Justia Class Action Opinion Summaries

In 2011, Roppo suffered serious injuries in an auto accident with Block, who was insured by Travelers. Travelers and the attorneys it retained for Block disclosed only the limits of Block’s automobile liability policy; they did not disclose the existence of his additional umbrella policy. Roppo eventually learned of the umbrella policy and then settled the case. She brought a proposed class action, challenging the company’s alleged practice of not disclosing the existence of umbrella policies. The case was removed to federal court under the Class Action Fairness Act, 28 U.S.C. 1332(d). The district court denied Roppo’s motion to remand to state court but allowed her to file a second amended complaint, which added Block’s defense attorneys as defendants. Her third amended complaint added a cause of action under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1962(c). The Seventh Circuit affirmed dismissal with prejudice the complaint’s 11 counts, finding that the district court had jurisdiction and that her complaint did not sufficiently state claims of fraudulent misrepresentation, negligent misrepresentation, and negligence under Illinois law, or violations of the Illinois Insurance Code and the Illinois Consumer Fraud and Deceptive Business Practices Act. View "Roppo v. Travelers Commercial Insurance Co." on Justia Law

In 2014, Haley and others filed a putative class action against Kolbe & Kolbe Millwork, claiming that windows purchased from Kolbe were defective and had allowed air and water to leak into (and damage) the plaintiffs’ homes. Kolbe tendered the defense of the defective-product claims to several insurance companies. Two companies—United States Fire Insurance and Fireman’s Fund—obtained permission to intervene in the case. United States Fire successfully moved for summary judgment, arguing that a 2016 decision of the Wisconsin Supreme Court (Pharmacal) absolved the insurers of their duty to defend Kolbe in the underlying suit. The court sua sponte awarded judgment to Fireman’s Fund. The Seventh Circuit reversed the judgment that the insurance companies had no duty to defend. The “Pharmacal” analysis does not apply because the homeowners sought compensation for the repair or replacement of individual elements of a larger structure. This kind of particularized demand was not at issue in Pharmacal, which applied an "integrated structure" analysis. Whether the walls and other elements of the plaintiffs’ homes constitute Kolbe’s “product,” such that coverage for any damage to those materials is extinguished by a policy exclusion is ambiguous. View "Haley v. Kolbe & Kolbe Millwork Co." on Justia Law

Rosemary Henn filed a putative class action in a federal court alleging that American Family Mutual Insurance Company wrongfully failed to compensate her and others similarly situated by depreciating labor costs in calculation of “actual cash value” for loss or damage to a building under its homeowner’s insurance policies. The federal court certified a question to the Nebraska Supreme Court asking whether an insurer, in determining the “actual cash value” of a covered loss, may depreciate the cost of labor when the policy does not state explicitly that labor costs will be depreciated and the terms “actual cash value” and “depreciation” are not defined in the policy. The Supreme Court answered in the affirmative, holding that the term “actual cash value” is unambiguous and that labor can be depreciated. View "Henn v. American Family Mutual Insurance Co." on Justia Law

In the Original Action, Michelle Pratt filed a class action on behalf of residents of Autumn Hills against Collier and two other entities, alleging that two wells supplied by Autumn Hills contained contaminated water. Barbara Williams was later substituted as a class representative. The state court awarded plaintiffs $70,085,000 for medical monitoring, and $11,952,000 for the loss in value to their homes. Williams then filed an equitable garnishment action in state court against the Insurers and Collier pursuant to Missouri Revised Statute 379.200. The district court ultimately entered a consent judgment in favor of Collier. The court concluded that the consent judgment was a final judgment and the court had jurisdiction over the appeal of the consent judgment; Williams has not waived her right to appeal the consent judgment where Williams' consent to entry of judgment against her represented consent to the form, rather than the substance, of the judgment; and the judgment on the pleadings was not a final order, and thus Williams did not file her notice of appeal out of time. The court also concluded that because Williams brought this action on behalf of a class previously certified under a state-law analogue to Rule 23, the action was necessarily “filed under” Rule 23 or a state-law analogue, even though the complaint omits explicit reference to such a rule. Therefore, the district court had jurisdiction under the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d). Finally, the court concluded that the district court did not err in granting judgment on the pleadings to the Insurer because the Insurers had no duty to defend or indemnify Collier for the claims asserted in the Original Action. Accordingly, the court affirmed the judgment. View "Williams v. Employers Mutual Casualty Co." on Justia Law

Fleet Owners Fund is a multi-employer “welfare benefit plan” under the Employee Retirement Security Act (ERISA), 29 U.S.C. 1001, and a “group health plan” under the Patient Protection and Affordable Care Act (ACA), 26 U.S.C. 5000A. Superior Dairy contracted with Fleet for employee medical insurance; the Participation Agreement incorporated by reference a 2002 Agreement. In a purported class action, Superior and its employee alleged that, before entering into the Agreement, it received assurances from Fleet Owners and plan trustees, that the plan would comply in all respects with federal law, including ERISA and the ACA. Plaintiffs claim that, notwithstanding the ACA’s statutory requirement that all group health plans eliminate per-participant and per-beneficiary pecuniary caps for both annual and lifetime benefits, the plan maintains such restrictions and that Superior purchased supplemental health insurance benefits to fully cover its employees. Fleet argued that the plan is exempt from such requirements as a “grandfathered” plan. The district court dismissed the seven-count complaint. The Sixth Circuit affirmed, concluding that plaintiffs lacked standing to bring claims under ERISA and ACA, having failed to allege concrete injury, and did not allege specific false statements. View "Soehnlen v. Fleet Owners Insurance Fund" on Justia Law

