Spagnola v. Great Northern Insurance Company
Filing
153
OPINION & ORDER: Notwithstanding the foregoing, because Wal-Mart has no effect on any of the other elements of Rule 23 applicable here and for the reasons set forth in my January 7, 2010 Opinion & Order, plaintiffs cannot satisfy the elements of adeq uacy of representation, predominance, and superiority. Spagnola, 264 F.R.D. at 91-99. Therefore, I hold that defendants' motion to deny class certification is again granted. Unless the plaintiffs appeal this order pursuant to Rule 23(f), both outstanding motions will be presumed renewed and the pretrial scheduling order originally entered into will be reviewed and the parties will be notified if another pretrial conference is necessary. (Signed by Judge Harold Baer on 11/22/2011) (djc)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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FRED SPAGNOLA, individually and on behalf of
all those similarly situated,
Plaintiff,
-againstTHE CHUBB CORPORATION, FEDERAL
INSURANCE COMPANY, GREAT NORTHERN
INSURANCE COMPANY, JOHN D. FINNEGAN
and THOMAS F. MOTAMED,
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Defendants.
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JONATHAN A. BERNSTEIN, individually and on
behalf of all those similarly situated,
Plaintiff,
-againstTHE CHUBB CORPORATION, FEDERAL
INSURANCE COMPANY, GREAT NORTHERN
INSURANCE COMPANY, JOHN D. FINNEGAN
and THOMAS F. MOTAMED,
06 Civ. 9960 (HB)
OPINION & ORDER
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08 Civ. 193 (HB)
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Defendants.
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Hon. HAROLD BAER, JR., United States District Judge:
On January 7, 2010, I issued an Opinion & Order that, inter alia, granted defendants’
motion to deny class certification in this case involving a dispute over homeowners’ insurance
policies, and on July 15, 2010 the Court of Appeals granted plaintiffs’ petition for interlocutory
review of that decision. On October 5, 2010, I denied the defendants’ motion to dismiss and
plaintiffs’ cross motion to compel discovery pending the resolution of the class certification issue
on appeal. On August 09, 2011, the Court of Appeals issued the following mandate:
Upon due consideration, IT IS HEREBY ORDERED that the district court’s
January 7, 2010 Opinion & Order is VACATED to the extent that it granted
Appellees’ motion to deny class certification, and the case is REMANDED to the
district court for further consideration in light of the Supreme Court’s decision in
Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541[.]
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(Dkt. # 137.). On September 22, 2009 I held a pretrial conference and ordered briefing on the
issue of how Wal-Mart affects the analysis of commonality in the present case, and on October
31, 2011 the parties submitted their briefs. For the following reasons and following a review of
Wal-Mart as directed by the Circuit, I once again grant defendants’ motion to deny class
certification.
In Wal-Mart, the Supreme Court reversed the Ninth Circuit and held that the plaintiff
failed to satisfy the requirements of Federal Rule of Civil Procedure 23(a) and 23(b)(2) in a case
involving the alleged denial of equal pay and promotions based on sex. 131 S. Ct. at 2547, 2557.
So far as I can devisetell, the Court of Appeals, while it did not issue an opinion, intended for me
to provide me with an opportunity to interpret have a first crack at interpreting how any
intervening change in class certification law wrought by the Supreme Court in Wal-Mart would
impact my decision here. In my January 7, 2010 Opinion & Order, I granted defendants’ motion
to deny class certification because plaintiffs failed to meet the requirements of adequacy of
representation, predominance and superiority, notwithstanding my finding that commonality was
satisfied “if only barely.” Spagnola v. Chubb Corp., 264 F.R.D. 76, 94 (S.D.N.Y. 2010). The
issue in Wal-Mart applicable to Spagnola is the issue of commonality under Rule 23(a)(2), and
even if Wal-Mart were to change my analysis of commonality, it would not affect the final
decision to deny class certification, which was based on other grounds. Nevertheless, for the
reasons set forth below, Wal-Mart has no effect on my analysis of commonality in this case.
Wal-Mart clarifies that to satisfy the commonality requirement, a plaintiff must do more
than simply show that there is at least one common issue of law or fact. A plaintiff must show
that its claims rest upon a “common contention…that [] is capable of classwide resolution—
which means that determination of its truth or falsity will resolve an issue that is central to the
validity of each one of the claims in one stroke.” Wal-Mart, 131 S. Ct. at 2551. “‘What matters
to class certification…is not the raising of common questions. . . but, rather the capacity of a
classwide proceeding to generate common answers apt to drive the resolution of the litigation.’”
Id. (quoting Richard A. Nagareda, Class Certification in the Age of Aggregate Proof, 84 N.Y.U.
L. REV. 97, 132 (2009)) (emphasis in original).
Here, plaintiffs’ remaining breach of contract claim is based on the theory that defendants
increased coverage and premiums in a way that did not reflect current costs and values.
Defendants argue that plaintiffs cannot satisfy commonality because their differing
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interpretations of the contract at issue indicated that there was no common questions of law or
fact between prospective representatives and the class. However, as I noted in my January 7,
2011 decision, "the claims at issue in this case bear at least two common questions: (a) the
meaning of the term 'current costs and values' and its relationship to CPI, and (b) whether the
methodology that was actually used to raise coverage was permitted under the contract."
Spagnola, 264 F.R.D. at 94-95. Wal-Mart has no effect on the fact that "whatever the contract
meant, it had the same meaning with respect to all policyholders, and the final determination of
that meaning does not depend on [the representative plaintiffs'] own subjective understanding."
/d. at 94. The meaning of the COntraet language is certainly an issue that is eentral to the validity
of the claim for breach of contract. Despite Wal-Mart potentially raising the bar for
commonality in some cases, the plaintiffs here, as noted in my earlier decision, make a showing
sufficient to pass muster, if only barely.'
Notwithstanding the foregoing, because Wal-Mart has no effect on any ofthe other
elements of Rule 23 applicable here and for the reasons set forth in my January 7, 2010 Opinion
& Order, plaintiffs cannot satisfY the elements of adequacy of representation, predominance, and
superiority. Spagnola, 264 F.R.D. at 91-99. Therefore, I hold that defendants' motion to deny
class certification is again granted. Unless the plaintiffs appeal this order pursuant to Rule 23(f),
both outstanding motions will be presumed renewed and the pretrial seheduling order originally
entered into will be reviewed and the parties will be notified if another pretrial conference is
necessary.
so
New York,JYt1w York
November
2011
otI\
HAROLD BAE • JR.
United States Distrid Judge
I Similarly, Judge Rakoffrecently found that IVai-Marl had "no effect" on his determination of the commonality
prong in Pub. Employees Retirement System of Miss., et aI.• v. Merrill Lynch & Co., Inc.. et al., 08 eiv. 10841, 20 II
WL 3652477, at *7. The common questions in that case-whether the defendants' registration cel1ification
statements of contained false or misleading statements or material omissions) known as "Offering Documents"
"[were] clearly susceptible to common answers." Id. An analysis of the language contained within the contract at
issue here, like the Offering Documents in Pub. Employees Retirement System ofMiss, will generate a common
answer apt to drive the resolution of the litigation.
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