Clark v. Prudential Ins. Co. of Am.

• Decision Date: 18 April 2013
• Docket Number: Civ. No. 08–6197 (DRD).
• Citation: 940 F.Supp.2d 186
• Parties: Beverly CLARK, Jesse J. Paul, Warren Gold, Linda M. Cusanelli, Carole L. Walcher, and Terri L. Droggel, on behalf of themselves and all others similarly situated, Plaintiffs, v. The PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation, Defendant.
• Court: U.S. District Court — District of New Jersey

940 F.Supp.2d 186

Beverly CLARK, Jesse J. Paul, Warren Gold, Linda M. Cusanelli, Carole L. Walcher, and Terri L. Droggel, on behalf of themselves and all others similarly situated, Plaintiffs,

v.The PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation, Defendant.

Civ. No. 08–6197 (DRD).

United States District Court,

D. New Jersey.

April 18, 2013.

Nagel Rice LLP, Bruce Nagel, Esq., Robert H. Solomon, Esq., Roseland, NJ, Kasowitz, Benson, Torres & Friedman LLP, Charles N. Freiberg, Esq., Brian P. Brosnahan, Esq., David A. Thomas, Esq., Jacob N. Foster, Esq., San Francisco, CA, Law Offices of Craig A. Miller, Craig A. Miller, Esq., San Diego, CA, for Plaintiffs.

Lowenstein Sandler PC, Douglas S. Eakeley, Esq., Natalie J. Kraner, Esq., Roseland, NJ, Goodwin Proctor LLP, John D. Aldock, Esq., Mark S. Raffman, Esq., Adam M. Chud, Esq., Washington, D.C., for Defendant.

OPINION

DEBEVOISE, Senior District Judge.

I. BACKGROUND

This case concerns allegations of deception and bad faith against a health insurance company, The Prudential Insurance Company of America (“Prudential”). The heart of the complaint is that Prudential stopped selling a certain health insurance policy to new customers (“closing the block”), knowing that this would result in prohibitive increases in premium rates as sick policyholders remain in the block and healthy policyholders leave, resulting in the sick getting locked-in to the increasingly expensive policy and locked-out of alternative options due to development of a pre-existing condition. Plaintiffs, former policyholders, contend that Prudential had falsely misrepresented to its policyholders that the only reason for increased premiums would be increasing age of the insured and rising medical costs, and failed to disclose that a major reason for the premium increases was the closing of the block and the consequences thereof. On February 5, 2013, the Court rendered a decision denying class certification on multiplegrounds and granting Prudential's summary judgment in part based on the statute of limitations.

Currently before the Court are three motions filed by Plaintiffs: a motion for reconsideration of the order denying Plaintiffs' motion for class certification; a motion to alter or amend the class certification order with respect to redefining the class and bifurcating liability and damages issues so that the class may be certified solely for purposes of liability; and a motion for reconsideration of the order granting Prudential's motion for summary judgment in part.

II. DISCUSSION

A. STANDARD OF REVIEW

In the District of New Jersey, motions for reconsideration are governed by Local Civil Rule 7.1(i) and are considered “extremely limited procedural vehicle(s).” Resorts Int'l, Inc. v. Greate Bay Hotel & Casino, 830 F.Supp. 826, 831 (D.N.J.1992). As a result, “reconsideration is an extraordinary remedy, that is granted ‘very sparingly[.]’ ” Brackett v. Ashcroft, Civ. No. 03–3988(WJM), 2003 U.S. Dist. LEXIS 21312, 2003 WL 22303078, at *2 (D.N.J. Oct. 7, 2003) ( quoting Interfaith Community Org. v. Honeywell Int'l, Inc., 215 F.Supp.2d 482, 507 (D.N.J.2002)).

Local Civil Rule 7.1(i) permits a party to seek reconsideration by the Court of matters which the party “believes the Judge or Magistrate Judge has overlooked” when it ruled on the motion. See L. Civ. R. 7.1(i). The movant has the burden of demonstrating either: “(1) an intervening change in the controlling law; (2) the availability of new evidence that was not available when the court [issued its order]; or (3) the need to correct a clear error of law or fact or to prevent manifest injustice.” Max's Seafood Cafe v. Quinteros, 176 F.3d 669, 677 (3d Cir.1999) ( citing N. River Ins. Co. v. CIGNA Reinsurance Co., 52 F.3d 1194, 1218 (3d Cir.1995)). The Court will grant a motion for reconsideration only where its prior decision has overlooked a factual or legal issue that may alter the disposition of the matter. See U.S. v. Compaction Sys. Corp., 88 F.Supp.2d 339, 345 (D.N.J.1999); see also L. Civ. R. 7.1(i). “The word ‘overlooked’ is the operative term in the Rule.” Bowers v. NCAA, 130 F.Supp.2d 610, 612 (D.N.J.2001) (citation omitted).