Plaintiffs were both insured by USAA Casualty Insurance Company under auto insurance policies that provided medical payments coverage. Plaintiffs filed a complaint against USAA arguing that USAA’s practice of sending medical claims to Auto Injury Solutions (AIS) for review was an improper cost containment scheme designed to deprive Montana consumers of their first-party medical pay benefits. Plaintiffs subsequently filed a motion to certify a proposed class. The district court issued its order certifying the class, concluding “all members of the proposed class were subject to the same claims processing procedure of outsourcing claims to AIS. USAA appealed from the certification order. The Supreme Court reversed, holding that the district court abused its discretion by certifying the class under Mont. R. Civ. P. 23(a) and under Mont. R. Civ. P. 23(b)(3). Remanded. View "Byorth v. USAA Casualty Insurance Co." on Justia Law

Relying on an advertiser’s claim that its fax advertising program complied with the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227, Stevens & Ricci allowed the advertiser to fax thousands of advertisements to potential customers on its behalf. More than six years later, Hymed filed a class action TCPA lawsuit, which settled with a $2,000,000 judgment against Stevens & Ricci. While that suit was pending, Auto-Owners sought a declaratory judgment, claiming that the terms of the insurance policy it provided Stevens & Ricci did not obligate it to indemnify or defend Stevens & Ricci in the class action. The Third Circuit affirmed summary judgment, finding that the sending of unsolicited fax advertisements in violation of the TCPA did not fall within the terms of the insurance policy. The “Businessowners Insurance Policy” obligated Auto-Owners to “pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’, ‘property damage’, ‘personal injury’ or ‘advertising injury’ to which this insurance applies.” The “advertising injury” deals only with the publication of private information, View "Auto-Owners Ins. Co. v. Stevens & Ricci Inc" on Justia Law

Blue Cross controls more than 60% of the Michigan commercial health insurance market; its patients are more profitable for hospitals than are patients insured by Medicare or Medicaid. BC enjoys “extraordinary market power.” The Justice Department (DOJ) claimed that BC used that power to require MFN agreements: BC would raise its reimbursement rates for services, if a hospital agreed to charge other commercial insurers rates at least as high as charged to BC. BC obtained MFN agreements with 40 hospitals and MFN-plus agreements with 22 hospital systems. Under MFN-plus, the greater the spread between BC's rates and the minimum rates for other insurers, the higher the rates that BC would pay. Class actions, (consolidated) followed the government’s complaint, alleging damages of more than $13.7 billion, and seeking treble damages under the Sherman Act, 15 U.S.C 15. In 2013, Michigan banned MFN clauses; DOJ dismissed its suit. During discovery in the private actions, plaintiffs hired an antitrust expert, Leitzinger. BC moved to exclude Leitzinger’s report and testimony. Materials relating to that motion and to class certification were filed under seal, although the report does not discuss patient information. BC agreed to pay $30 million, about one-quarter of Leitzinger's estimate, into a settlement fund and not to oppose requests for fees, costs, and named-plaintiff “incentive awards,” within specified limits. After these deductions, $14,661,560 would be allocated among three-to-seven-million class members. Class members who sought to examine the court record or the bases for the settlement found that most key documents were heavily redacted or sealed. The court approved the settlement and denied the objecting class members’ motion to intervene. The Seventh Circuit vacated, stating that the court compounded its error in sealing the documents when it approved the settlement without meaningful scrutiny of its fairness to unnamed class members . View "Shane Group, Inc. v. Blue Cross Blue Shield of Mich." on Justia Law

This case arose out of claims asserted by multiple people against Blue Cross and Blue Shield of Montana, now known as Caring for Montanans, Inc. (CFM) and Montana Comprehensive Health Association (MCHA). The claimants asserted that while they were insured by CFM or MCHA, they submitted claims that the insurers denied based upon exclusions contained in their health insurance policies. These exclusions generally provided that the insurer would not pay for health care costs of the injured insureds if the insureds received, or were entitled to receive, benefits from any automobile liability policy. These exclusions were subsequently disapproved by the Montana Commissioner of Insurance, and the insureds sought the previously-denied benefits. The district court certified a class of claimants for settlement purposes only. The court then held a fairness hearing on a proposed settlement agreement and approved the settlement. Several class members objected to the settlement and appealed to the Montana Supreme Court, arguing they should have been allowed to conduct further discovery to ascertain the fairness of the settlement agreement. The Supreme Court agreed with the objectors and remanded the case to the district court for further discovery and a second fairness hearing. The district court allowed further discovery, held a second fairness hearing, and determined that the same settlement agreement was fair, reasonable, and adequate. The Objectors again appealed. Finding no reversible error, the Supreme Court affirmed. View "Pallister v. BCBS" on Justia Law

The Joyce law firm purchased professional liability insurance from Professionals Direct. In 2007 the firm won a large damages award for a class of securities-fraud plaintiffs and hired another law firm to sue to collect the money from the defendant’s insurers. Some class members thought the Joyce firm should have handled enforcement of the judgment itself under the terms of its contingency-fee agreement. They took the firm to arbitration over the extra fees incurred. Professionals Direct paid for the firm’s defense in the arbitration. After the arbitrator found for the clients and ordered the firm to reimburse some of the fees they had paid, the insurer refused a demand for indemnification. The district judge sided with the insurer, concluding that the award was a “sanction” under the policy’s exclusion for “fines, sanctions, penalties, punitive damages or any damages resulting from the multiplication of compensatory damages.” The Seventh Circuit affirmed. While the arbitration award was not functionally a sanction, another provision in the policy excludes “claim[s] for legal fees, costs or disbursements paid or owed to you.” Because the arbitration award adjusted the attorney’s fees owed to the firm in the underlying securities-fraud class action, the “legal fees” exclusion applies. View "Edward T. Joyce & Assocs. v. Prof'ls Direct Ins. Co." on Justia Law