute. The trial court agreed and struck the allegations from the sixth amended complaint. Finding no reversible error in that decision, the Court of Appeal affirmed. View "Moran v. Prime Healthcare Management, Inc." on Justia Law

Plaintiff filed individual and class claims in Montana state court against GEICO after GEICO failed to advance pay Plaintiff’s medical bills and lost wages following a car accident caused by GEICO’s insured. GEICO removed the lawsuit to federal court, asserting jurisdiction under the Class Action Fairness Act (CAFA). Neither Plaintiff nor the district court questioned whether CAFA jurisdiction was proper.   The Ninth Circuit vacated the district court’s judgment and remanded for the district court to conduct the necessary evidentiary inquiry and determine whether GEICO can sufficiently establish that more than $5 million is in dispute. The panel held that it could sua sponte question a defendant’s allegation of CAFA jurisdiction. The panel further concluded that the current record did not sufficiently demonstrate that CAFA’s amount-in-controversy requirement was met because it was not evident from the face of the complaint and the nature of the class claims that this controversy involved more than $5 million, nor did GEICO’s notice of removal and supporting declaration satisfactorily establish that more than $5 million was in dispute. View "BRANDON MOE V. GEICO INDEMNITY COMPANY, ET AL" on Justia Law

After Wynndalco Enterprises, LLC was sued in two putative class actions for violating Illinois’ Biometric Information Privacy Act (“BIPA”), its business liability insurer, Citizens Insurance Company of America, filed an action seeking a declaration that it has no obligation under the terms of the insurance contract to indemnify Wynndalco for the BIPA violations or to supply Wynndalco with a defense. Citizens’ theory is that alleged violations of BIPA are expressly excluded from the policy coverage. Wynndalco counterclaimed, seeking a declaration to the contrary that Citizens is obligated to provide it with defense in both actions. The district court entered judgment on the pleadings for Wynndalco.   The Seventh Circuit affirmed. The court explained that the narrowing construction that Citizens proposes to resolve that ambiguity is not supported by the language of the provision and does not resolve the ambiguity. Given what the district court described as the “intractable ambiguity” of the provision, the court held Citizens must defend Wynndalco in the two class actions. This duty extends to the common law claims asserted against Wynndalco in the other litigation, which, as Citizens itself argued, arise out of the same acts or omissions as the BIPA claim asserted in that suit. View "Citizens Insurance Company of America v. Wynndalco Enterprises, LLC" on Justia Law

Plaintiffs sued Defendants GEICO Advantage Insurance Company and its related entities. Each Plaintiff possessed a vehicle that was subject to a private passenger auto insurance policy with a different Defendant (collectively, the “Policies”). Each Plaintiff’s vehicle was involved in an auto collision while insured under one of the Policies. Plaintiffs sought to represent a class of insureds claiming that GEICO failed to fully compensate them for the total loss of their vehicles under their respective insurance policies. The district court held that Plaintiffs had standing to sue on behalf of the proposed class and subsequently granted class certification. GEICO appealed both holdings.
The Fifth Circuit affirmed. The court wrote it is clear that each Plaintiff individually satisfies the less stringent class certification approach. Indeed, there is no dispute that each Plaintiff alleges that he or she has suffered some injury; the disagreement between the parties concerns how those injuries relate to those of the class. Further, the court wrote it disagreed with the contention that Plaintiffs have alleged three separate injuries. GEICO’s failure to remit any of the three Purchasing Fees amounts to the same harm—a breach of the Policies. The court also concluded that the strategic value of these claims’ waiver is considerably greater than their inherent worth. It was accordingly within the district court’s discretion to rule that Plaintiffs are adequate class representatives. Moreover, the court wrote that GEICO’s arguments against class certification for this claim largely track its arguments opposing certification of Plaintiffs’ other claims. The district court’s analysis meets the requisite rigor when read in the broader context of its decision. View "Angell v. GEICO Advantage Ins" on Justia Law

