Walker v. Life Insurance Company of The Southwest, 032320 FED9, 19-55241

Docket Nº:19-55241, 19-55242
Opinion Judge:TALLMAN, CIRCUIT JUDGE
Party Name:Joyce Walker; Kim Bruce Howlett; Muriel Spooner; Taline Bedelian; Oscar Guevara, on behalf of themselves and all others similarly situated, Plaintiffs-Appellees/ Cross-Appellants, v. Life Insurance Company of the Southwest, a Texas corporation, Defendant-Appellant/ Cross-Appellee.
Attorney:Noah A. Levine (argued), Wilmer Cutler Pickering Hale & Dorr LLP, New York, New York; Andrea J. Robinson and Timothy J. Perla, Wilmer Cutler Pickering Hale & Dorr LLP, Boston, Massachusetts; Matthew T. Martens, Wilmer Cutler Pickering Hale & Dorr LLP, Washington, D.C.; Jonathan A. Shapiro, Baker ...
Judge Panel:Before: Marsha S. Berzon, Richard C. Tallman, and Ryan D. Nelson, Circuit Judges.
Case Date:March 23, 2020
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Joyce Walker; Kim Bruce Howlett; Muriel Spooner; Taline Bedelian; Oscar Guevara, on behalf of themselves and all others similarly situated, Plaintiffs-Appellees/ Cross-Appellants,

v.

Life Insurance Company of the Southwest, a Texas corporation, Defendant-Appellant/ Cross-Appellee.

Nos. 19-55241, 19-55242

United States Court of Appeals, Ninth Circuit

March 23, 2020

Argued and Submitted February 10, 2020 Pasadena, California

Appeal from the United States District Court No. 2:10-cv-09198-JVS-JDE for the Central District of California James V. Selna, District Judge, Presiding

Noah A. Levine (argued), Wilmer Cutler Pickering Hale & Dorr LLP, New York, New York; Andrea J. Robinson and Timothy J. Perla, Wilmer Cutler Pickering Hale & Dorr LLP, Boston, Massachusetts; Matthew T. Martens, Wilmer Cutler Pickering Hale & Dorr LLP, Washington, D.C.; Jonathan A. Shapiro, Baker Botts LLP, San Francisco, California; for Defendant-Appellant.

Brian P. Brosnahan (argued), Cornerstone Law Group, San Francisco, California; Lyn R. Agre, Margaret A. Ziemianek, and Veronica Nauts, Kasowitz Benson Torres LLP, San Francisco, California; for Plaintiffs-Appellees.

Xavier Becerra, Attorney General; Diane S. Shaw, Senior Assistant Attorney General; Lisa W. Chao, Supervising Deputy Attorney; Office of the Attorney General, Los Angeles, California; for Amicus Curiae Ricardo Lara, Insurance Commissioner of the State of California.

Before: Marsha S. Berzon, Richard C. Tallman, and Ryan D. Nelson, Circuit Judges.

SUMMARY [*]

Class Certification

The panel affirmed the district court's class certification order, and dismissed plaintiffs' untimely and procedurally improper attempts to cross-appeal, in a diversity action alleging a life insurance company violated California law concerning policy investment information.

In the course of purchasing a policy, a prospective policyholder receives at least one type of illustration, which is an informational document projecting a policy's returns: (1) a "pre-application" illustration, which the applicant may, but is not required to, receive before or at the same time as obtaining the policy application; and/or (2) a "batch" illustration, which is delivered to the applicant along with a copy of the policy, after the applicant submits her application and the insurer approves it.

The named plaintiffs received pre-application and batch illustrations, and allegedly relied on the illustrations in deciding to purchase policies. Plaintiffs alleged that the insurer's illustrations of potential earnings violated California's Unfair Competition Law ("UCL").

Fed. R. Civ. P. 23(b)(3) requires that "questions of law and fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other methods." The district court certified a narrow class of California residents who were pre-application illustration recipients, and which effectively excluded those policyholders who received only batch illustrations when their policies were delivered.

