310 P.3d 452
Mont.2013Background
- Plaintiff Robert Jacobsen settled an unrepresented automobile claim with Allstate under its CCPR (Claim Core Process Redesign) “fast track” process, later rescinded and eventually settled for far more after counsel intervened; he then sued for UTPA violations, bad faith, emotional distress, and punitive damages.
- On remand after an earlier appeal (Jacobsen I), discovery produced McKinsey documents showing Allstate’s CCPR design to increase early unrepresented settlements and reduce attorney involvement to lower payouts.
- Jacobsen amended to add a class claim alleging CCPR is a programmatic violation of §33‑18‑201(1) & (6), MCA, affecting all unrepresented first‑ and third‑party claimants in Montana whose claims were adjusted by CCPR.
- The District Court certified a Rule 23(b)(2) class for declaratory and injunctive relief, and also (improperly, per this Court) certified class‑wide punitive damages and a common‑fund attorney‑fee remedy.
- On appeal, this Court affirmed certification of a (reformed) Rule 23(b)(2) class for declaratory and injunctive relief and held evidence at the certification stage need not be in trial‑admissible form, but reversed certification of class‑wide punitive damages and remanded with modified class relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 23(a) prerequisites (numerosity, commonality, typicality, adequacy) were met | Jacobsen: CCPR is a common, programmatic practice causing indivisible legal injury to unrepresented claimants; the named plaintiff’s claim stems from same program | Allstate: Individualized outcomes and defenses defeat commonality/typicality/adequacy | Court: No abuse of discretion — after probing the record (applying Wal‑Mart reasoning) the class met Rule 23(a) (numerosity unchallenged; commonality/typicality/adequacy satisfied) |
| Whether a Rule 23(b)(2) class is appropriate | Jacobsen: CCPR defendants acted on grounds applying generally to the class; declaratory/injunctive relief appropriate; incidental monetary remedies permissible | Allstate: Class lacks cohesiveness; monetary relief predominates and (b)(2) is inappropriate; due process concerns | Court: Affirmed (b)(2) certification for declaratory and mandatory injunctive relief (reopening/re‑adjustment notice and process); class cohesive for that relief |
| Whether class‑wide punitive damages can be certified under Rule 23(b)(2) | Jacobsen: Punitive relief may be incidental or appropriate for programmatic malice | Allstate: Class‑wide punitive award would violate due process; individualized damages and defenses required | Court: Reversed class‑wide punitive damages certification; punitive relief must be determined only after individual compensatory damages are proved — class trial may determine existence of actual fraud/malice but not award class‑wide punitive damages |
| Whether Montana Rules of Evidence must be strictly applied at class certification | Jacobsen: Certification stage may consider evidence that might be inadmissible at trial; preliminarily probe the record | Allstate: District Court improperly relied on inadmissible evidence; M. R. Evid. apply | Held: District Court did not err — class certification is preliminary; evidence need not be in trial‑admissible form though ultimate admissibility remains for trial |
Key Cases Cited
- Jacobsen v. Allstate Ins. Co., 215 P.3d 649 (Mont. 2009) (earlier appeal and remand that compelled production of McKinsey documents)
- Wal‑Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) (clarified Rule 23(a)(2) commonality and endorsed a rigorous, merits‑probing certification review)
- Mattson v. Mont. Power Co., 291 P.3d 1209 (Mont. 2012) (Montana guidance on district court’s obligation to resolve factual disputes to certify class)
- Ferguson v. Safeco Ins. Co. of Am., 180 P.3d 1164 (Mont. 2008) (approving Rule 23(b)(2) declaratory/injunctive relief for programmatic insurer practices)
- McReynolds v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 672 F.3d 482 (7th Cir. 2012) (upholding (b)(2) class to adjudicate lawfulness of a company‑wide policy and allowing later individual damages proceedings)
- Philip Morris USA v. Williams, 549 U.S. 346 (2007) (due process requires opportunity for defendants to present defenses to individual punitive awards)