Moreover, L. Civ. R. 7.1(i) does not allow parties to restate arguments which the court has already considered. See G–69 v. Degnan, 748 F.Supp. 274, 275 (D.N.J.1990). Thus, a difference of opinion with the court's decision should be dealt with through the normal appellate process. See e.g., Bowers, 130 F.Supp.2d at 612 (citations omitted); Florham Park Chevron, Inc. v. Chevron U.S.A., Inc., 680 F.Supp. 159, 162 (D.N.J.1988); NL Indus., Inc. v. Commercial Union Ins. Co., 935 F.Supp. 513, 516 (D.N.J.1996) ( “Reconsideration motions ... may not be used to relitigate old matters, or to raise arguments or present evidence that could have been raised prior to the entry of judgment.”). In other words, “[a] motion for reconsideration should not provide the parties with an opportunity for a second bite at the apple.” Tischio v. Bontex, Inc., 16 F.Supp.2d 511, 533 (D.N.J.1998) (citation omitted).

B. ANALYSIS

After extensive briefing and oral argument, the Court issued a 107–page opinion concluding that the claims of the proposed 17,000–member class spanning a thirty-year period across four states were not fit for class treatment. ( See Opinion, ECF 227, hereinafter “Op.”) The ruling considered hundreds of pages of briefing and analysis, thousands of pages of exhibits, oral argument, and supplemental briefing. First, the Court set forth a factual record going to the individual plaintiffs' experiences with the Comprehensive Health Insurance Policy (“CHIP”), the overall experience of CHIP policyholders over a thirty year period, and the methodology proposed and critiqued by experts in lengthy reports, rebuttals, and certifications as to the ability to establish a reliable common approach to assess damages for the class. The Court then assessed objections to evidence, and examined the original proposal to categorize the class and subclass, and the revised proposal for class categorization. Part Two of the Opinion analyzed the facts in light of the Rule 23 requirements for class certification. Part Three addressed the individual facts of four of the six proposed class representatives with respect to summary judgment based on the statute of limitations. The facts and findings of the Court are set forth in full in the Opinion, and are discussed below with respect to objections raised by Plaintiffs in their motions to reconsider and amend.

The briefs with regard to the motion for reconsideration of the order denying the motion for class certification (hereinafter “MRCC”) and the motion to alter or amend the class certification order to redefine the class and bifurcate liability from damages (hereinafter “MAC”), are inter-related and cross-referential, and are addressed jointly first. The motion for reconsideration of the order granting in part Prudential's motion for summary judgment (hereinafter “MRSJ”) is then addressed in part two of the discussion below.

1. Motion for Reconsideration of the Order denying Class Certification and the Motion to Alter or Amend the Order denying class certification

In the event that the Court does not reverse its Order denying class certification, Plaintiffs propose two types of narrowing of the class certification: 1) limiting class membership to policyholders who maintained CHIP in force until at least 2001; and/or 2) bifurcating the issue of liability and damages so that the class may be certified as to liability, with a separate trial to handle individuals' damages. These two proposals are introduced for the first time, despite the substantial procedural history in this case detailed in the Court's prior opinion, which includes the addition and removal of class representatives, claims, and a revised class categorization proposal.

A. Damages and Bifurcation

Plaintiffs argue that the Court made a clear error of fact in concluding that the damages methodology proposed by Dr. Frech did not satisfy Plaintiffs' burden to propose a common approach to measuring damages. First, Plaintiffs argue that the Court made a clear error of fact in concluding that the damages methodology proposed by Dr. Frech fails to account for individualized factors such as age, gender, geographic location, health status, approvals of premium rate increases by resident state, deductible levels, and addition or removal of dependants because these factors are incorporated in the actual dollar premiums, and the percent excess premiums mathematically cancel out the individual factors. (MRCC Br. at 1–5.) However the Court noted that “Dr. Frech seems to justify his proposal by arguing that these individualized considerations go to the wayside because they are already weighted and included in his actual premium index and the but-for premium index.” (Op. at 80.)

The Court went on to determine that Dr. Frech's proposal failed because criticismsubmitted by Mr. Wildsmith “suggests that the formula offered by Dr. Frech is static and does not account for a range of possible changing conditions over time.” (Op. at 81.) Indeed, Plaintiffs submit as follows:

[O]ne could argue that [Dr. Frech's calculation] was not an exact apples-to-apples' comparison because the but-for index does not account for aging while the average market premium was for [Ms. Clark's] 2009 age. Mr. Wildsmith correctly noted and adjusted her but-for premium for aging. The result was that the implied but-for premium for her was roughly twice the average market premium.

(MRCC Br. at 6–7.) Plaintiffs attempt to reframe Mr. Wildsmith's critique as a validation of the model because it shows that Dr. Frech's calculation is conservative. Additionally, Plaintiffs summarily argue that Dr. Frech's damages calculation is substantiated because it “factors in the relative richness of CHIP's benefits compared to other policies[, as] one would expect the...