Overview

The misuse of consumer litigation and class actions poses a significant threat in today's business world. Statutes and rules intended to provide a forum for groups of small but legitimate claims have become the weapon of choice for leveraging masses of meritless suits into unjustified settlements. Knowledge of and experience in defending these complex matters is essential to success in what can be “bet-the-company” litigation.

Mayer Brown lawyers have successfully defended insurance industry clients over the past several decades in a wide array of class action litigations. We have successfully defended major life and commercial insurers as well as personal lines carriers in market conduct and consumer fraud class actions, antitrust and RICO class actions, and ERISA and securities fraud class actions. Using our intimate understanding of insurance products and distribution channels, we have routinely defeated class certification motions while also successfully arguing for dismissal at the motion to dismiss and summary judgment stages. Even when we are not the trial counsel, we are retained by insurers after an adverse judgment in class action cases to brief and argue on appeal before every federal court of appeals and the highest courts in a majority of the states.

Due to our intimate knowledge of life and annuity, health, personal auto and home, and commercial property and casualty insurance products, Mayer Brown is uniquely qualified to efficiently and successfully defend insurance companies against class action claims. Our deep experience in, and our extensive knowledge of, the insurance industry and class action litigations ensures that our clients receive tailored, comprehensive and strategic advice in planning and defending class actions of all types.

Praxis

Representative engagements include the following:

  • Snyder v. State Farm Mutual Automobile Ins. Co. Appellate representation in a nationwide class action alleging breach of contract and Illinois Consumer Fraud Act violations in specifying the use in repair estimates of parts made by companies other than the original equipment manufacturer.
  • Jordan v. Central National Ins. Co. of Omaha. Defense of insurer in a purported class action in federal court in Georgia alleging violations of federal and state law in connection with the sale of “non-filing” insurance to purchasers of jewelry on credit.
  • Loveless v. Central National Ins. Co. of Omaha. Defense of a number of purported class actions filed against Mississippi banks and their insurers alleging that the forced placement of insurance on bank customers with automobile loans violates the Truth in Lending Act, RICO and Mississippi state law.
  • Gallagher v. American Health & Life Ins. Co. Defense of a class action involving AHLIC's alleged residual liability to fixed-annuity life insurance policyholders after the company to which the policies were transferred became insolvent.
  • In re Insurance Brokerage Antitrust Litig. Defense of a class action alleging a broad industry-wide RICO and federal antitrust conspiracies.
  • Creveling v. Government Employees Insurance Co. Defense of a putative class action involving State Farm’s alleged breach of insurance contracts with certain of its Maryland insureds by denying PIP claims to the extent that the medical expenses had been paid by a party other than the insured (e.g., by an HMO). The Maryland Court of Appeals affirmed the trial court’s refusal to certify the case for class treatment, agreeing with our argument that State Farm’s liability to each putative class member turned on inherently individualized issues, such as whether the medical treatment received by the insured was necessary and related to a covered accident, and whether the charges for those treatments were reasonable. Accordingly, the court held that the case failed to satisfy the “commonality” requirement of Maryland’s class action rule. This was one of a series of cases in which Mayer Brown defeated class certification of medpay-type claims.
  • Knudsen v. Liberty Mutual Insurance Company. The plaintiffs in this case filed a consumer class action in Illinois state court against Liberty Mutual, challenging the amounts it pays for medical expense claims on workers’ compensation and casualty policies. The suit was filed in March 2000, well before the February 18, 2005, effective date of the Class Action Fairness Act (CAFA). After CAFA became effective, the plaintiffs amended their class definition to reference a number of additional policies, subsidiaries and affiliates of Liberty Mutual, though they added no defendants. The state judge certified the requested nationwide class of plaintiffs and, without trial, entered a default order against Liberty Mutual on liability, leaving only damages to be calculated. Liberty Mutual then removed the case to federal district court under CAFA, where the district judge remanded the case to state court. We successfully petitioned the Seventh Circuit to review and reverse that order. The court accepted our argument that the plaintiffs’ pre-CAFA pleadings failed to provide Liberty Mutual with notice of the new claims added by the class certification order. The court thus held that the class certification order amounted to the “commencement” of a new action after CAFA’s effective date, making the case properly removable to federal court under CAFA. The Seventh Circuit instructed the district judge, on remand, to give no weight to the state judge’s earlier orders on class certification and liability and to consider these and all other issues anew.
  • Lutz v. Protective Life Ins. Co. The plaintiff filed a putative statewide class action alleging, among other things, that Protective failed to comply with the provision of the Florida Insurance Code that exempts out-of-state insurers from most of the Code’s substantive requirements and that the exemption provision was “incorporated” into the class’s insurance policies. We were retained by the American Council of Life Insurers to draft an amicus curiae brief in support of Protective. The Florida District Court of Appeals affirmed the trial court’s determination that the plaintiff had failed to explain how Protective had violated the exemption provision such that a breach of contract had occurred or damages had resulted.
  • Sandwich Chef of Texas, Inc. v. Reliance National Indemnity Insurance Co. This case addressed whether, under the predominance inquiry of Federal Rule of Civil Procedure 23(b), the Fifth Circuit properly reversed the certification of a RICO fraud case as a nationwide class action against 141 insurance companies that sold “retrospectively rated” workers’ compensation policies. We were brought in to assist in drafting the successful brief in opposition to certiorari, in which we argued that the case did not warrant Supreme Court review because there was no circuit split in the lower courts and the Fifth Circuit’s decision was plainly correct because trial of proximate causation and other liability issues would require the jury to evaluate evidence of each class member’s knowledge of specific facts and communications with its insurer.