Kartman v. State Farm Mutual Automobile Insurance
2011 U.S. App. LEXIS 2830
| 7th Cir. | 2011Background
- A 2006 hailstorm in central Indiana caused extensive roof damage to State Farm policyholders.
- State Farm adjusted and paid millions; many policyholders were dissatisfied with underpayment.
- Approximately 7,000+ policyholders joined a state-court class action alleging breach of contract, bad-faith denial of benefits, and unjust enrichment.
- The case was removed to federal court; plaintiffs moved for Rule 23(b)(3) damages class and/or Rule 23(b)(2) injunctive relief class.
- The district court denied 23(b)(3) damages class but certified a 23(b)(2) injunctive class to reinspect roofs under a uniform, objective standard.
- State Farm appealed under Rule 23(f); the Seventh Circuit reversed, holding 23(b)(2) certification was improper and remanding to decertify.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 23(b)(2) injunctive class certification was proper | Kartman argues for class-wide reinspections under a uniform standard. | State Farm contends only damages class treatment is appropriate; injunctive relief is improper. | Not proper; 23(b)(2) certification reversed. |
| Whether there is an independent cognizable injunctive-duty claim | Insurer had a duty to inspect using a uniform objective standard. | No contract or tort duty to use a particular inspection method exists. | No independent injunctive duty; damages theory controls. |
| Whether a damages class under 23(b)(3) was appropriate | Common issues could support a class on damages across policyholders. | Damages are highly individualized; no common method proves underpayment class-wide. | Damages class inappropriate; issue supports decertification of 23(b)(3). |
| Whether an issues class under 23(c)(4) was appropriate | Some common issues could be handled separately as issues class. | Nothing appropriate for 23(c)(4) given damages relief dominates; overall relief sought is monetary. | Not appropriate; no suitable issues class identified. |
| Whether injunctive relief could finality-satisfy Rule 23(b)(2) requirements | Injunction would finalize remedies for class-wide relief. | Injunction would be ongoing and impractical; final damages remedy exists. | Injunction not final or appropriate; reversal mandated. |
Key Cases Cited
- Jefferson v. Ingersoll Int'l Inc., 195 F.3d 894 (7th Cir.1999) (damages class generally required for monetary disputes unless proper grounds for injunctive relief)
- Andrews v. Chevy Chase Bank, 545 F.3d 570 (7th Cir.2008) (de novo review of purely legal class-certification questions)
- Szabo v. Bridgeport Machs., Inc., 249 F.3d 672 (7th Cir.2001) (merits may inform class certification when intertwined with issues)
- Allen v. International Truck & Engine Corp., 358 F.3d 469 (7th Cir.2004) (distinctions between final relief and ongoing remedies in 23(b)(2) analysis)
- Barnes v. Am. Tobacco Co., 161 F.3d 127 (3d Cir.1998) (medical-monitoring injunctions and finality considerations under Rule 23(b)(2))