Duane Morris Class Action Review - 2023 - Report - Page 116
damages is vanishingly small so long as this court maintains its view that evidence
material to the issue of program quality implicates educational malpractice, a claim this
court [previously] foreclosed.” Id. As a result, the court believed this case could be
resolved by ascertaining what education was actually offered and this question did not
implicate complex factual disputes requiring voluminous, and expensive, expert
testimony. Id. Secondarily to its superiority analysis, the court also considered six
procedural scenarios that could arise depending on its class certification ruling. Id. at *4.
All six scenarios weighed against certification, but the court found particularly
compelling scenario 1: “[t]he court certifies the class as to the implied contract claim and
the case goes forward to trial. Should the plaintiffs lose - as appears very likely due to
their inability to prove damages - then the implied contract claim of the entire plaintiff
class will have been finally adjudicated.” Id. This outcome precluded the court from
concluding “class action treatment is either superior or more just than the available
alternatives.” Id.
In Day, et al. v. GEICO Casualty Co., 2022 U.S. Dist. LEXIS 197698 (N.D. Cal. Oct. 31,
2022), although the District of Massachusetts denied certification under Rule 23(b),
particularly in light of the student class’s inability prove damages, the inverse situation
arose a few weeks later in the Northern District of California when a putative class of
policyholders sued GEICO in Day
During the early months of the COVID-19 pandemic, GEICO announced its “GEICO
Giveback” program (the Giveback) that provided a 15% discount on new and renewed
insurance policies. Id. at *1. Day sued GEICO on behalf of a putative class of California
insurance holders, every one of which purchased a GEICO insurance policy that
required payment of taxes and/or certain fees in the event of total loss. Day claimed
GEICO breached the terms of its policies with class members by failing to pay these
taxes and fees to insured whose vehicles were deemed total losses. When she moved
to certify a class of over two million putative class members, all of whom were California
residents who purchased either “personal, automobile, motorcycle, or RV insurance
from GEICO” during the two-year class period, only one of Day’s claims remained under
the California’s Unfair Competition Law (UCL). Id. Day claimed GEICO violated the UCL
by: (1) failing to remit “an appropriate refund of premiums based on excess profit and an
accurate risk assessment; (2) giving the refund only to customers who renewed their
policies; (3) falsely claiming the Giveback provided ‘substantial and full relief’; and (4)
failing to disclose its excessive profits. Id. at *2.
When GEICO argued against class certification on Rule 23(b)(3) grounds, it maintained
that Day’s expert report could not survive the Daubert standard. Whether it was
standalone or fed into GEICO’s larger opposition, GEICO’s Daubert argument had the
potential to end class certification analysis before it even began by injuring Day’s ability
to answer damages-related questions posed by the Rule 23(B)(3) analysis. GEICO
challenged Day’s expert’s report, arguing it lacked a recognized methodology, was
incomplete and vague, “cherry picked” data, improperly calculated rates retroactively,
and conflicted with regulatory ratemaking processes. Id. at *3. GEICO’s Daubert
challenge was unsuccessful.
115
© Duane Morris LLP 2023
Duane Morris Class Action Review – 2023
