I previously posted on the Seventh Circuit’s opinion reversing class certification in Kartman v. State Farm Mutual Auto. Ins. Co., where the plaintiffs claimed that State Farm improperly applied inconsistent standards in adjusting hail damage claims. Law360 recently reported on the petition for certiorari in that case. (I don’t have a link to the petition online, but e-mail me if you’d like a copy.)
The petition seeks certiorari on the question of whether the Seventh Circuit improperly decided the merits when it concluded that plaintiffs’ claims for injunctive relief were not “cognizable” because there is no contractual or tort duty requiring an insurer to use a particular methodology in evaluating hail damage. The petition suggests that this was equivalent to a motion to dismiss or summary judgment ruling, and was not sufficiently tied to one of the elements of Rule 23, and therefore was an improper merits ruling under Rule 23.
I’d be surprised if the Supreme Court grants certiorari in this case because the Seventh Circuit had several other grounds for finding class certification improper, and even if this was an error and the Supreme Court corrected it, it probably would not change the result. But it’s certainly a petition that insurers should keep tabs on because if certiorari were granted it could substantially impact insurance class actions. I see the Seventh Circuit here as really deciding a question of background law that, while it might not precisely fit within one of the elements of Rule 23, it is an issue that is reasonably necessary for a court to decide in framing the issues presented on class certification. What the basic law is that governs the plaintiffs’ causes of action is often necessary to decide in order to apply Rule 23 requirements, and there should not be anything wrong with that.