I’ve tried to make this a blog with national coverage. This post is my first venture to Alaska, which is about as far from my home in Connecticut as one can get and still be in the U.S. (except, I suppose, for Hawaii). What sparked my venture to write about a decision from Alaska is that it’s the first insurance class action decision I’ve seen that applies the Supreme Court’s recent decision in Comcast Corp. v. Behrend (blog post).
In Wheeler v. United Services Automobile Association, Case No. 3:11-cv-00018-SLG, 2013 U.S. Dist. LEXIS 122447 (D. Alaska Aug. 27, 2013), the plaintiff was a driver who made a claim against a driver insured by USAA, and later settled her claim. She alleged that under Alaska law, she was entitled to attorneys’ fees calculated as a percentage of her total damages, rather than as a percentage of the settlement amount. The dispute involves whether the insurance policy at issue complied with a regulatory requirement that enables an insurer to limit its liability for attorneys’ fees under Alaska law. Id. at *3.
In denying class certification, the court focused on the issue of individualized damages, which it concluded precluded class certification. The court explained that:
Comcast thus holds that where a proposed Rule 23(b)(3) class involves individualized damages, the plaintiff must provide the district court with a method that is capable of measuring damages on a classwide basis. Without such a method, Comcast instructs that the predominance requirement of Rule 23(b)(3) cannot be met, as “[q]uestions of individual damage calculations will inevitably overwhelm questions common to the class.”
. . .
[E]ven under the authority cited by the dissent in Comcast, certain categories of cases, such as those involving “significant personal injury damages,” are inappropriate for class actions because of the extent of the individualized damage evaluations necessary, which prevents them from meeting the predominance requirement of Rule 23(b)(3).
Here, the necessary damage calculations would involve separate and “significant personal injury damages” evaluations for each of the proposed 136-plus class members. Each proposed class member allegedly received attorney’s fees that were calculated as a percentage of the policy limit. Ms. Wheeler asserts that each member should have received attorney’s fees calculated as a percentage of the amount of his or her actual damages. The amount of damages allegedly due to each class member would therefore be the difference between the fee award actually received (percentage of policy limit) and the fee award that was supposed to have been received (percentage of actual damages). The fee award actually received is a known number. But each proposed class member was injured in a separate accident and suffered unique injuries; thus, the amount of damages allegedly due to each class member would differ significantly based on the specific nature of each proposed member’s injury.
Ms. Wheeler has not provided the Court with any common method of determining the amount of each proposed class member’s actual damages, and thus has not demonstrated that damages are capable of measurement on a classwide basis. That she has not done so is not surprising, as the Court cannot conceive of a common method that could be applied in these circumstances. Instead, to calculate damages, the Court would be required—for each of the 136-plus proposed class members—to conduct a separate evidentiary proceeding for that class member to determine the cause(s) of each member’s accident and the amount of damages suffered by each of them. The individual questions of fact implicated in the determination of damages for the proposed class would “inevitably overwhelm” the common questions of law and fact asserted in the SAC. Accordingly, the Court finds that Ms. Wheeler has not demonstrated that the proposed class meets the predominance requirement of Rule 23(b)(3).
Id. at *13-16.
The rationale articulated in Wheeler is applicable to many class actions brought against insurers, where resolving the individual class members’ claims requires placing a value on a personal injury claim, or property damage to a home or vehicle. This is an excellent example of how an insurer can take advantage of the Comcast decision in defending against class certification.