The recent Sixth Circuit decision in Pipefitters Local 636 Insurance Fund v. Blue Cross Blue Shield of Michigan, 2011 U.S. App. LEXIS 16624 (6th Cir. Aug. 12, 2011) makes some interesting points about superiority that I think are particularly significant, and have not seen in other class action decisions. 

The case involved whether certain fees imposed by Blue Cross Blue Shield of Michigan on an employee union’s insurance fund were authorized by Michigan law and whether there was an improper failure to disclose these fees.  See id. at *2-4.  The district court ruled on summary judgment motions that collecting the fees at issue was contrary to Michigan law, and then granted class certification.  Id. at *16-21. 

The Sixth Circuit reversed the class certification on several grounds, but what I found most interesting were two points the court made about commonality: 

  1. The court explained that, because the district court had already decided the central legal issues, a class action was not the superior method of resolution — “it would have been more judicially efficient to enter a final judgment in the individual action so as to allow BCBSM to file an appeal.  In this way, the central legal issue could have been resolved by this court, and based on that outcome, other potential class members could then decide whether to pursue an individual suit . . . .”  Id. at *18.  This rationale applies in many insurance class actions, where all that is really needed is a final appellate resolution of a central issue of coverage or statutory interpretation, and then the decision can be applied to individual cases.  A class action may not be the superior method of getting the issue resolved. 
  2. The court gave significant weight to an amicus brief filed by the Michigan insurance commissioner in support of the insurer’s position.  The amicus brief explained that the fees at issue helped fund coverage for senior citizens under a Medigap program, and thus a class action could lead to higher premiums or reduced coverage for seniors.  The court wrote that “[t]he serious financial repercussions to Michigan’s elderly population further support a conclusion that a class action is not a superior method of resolving the Fund’s allegation,” and thus “[t]he public’s interest would also be better served by allowing the individual suit . . . to proceed to this court for appellate review.”  Id. at *32.  I rarely see these kinds of public interest arguments made in insurance class actions.  This one clearly caught the court’s attention, although it’s rare that the insurance commissioner will weigh in with an amicus brief.  But this is something that is certainly worth giving serious thought to in appropriate cases.  In many instances the certification of an insurance class action will benefit a relatively small group of insureds and the plaintiffs’ lawyers but potentially to the detriment of the rest of the company’s insureds.

 

Tags: Superiority
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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.

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