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Retained Asset Account ERISA Class Action: First Circuit Overturns Judgment in Favor of Plaintiffs

Posted in Life Insurance

One of the hot areas of class action litigation against life insurers over the last few years has been the use of retained asset accounts, whereby the insurer pays life insurance proceeds not by a lump sum but instead by providing beneficiaries with access to an interest-bearing account from which the funds can be drawn.  One of the cases in which the plaintiffs’ bar had success was in the District of Maine, where the district court found a breach of fiduciary duty under ERISA (see my February 22, 2012 blog post).  This case ultimately resulted in a $12 million judgment in favor of the plaintiff class, but that judgment was recently overturned by the First Circuit.  The First Circuit found no ERISA violation where the use of the retained asset account was expressly authorized by the ERISA plan, and the insurer complied with the plan.  The First Circuit’s decision closely followed decisions by the Second and Third Circuits reaching similar conclusions.

In Merrimon v. UNUM Life Insurance Company of America, Nos. 13-2128, 13-2168, 2014 U.S. App. LEXIS 12540 (1st Cir. July 2, 2014), the plaintiffs asserted that the use of the retained asset accounts to pay benefits: (1) constituted self-dealing in plan assets, in violation of section 406(b) of ERISA; and (2) violated a duty of loyalty under section 404(a) of ERISA.  The court of appeals initially addressed standing, concluding that the plaintiffs had standing because the claimed wrongful retention and misuse of assets “[i]f proven, would constitute a tangible harm, even if no economic loss results.”  Id. at *10.  The court also found that the Department of Labor’s conclusion that the use of a retained asset account does not violate ERISA where it is consistent with the plan terms, as expressed in an amicus brief, was entitled to deference because it was well-reasoned (not because the court agreed with it, but because the analysis itself was thorough).  Id. at *13-17. 

On the first issue, the First Circuit agreed with the district court that there was no violation of section 406(b), which prohibits self-dealing in plan assets, because the assets in retained asset accounts were not plan assets.  The court explained that “[i]t is the beneficiary, not he plan itself, who has acquired an ownership interest in the assets backing the RAA,” and “a beneficiary’s assets are not plan assets.”  Id. at *20.  The First Circuit distinguished its prior decision in Mogel v. Unum Life Ins. Co., 547 F.3d 23 (1st Cir. 2008), often relied upon by the plaintiffs’ bar, on the grounds that Mogel involved a plan that specifically mandated that benefits be paid in a lump sum, and the insurer in that case failed to comply with the plan documents.  Merrimon, at *20.

On the second issue, the First Circuit found no violation of section 404(a), which requires a fiduciary to discharge its duties solely in the interests of participants and beneficiaries.  The court relied on the Department of Labor’s amicus brief, and explained that once the insurer paid the benefits into the retained asset accounts, its fiduciary duties ceased and the subsequent relationship was a debtor-creditor relationship governed only by state law.  Id. at *26-27.  The setting of interest rates on the accounts was thus governed only by state law.  Id. at *31.

Based on these rulings, the First Circuit overturned a $12 million judgment in favor of the certified class, and instructed the district court to enter judgment in favor of the insurer.  Will this be the nail in the coffin of retained asset account class action litigation?  Perhaps, but stay tuned.

Comcast Construed In Recent Seventh Circuit Opinion

Posted in Class Certification Standards

After the Supreme Court decided Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013) (blog post), requiring damages to be provable on a classwide basis in order for a class to be certified under Rule 23(b)(3), class action practitioners and commentators wondered how much impact Comcast would have.  The Seventh Circuit recently addressed the scope of Comcast in a products liability case.  The decision potentially could impact other types of consumer class actions, and warrants a careful read.

If you’ve been anywhere near a supermarket in recent years, I’m sure you’ve seen a lot of foods advertised as organic.  But you may not have heard about organic shingles for your roof.  I had not, until I read In re IKO Roofing Shingle Products Liability Litigation, No. 14-1532, 2014 U.S. App. LEXIS 12684 (7th Cir. July 2, 2014).  The issue in the case, though, appears to have nothing to do with what “organic” means when it is used in describing a roofing shingle.  The plaintiffs allege that the defendant manufacturer falsely told consumers that certain organic roofing shingles met an ASTM D225 standard, and were tested using an ASTM D228 protocol.  Id. at *1-2.  The district court denied class certification on the grounds that individual consumers’ experiences with the roofing shingles would vary substantially based on the weather the shingles experienced, whether they were installed properly, etc.  Id. at *7-8. 

