Here is the second installment of my summaries of significant recent P&C class action decisions: 

  • Seabron v. American Family Mutual Insurance Company, 2012 U.S. Dist. LEXIS 41451 (D. Colo. Mar. 27, 2012):  This is a relatively rare written opinion on several discovery issues that often arise in insurance class actions. The court resolves a dispute over production of a sample of claim files, ruling that sampling is appropriate for purposes of class discovery, and that a sample of 10% (approximately 160 files for the roughly 1600 putative class members) was appropriate.  (The insured proposed 25% and the insurer proposed 2%.)  The court also provides a detailed methodology for selecting the random sample.  There is no discussion of how the 10% figure was appropriate, it appears the court simply selected what it thought was reasonable.  The court also holds that in a UM/UIM case where bad faith claims were asserted, information regarding reserves and settlement authority was discoverable under Colorado law.  The court also addresses privacy issues involving the putative class members, concluding that medical information in claim files is discoverable, but requiring that all personal identifying information in the claim files be redacted (no doubt a time-consuming and costly effort).  Lastly, the court concludes that production of documents in .tif or .pdf format is more appropriate than native format, given that Bates numbers cannot be applied in native format and electronic redactions cannot be performed on native documents. 
  • Klonsky v. RLI Insurance Company, 2012 U.S. Dist. LEXIS 47333 (D. Vt. Apr. 4, 2012):  This putative class action asserts that an insurer violated the Fair Credit Reporting Act (FCRA) by pulling a motor vehicle history report on an insured without the driver’s consent and without a permissible purpose.  The allegation was that where a father was involved in an auto accident, the insurer also pulled a motor vehicle report for his daughter, who was insured by the policy but not involved in the accident.  This was allegedly part of a practice whereby the insurer would pull such reports for all insureds when a claim was made.  The court denied a motion to dismiss, ruling that the motor vehicle report qualified as a “consumer report” under the FCRA.  It appears the issue of whether the insurer had a proper purpose to pull the report was not raised on the motion to dismiss.  It’s unclear to me how the daughter can claim any real injury here given that her report showed a clean record.  But insurers may want to check that their procedures regarding pulling motor vehicle reports are in compliance with FCRA requirements.