104 F.4th 1182
9th Cir.2024Background
- Plaintiffs (about 2,000 individuals) entered into structured settlement annuities (SSAs) for personal injury claims, but later sold their rights to periodic payments through “factoring” for discounted lump sums from Symetra and affiliates.
- Factoring transactions are permitted with oversight and must be deemed in the annuitant’s best interest by a court, which considers disclosures and individual circumstances under state Structured Settlement Protection Acts (SSPAs).
- Plaintiffs allege that Symetra misused confidential information and their position as issuer/obligor to wrongfully induce annuitants into unfavorable factoring arrangements, using misleading marketing and undisclosed conflicts of interest.
- Claims included RICO, state consumer protection, breach of contract (especially for contracts with anti-assignment provisions), unjust enrichment, and related theories.
- The district court certified nationwide classes under Fed. R. Civ. P. 23, finding common issues, particularly around uniform marketing materials and causation.
- On appeal, the Ninth Circuit was asked to review class certification, especially in light of individualized circumstances and legal variations in state law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Predominance of Common Issues (Rule 23(b)(3)) | Common, uniform marketing/materials justified a presumption of causation | Individual circumstances and state court reviews predominate | Individualized causation issues predominate; no class cert. |
| Common Sense Inference of Reliance/Causation | Reliance should be inferred from uniform “friend/advocate” marketing | Each plaintiff’s circumstances and motivations are unique | Common inference inappropriate due to individualized facts |
| Anti-assignment Provision Subclass | Defendants breached contracts with “no assignment” language, fit for class | State laws governing enforceability are too varied for class | Choice of law and enforceability vary too much for subclass |
| Application of Multiple States’ Laws | Variations in law do not defeat certification; provisions are substantially similar | Material legal differences overwhelm commonality | Plaintiffs failed to show predominance given legal variation |
Key Cases Cited
- Legal Econ. Evaluations, Inc. v. Metro. Life Ins. Co., 39 F.3d 951 (9th Cir. 1994) (explaining SSA arrangements and roles of parties)
- Cordero v. Transamerica Annuity Serv. Corp., 34 F.4th 994 (11th Cir. 2022) (discussing tax treatment and oversight of factoring/guidelines)
- Symetra Life Ins. Co. v. Rapid Settlements, Ltd., 775 F.3d 242 (5th Cir. 2014) (factoring company practices and SSPA requirements)
- Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) (class action requirements for commonality/predominance)
- Tyson Foods, Inc. v. Bouaphakeo, 577 U.S. 442 (2016) (standards for predominance in class certification)
- Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639 (2008) (civil RICO and causation/reliance standards)
- Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 719 P.2d 531 (Wash. 1986) (causation for Washington Consumer Protection Act)