I previously posted on Wal-Mart Stores, Inc. v. Dukes.  Another pending Supreme Court case that could affect insurance class actions is Smith v. Bayer Corp., No. 09-1205 (docket).

Smith involves the scope of a federal court’s power to enjoin members of a proposed (not certified) class from continuing to seek class certification on the same issues in state court after a federal court has denied class certification.  The case involves a multidistrict litigation concerning Baycol, a cholesterol-reducing drug that was withdrawn from the market by Bayer.  The federal judge denied class certification, and shortly thereafter a plaintiff in another case filed a motion for class certification in a West Virginia state court.  The federal judge enjoined the plaintiff in the West Virginia state court case from continuing to pursue class certification.  The Eighth Circuit upheld the injunction, and the Supreme Court granted certiorari.  The Class Action Countermeasures Blog set out some highlights from the oral argument. 

The same tactic used by the plaintiffs’ attorneys in Smith happens frequently in insurance class actions – the same insurer is sued on the same issue in various jurisdictions, sometimes by the same plaintiffs’ lawyers, and in some instances they lose many times but keep trying to find a judge somewhere who will certify a class.

If the Court allows these types of injunctions, one unique issue insurers will face is that insurance policies are issued by individual underwriting companies that are part of a family of insurers.  An issue will arise as to whether a denial of class certification against one company can bar another class action on the same issue brought against a different entity that is part of the same corporate family. 

Based on the transcript of the oral argument in the Supreme Court, my guess (it is only a guess) is that the Court will allow these types of injunctions to be issued but may narrow the circumstances under which such injunctions are appropriate.

Justice Ginsburg expressed a concern about a plaintiffs’ attorney being able to keep trying until they find a judge who will certify a class: 

You pick up a different plaintiff, and you go to a different forum.  How – and I guess your answer is that you could go on and on and on until – until maybe you find a judge who will certify this class.  (Transcript, at 17.)

In response to a question from Justice Kagan, plaintiffs’ counsel conceded, that the Class Action Fairness Act was intended to prevent this type of forum-shopping: 

JUSTICE KAGAN:  When – when Congress enacted CAFA, did Congress think about this precise issue, the issue that Justice Ginsburg is raising about a lawyer going from State to State with a different named plaintiff?  Was that – was that part of what Congress was reacting to?

MR. MONAHAN:  Yes, Justice Kagan, it’s my understanding that that was something they were concerned about.  And they were concerned about, again, some States being too permissive in granting class certifications . . . .  (Transcript, at 21-22.) 

Justice Alito also pointed out that there is no due process right to have a class action, and Congress could do away with class actions altogether if it wanted to.  (Transcript, at 23.) 

Justice Ginsburg, however, later suggested to defense counsel that “maybe you could be right about preclusion but wrong about use of the anti-suit injunction” (Transcript, at 33), but that could mean that the state court would be the one deciding the preclusion issue, not the federal court.  Some justices also appeared to be concerned about whether the Court, if it affirmed, would be taking away states’ ability to set somewhat different standards for class certification than the federal standards.  Justice Sotomayor expressed a concern about how these injunctions should be framed narrowly.

 

Tags: Supreme Court
Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Wystan Ackerman Wystan Ackerman

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you…

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you have something to say.  For those looking for my detailed law firm bio, click here.  If you want a more light-hearted and hopefully more interesting summary, read on:

People often ask about my unusual first name, Wystan.  It’s pronounced WISS-ten.  It’s not Winston.  There is no “n” in the middle.  It comes from my father’s favorite poet, W.H. (Wystan Hugh) Auden.  I’ve grown to like the fact that because my name is unusual people tend to remember it better, even if they don’t pronounce it right (and there is no need for anyone to use my last name because I’m always the only Wystan).

I grew up in Deep River, Connecticut, a small town on the west side of the Connecticut River in the south central part of the state.  I’ve always had strong interests in history, politics and baseball.  My heroes growing up were Abraham Lincoln and Wade Boggs (at that time the third baseman for the Boston Red Sox).  I think it was my early fascination with Lincoln that drove me to practice law.  I went to high school at The Williams School in New London, Connecticut, where I edited the school newspaper, played baseball, and was primarily responsible for the installation of a flag pole near the school entrance (it seemed like every other school had one but until my class raised the money and bought one at my urging, Williams had no flag pole).  As a high school senior, my interest in history and politics led me to score high enough on a test of those subjects to be chosen as one of Connecticut’s two delegates to the U.S. Senate Youth Program, which further solidified my interest in law and government.  One of my mentors at Williams was of the view that there were far too many lawyers and I should find something more useful to do, but if I really had to be a lawyer there was always room for one more.  I eventually decided to be that “one more.”  I went on to Bowdoin College, where I wrote for the Bowdoin Orient and majored in government, but took a lot of math classes because I found college math interesting and challenging.  I then went to Columbia Law School, where I was lucky enough to be selected as one of the minions who spent their time fastidiously cite-checking and Blue booking hundred-plus-page articles in the Columbia Law Review.  I also interned in the chambers of then-Judge Sonia Sotomayor when she was a relatively new judge on the Second Circuit, my only connection to someone who now has one-ninth of the last word on what constitutes the law of our land.  I graduated from Columbia in 2001, then worked at Skadden Arps in Boston before returning to Connecticut and joining Robinson+Cole, one of the largest Connecticut-based law firms.  At the end of 2008, I was elected a partner at Robinson+Cole.

I’ve worked on class actions since the start of my career.  Being in the insurance capital of Hartford, we have a national insurance litigation practice and most of the class actions I’ve defended have been brought against insurance companies. I’ve also handled some involving products liability, managed care, health care, utilities, financial services, higher education and environmental issues.

My insurance class action practice usually takes me outside of Connecticut.  I’ve had the pleasure of working on cases in various federal and state courts and collaborating with great lawyers across the country.  While class actions are an increasingly large part of my practice, I don’t do exclusively class action work.  The rest of my practice involves litigating insurance coverage cases, often at the appellate level.  That also frequently takes me outside of Connecticut.  A highlight of my career thus far was working on Standard Fire Ins. Co. v. Knowles, the U.S. Supreme Court’s first Class Action Fairness Act case.  I was Counsel of Record for Standard Fire on the cert petition, and had the pleasure of working with Ted Boutrous on the merits briefing and oral argument.

I started this blog because writing is one of my favorite things to do and I enjoy following developments in class action law, writing about them and engaging in discussion with others who have an in interest in this area.  It’s a welcome break from day-to-day practice, keeps me current, broadens my network and results in some new business.

When I’m not at work, you might find me running lines or watching a musical with my teenage daughter who hopes to be a Broadway star (or taking her to voice or dance lessons) or reading a good book.

Read more about Wystan Ackerman
Show more Show less
Related Posts
Rule 23(b)(2) and Fail-Safe Classes Addressed By Fifth Circuit
September 19, 2012
Preliminary Injunctions in Insurance Class Actions: Is Losing "Peace of Mind" from Insurance Irreparable Harm?
July 27, 2012
Preliminary Injunctions in Insurance Class Actions: California Federal Court Enjoins Life Insurer From Implementing Rate Increase
April 26, 2012