In seeking to certify multistate and nationwide class actions against insurance companies, plaintiffs’ attorneys often argue that the law of breach of contract is essentially the same nationwide, and therefore class certification is proper.  This argument has some appeal to some judges, at least at first blush.  As I think back to my contracts class in the first year of law school (with E. Allan Farnsworth), I don’t recall a lot of discussion about differences in state law.  At the 30,000 foot level, when you are learning the fundamentals, the basics of the law of contract formation and breach are fairly uniform.  But what courts don’t always recognize in class actions is that, when it comes to important nuances, such as what constitutes an ambiguity or what rules the court follows if it finds an ambiguity, there is substantial variation in state law.  It’s also not uncommon that even under what are nominally the very same rules on ambiguity, two judges in two different states applying their own state precedents will reach the opposite result. 

In Krueger v. Northwestern Mutual Life Insurance Company, 2011 U.S. Dist. LEXIS 79440 (N.D. Fla. July 21, 2011), the court held that differences in state law on breach of contract precluded certification (along with other grounds).  The plaintiff alleged that Northwestern Mutual entered into annuity contracts that promised to pay dividends from its surplus, and then later changed its practice and paid interest on a short-term bond instead, allegedly in breach of the contracts.  Id. at *1-2.  In a single-state class action that was certified in Wisconsin, the case went to trial and the court found a breach of contract and breach of fiduciary duty.  Id. at *4.  The plaintiff in the Florida case sought to certify a class of purchasers of these annuities who resided in Florida either at the time of purchase or currently.  Id.  The parties agreed that Wisconsin’s choice of law rules governed, but under those rules, the law of the state where the contract was entered into generally would apply, and that would vary because the class included people who purchased the annuities in various states and then moved to Florida (given Florida’s popularity as a retirement destination, not an uncommon occurrence).  Id. at *10-11.

The court denied certification on typicality, predominance and manageability grounds.  It found that the plaintiff had failed to meet her burden of showing uniformity or near-uniformity of state law.  The court explained that states have different standards for ambiguity, and different standards for admissibility of extrinsic evidence.  Id. at *11-13.   

Another key deciding factor in this decision was that the defendant intended to assert defenses of waiver, notice and estoppel, where available under state law, and these defenses would require a factual inquiry into the facts surrounding the purchase of the annuities.  Id. at *15-16.  As I’ve noted before on this blog, defenses are often key to defeating class certification in insurance class actions.  The Supreme Court made clear in Wal-Mart v. Dukes (see my prior blog post) that the class action device cannot be used in a manner that strips a defendant of its defenses that require introduction of individual facts.  That part of Wal-Mart was unanimous, and was something Justice Sotomayor was stressing during oral argument.  In opposing class certification, these defenses should be demonstrated with evidence of concrete examples from the putative class.  Sometimes it can be hard work to find the evidence to demonstrate those examples, but they are powerful.

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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.