The recent denial of class certification in Fosmire v. Progressive Max Ins. Co., 2011 U.S. Dist. LEXIS 117366 (W.D. Wash. Oct. 11, 2011) is the second opinion I’ve seen post-Wal-Mart that applies the new standards in detail in an insurance class action.  This putative nationwide class action alleged that Progressive improperly failed to pay for diminution in value on auto claims under uninsured/underinsured (UM/UIM) coverage.  That is, where a vehicle has been damaged in an accident and repaired, it may not be fully repairable, or it may lose some value because a repaired vehicle may be worth less than one that has never been in an accident.  (It seems that those “Carfax” reports make a difference to used car buyers.)  The plaintiff asserted that Progressive had what she labeled as a “don’t ask, don’t tell” policy, under which the company would not advise insureds of the potential availability of a payment for diminution in value, and would consider such claims only where the insured made a claim for it.  Id. at *4-5.

There are several notable aspects to this opinion:

  1. The court excluded the plaintiff’s expert under Daubert.  The court found the more “relaxed” standard adopted by the Eighth Circuit in In re Zurn Pex Plumbing Prods. Liab. Litig., 644 F.3d 604 (8th Cir. 2011) (see my prior blog post) to be the correct standard, rather than the full Daubert analysis that has been required by the Seventh and Eleventh Circuits.  This “relaxed” standard does not decide on admissibility at trial of the expert’s testimony, but rather focuses on its reliability for purposes of class certification issues and limits the focus to the evidence available to the expert at the class certification stage, in light of the discovery taken to date.  Here, the plaintiff’s expert (Polissar) proposed to calculate classwide damages using a 10-year-old study conducted by a different expert (Siskin).  The court found this testimony inadmissible for class certification purposes because Polissar did nothing to ascertain the reliability of Siskin’s work, had never looked at Progressive’s data produced in discovery, had no idea what the proposed class definition was, and had made no attempt to determine how the 10-year-old study by Siskin would apply to the proposed class in the case at bar.  This is a classic case for exclusion of expert testimony under Daubert.  Despite the court’s characterization of its analysis as application of a “relaxed” standard, in the end I don’t think that mattered much – this was a thorough vetting of the reliability and admissibility of the testimony. 
  2. The named plaintiff was atypical because of a defense raised regarding a material misrepresentation on the insurance application.  Progressive raised a defense based on the fact that, when she purchased the policy, the plaintiff failed to disclose that her fiancé was a driver in her household who would drive the car. He was driving when the accident occurred.  Although the plaintiff argued that she did not make a misrepresentation, the court was “concerned that litigation concerning this defense will preoccupy Ms. Fosmire to the detriment of class claims” and “it threatens to undermine her credibility at trial, which also undermines the element of typicality.”  Id. at *24.  This is a good reminder for insurers and their counsel to fully explore any potential defenses to a named plaintiff’s claim.  Even if you are not going to win summary judgment on a defense, it may be grounds to defeat certification. 
  3. Adequacy of representation was not satisfied due to claim splitting.  The court explained that some jurisdictions allow a recovery for “stigma” damages, on the theory that the value of a vehicle has declined because a repaired vehicle is worth less to buyers than one that has never been in an accident (my “Carfax” example above).  Other jurisdictions, like Washington State, do not allow this type of recovery but allow a recovery on the theory that a particular vehicle cannot be fully restored to its pre-loss condition (e.g., because of weakened metal).  The plaintiff here did not pursue “stigma” damages, apparently because she thought that would improve her chances on class certification.  Putative class members who wanted to pursue “stigma” claims in jurisdictions that allowed such claims likely would not be able to do so if the class were certified.  The court found that this created a conflict of interest between the named plaintiff and the putative class, and therefore adequacy of representation was lacking.  This is a good example of how, in defending these cases, you need to put yourselves in the shoes of the putative class members and think about what kinds of claims they might want to bring but that the named plaintiff chose not to pursue.  This is somewhat counterintuitive because in most cases your focus as defense counsel or in-house counsel is on aggressively defending the claims that were brought, not thinking about what additional arguments a plaintiffs’ lawyer might have asserted.  
  4. Predominance was not satisfied due to differences in state law.  Because only one jurisdiction had expressly ruled on the availability of diminution in value damages under UM/UIM policies, the court found that the need to decide numerous unsettled issues of state law demonstrated a lack of predominance.  The court explained that “determining whether each [UM/UIM] statute requires diminution damages would require an evaluation of the interplay between the statutory language and the tort law in each state.”  Id. at *30.  Despite the plaintiff’s argument that the policy language was essentially the same in all applicable jurisdictions and that breach of contract law is consistent, the court found that given the nuances that would need to be delved into for each jurisdiction, the plaintiff had not met her burden of demonstrating a method for addressing the differences in state law.  (See my prior post on the topic of differences in state law on breach of contract.)
  5. Rule 23(b)(2) certification was unavailable because of a lack of cohesiveness and because monetary damages were not incidental.  The court found a lack of cohesiveness precluding certification under 23(b)(2) for essentially the same reasons that certification was denied under (b)(3).  It also concluded that, under Wal-Mart, the damages sought could not be determined in an objective, classwide manner and thus were not “incidental.”

In my view, this is the type of case that was unlikely to meet the standard for class certification even before Wal-Mart.  It demonstrates though that the bar has been raised and that there are additional lines of argument available to insurers and other class action defendants.

Email this postTweet this postLike this postShare this post on LinkedIn
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.