The Supreme Court's 2011 Class Action Decisions: Their Impact on Insurance Class Actions

Wystan Ackerman   By Wystan Ackerman, Partner, Robinson & Cole LLP

This commentary by Wystan Ackerman analyzes the three decisions issued by the U.S. Supreme Court on class actions in 2011, with a focus on their impact on the insurance industry: Wal-Mart Stores, Inc. v. Dukes, AT&T Mobility, LLC v. Concepcion, and Smith v. Bayer Corp. The commentary predicts how these decisions will affect new class action filings and discusses how they impact defense strategy in insurance class actions.

During its 2010-2011 term, the United States Supreme Court issued three new decisions on class actions. Most prominently, in Wal-Mart Stores, Inc. v. Dukes, the Court addressed a host of class action issues. It fundamentally reinvigorated and redefined the commonality requirement, and also addressed consideration of the merits on class certification, scrutiny of expert testimony, whether statistical sampling may be used to prove classwide damages, and under what circumstances monetary relief can be obtained under Rule 23(b)(2). Wal-Mart raised the bar for plaintiffs to obtain class certification in a number of ways, and the case undoubtedly will be cited in nearly every brief and decision on class certification for years to come. Wal-Mart will substantially aid insurers not only in defending themselves from putative class actions but in defending class actions brought against their insureds.

Two other opinions of the Court also addressed important class action issues. In AT&T Mobility, LLC v. Concepcion, the Court upheld the use of arbitration provisions in consumer contracts that bar class action arbitrations, holding that state law rendering such provisions unconscionable was preempted by the Federal Arbitration Act. Concepcion will be particularly important for insurers in class actions where their policies have appraisal or arbitration provisions. It also provides a potential opportunity for insurers to reduce their class action exposure by expanding their use of arbitration.

In Smith v. Bayer Corp., the Court held that, under the federal Anti-Injunction Act, a federal court, after denying class certification, could not enjoin a state court from adjudicating a putative class action on the very same issue. While the Court failed to resolve this issue the way that class action defendants had hoped it would be resolved, the Court raised important questions for the future regarding the problem of serial re-litigation of class certification. New solutions will be needed to remedy this problem.

Wystan Ackerman is a partner at Robinson & Cole LLP in Hartford, Connecticut, where he chairs the firm's Class Action Team. He has a national practice focusing on defending insurers in class actions and litigating critical insurance coverage issues at the trial and appellate levels. He writes the blog Insurance Class Actions Insider at www.insuranceclassactions.com. He has defended class actions in a variety of substantive areas and industries, including insurance, products liability, financial services, and securities. Mr. Ackerman also has litigated prominent coverage cases arising from, for example, the September 11th catastrophe, Hurricane Katrina and Chinese-made drywall. Mr. Ackerman has litigated appeals in the First, Second, Third, Fourth, Fifth, Eighth and Eleventh Circuits, as well as in various state appellate and supreme courts, and has opposed certiorari petitions in the U.S. Supreme Court. He received his B.A., summa cum laude, from Bowdoin College, and his J.D. from Columbia Law School, where he was a James Kent Scholar and a notes editor of the Columbia Law Review.

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Lexis.com subscribers can access the Lexis enhanced version of the Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 180 L. Ed. 2d 374 (U.S. 2011) decision with summary, headnotes, and Shepard's. Non subscribers can access the free unenhanced version of the Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 180 L. Ed. 2d 374 (U.S. 2011) decision available from lexisONE Free Case law.

Lexis.com subscribers can access the Lexis enhanced version of the AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 179 L. Ed. 2d 742 (U.S. 2011) decision with summary, headnotes, and Shepard's. Non subscribers can access the free unenhanced version of the AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 179 L. Ed. 2d 742 (U.S. 2011).

Lexis.com subscribers can access the Lexis enhanced version of the Smith v. Bayer Corp., 131 S. Ct. 2368, 180 L. Ed. 2d 341 (U.S. 2011) decision with summary, headnotes, and Shepard's. Non subscribers can access the free unenhanced version of the Smith v. Bayer Corp., 131 S. Ct. 2368, 180 L. Ed. 2d 341 (U.S. 2011).

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