Maxon v. Sentry Life Insurance Company

Filing 66

ORDER granting Sentry Life Insurance Company's motion to stay Case No. 18-cv-379-jdp (dkt. 15) and denying plaintiff Anneliese Emerson's cross-motion to consolidate her case with 18-cv-254-jdp (dkt. 17). Case 18-cv-379-jdp is stayed pending resolution of 18-cv-254-jdp. Signed by District Judge James D. Peterson on 9/14/2018. (jls)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN

ANNELIESE EMERSON, on behalf of herself
and all others similarly situated,
Plaintiff,

OPINION & ORDER

v.
18-cv-379-jdp
SENTRY LIFE INSURANCE COMPANY,
Defendant.

PRUDENCE F. MAXON, on behalf of herself
and all others similarly situated,
Plaintiff,

OPINION & ORDER

v.
18-cv-254-jdp
SENTRY LIFE INSURANCE COMPANY,
Defendant.
Plaintiff Anneliese Emerson filed a lawsuit against Sentry Life Insurance Company for
breach of contract on behalf of herself and a proposed class of other Sentry life insurance
policyholders. Her case is substantively identical to a previously filed proposed class action,
Maxon v. Sentry Life Insurance Company, No. 18-cv-254 (W.D. Wis.), which was filed in the
Middle District of Florida in August 2017 and transferred to the Western District of Wisconsin
this past April. Pending before the court is Sentry’s motion to stay Emerson’s case pending the
resolution of Maxon, Dkt. 15, and Emerson’s cross-motion to consolidate her suit with Maxon.
Dkt. 17.1 For the reasons explained below, the court will grant Sentry’s motion to stay and
deny Emerson’s cross-motion to consolidate.

1

Docket citations in this opinion refer to the Emerson case. Citations to the Maxon docket

BACKGROUND
Prudence Maxon and Anneliese Emerson are both longtime holders of Sentry universal
life insurance policies. Both allege that Sentry has improperly increased the cost of insurance
(“COI”) charges that Sentry deducts from policyholders’ accounts each month by considering
factors unrelated to mortality expectations. Maxon filed first, bringing class-wide claims for
breach of contract, conversion, and declaratory and injunctive relief. No. 18-cv-254, Dkt. 1,
¶¶ 51–79. The parties conducted substantial discovery in the Middle District of Florida before
a motion to transfer landed the case here. Id., Dkt. 50.
A little more than a month after the change of venue, and nine months after the Maxon
case was filed, Anneliese Emerson filed a suit of her own against Sentry in this district.2 She
pleaded the same class-wide breach of contract claim as Maxon, and proposed an identical
briefing and trial schedule. Compare Dkt. 14, at 5 with Maxon, No. 18-cv-254, Dkt. 56.
Neither Emerson nor Sentry disputes that the two proposed class actions are
substantively identical. See Dkt. 15, at 7; Dkt. 18, at 5–6. But they disagree about how to
proceed. Sentry has moved for a stay, and asks the court not to allow the simultaneous
prosecution of redundant lawsuits. Emerson has responded with a motion to consolidate under
Federal Rule of Civil Procedure 42(a), arguing that consolidation will serve judicial economy
and avoid undue prejudice. The court also received briefing from Maxon, who opposes

include the case number, No. 18-cv-254.
2

Sentry alleges, and Emerson does not appear to dispute, that two days after the Maxon action
was transferred to this district, plaintiff’s counsel posted a notice on its website seeking
plaintiffs for possible litigation against Sentry related to COI charges. Dkt. 15, at 3. Sentry
further alleges that, before it moved for a stay and prior to Emerson’s decision to seek
consolidation, Emerson’s counsel proposed to jump in front of the Maxon schedule and try this
case in a little over one year. Id. at 5 n.3.

2

consolidation and joins Sentry in advocating that Emerson be stayed while her first-filed case is
litigated. Maxon, No. 18-cv-254, Dkt. 59.

ANALYSIS
“[T]he power to stay proceedings is incidental to the power inherent in every court to
control the disposition of cases on its docket with economy of time and effort for itself, for
counsel and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936). In exercising its
discretion, courts must “balance interests favoring a stay against interests frustrated by the
action” in light of the court’s strict duty to exercise jurisdiction in a timely manner.” Grice Eng’g,
Inc. v. JG Innovations, Inc., 691 F. Supp. 2d 915, 920 (W.D. Wis. 2010) (citing Cherokee Nation
of Oklahoma v. United States, 124 F.3d 1413, 1416 (Fed. Cir. 1997). Courts often consider such
factors as:
(1) whether the litigation is at an early stage; (2) whether a stay will unduly
prejudice or tactically disadvantage the non-moving party; (3) whether a stay
will simplify the issues in question and streamline the trial; and (4) whether a
stay will reduce the burden of litigation on the parties and on the court.
Id. (internal citations omitted). The burden of showing that the circumstances justify a stay
falls on the moving party. Nken v. Holder, 556 U.S. 418, 433–34 (2009).
Consolidation is another case management tool. Under Rule 42(a), a district court may
consolidate cases which involve a common question of law or fact. Consolidation “is a matter
committed to the sound discretion of the trial judge.” Canedy v. Boardman, 16 F.3d 183, 185
(7th Cir. 1994). In applying Rule 42(a), courts typically balance judicial economy concerns
with any countervailing considerations of equity. See United States v. Knauer, 149 F.2d 519, 520
(7th Cir. 1945).

