Last week, the Fifth Circuit issued a brief advisory that highlighted an important point that doesn’t come up often in class certification decisions. Class certification failed because plaintiffs’ proposed theory of liability would only benefit some members of the class and disadvantage others, who would be overpaid if plaintiffs’ theory were correct. For this reason alone, the plaintiffs could not adequately represent the class.
Prudhomme v. Government Employees Insurance Company, No. 21-30157, 2022 WL 510171 (5th Cir. Feb. 21, 2022) (by curiam) was similar to another case I recently wrote about – plaintiffs claimed their insurer had undervalued their vehicles which were considered total losses, in violation of Louisiana law. Avoiding issues of commonality and salience, which are typically central to class certification decisions, the Fifth Circuit upheld the denial of class certification because the adequacy of the representation requirement was not met. . Indeed, “a portion of the proposed class members received payments above (i.e., benefited from) the allegedly unlawful evaluation. In the district court’s opinion, an expert witness estimated that about one-fifth of the class would have received less on the plaintiffs’ theory than they received from GEICO. While the plaintiffs argued that class members who were overpaid under their theory could still be entitled to damages under Louisiana law, that would likely create a typicality issue. Class representatives cannot adequately represent a class if they offer “a theory of responsibility that disadvantages part of the class they are supposed to represent”.
Pay attention to this type of issue the next time you file a class action lawsuit. It might hide in your case when you peel the onion.