The Seventh Circuit vacated the denial of certification, rejecting the district court’s view that Comcast requires “commonality of damages,” explaining that “[i]f this is right, then class actions about consumer products are impossible,” and that recent Seventh Circuit precedent finding class certification appropriate in two products cases would have to be overruled.  Id. at *8 (citing Butler v. Sears, Roebuck & Co., 727 F.3d 796 (7th Cir. 2013) and Pella Corp. v. Saltzman, 606 F.3d 391 (7th Cir. 2010)).  The Seventh Circuit described Comcast’s primary focus as being on whether the theory of loss matched the theory of liability.  It noted that there were two potential approaches to damages identified by the plaintiffs that matched the theory of liability:  (1) damages potentially could be calculated based on the difference in market price between a shingle that satisfies the applicable standard and one that does not; or (2) if the putative class members’ shingles failed, and the shingles’ failure to meet the applicable standard caused the failure, they would be entitled to damages (although this would require individual hearings, which the court appeared to recognize might not be manageable).  Id. at *11.  The Seventh Circuit repeatedly made clear, however, that it was not ruling that class certification was required or would even be prudent.  That was left to the district court to determine on remand.   The Seventh Circuit noted that a thorough examination of the expert testimony and other evidence appeared warranted, but was not before the court of appeals.  Id. at *12-15.

Plaintiffs’ lawyers undoubtedly will cite this decision when faced with defendants’ arguments in consumer class actions that damages are not provable on a classwide basis, as required by Comcast.  From the defendants’ perspective, however, it is important that the Seventh Circuit clearly was not saying that there was no need for a deeper dive by the district court into whether in fact damages could be proven on a class wide basis, and whether the plaintiffs’ damages theories were viable as a matter of law.  Comcast would support further examination of those issues as well.  The Seventh Circuit’s opinion seems clear that such further analysis would be appropriate, and certainly not foreclosed by its opinion.

Class Action Settlement in Pella Windows Case Overturned By Seventh Circuit

Posted in Class Action Settlements

One of the prominent cases in which a products liability class action has been certified in recent years is Pella Corp. v. Saltzman, 606 F.3d 391 (7th Cir. 2010), involving windows that allegedly contained a design defect that allowed water infiltration.  After the class was certified, a settlement was reached and approved by the federal district court, over objections by some of the named plaintiffs.  The Seventh Circuit recently reversed approval of the settlement, in an at times vituperative opinion by Judge Posner in which he refers to the settlement as “scandalous.”  Eubank v. Pella Corp., Nos. 13-2091 et al., slip op. (7th Cir. June 2, 2014).  This opinion has gotten a fair amount of attention in the legal media.

One of the reasons for disapproval of the settlement is hardly surprising, and unremarkable.  The lead named plaintiff was the father-in-law of the lead class counsel, whose wife (the daughter of the lead named plaintiff) was also a lawyer in the same law firm.  There were four other class representatives.  Until all of them objected to the settlement.  This kind of thing has long been disapproved in class actions.  As the court explained, a named plaintiff is supposed to be a fiduciary for the class, and to direct and supervise class counsel, and cannot have this type of conflict of interest.

The Seventh Circuit also found the settlement terms unfair because, among other reasons: the claim forms were unduly long (12 and 13 pages) and required data that would be difficult to locate (it appears that the class member would have to tear out their window and look for ID numbers on it); some claimants would get only coupons; in order to recover more than $750 and up to $6,000, claimants would have to participate in arbitration likely without counsel or expert witnesses; and the aggregate value of the settlement to the class, for those who had made claims, would be less than the attorneys’ fees.  The court concluded that “[c]lass counsel sold out the class.”  (Slip op. at 17.) The settlement notice was also found to be misleading because it implied that the $750 and $6,000 figures were guarantees rather than ceilings on potential payments.

The opinion has a lot of dicta.  There are a couple of areas where even the best intentioned parties seeking approval of a class action settlement, and district judges inclined to approve them, could run into problems, depending on how much other courts follow some of what Judge Posner has to say.  First, at one point, the opinion states:

Not only did the settlement agreement not quantify the benefits to the class members, but the judge approved it before the deadline for filing claims.  He made no attempt to estimate how many claims were likely to be filed, though without such an estimate no responsible prediction of the value of the settlement to the members of the class could be made.  (Slip op. at 10-11.)

Claims-made settlements, where only those class members who submit claim forms receive relief, are very common.  Does this mean that claims-made settlements should not be approved without expert testimony as to what the potential “take rate” (percentage of class members responding with valid claims)  might be?  Where is that information going to come from given that it is not infrequently treated as confidential?  Or does this mean that the parties should go through the entire, often quite expensive, process of giving notice and receiving claim forms back before the settlement approval hearing is held?  There is some potential benefit here — most defendants would probably be happy to have attorneys’ fees awards to class counsel be based only on what class members actually receive in benefits.  But perhaps not if this makes it too difficult to reach a resolution because class counsel does not have a sufficient financial incentive to settle.

