A recent Ninth Circuit decision reconciled other decisions within that circuit involving auto insurance total losses, concluding that individual questions predominated and therefore affirming the district court’s denial of class certification. The dissent, however, called for en banc review, suggesting that an intra-circuit split exists.

In Ambrosio v. Progressive Preferred Insurance Company, – F. 4th –, 2025 WL 2628179 (9th Cir. Sept. 12, 2025), the plaintiffs brought a putative class action against Progressive, alleging that it improperly used a “projected sold adjustment” (PSA) to calculate the actual cash value (ACV) of their totaled vehicles. The PSA was used to adjust list prices of comparable vehicles to reflect negotiations at the time of sale. The plaintiffs claimed this resulted in undervaluation and a breach of contract. The district court declined to certify the proposed class on the grounds that individualized issues would predominate, and the plaintiffs appealed.

Affirming the district court, the Ninth Circuit found that the PSA was not facially unlawful under the policies defining ACV based on market value because each insured would need to compare the allegedly flawed “market value” with a correct one to win on the merits. The court noted that the PSA was designed to reflect consumer purchasing behavior and was not unlawful under Arizona law, distinguishing another similar Ninth Circuit case involving a Washington statute. The plaintiffs argued that the PSA always resulted in an undervaluation, but the court disagreed. It explained that “[w]e cannot now read an unwritten requirement into the contract of how to calculate ‘market value,’” and “[i]f the appraisal from [Progressive’s vendor] resulted in a fair ‘market value’ assessment, even while using the PSA, then the ACV would be accurate, and there would be no injury.” Moreover, “[t]his is not a dispute over the amount of any individual’s damages … but over an essential element of each individual [putative class member’s] claim,” i.e., injury.  Progressive had demonstrated that it, if a factfinder accepted its evidence from “blue book” type sources, it could prove that, for at least two putative class members, the vehicle’s market value was higher than the amount paid. The majority noted that “denying Progressive this defense altogether would seem to violate due process.”

Judge Wallach of the Federal Circuit, sitting by designation, dissented. The dissent concluded that the PSA was a one-sided deduction that did not fit the contract’s requirement to determine ACV. The dissent criticized Progressive’s evidence of market value as inconsistent with how the claims were adjusted. It concluded that the district court should have certified the class and then interpreted the policy at the summary judgment stage or trial. The dissent acknowledged, however, that the majority opinion was consistent with recent decisions by the Third, Fourth and Seventh Circuits, all in similar cases involving Progressive’s use of PSAs. The dissent also suggested that en banc review may be appropriate.

The majority opinion highlighted a couple of defense strategies that I have often mentioned on this blog, and which were successful here. First, demonstrate how individual putative class members’ cases would be tried if they were individual cases, with specific evidence showing a lack of injury. Second, stress that the defendant cannot be deprived of presenting those defenses merely because of the plaintiff’s desire for class treatment. The class action mechanism is not supposed to alter the parties’ substantive rights.