Justia Class Action Opinion Summaries

Principal Life Insurance Company (Principal) offers a product called the Principal Fixed Income Option (PFIO), a stable value contract, to employer-sponsored 401(k) plans. Plaintiff on behalf of himself and a class of plan participants who deposited money into the PFIO, sued Principal under the Employee Retirement Income Security Act of 1974 (ERISA), claiming that it (1) breached its fiduciary duty of loyalty by setting a low-interest rate for participants and (2) engaged in a prohibited transaction by using the PFIO contract to make money for itself. The district court granted summary judgment to Principal after concluding that it was not a fiduciary. The Eighth Circuit reversed, holding that Principal was a fiduciary. On remand, the district court entered judgment in favor of Principal on both claims after a bench trial. Plaintiff challenges the court’s judgment.   The Eighth Circuit affirmed. The court agreed with the district court that Principal and the participants share an interest because a guaranteed CCR that is too high threatens the long-term sustainability of the guarantees of the PFIO, which is detrimental to the interest of the participants. The question then becomes whether the court clearly erred by finding that Principal set the CCR in the participants’ interests. The court held that the district court did not clearly err by finding that the deducts were reasonable and set by Principal in the participants’ interest of paying a reasonable amount for the PFIO’s administration.  Finally, the court affirmed the district court’s judgment in favor of Principal on the prohibited transaction claim because it is exempted from liability for receiving reasonable compensation. View "Frederick Rozo v. Principal Life Insurance Co." on Justia Law

The Court of Chancery granted Defendants' partial motion to dismiss Plaintiffs' amended complaint, holding that Plaintiffs did not satisfy the statutory definition of "creditor" as required to have standing to pursue their amended claims under the Delaware Uniform Fraudulent Transfer Act (DUFTA).Defendant Genworth Life Insurance Company (GLIC) wrote a line of long-term care (LTC) insurance policies. Plaintiffs, a putative class of GLIC LTC policyholders and GLIC insurance agents who sold LTC policies, alleged that fraudulent transfers jeopardized GLIC's ability to pay LTC claims to its policyholders and LTC commissions to its insurance agents. Plaintiffs later amended their complaint to add three new claims challenging the distribution of certain proceeds as intentional and constructive fraudulent transfers. The Court of Chancery granted Defendants' partial motion to dismiss, holding that Plaintiffs' new DUFTA claims failed because they were not "claims" under DUFTA. View "Burkhart v. Genworth Financial, Inc." on Justia Law

In March 2012, First Solar, Inc. stockholders filed a class action lawsuit against the company alleging that it violated federal securities laws by making false or misleading public disclosures ("Smilovits Action"). National Union Fire Insurance Company of Pittsburgh, PA (“National Union”) provided insurance coverage for the Smilovits Action under a 2011–12 $10 million “claims made” directors and officers insurance policy. While the Smilovits Action was pending, First Solar stockholders who opted out of the Smilovits Action filed what has been referred to as the Maverick Action. The Maverick Action alleged violations of the same federal securities laws as the Smilovits Action, as well as violations of Arizona statutes and claims for fraud and negligent misrepresentation. In this appeal the issue presented for the Delaware Supreme Court's review was whether the Smilovits securities class action, and a later Maverick follow-on action were related actions, such that the follow-on action was excluded from insurance coverage under later-issued policies. The Superior Court found that the follow-on action was “fundamentally identical” to the first-filed action and therefore excluded from coverage under the later-issued policies. The Supreme Court found that even though the court applied an incorrect standard to assess the relatedness of the two actions, judgment was affirmed nonetheless because under either the erroneous “fundamentally identical” standard or the correct relatedness standard defined by the policies, the later-issued insurance policies did not cover the follow-on action. View "First Solar, Inc. v. National Union First Insurance Company of Pittsburgh, PA" on Justia Law

