Back in June, I posted about the Oregon Supreme Court’s decision in Strawn v. Farmers Insurance Company of Oregon.  This class action involved payments for personal injury protection (PIP) coverage under auto insurance policies.  Farmers used software to analyze claimed medical expenses in comparison with a database of charges for particular medical services in the region.  It selected a particular percentile (at different times it chose the 80th, 90th and 99th percentiles) as a cutoff for what it would pay for a particular service (although it claimed that adjusters were authorized to override this in appropriate circumstances).  The plaintiffs’ claim was that this process was arbitrary and a breach of the contractual obligation to pay “reasonable and necessary” medical expenses, as well as fraud.  A class was certified and the case was tried to a jury.  A judgment in favor of the class was entered for approximately $900,000 in compensatory damages and $8 million in punitive damages.  The Oregon Supreme Court affirmed the verdict, rejecting Farmers’ arguments that it was denied the ability to present individualized defenses and that the plaintiff failed to prove class-wide reliance.  The court also held that Farmers had waived its constitutional challenge to punitive damages because it had failed to adequately preserve a challenge to a waiver ruling by the trial court in its appeal to the Oregon Court of Appeals. 

On October 5, 2011, Farmers filed a petition for certiorari in the U.S. Supreme Court (No. 11-445; e-mail me for a copy of the petition).  This case presents the Supreme Court with an opportunity to decide what limitations the federal Due Process Clause places on state court class actions.  Specifically, Farmers contends that the Due Process Clause bars a state court from ruling that individualized reliance on a fraud claim need not be proven on an individual basis in a class action, even though individual proof would be required in an individual case.  In other words, a class action should not be able to alter substantive law.  Farmers also argues that the Oregon Supreme Court, in finding that Farmers had waived its constitutional challenge to the punitive damages award, effectively created a new rule of state procedural law in a manner that violated due process.  (There were also some interesting issues raised post-decision about some ex parte communications between plaintiff’s counsel and members of the Oregon Supreme Court.  On reconsideration, after a recusal of the justice most directly implicated in some of the ex parte communications, the court reaffirmed its earlier decision.  This is discussed in the cert petition, perhaps to give some flavor and background, but this issue is not expressly raised as a question presented.) 

The cert petition was filed by Ted Boutrous, who argued Wal-Mart v. Dukes.  The petition focuses in part on that decision, and seeks to extend the prohibition on “Trial by Formula” that was adopted by the Court in Dukes, chiefly based on the federal Rules Enabling Act, so that this principle would become a due process requirement in state court class actions.  There was a petition for certiorari last term filed by Philip Morris involving somewhat similar due process issues in state court class actions.  Justice Scalia granted a stay, but the Court ultimately denied certiorari (see my prior blog post about the Philip Morris case). 

This is definitely a petition to follow for those keeping an eye on insurance class actions, and I will continue to follow it on this blog.  Because this is a rare class action that actually went to trial, it provides the Supreme Court a relatively rare and unique opportunity to weigh in on due process issues.  But at the same time it is clearly a case that is complicated factually and procedurally (as almost any class action would be by the time it gets through a trial and state court appeal).  I expect the response to the petition will try to argue that the Oregon Supreme Court had some other independent grounds for its rulings on pertinent issues and that, in light of the facts, procedural history and nuances involved in the case, the constitutional issues are not “cleanly” presented in a way conducive to Supreme Court review.  That is a typical tactic in opposing cert, especially where, as here, a case is likely to have some appeal on its merits.  It will be interesting to see whether the Court takes this case up.  If it does, the insurance industry and insurance lawyers will want to follow it closely.

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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.