954 F.3d 240
5th Cir.2020Background:
- Jackson National Life sold standardized variable annuities nationwide; early withdrawals incur "surrender charges" calculated by schedule.
- Fourteen Texas residents sued Jackson (all purchased through a Texas broker) alleging Jackson miscalculated surrender charges and reduced living/death benefits, seeking to certify a nationwide class of purchasers who incurred surrender charges.
- Jackson moved to dismiss (did not raise lack of personal jurisdiction in its Rule 12 motions), later answered and asserted lack of personal jurisdiction as to non‑Texas class members and opposed class certification on multiple grounds.
- The district court granted leave to add a non‑Texas representative, held Jackson waived its personal‑jurisdiction defense, and certified a nationwide class under Rule 23(b)(3); it found common issues predominated and damages calculable from Jackson’s records.
- On interlocutory appeal the Fifth Circuit vacated certification and remanded, holding Jackson did not waive its personal‑jurisdiction defense, the district court failed a rigorous predominance analysis (state‑law variations and affirmative defenses), and plaintiffs’ damages model for living/death benefits was inadequate.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Waiver of personal jurisdiction as to non‑Texas class members | Jackson waived PJ by omitting it from pre‑certification Rule 12 motions and by litigating the merits | PJ as to unnamed non‑Texas class members was not "available" pre‑certification; Jackson preserved PJ in its answer and opposition to certification | Court: Jackson did not waive PJ; defense was not available before certification and contemporaneous merits activity did not amount to waiver |
| Predominance — breach interpretation across jurisdictions | Contracts are uniform and unambiguous; breach is a common, classwide question | State‑law variations and potential extrinsic evidence mean contract interpretation will require individualized inquiries | Court: Vacated certification; district court failed to analyze state‑law variations and must conduct a rigorous multi‑state predominance inquiry on remand |
| Predominance — affirmative defenses (waiver/ratification) | Waiver/ratification would require legal knowledge after liability is established and thus do not defeat predominance | These defenses turn on individual customers’ factual knowledge/actions at formation, producing individualized inquiries | Court: District court erred in requiring legal‑consequence knowledge; defenses focus on factual knowledge and could overwhelm predominance absent rigorous analysis |
| Adequacy of damages model for class treatment | Plaintiffs’ expert can compute excessive surrender charges from Jackson’s records; classwide damages are measurable | Plaintiffs offered no usable model for damages to living and death benefits, which are complex and individualized | Court: Expert model was adequate for excess charges but inadequate for living/death benefits; certification improper without a classwide formula (plaintiffs later indicated they might abandon those damages) |
Key Cases Cited
- Bristol‑Myers Squibb Co. v. Superior Court of California, 137 S. Ct. 1773 (2017) (Supreme Court decision on specific jurisdiction limits in mass‑tort context)
- In re Checking Account Overdraft Litig., 780 F.3d 1031 (11th Cir. 2015) (putative class members are not before the court until certification; defenses not "available" pre‑certification)
- Comcast Corp. v. Behrend, 569 U.S. 27 (2013) (plaintiffs must show damages are measurable on a classwide basis to satisfy predominance)
- Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997) (need for rigorous Rule 23 analysis and caution on predominance)
- Castano v. American Tobacco Co., 84 F.3d 734 (5th Cir. 1996) (state‑law variations can defeat predominance; cursory review reversible)
- Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036 (2016) (distinguishing common vs. individual questions and permissibility of some individualized damages calculations)
- Cole v. General Motors Corp., 484 F.3d 717 (5th Cir. 2007) (party seeking nationwide class must provide extensive analysis of state‑law variations)
- Jackson v. FIE Corp., 302 F.3d 515 (5th Cir. 2002) (Rule 12 waiver principles regarding omission of defenses)