A sometimes-overlooked aspect of class action law is how class certification rules interact with the Rules Enabling Act, which provides that rules of procedure and evidence “shall not abridge, enlarge or modify any substantive right.” 28 U.S.C. § 2072(b). Some class actions attempt to use the class action device to evade obstacles to obtaining individual relief under the applicable substantive law, or to short circuit the substantive law where it requires individualized proof. The Ninth Circuit recently focused on the Rules Enabling Act in reversing (in large part) a class certification order.

In Wit v. United Behavioral Health, — F.4th –, 2023 WL 411441 (9th Cir. Jan. 26, 2023), the plaintiffs brought claims under the Employee Retirement Income Security Act (ERISA), asserting that the defendant utilized internal guidelines for reviewing claims  for behavioral health services under health benefit plans that were allegedly more restrictive than the terms of the plans. The plaintiffs attempted to avoid individualized issues by seeking as their remedy an order requiring the defendant to “reprocess” claims of putative class members, without the court deciding whether there was an actual entitlement to benefits. The district court certified a class on this theory. It reasoned that to order “reprocessing” it would not have to make determinations about entitlement to benefits (which would implicate “a multitude of individualized circumstances” regarding each class member’s medical condition). After a bench trial, the district court issued declaratory and injunctive relief in favor of the class, including ordering the defendant to utilize new guidelines, ordering “reprocessing” of claims in accordance with the new guidelines, and appointing a special master to oversee compliance for ten years. Some might characterize that as a court effectively overseeing the operations of an insurer.

The Ninth Circuit reversed the class certification order to the extent it was based on the “reprocessing” remedy (but not with respect to a breach of fiduciary duty claim). The Ninth Circuit reasoned that, under ERISA, “reprocessing is not truly the remedy that Plaintiffs seek, it is the means to the remedy that they seek,” i.e., entitlement to benefits. The district court thus “improperly allowed Plaintiffs to use Rule 23 as a vehicle for enlarging or modifying their substantive rights where ERISA does not provide reprocessing as a standalone remedy.”

The Ninth Circuit also held that the district court erred in excusing absent class members from complying with the requirements under their benefit plans that they exhaust administrative remedies, including pursuing an administrative appeal. This was likewise inconsistent with the Rules Enabling Act because “the district court abridged [defendant’s] affirmative defense of failure to exhaust and expanded many absent class members’ right to seek judicial remedies under Rule 23(b)(3).” It noted that the Supreme Court has held that a class cannot be certified by effectively depriving the defendant of its individualized defenses.

I see potential implications here beyond ERISA plans, to putative class actions involving other contractual and statutory rights. Defendants often can argue that the terms of the contract or other applicable substantive law require an individualized analysis, or that the putative class members must take individualized steps to establish their rights. Under this decision, a court cannot ignore those obstacles to class certification.

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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.