After Wal-Mart v. Dukes, plaintiffs’ lawyers tend to file more narrowly-tailored, single state class actions, often focusing on insurers’ compliance with state statutes or regulations.  Recent filings against GEICO and Progressive, two of the country’s largest auto insurers, are good examples of this trend: 

  • Davis v GEICO Casualty Company.pdf, Case No. 2012CA005024 (Florida Circuit Court, 15th Judicial Circuit in and for Palm Beach County, filed Mar. 22, 2012):  This case focuses on a Florida statute requiring insurers to make disclosures regarding UM/UIM coverage, and obtain a signed written consent if an insured chooses not to buy UM/UIM coverage or chooses limits lower than the bodily injury coverage limits.  See Fla. Stat. § 627.727.  After a few entertaining paragraphs about the cavemen, the gecko and “15 minutes can save 15%,” the complaint alleges that GEICO fails to comply with this Florida statute by failing to provide Florida consumers who buy their policies by phone or over the Internet in 15 minutes with the required disclosures, and failing to obtain their signatures. The complaint vaguely pleads that GEICO’s electronic signature process for Internet sales fails to comply with Florida law with respect to electronic signatures.  The complaint seeks, among other relief, reformation of the policies of putative class members such that they provide UM/UIM limits equal to the bodily injury coverage limits.  This is not unique to Florida – some other states have similar requirements for declining UM/UIM coverage or buying lower limits for such coverage. 
  • Beavers v Progressive Casualty Company.pdf, No. CV 12 779206 (Ohio Court of Common Pleas, Cuyahoga County, filed Mar. 28, 2012):  This case focuses on Ohio regulations requiring that, when an insurer pays a claim for a total loss of a vehicle, it must provide notice to the claimant that sales tax will be reimbursed if a replacement vehicle is purchased within 30 days, and the insurer must provide such reimbursement if a claim for sales tax is timely submitted.  See Ohio Admin. Code § 3901-1-54(H)(7).  The complaint alleges that Progressive provides a notice that states only that “we will include applicable sales taxes and fees when required by law.”  (Complaint, ¶ 10.)  The plaintiff claims that this notice is insufficient “because it fails to provide the claimant with any information regarding when taxes and fees are ‘required by law.’”  (Id., ¶ 11.) This seems to go against the basic legal principle that people are presumed to know the law, although in reality few average citizens take the time to explore the intricacies of insurance department regulations.

Other insurers may want to pay attention to these filings because it’s common for plaintiffs’ lawyers to file class actions first against the insurers with the largest market shares and then, if they have some success, follow with suits against carriers with smaller market shares.  (Although sometimes this happens the other way around, perhaps because plaintiffs’ lawyers think the smaller insurers will have less familiarity with class actions and hire less qualified defense counsel, and will try to obtain favorable rulings they can then use against the larger carriers.)  

Insurers seeking to avoid class action exposure in the post-Wal-Mart era would be well-served to devote resources to beefing up their compliance department.  Careful compliance with state statutes and regulations should help avoid being sued in some of these types of lawsuits.