The Fourth Circuit affirmed the district court's certification of the class and the approval of the insurance class action settlement. The settlement agreement requires Banner to refund to class members a portion of the money they had paid, with a minimum of $100 per class member, and provides some nonmonetary benefits, with a total value of roughly $40 million.The court concluded that the Allen Trust's argument that the district court improperly placed upon it the burden of overcoming the settlement provides no basis for reversal; the district court did not abuse its discretion in determining that the Dickman class met the requirements of class certification under Federal Rule of Civil Procedure 23(a); and the district court did not abuse its discretion in determining that the settlement was fair, reasonable, and adequate under Rule 23(e)(2). View "1988 Trust For Allen Children v. Banner Life Insurance Co." on Justia Law

The First Circuit affirmed the judgment of the district court granting two summary judgment motions in favor of Defendants in this class action lawsuit, holding that Defendants' actions in this case could not support a claim under the Racketeer Influenced and Corrupt Organizations Act (RICO).In granting the two summary judgment motions at issue, one filed on behalf of all Defendants and on filed behalf of certain Defendants, the district court adopted the findings of law of the Court of Appeals of Puerto Rico in Collazo Burgos v. La Asociación de Suscripción Conjunta del Seguro de Responsabilidad Obligatorio, No. K AC2010-0179, 2017 WL 6884428 (P.R. Cir. Nov. 30, 2017). The court further held that Defendants' actions were required under Puerto Rico law and thus could not support a RICO claim. The First Circuit affirmed, holding that the district court did err under the Erie doctrine in adopting the reasoning of the court of appeals in Collazo Burgos. View "Torres-Ronda v. Nationwide Mutual Insurance Co." on Justia Law

The Health Care Authority for Baptist Health, an affiliate of UAB Health System ("HCA"), and The Health Care Authority for Baptist Health, an affiliate of UAB Health System d/b/a Prattville Baptist Hospital (collectively, "the HCA entities"), appealed a circuit court order denying their motion to compel arbitration in an action brought by Leonidas Dickson, II. In 2015, Dickson sustained injuries as a result of an automobile accident. Following the accident, Dickson was taken to Prattville Baptist Hospital ("PBH"), where he was treated and discharged. Dickson was partially covered by a health-insurance policy issued by Blue Cross and Blue Shield of Alabama, Inc. ("BCBS"). PBH was a party to a "Preferred Outpatient Facility Contract" ("the provider agreement") with BCBS, under which the medical care rendered to Dickson in the emergency department at PBH was reimbursable. In 2017, Dickson filed a complaint to challenge a reimbursement that PBH had received in exchange for Dickson's medical treatment. Dickson's complaint also sought to certify a class of people who were insured by BCBS and who had received care at any hospital operated by HCA's predecessor, Baptist Health, Inc. ("BHI"). After the HCA entities' motion to dismiss was denied, the HCA entities filed an answer to the lawsuit, but the answer did not raise arbitration as a defense. After a year of extensive discovery (including class certification and class-related discovery), the HCA entities moved to compel arbitration on grounds that Dickson's health-insurance policy with BCBS required all claims related to the policy to be arbitrated and that the provider agreement also provided for arbitration, contingent upon the arbitration requirements of the BCBS policy. The trial court denied the motion to compel without providing a reason for the denial. After a request for reconsideration was also denied, the HCA entities appealed. The Alabama Supreme Court concluded the HCA entities waived their right to arbitration, thus affirming the trial court order. View "The Health Care Authority for Baptist Health v. Dickson" on Justia Law