Plaintiff, MSP Recovery Claims, Series LLC (“MSP”) appealed from the district court’s judgment dismissing for lack of standing its putative class action against Defendant Hereford Insurance Company (“Hereford”) and denying leave to amend. MSP has brought several lawsuits around the country seeking to recover from insurance companies that allegedly owe payments to Medicare Advantage Organizations (“MAOs”) under the Medicare Secondary Payer Act (the “MSP Act”). In the putative class action brought here, MSP charges Hereford with “deliberate and systematic avoidance” of Hereford’s reimbursement obligations under the MSP Act.   The Second Circuit affirmed. The court concluded that MSP lacked standing because its allegations do not support an inference that it has suffered a cognizable injury or that the injury it claims is traceable to Hereford. The court also concluded that the district court did not abuse its discretion when it denied MSP leave to amend based on MSP’s repeated failures to cure. The court explained that the plain language of Section 111 provides that when a no-fault insurance provider such as Hereford reports a claim pursuant to Section 111, it does not thereby admit that it is liable for the claim. The statutory context of the section’s reporting obligation and the purpose of the reporting obligation confirms the correctness of this interpretation. Because MSP’s argument that the payments made by EmblemHealth are reimbursable by Hereford rests entirely on its proposed interpretation of Section 111, MSP has not adequately alleged a “concrete” or “actual” injury or that the injury it alleges is fairly traceable to Hereford. View "MSP v. Hereford" on Justia Law

Plaintiffs sought class certification to pursue various claims against the Hilton Hotels Retirement Plan (“Hilton Plan”) for what they say are unlawfully denied vested retirement benefits. The district court ultimately denied certification on the ground that Plaintiffs had proposed an “impermissibly ‘fail-safe’” class—that is, a class definition for which membership can only be ascertained through “a determination of the merits of the case.”   The DC Circuit reversed and remanded the district court’s decision, finding that the district court, in this case, bypassed Rule 23’s requirements and based its denial of class certification entirely on the class’s “fail-safe” character. The court explained that the textual requirements of Rule 23 are fully capable of guarding against unwise uses of the class action mechanism. So the court rejected a rule against “fail-safe” classes as a freestanding bar to class certification ungrounded in Rule 23’s prescribed criteria. Instead, district courts should rely on the carefully calibrated requirements in Rule 23 to guide their class certification decisions and the authority the Rule gives them to deal with curable misarticulations of a proposed class definition. View "In re: Valerie White" on Justia Law

Plaintiffs, current and former employees of RingCentral, participated in RingCentral’s employee welfare benefits plan. The plan participated in the “Tech Benefits Program” administered by Sequoia Benefits and Insurance Services, LLC, a management and insurance brokerage company. The Tech Benefits Program was a MEWA that pooled assets from employer-sponsored plans into a trust fund for the purpose of obtaining insurance benefits for employees at large-group rates. Plaintiffs filed this putative class action on behalf of the RingCentral plan and other Tech Benefits Program participants, asserting that Sequoia owed fiduciary duties to the plan under ERISA because Sequoia allegedly exercised control over plan assets through its operation of the Tech Benefits Program. Plaintiffs alleged that Sequoia violated its fiduciary duties by receiving and retaining commission payments from insurers, which Plaintiffs regarded as kickbacks, and by negotiating allegedly excessive administrative fees with insurers, leading to higher commissions for Sequoia.   The Ninth Circuit affirmed the district court’s dismissal for lack of Article III standing. The court held that Plaintiffs failed to establish Article III standing as to either of their two theories of injury. The panel held, as to the out-of-pocket-injury theory, Plaintiffs failed to establish the injury in fact required for Article III standing because their allegations did not demonstrate that they paid higher contributions because of Sequoia’s allegedly wrongful conduct. And Plaintiffs failed to plead the third element, that their injury would likely be redressed by judicial relief. View "RACHAEL WINSOR, ET AL V. SEQUOIA BENEFITS & INSURANCE, ET AL" on Justia Law