Considering the insurer's challenge to the class certification order, the panel held that any misunderstanding on the district court's behalf in interpreting Briseno v. ConAgra Foods, Inc., 844 F.3d 1121, 1133 (9th Cir. 2017), did not meaningfully influence its predominance analysis. The panel concluded that there was no separate error related to the class definition. To bring a UCL claim, a plaintiff must establish he suffered as a result of the defendant's conduct. The panel held that the district court considered the key issue - whether each plaintiff was exposed to, and thereby could have relied on, the deficient illustrations. The panel further concluded that in UCL cases: exposure is relevant to predominance, but only to establish reliance; and a district court does not err per se by not considering the class membership question under the predominance prong of UCL analysis. The panel rejected the insurer's two specific concerns to the class certification order: the district court's reliance on Briseno; and the class definition. The panel held as an issue of first impression in this circuit that a district court can, as it did here, define a class in a way that automatically gives rise to a presumption of reliance.

The panel held that plaintiffs' attempted appeals of the district court's class certification and reconsideration orders were untimely and procedurally improper, respectively. The panel did not reach the merits of plaintiffs' arguments. The panel further denied plaintiffs' motion to take judicial notice of their petition to appeal, and the insurer's answer thereto.

OPINION

TALLMAN, CIRCUIT JUDGE

Life Insurance Company of the Southwest ("LSW") appeals in case number 19-55241 a class-certification order, arguing the district court committed legal error by granting certification in a case featuring predominantly individualized questions. Joyce Walker and four other named plaintiffs in case number 19-55242 challenge, on behalf of the certified class ("Plaintiffs"), the same certification order. Plaintiffs seek to enlarge the class. LSW counters that Plaintiffs' appeal is either too late or procedurally improper.

In disposing of the issues before us, we are guided by well-established canons of class-certification law, which collectively-and as specifically applied here-remind us that the class-action mechanism is remedial, but not absolute. On one hand, the district court's order certifying a class properly enables the mechanism to serve its intended purpose: providing individual plaintiffs with a vehicle through which they can efficiently protect their rights and overcome potentially prohibitive economic barriers to seek legal relief. On the other hand, those equitable justifications for the class-action mechanism do not save Plaintiffs' case from the straightforward, even if unforgiving, timing and procedural requirements that serve practical case-management purposes.

We invoke these principles in affirming the district court's certification order and declining to consider Plaintiffs' cross-appeal.

I

LSW sells life insurance policies, which also double as investment vehicles, two of which are challenged here. In the course of purchasing a policy, a prospective policyholder receives at least one type of "illustration," which is an informational document projecting a policy's returns, over the life of the policy, on premiums in addition to the payment of a lump-sum benefit at death. The first kind of illustration is a "pre-application" illustration, which the applicant may, but is not required to, receive before or at the same time as obtaining the policy application. A "batch" illustration, in contrast, typically is delivered to the applicant along with a copy of the policy, after the applicant submits her application and LSW approves it. LSW does not always provide an applicant with a batch illustration. But it must do so under California law if either a pre-application illustration was never given to the applicant, or the policy as issued reflected different underwriting criteria from the pre-application illustration. All five named Plaintiffs received pre-application and batch illustrations.

Plaintiffs argue that LSW's illustrations of potential earnings violate California's Unfair Competition Law ("UCL") because they do not define or detail the meaning of policy column headings reading "Guaranteed Values at 2.00%" and "Guaranteed Values at 2.50%." Plaintiffs also allege the illustrations promised to eliminate a certain administrative fee after ten years, and that the illustrations fail to describe this "nonguaranteed" element in violation of California law. Plaintiffs allegedly relied on the illustrations in deciding to purchase policies.

Plaintiffs' UCL case has taken a circuitous path. The district court originally dismissed the very claims underlying this appeal, finding that the part of the UCL under which Plaintiffs sued did not create a private right of action. Around the same time, in November 2012, the district court certified two classes advancing related but distinct claims. One class consisted of policyholders advancing common-law fraud claims against LSW. The other was made up of policyholders who received pre-application illustrations and brought claims under a different part of the UCL. The district court subsequently decertified the latter class, concluding that the task of determining on a plaintiff-by-plaintiff basis who received pre-application illustrations would predominate over questions common to the class, rendering class treatment inappropriate.

After a jury returned a defense verdict on the fraud and UCL claims, a panel of this Court reversed the district court's dismissal order...

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