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In this case, all of the relevant factors counsel in favor of granting a stay and denying
the motion to consolidate. First, Emerson is at an early stage of litigation, whereas Maxon is
considerably further along. Over the past year, the parties in Maxon negotiated a confidentiality
agreement and ESI protocol, conducted document discovery and a 30(b)(6) deposition, and
retained experts in anticipation of briefing class certification, which is now mere weeks away.
See Dkt. 21, at 6 n.6; Maxon, No. 18-cv-254, Dkt. 59, at 4. By contrast, Emerson has only just
commenced discovery, having just served its first two sets of document requests and noticed
one 30(b)(6) deposition. Dkt. 15, at 5.
Second, Emerson is unlikely to suffer prejudice as a result of a stay. Emerson argues
that a stay would “indefinitely freeze” her claim while the Maxon case is litigated, “with the real
possibility that Maxon could be defeated on class certification, that class certification could be
appealed, that Maxon could lose individually at summary judgment or trial.” Dkt. 18, at 9–10.
Emerson contends that, as a result, she and the class will continue paying the higher cost of
insurance, “possibly for years longer than they would if the judge were to allow both cases to
proceed.” Id. at 10. But it is unclear why this is so. Emerson is a member of the proposed Maxon
class, and her rights and grievances as to Sentry will be protected and adjudicated just like any
other class member’s, so long as she does not opt out of the class.3 See Guill v. Alliance Resource
Partners, L.P., No. 16-cv-424, 2017 WL 1132613, at *3 (S.D. Ill. Mar. 27, 2017) (finding no
undue prejudice to plaintiff and staying his later-filed class action where plaintiff was member
of the putative class in first-filed class action seeking identical relief). And given that Emerson

3

This distinguishes Emerson from the plaintiffs in each of the cases she cites, Dkt. 18, at 10,
none of which involved earlier-filed class actions in which the plaintiff’s rights stood to be
protected. In fact, none of the cases Emerson cites—either in opposition to a stay or in support
of consolidation—feature scenarios that resemble the facts in this case.

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sought to adopt the Maxon schedule and now seeks to consolidate her case with Maxon, her
argument that allowing Maxon to proceed will somehow prolong the period of impermissible
fee paying makes little sense. Emerson fails to provide a plausible account of what she stands
to lose by proceeding as a member of the Maxon class, other than representation by the counsel
of her choice.
As to the third and fourth factors, granting a stay seems likely to simplify the issues,
whereas consolidating the actions seems likely to further complicate matters and increase the
burdens of litigation. Emerson’s claims stand to be resolved in the Maxon action, at little cost
to Emerson. If Maxon prevails, Emerson can obtain relief as part of any class-wide judgment
or settlement. She may also opt out of the class or object to any settlement if she so chooses.
See Fed. R. Civ. P. 23(c)(2)(B)(v); (e)(5). If Maxon loses on the merits after class certification,
that judgment will preclude Emerson’s suit. See Patzer v. Board of Regents of Univ. of Wisconsin
Sys., 763 F.2d 851, 855 (7th Cir. 1985). Finally, although Emerson does not explain why she
believes that she is better-positioned to meet the Rule 23(a) requirements than Maxon, if, as
Emerson supposes, Maxon loses on class certification for failing to meet the Rule 23(a)
adequacy and typicality requirements, Dkt. 18, at 11, Emerson can move to lift the stay so
that she can proceed with her suit.
Emerson points to this latter hypothetical as sufficient reason to consolidate the cases
rather than impose a stay, arguing that consolidation would provide an additional class
representative and “create a unified front that would fortify the prosecution of Sentry and
increase the likelihood of class certification.” Id. at 8. This argument is speculative. Adding
more class representatives might increase the chances that at least one representative will satisfy
the Rule 23 requirements, but Emerson has not identified a reason why Maxon is inadequate.

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Regardless, any benefit of consolidation is outweighed by the burdens that would follow from
adding another set of class counsel in a consolidated action. Counsel for Maxon and Sentry
have made clear their preference that they not be made to coordinate with another set of
attorneys. Dkt. 21, at 5; Maxon, No. 18-cv-254, Dkt. 59, at 4. Indeed, consolidating the cases
would lead to the multiplication of briefing and proceedings. See id. at 4–5 (indicating that a
motion for appointment of interim class counsel under Fed. R. Civ. P. 23(g)—and jockeying
over lead counsel status—is sure to follow any grant of consolidation); Dkt. 18, at 7 (same).
These considerations militate in favor of a stay and against consolidation. The court has
“broad managerial discretion to prevent unnecessary duplication of effort in related cases
through consolidation or other means.” SanDisk Corp. v. Phison Elecs. Corp., 538 F. Supp. 2d
1060, 1068 (W.D. Wis. 2008) (quoting E.E.O.C. v. G-K-G, Inc., 39 F.3d 740, 745 (7th Cir.
1994)). Here, a stay provides the “other means” to prevent the inevitable duplication that
Emerson’s suit would create.

ORDER
IT IS ORDERED that defendant Sentry’s motion to stay, Dkt. 15, is GRANTED, and
plaintiff Anneliese Emerson’s cross-motion to consolidate, Dkt. 17, is DENIED. Case No. 18cv-379-jdp is STAYED pending resolution of No. 18-cv-254-jdp. If the court denies class
certification in No. 18-cv-254-jdp, Emerson may move to lift the stay at that time.
Entered September 14, 2018.
BY THE COURT:
/s/
________________________________________
JAMES D. PETERSON
District Judge

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