Plaintiffs' Class Decertified Based on Lack of Commonality of Individual Claims
(November 2010) By Eric M. Leppo, Associate
For more information, contact Paul Farquharson.
Kuei-I Wu, et al. v. MAMSI Life & Health Insurance Company, et al.,
Case No. RDB-07-CV-1170, (U.S. District Court for the District of Maryland, October 18, 2010)
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In this recently issued Memorandum Opinion, authored by
Judge Richard D. Bennett of the U.S. District Court for the District of
Maryland, the Court granted Defendants' Motion to decertify the Plaintiffs'
class action suit. While the state court had previously certified the class of
Plaintiffs prior to removal, the Federal Court determined that too many issues
required independent analysis as to each Plaintiff for the matter to proceed as
a class action suit.
The lead Plaintiff, Kuei-I Wu, was involved in a motor
vehicle accident in 2001, while she was a full-time student at the University of
Maryland. She had an auto insurance policy with Geico, and a health insurance
policy issued by MAMSI Life & Health. Her medical treatment provider was
allegedly directed by MAMSI to obtain payment from her no fault auto coverage
benefits ("PIP"), before seeking funds from MAMSI.
Therefore, Plaintiff alleges that the MAMSI entities
improperly directed many individuals' health care providers to obtain
payment for services related to automobile accidents, from PIP coverage,
before seeking payment from MAMSI. Wu contends that all persons with MAMSI
healthcare plans who also have automobile insurance, and have been in an
automobile accident since September 2001 make up a class of Plaintiffs all
with the exact same breach of contract claim against MAMSI for this
activity.
The MAMSI insurance entities moved for the class to be
decertified on the basis that the group of Plaintiffs do not meet the
requirements for a class action suit under Fed. R. Civ. Proc. 23. In order
for a lead Plaintiff to represent a class of individuals in a class action
suit four factors must be met:
- (1) the class is so numerous that joinder of all members is impracticable ("numerosity");
- (2) there are questions of law or fact common to the class ("commonality");
- (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class ("typicality"); and
- (4) the representative parties will fairly and adequately protect the interests of the class ("adequacy of representation").
Fed. R. Civ. Proc. 23
The Fourth Circuit has noted that the final three
requirements tend to merge together, and that commonality and typicality are
the guideposts for determining whether a class action is economical and fair
to the class members. Brown v. Nucor Corp., 576 F.3d 149, 152 (4th Cir.
2009). The District Court went about applying the facts of this case to the
four factors.
First, the Court recognized that the Defendants did not
challenge the issue of numerosity, as approximately 2,771 individuals had
been identified during discovery as having MAMSI insurance contracts that
allegedly prohibited MAMSI from coordinating benefits with PIP.
The Court then moved on to the factors it considered to
be dispositive, commonality and typicality. A common question is said to be
one that can be resolved for each class member in a single hearing, and does
not turn on the individual circumstance of each class member. Therefore, if
each Plaintiff's claim needs to be evaluated on a case-by-case basis, there
is not sufficient commonality to justify a class action suit as opposed to
separate actions by many Plaintiffs. Similarly, if such case-by-case inquiry
is required, the lead Plaintiff's case cannot be said to be typical of each
of the other Plaintiffs' actions.
The Court found that each potential Plaintiff in this
case would need to show that he or she meets the class definition and was
actually involved in an automobile accident; demonstrate that MAMSI
coordinated with a healthcare provider regarding PIP benefits in violation
of the contract provisions; and prove the individual breach of contract
damages that he or she sustained as a result. The Court deemed that such
case-by-case determinations could not co-exist with a class action lawsuit,
and the Court determined that commonality and typicality did not exist.
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