In re Monumental Life Ins. Co.
| Citation | 365 F.3d 408 |
| Decision Date | 02 April 2004 |
| Docket Number | No. 02-30540.,02-30540. |
| Parties | In the Matter of: MONUMENTAL LIFE INSURANCE COMPANY, Industrial Life Insurance Litigation. Mattie Bratcher, et al., Plaintiffs, Mattie Bratcher; John Bratcher; Caroline Brown, on Behalf of Herself and All Others Similarly Situated; Mary Sue Truesdale; Maxine Cash, on Behalf of Herself and All Others Similarly Situated; Mildred Buford, Also Known as Mildred Gamlin, on Behalf of Herself and All Others Similarly Situated, Plaintiffs-Appellants, v. National Standard Life Insurance Company, et al., Defendants, Monumental Life Insurance Company, Defendant-Appellee. In the Matter of: Unitrin, Inc., Industrial Life Insurance Litigation. Rosie Lee Cothran, et al., Plaintiffs, Elizabeth Walker, Plaintiff-Appellant, v. Security Industrial Insurance Company, et al., Defendants, Monumental Life Insurance Company, Defendant-Appellee. In the Matter of: American National Insurance Company, Industrial Life Insurance Litigation. Rose Mary Roach, on Behalf of Herself and All Others Similarly Situated, Plaintiff-Appellant, v. American National Insurance Company, Defendant-Appellee. In the Matter of: Western & Southern Life Insurance Co., Industrial Life Insurance Litigation. Joseph Bell, etc., et al., Plaintiffs, Joseph Bell, Individually and on Behalf of Others Similarly Situated; Willa Ellis, Doctor; Thelma Walker Oatis, on Behalf of Themselves and All Others Similarly Situated; Alma Hyde, Plaintiffs-Appellants, v. Western & Southern Life Insurance Company, Defendant-Appellee. |
| Court | United States Courts of Appeals. United States Court of Appeals (5th Circuit) |
Gerald Edward Meunier, Gainsburgh, Benjamin, David, Meunier & Warshauer, Stephen B. Murray, Murray Law Firm, New Orleans, LA, Joe R. Whatley, Jr., Birmingham, AL, for Plaintiff-Appellant.
Bob F. Wright, James Parkerson Roy, Donald Ray Cravins, Jr., Domengeaux, Wright, Roy & Edwards, Lafayette, LA, John J. Stoia, Jr., JoBeth Halper, Milberg, Weiss, Bershad, Hynes & Lerach, San Diago, CA, Sanford Svetcov, Milberg, Weiss, Bershad, Hynes & Lerach, San Francisco, CA, Melvin I. Weiss, Milberg Weiss, Bershad, Hynes & Lerach, Boca Raton, FL, for Plaintiff-Appellant.
Andrew S. Friedman, Bonnett, Fairbourn, Friedman & Balint, Phoenix, AZ, for John Bratcher, Mattie Bratcher, Caroline Brown, Mildred Buford, Maxine Cash and Mary Sue Truesdale.
Herman Watson, Jr., Watson, Jimmerson, Givhan, Martin & McKinney, Huntsville, AL, for John Bratcher and Mattie Bratcher.
Linda Ibach Shaunessy, Asst. Atty. Gen., Jeffrey Monroe Graham, Austin, TX, for State of Texas and Texas Department of Insurance, Amici Curiae.
Joel Feldman, Jeffrey E. Crane, Sidley, Austin, Brown & Wood, Chicago, IL, Stephen H. Kupperman, Barrasso, Usdin, Kupperman, Freeman & Sarver, New Orleans, LA, for Monumental Life Insurance Co.
Andrew Jan Mytelka, Steven Carl Windsor, Greer, Herz & Adams, Galveston, TX, Anthony Joseph Rollo, Jr., McGlinchey Stafford, New Orleans, LA, for American National Insurance Co.
Thomas A. Casey, Jr., Jones, Walker, Waechter, Poitevent, Carrere & Denegre, New Orleans, LA, Joseph S. Piacun, Metairie, LA, for Western and Southern Life Insurance Co.
Even M. Tager, Craig W. Canetti, Mayer, Brown, Rowe & Maw, Victoria E. Fimea, American Council of Life Insurers, Washington, DC, for American Council of Life Insurers, Amicus Curiae.
Scott J. Cipinko, Life Insurers Council, Atlanta, GA, for Life Insurers Council, Amicus Curiae.
Norman J. Chachkin, NAACP Legal Defense & Educational Fund, New York City, for NAACP Legal Defense and Educational Fund, Inc., Amicus Curiae.
Donald J. Russell, Robbins, Russell, Englert, Orsek & Untereiner, Washington, DC, for Chamber of Commerce of The United States, Amicus Curiae.
Appeal from the United States District Court for the Eastern District of Louisiana.
ON PETITION FOR REHEARING
(Opinion Aug. 13, 2003, 343 F.3d 331)
Before SMITH, DENNIS and CLEMENT, Circuit Judges.
