Back in May of 2011, I wrote a blog post about a denial of class certification by the Western District of Washington in Boucher v. First American Title Insurance CompanyThe court denied certification but allowed the plaintiffs to conduct discovery and later file a renewed motion for class certification.  The recent decision on the renewed motion for certification, Boucher v. First American Title Insurance Company, 2012 U.S. Dist. LEXIS 102904 (W.D. Wash. July 24, 2012), denies the second attempt to certify a class, and illustrates how district courts are approaching class certification post-Wal-Mart and how insurers are successfully defending against certification.

This is one of a series of putative class actions against title insurers alleging that they failed to charge properly-discounted premiums for policies issued in connection with refinancing of homes.  (For other blog posts on this topic, skim through the Title Insurance page of my blog.)  The allegation here was that First American was improperly charging a full rate rather than a discounted rate for policies issued when a property  was refinanced.   The key to the court’s decision was that, with a deep dive into the facts after additional discovery had occurred, it became clear to the judge that there was much more nuance to the issue than had appeared at first blush.  It was not a simple issue of providing a discount or failing to do so, but rather the court explained that “First American’s rate manuals contain a variety of exceptions, surcharges, and convoluted provisos that will, in some circumstances, lead to a customer paying something other than the general schedule rate or the reorganization [i.e., discounted] rate.”  Id. at *5.  After further discovery, the plaintiffs identified 74 class members that they claimed were overcharged.  First American’s underwriting counsel reviewed these files and demonstrated that some of these class members did not qualify for a discount and some were properly charged a special rate based on their circumstances.  Some of the class members paid too much and others paid too little, but it was based on miscalculations not an improper failure to apply the reorganization discount.  Id. at *19-20.  The court ultimately concluded, without deciding the merits of any individual claim, that First American had good faith bases to contest many of the putative class members’ claims, and that “instances of overcharging and undercharging were not systematic (as the Bouchers claimed), but rather the result of errors that are apt to occur in any set of hundreds of thousands of customer transactions.”  Id. at *22.  The court further explained that “proving each class member’s claim would require a time-consuming individual process,” that “First American has a right to present similar evidence in response to every class member’s claim,” and that “[w]ere it necessary for the court to revisit its commonality finding, it might reach a different conclusion [than it had previously reached] in light of Dukes.”  Id. at *24-25 & n.5.

What are the lessons here for insurance companies and their defense counsel?  First, if you are aiming to avoid class action exposure with respect to underwriting-related matters, try not to make your system of calculating rates too simple.  The more exceptions there are to “general rules” and the more nuanced the rate-setting process is, the less likely it is that there will be an across-the-board mistake by front-line personnel or a compliance issue that leads to a class action being certified against your company.  Of course this has to make business sense too, not just avoid litigation.  But the more tailored the premium is to information that has direct impact on the risk, presumably the more accurate the premium is as well. 

Second, when you are defending putative class actions, there is no substitute for doing your homework.  The more deeply that in-house and outside counsel dive into the facts of claims of putative class members, often the better able you are to defend the case.  Sometimes there is resistance to this because it’s hard work to even identifiy the putative class members.  Some people in the company may say it is impossible to identify them or it will take too long, or it is not worth the effort because the plaintiffs have the burden of proof and the defendant should not do their work for them (although much of this work clearly should be protected as work product if you decide not to use it).  But very often this kind of hard work pays off because you discover all kinds of defenses to class certification that were not readily apparent when the case began.  So challenge what the business people or the client at first say is impossible or not worth the effort, and see where it takes you.   

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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.