Can a court certify a class action to decide an insurance coverage issue, and then issue an injunction requiring an insurer to apply the court’s ruling to claims of class members?  A recent Third Circuit opinion danced around that question, without directly taking it on, holding only that the district court could not issue that type of injunction while simultaneously decertifying the class, but purporting to retain jurisdiction to enforce the injunction.

Meyer v. CUNA Mutual Insurance Society involved coverage under a credit disability insurance policy, under which the insurer would cover car loan payments if the insured became totally disabled.  The central issue was how to construe the policy’s definition of “total disability,” which was as follows:

during the first 12 consecutive months of disability means that a member is not able to perform substantially all of the duties of his occupation on the date his disability commenced because of a medically determined sickness or accidental bodily injury. After the first 12 consecutive months of disability, the definition changes and requires the member to be unable to perform any of the duties of his occupation or any occupation for which he is reasonably qualified by education, training or experience.

The plaintiff argued that, after the first 12 months, if an insured was “unable to perform any of the duties of his occupation,” the insured would be totally disabled.  The insurer argued that, after the first 12 months, an insured must show not only that he was unable to perform duties of his or her pre-injury occupation, but also that he or she could not perform duties of “any occupation for which he is reasonably qualified by education, training or experience.”  The district court certified a class on this issue, and then, on cross motions for summary judgment, ruled that the policy language was ambiguous and must be construed in favor of the insured, reasoning that the use of the word “or”  supported the insured’s interpretation, making it a reasonable one.  The district court then entered a permanent injunction requiring the insurer to review claim forms of class members in accordance with the coverage ruling, with the court retaining jurisdiction to resolve future disputes between class members and the insurer through adjudication of motions for contempt.  After entering this injunction, the district court decertified the class, finding that the remaining issues were inappropriate for class treatment.

The propriety of the original certification of the class and the later decertification were not raised on appeal.  The Third Circuit affirmed with respect to the policy interpretation issue, focusing on the word “or” in the definition of “total disability” and agreeing with the district court (this is discussed further on a Pennsylvania appellate law blog).  The Third Circuit, however, vacated the injunction, finding that it was an abuse of discretion to retain jurisdiction to issue the injunction and retain jurisdiction while at the same time decertifying the class – “[o]nce decertification became effective, the District Court had no jurisdiction over any of the claims of the putative class members and therefore no ability to order that any relief be granted to any claimant other than Meyer [the named plaintiff].” 

What is most interesting here is what the Third Circuit did not address.  Insurance coverage issues frequently can be decided as a matter of law (at least where policy language is unambiguous), but the application of any such ruling to the facts of hundreds or thousands of individual claims is typically inappropriate for class treatment.  The unique approach taken by the district court here was procedurally improper because of how it was implemented, but what if the district court had not decertified the class?  What if somehow the class could be re-certified on remand?  Would this approach be viable?  The Seventh Circuit’s decision in Kartman v. State Farm, which I previously blogged about, says the answer is “No.”  The Supreme Court’s forthcoming opinion in Wal-mart v. Dukes, which I also blogged about, likely will speak on this – the Court is expected to address under what circumstances putative classes seeking injunctive/declaratory relief can be certified under Rule 23(b)(2). 

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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 at Skadden.  Being in the insurance capital of Hartford, we have a national insurance litigation practice and I was fortunate to have the opportunity to work on some prominent class actions arising from the 2004 hurricanes in Florida and later Hurricane Katrina, including cases involving the applicability of the flood exclusion, statutes known as valued policy laws, and various other issues.  My interest and experience in class actions gradually led me to focus on that area.

In Connecticut courts I’ve defended various kinds of class actions that go beyond insurance, including cases involving products liability, securities, financial services and consumer contracts.

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 my desk or flying around the country trying to save insurance companies from the plaintiffs’ bar, or attending a conference on class actions or insurance litigation (for more on those, see the Seminars/Programs page of this blog), I often can be found playing or reading with my young daughter, helping my wife with her real estate and mortgage businesses, reading a book about history or politics, or watching the Boston Red Sox (I managed to find bleacher seats for Game 2 of the 2004 World Series when Curt Schilling pitched with the bloody sock).  When the weather is good I also love to take the ferry to Block Island, Rhode Island and ride a bike or walk the trails there. If you go, I highly recommend the Clay Head Trail.