The Supreme Court affirmed in part and reversed in part the judgment of the district court granting class certification in this action alleging breach of contract and violation of Montana's Unfair Trade Practices Act (UTPA), Mont. Code Ann. 33-18-101 et seq., holding that a sufficient factual basis was established to justify certification of the classes.Plaintiffs filed this action against Fergus Farm Mutual Insurance Company (FFM), alleging that FFM breached its insurance contract with Plaintiffs and all other insureds by failing to include general contractor overhead and profit in the cost to repair or replace Plaintiffs' property. The district court granted Plaintiffs' motion for class certification. The Supreme Court reversed in part, holding (1) the district court did not abuse its discretion by determining that common questions of law predominate the litigation and support certification of the class; but (2) certain conclusions reached by the district court were a "bridge too far" at this stage of litigation. View "Kramer v. Fergus Farm Mutual Insurance Co." on Justia Law

Under its replacement-cost homeowner insurance contracts, State Farm calculated its payment obligations by estimating the amount it would cost to repair or replace damaged property and subtracting depreciation and the deductible. During the class period, State Farm depreciated costs for both materials and labor.Policyholders filed a putative class action. The Sixth Circuit held that in an insurance contract that incorporates Kentucky’s “replacement cost minus depreciation” formula, the insurer cannot depreciate the costs of labor when determining payments. State Farm changed its practice and created a refund program for those who had received payments between the decision and the date State Farm stopped deducting labor depreciation. Most policyholders received refunds of less than $1,000. The court certified the class as: All persons and entities that received “actual cash value” payments ... from State Farm … for loss or damage to a dwelling or other structure in … Kentucky ... where the cost of labor was depreciated," excluding those that received payment in the full amount of insurance.The Sixth Circuit affirmed. The claims share a common legal question central to the validity of each claim: whether State Farm breached the standard form contracts by deducting labor depreciation. No individualized proof is necessary to resolve this question on a classwide basis. That common question predominates over individual questions, although damages will vary. The court did not abuse its discretion in finding class litigation to be the superior method of adjudication and class membership is ascertainable View "Hicks v. State Farm Fire & Casualty Co." on Justia Law

The Supreme Court affirmed the order of the district court partially denying Appellant's motion for attorney fees, holding that the district court did not abuse its discretion in its determination of whether attorney fees awarded to class counsel were reasonable.Appellant filed individual and class action claims against Montana University System (MUS). The parties reached a partial settlement. The district court approved the settlement and appointed Appellant the class representative and her attorneys as class counsel. The court's order provided that class counsel were entitled to attorneys' fees and costs, but the parties were unable to agree to a total attorney fees and costs award. The district court declined to award class counsel their requested fees under a percentage-based calculation and, instead, calculated the fee award by multiplying the hours worked on the case by hourly rates of $275 and $375, respectively. The Supreme Court affirmed but remanded the case for a determination of the interest to which Appellant was entitled, holding (1) the district court did not abuse its discretion in determining whether the attorney fees awarded to class counsel were reasonable; and (2) Appellant was entitled to interest in accordance with Mont. Code Ann. 25-9-205. View "Gendron v. Montana University System" on Justia Law

The term "Actual Cash Value" is ambiguous with respect to the withholding of labor depreciation in Mississippi homeowners insurance policies that provide no further definition of ACV. The Fifth Circuit affirmed the district court's denial of State Farm's motion to dismiss with respect to plaintiff's breach of contract claim. The court found that, in the context of a Mississippi homeowners policy that refers to "Actual Cash Value" without further definition, both interpretations are reasonable. Therefore, the court held that the contract was ambiguous and the court applied Mississippi's interpretive canons, which provides that an ambiguous insurance contract is interpreted against the insurance company.The court reversed the district court's denial of State Farm's motion to dismiss with respect to plaintiff's tort claims. The court explained that, because the law on this question of interpreting "Actual Cash Value" in Mississippi was unsettled, State Farm had an arguable basis to depreciate labor costs. The court also found that the district court did not abuse its discretion in certifying a class of Mississippi State Farm policyholders similarly situated to plaintiff, who received "Actual Cash Value" payments in which labor was depreciated and whose contracts similarly did not define "Actual Cash Value." View "Mitchell v. State Farm Fire & Casualty Co." on Justia Law