Life insurance class actions I have been following include the multi-district litigation (MDL) against Prudential Life Insurance Company of America pending in federal district court in Massachusetts.  This case involves the payment of life insurance benefits under servicemembers’ and veterans’ group life insurance programs that are operated by Prudential and subsidized by the federal government.  The plaintiffs contend that it is improper for Prudential to pay policy proceeds by opening an “Alliance Account” and providing the beneficiary with a checkbook from which the entire proceeds can be withdrawn immediately or left in the account to earn interest at a rate determined by Prudential.  The plaintiffs contend that the policy and applicable law mandate payment of the benefits in one lump sum check or 36 monthly checks if the beneficiary chooses that option.  For more background on this case and the district court’s denial of Prudential’s motion to dismiss, see my May 12, 2011 blog post and April 14, 2011 blog post

Judge Ponsor, who is presiding over this MDL, was recently faced with deciding class certification.  One of his colleagues on the Massachusetts federal bench, Judge Stearns, has granted class certification in a case against CIGNA also involving the use of “checkbook” accounts to pay policy proceeds.  However, these two cases potentially involve some different issues and different policy language.  The Prudential policies are governed in part by a federal statute establishing the servicemembers’ and veterans’ programs, and the case against CIGNA involves an ERISA employee benefit plan. 

Judge Ponsor’s recent decision, In re Prudential Insurance Company of America SGLI/VGLI Contract Litigation, 2012 U.S. Dist. LEXIS 116896 (D. Mass. Aug. 20, 2012), ultimately did not decide the merits of class certification. Instead, he took Prudential up on its offer to file a summary judgment motion on the issue of whether the named plaintiffs suffered any cognizable injury and consider that motion before ruling on class certification.  Judge Ponsor found that this issue would be significant in assessing predominance of common issues of law and fact, which was the main issue in dispute.  He explained that:

Plaintiffs’ theory of injury appears to be that the proposed class members were injured by the very fact that they received an Alliance Account instead of a lump sum payment, because providing a lump sum payment by cash is not the same as providing an account book. See Mogel v. UNUM Life Ins. Co. of Am., 547 F.3d 23, 26 (1st Cir. 2008) (“[D]elivery of the checkbook did not constitute a `lump sum payment’ called for by the policies. . . . `[T]he difference between delivery of a check and a checkbook . . . is the difference between [Defendant] retaining or [Defendant] divesting possession of Plaintiffs’ funds.'”).

However, Defendant argues and the court agrees, the fact that an Alliance Account is not the same as a lump sum payment does not necessarily mean that a beneficiary was injured by receiving an Alliance Account. According to Defendant, determining whether each member of the proposed class suffered an injury will require substantial individualized inquiry, including taking depositions of the class members to determine, for example, whether they knew that they could withdraw money from the Alliance Accounts at any time, whether and when they did withdraw money, and whether they actually benefitted from leaving their money in the Alliance Accounts. Defendant further argues that individualized evidence that has already been uncovered during discovery through the depositions of the named Plaintiffs shows that the named Plaintiffs suffered no injury and, in fact, some preferred to leave their money in the Alliance Accounts and knowingly chose to do so. Plaintiffs dispute the need for such individualized inquiry. They argue that, because they are seeking only disgorgement and interest remedies, how class members used their Alliance Account checkbooks or whether they may have preferred Alliance Accounts is irrelevant to the question of damages.

. . .

This threshold question of whether Plaintiffs suffered any cognizable injury is central to the case. A finding that the named Plaintiffs suffered no injury, while not binding on any prospective class members, may terminate the existing lawsuits. Even if Plaintiffs did suffer injury, the necessity of an individualized inquiry regarding injury for each proposed class member may render class certification inappropriate for some or all of the causes of action.

In light of these circumstances, it is clear that briefing and argument regarding this issue on motions for summary judgment will materially advance the litigation and aid the court’s decision regarding class certification. Cf. Santana v. Deluxe Corp., 12 F. Supp. 2d 162, 179 (D. Mass. 1998) (“A district court may rule on the merits of a summary judgment motion before deciding the class certification issue under Rule 23. . . .”).

Id. at *10-13.

It will be interesting to see how this turns out.  If the court reaches the question of whether a need for an individualized inquiry with respect to injury defeats class certification, it seems possible that the anticipated decision by the Supreme Court next Term in Comcast Corp. v. Behrend (see my June 26, 2012 blog post) may have something to say on that subject.  It’s always hard to predict exactly what the Court will address in its opinion, but the question on which certiorari was granted in Comcast appears to implicate the extent to which the need for individual adjudication of damages makes class certification inappropriate.  In Prudential, however, it appears that the question is not merely about damages but also about whether there was any cognizable injury (two closely-related, but distinct questions).

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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.