Cheryl Slade v. Progressive Security Insurance
856 F.3d 408
| 5th Cir. | 2017Background
- Plaintiffs sued Progressive alleging it used WorkCenter Total Loss (WCTL) to calculate base values for total-loss vehicles, producing lower base values and lower insurance payouts than lawful sources (NADA or Kelley Blue Book).
- Plaintiffs sought class certification under Rule 23(b)(3) for contract and Louisiana-insurance statutory claims and a common-law fraud claim; district court certified all claims.
- Plaintiffs’ damages model proposed replacing Progressive’s WCTL base value with NADA or KBB base values and then applying Progressive’s existing condition-adjustment scores to compute class-wide damages.
- Progressive appealed, arguing Comcast requires reversal of certification, and for the first time argued that Plaintiffs’ acceptance of Progressive’s condition scores could waive unnamed class members’ separate claims and create an adequacy/conflict problem.
- The Fifth Circuit remanded certification of the contract and Louisiana-insurance class to allow the district court to consider the adequacy/preclusion issues arising from the waiver of condition-adjustment claims, affirmed that the damages methodology satisfies Comcast, and reversed certification of the fraud class because individualized reliance defeats predominance.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Comcast/damages fit to liability theory | Plaintiffs: damages can be class-wide by substituting lawful NADA/KBB base values and applying Progressive’s condition adjustments | Progressive: Comcast requires damages model to match liability and thus certification should be reversed | Held: Plaintiffs’ damages model maps to liability and is permissible under Comcast; certification of contract/statutory class not barred by Comcast |
| Adequacy/waiver of condition-adjustment claims | Plaintiffs: disclaimed challenges to condition adjustments to avoid individualized issues and pursue class on base-value theory | Progressive: accepting Progressive’s condition scores risks waiving unnamed members’ future claims and creates conflict/inadequacy | Held: Issue not raised below; remanded for district court to weigh risk of preclusion, value of waived claims, and strategic benefit of waiver; court listed possible district-court responses (decertify, tailor notice/opt-out, certify, redefine class) |
| Predominance for fraud (reliance) | Plaintiffs: asserted common-law fraud claim as class claim | Progressive: reliance will be individualized because claimants could negotiate payouts individually | Held: Reversed fraud-class certification—under Louisiana law common-law fraud requires individualized proof of actual reliance, so predominance not met |
| Opt-out / preclusion protection | Plaintiffs: Rule 23(b)(3) opt-out protects unnamed members from preclusion | Progressive: opt-out may be insufficient if risk of preclusion is high | Held: Opt-out reduces risk and is a factor district court should consider, but not dispositive if risk/value of waived claims is large |
Key Cases Cited
- Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013) (damages model must measure only damages attributable to the certified liability theory)
- In re Deepwater Horizon, 739 F.3d 790 (5th Cir.) (Comcast requires fit between liability theory and damages model)
- Ludlow v. BP, P.L.C., 800 F.3d 674 (5th Cir. 2015) (interpreting Comcast in class-certification context)
- Feder v. Elec. Data Sys. Corp., 429 F.3d 125 (5th Cir. 2005) (adequacy inquiry elements for class representatives)
- Castano v. Am. Tobacco Co., 84 F.3d 734 (5th Cir. 1996) (fraud class actions cannot be certified when individual reliance predominates)
- Abbott v. Equity Grp., Inc., 2 F.3d 613 (5th Cir. 1993) (under Louisiana law, common-law fraud requires proof of actual reliance)
- Murray v. GMAC Mortg. Corp., 434 F.3d 948 (7th Cir. 2006) (weighing value of waived claims against strategic class benefits and opt-out considerations)