A recent amicus brief filed in support of a Supreme Court certiorari petition is definitely worth a read for corporate counsel who follow developments in class action law. The Washington Legal Foundation and the International Association of Defense Counsel filed this brief in Allstate Ins. Co. v. Jacobsen. Allstate is seeking Supreme Court review of a Montana state court decision certifying a mandatory class for monetary damages. In this brief, they argue that the Montana Supreme Court’s decision violates the Due Process Clause of the 14th Amendment to the Constitution, and is inconsistent with Wal-Mart. They ask the Supreme Court to take up the case due to its exceptional importance.
In the case, the Montana high court certified a class of all individuals in the state of Montana who settled claims with Allstate over a period of 20 years, and who may be entitled to compensatory and punitive damages awards, without notice to class members or the opportunity to opt out under a rule that is similar to Fed. R. Civ. P. 23(b)(2). The named plaintiff alleged violation of the state’s consumer protection law where settlements were negotiated with insureds unrepresented by counsel. The U.S. Supreme Court overturned a decision certifying a class for monetary damages under the same federal rule in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 1541, 2557 (2011) (Rule 23(b)(2) “does not authorize class certification when each class member would be entitled to an individualized award of monetary damages”). The amicus brief explains in detail the due process concerns raised by such a certification order, both for absent class members and defendants, and proposes extending the prohibition to state court rules authorizing class actions.
We will continue to follow this important case and the issues it raises, and provide further updates to our readers as developments occur.