I’ve previously posted regarding class actions against life insurers involving the use of “checkbook” accounts to pay policy proceeds, including posts about the denial of a motion to dismiss in a case against Prudential in Massachusetts federal court and the denial of a motion to dismiss in a case against MetLife in Nevada federal court.

In Otte v. Life Insurance Company of North America, Judge Stearns of the District of Massachusetts recently granted class certification in a case brought against affiliates of CIGNA on this issue.  This case involved life insurance policies issued as part of employee benefit plans governed by ERISA.  The insurers paid benefits using “checkbook” accounts known as CIGNAssurance accounts.  Interest was paid to the named plaintiffs at rates ranging from 0.39% to 0.74%.

On class certification, the defendants did not dispute numerosity or commonality (notably, this was briefed and decided before the Wal-Mart decision came down).  On typicality, the defendants argued that there was significant variation among the summary plan descriptions and other governing plan documents for each employer’s benefit plan, thereby precluding a finding of typicality.  The court rejected this based on the First Circuit decision in Mogel v. UNUM Life Ins. Co., but the court did not provide much explanation as to what the claimed variations were in the plan documents or why they would not matter.

The court was more persuaded by the defendants’ argument on typicality and predominance that their statute of limitations defense required an individualized analysis because whether a claim was time-barred would depend on when class members obtained actual knowledge of the alleged breach of fiduciary duty.  The court, however, concluded that sub-classing was appropriate, separating potentially-time barred claims from those that were clearly timely:

This issue . . . can be addressed by certifying two sub-classes, one consisting of persons whose claims arose within the three years before the filing of the Complaint, the other of persons whose claims arose three years prior to that date. A brief period of discovery should establish whether the second sub-class can survive the commonality test and whether a suitable representative of the sub-class can be identified.

With this decision granting class certification, it is likely that additional class actions will be filed on this issue.  There may be additional arguments insurers have against class certification that we haven’t yet seen in these cases, based on the terms of their policies (or summary plan descriptions for ERISA plans), and based on the Wal-Mart decision’s reinvigoration of the commonality requirement.  Stay tuned. 

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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.  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.

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