The petition for panel rehearing is DENIED, and no judge in regular active service having requested that the court be polled on rehearing en banc, the petition for rehearing en banc is DENIED. The opinion, 343 F.3d 331 (5th Cir.2003), is withdrawn for the limited purpose of making minor adjustments in the analyses contained in parts III.A, III.B, and V. Although by far the greater portion of the opinion remains intact, we now issue a new opinion, as follows:
* * * * * * * * * * *
In what may be the ultimate negative value class action lawsuit,1 plaintiffs challenge defendants' alleged practice of paying lower benefits and charging higher premiums to blacks in the sale of low-value life insurance. The district court denied plaintiffs' motion to certify a class pursuant to FED.R.CIV.P. 23(b)(2), , that the majority of class members would not benefit from injunctive relief. Based primarily on Allison v. Citgo Petroleum Corp., 151 F.3d 402 (5th Cir.1998), we reverse and remand.
This is a consolidation of civil rights actions against three life insurance companies: Monumental Life Insurance Company ("Monumental"), American National Insurance Company ("ANICO"), and Western and Southern Insurance Company ("Western and Southern"). Plaintiff policyowners, all of whom are black, allege that, for decades, defendants discriminated against them in the sale and administration of low-value life insurance policies, known as industrial life policies,2 that have face amounts of $2000 or less and require small weekly or monthly premiums. Defendants comprise over 280 companies that issued industrial life policies over a fifty- to sixty-five-year period.3
Plaintiffs allege two overtly discriminatory practices. First, they accuse defendants of placing blacks in industrial policies offering the same benefits as do policies sold to whites, but at a higher premium (dual rates). Second, defendants allegedly placed blacks in specially-designed substandard industrial policies providing fewer or lower benefits than do comparable plans sold to whites (dual plans). These practices are memorialized in the insurer's rate books and records, which explicitly distinguish dual rate and dual plan policies by race.4 Although, before filing their motion for class certification, plaintiffs challenged the insurers' alleged practice of charging blacks substandard premiums because of non-racial underwriting factors, such as mental condition, occupation, socioeconomic status, educational level, living conditions, and personal habits, plaintiffs no longer complain of such pretextual underwriting procedures.
Defendants state that they issued "hundreds, perhaps thousands, of different industrial life insurance products" encompassing a countless variety of underwriting standards. It is undisputed that all companies that sold dual rate or dual plan policies have not done so since the early 1970's. Also, as early as 1988, some insurers voluntarily adjusted premiums and/or death benefits to equalize the amount of coverage per premium dollar. Still, plaintiffs estimate that over 4.5 million of the 5.6 million industrial policies issued by defendants remain in-force; many other policies have been terminated, surrendered, or paid-up without remediation.5 Defendants' expert estimates that the ratio of terminated policies to outstanding policies is approximately five to one, meaning that slightly more than one million policies remain in-force.
Plaintiffs sued for violations of 42 U.S.C. §§ 1981 and 1982, seeking (1) an injunction prohibiting the collection of discriminatory premiums, (2) reformation of policies to equalize benefits, and (3) restitution of past premium overcharges or benefit underpayments. Pursuant to 28 U.S.C. § 1407, the Judicial Panel for Multidistrict Litigation ("MDL") consolidated the actions against Monumental and transferred them to the Eastern District of Louisiana for pretrial proceedings. Later, the MDL Panel took the same action with the cases against ANICO and Western and Southern.
Plaintiffs moved for certification of a class pursuant to rule 23(b)(2), requesting that class members be provided notice and opt-out rights. The district court denied certification, finding that plaintiffs' claims for monetary relief predominate over their claims for injunctive relief, making rule 23(b)(2) certification inappropriate. The court also found that, given the large number of companies and policies involved, individualized hearings were necessary to determine damages and whether claims were barred by the statute of limitations. Defendants sought, and this court granted, interlocutory review pursuant to FED.R.CIV.P. 23(f).
Defendants contend that class members cannot be readily identified by way of the class definition. A precise class definition is necessary to identify properly "those entitled to relief, those bound by the judgment, and those entitled to notice." 5 JAMES W. MOORE ET AL., MOORE'S FEDERAL PRACTICE § 23.21[6], at 23-62.2 (3d ed.2003); see DeBremaecker v. Short, 433 F.2d 733, 734 (5th Cir.1970). Some courts have stated that a precise class definition is not as critical where certification of a class for injunctive or declaratory relief is sought under rule 23(b)(2).6 Where notice and opt-out rights are requested, however, a precise class definition becomes just as important as in the rule 23(b)(3) context.
Plaintiffs sought to certify a class comprised of "[a]ll African-Americans who own, or owned at the time of policy termination, an industrial life insurance policy that was issued as a substandard plan or at a substandard rate." Defendants argue that the plain language of that definition does not comport with the class plaintiffs seek to certify. As we have noted, before moving for certification plaintiffs had included not only blacks who had purchased dual rate or dual plan policies, but also blacks who allegedly were forced into substandard plans, or forced to pay substandard rates, through the use of...
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