Second, Judge Posner writes that the district court judge “didn’t estimate the likely outcome of a trial, as he should have done in order to evaluate the adequacy of the settlement.”  (Slip op. at 19.)  How deep does such an evaluation need to go?  Class action trials are extremely rare, so verdict data is almost always not available and essentially useless.  Unless perhaps there are very similar individual cases that have been tried, but again that would be rare.  In most class action settlements the case has not been fully developed in discovery.  What evidence would be presented at trial and which side would be likely to prevail and by how much may be very difficult to predict.  It seems to me that the best that a district court could be expected to do in most class action settlements would be to estimate a reasonable range of possible outcomes at trial.

Statistical Sampling in Class Actions Addressed By California Supreme Court

Posted in Class Certification Standards, Defense Strategy

Back in February of 2012, I wrote a blog post about a California Court of Appeal decision addressing the use of statistical sampling in class actions.  The California Supreme Court recently granted review and affirmed the Court of Appeal’s decision that the trial court improperly allowed the case to be tried based on statistical evidence that failed to meet appropriate standards for reliability from a statistics point of view, and also refused to allow the defendant to present its individualized defenses.  The California Supreme Court’s opinion in Duran v. U.S. Bank National Association, 2014 Cal. LEXIS 3758 (Cal. May 29, 2014) – a rare decision following a class action trial – has received a fair amount of attention.  The key takeaways are that defendants cannot be deprived of litigating their defenses, even when they are individualized defenses, and that if sampling is used in some fashion it must done correctly and with a small margin of error.

Duran is an employment class action claiming that the defendant improperly classified certain employees as exempt based on a salesperson exemption, applicable to employees who spend 50% of the workday outside the office in sales activities.  The class was relatively small (260 employees).  The first phase of the case (liability) was initially tried by a method that involved randomly selecting 20 class members (one of whom refused to appear), adding the two named plaintiffs, and taking testimony from them.  The court refused to allow the defendant to introduce other evidence from absent class members.  The court concluded that the entire class was misclassified as exempt employees, although there was evidence that some were not.  During the second phase of the trial (on damages), the court calculated overtime hours for the class by an extrapolation from the testimony of the class members, a calculation which the plaintiffs’ own expert testified had a 43% margin of error.

The California Supreme Court’s decision is lengthy.  Here are the central points:  First, the court emphasized the importance of a trial plan prior to deciding class certification:

If statistical evidence will comprise part of the proof on class action claims, the court should consider at the certification stage whether a trial plan has been developed to address its use. A trial plan describing the statistical proof a party anticipates will weigh in favor of granting class certification if it shows how individual issues can be managed at trial. Rather than accepting assurances that a statistical plan will eventually be developed, trial courts would be well advised to obtain such a plan before deciding to certify a class action. In any event, decertification must be ordered whenever a trial plan proves unworkable.

Id. at *48.

Second, the trial plan must allow the defendant to litigate its affirmative defenses, regardless of whether they are individual defenses:

We need not reach a sweeping conclusion as to whether or when sampling should be available as a tool for proving liability in a class action. It suffices to note that any class action trial plan, including those involving statistical methods of proof, must allow the defendant to litigate its affirmative defenses. If a defense depends upon questions individual to each class member, the statistical model must be designed to accommodate these case-specific deviations. If statistical methods are ultimately incompatible with the nature of the plaintiffs’ claims or the defendant’s defenses, resort to statistical proof may not be appropriate. Procedural innovation must conform to the substantive rights of the parties.

Id. at *68.  The court also quoted the U.S. Supreme Court’s statement in Wal-Mart v. Dukes that “a class cannot be certified on the premises that [the defendant] will not be entitled to litigate its statutory defenses to individual claims.”  Id. at *56.

Third, if statistical sampling is used, “[w]ith input from the parties’ experts, the court must determine that a chosen sample size is statistically appropriate and capable of producing valid results within a reasonable margin of error.”  Id. at *74.  This analysis can involve evaluating the extent of variability within the sample, ensuring that a sample is randomly selected, that there is no selection bias (the court found it improper to use the named plaintiffs in the sample, and to allow opt outs without re-sampling), and a large margin of error is improper.  One problem that will arise here is that in any class action you will have a significant portion of class members who decline to participate, and that can create selection bias in any sample.

From the defense perspective, some key takeaways here, as I see them, are:  (1) try to force the plaintiff to present a detailed trial plan at the time of class certification; (2) emphasize your affirmative defenses and insist on presenting them; and (3) in challenging sampling, focus on variability and selection bias.

Strategies for Removal Under Class Action Fairness Act (CAFA): ABA Corporate Counsel Article

Posted in Articles, Class Action Fairness Act

I recently published an article in the ABA Corporate Counsel newsletter, entitled “Strategies for Removal Under the Class Action Fairness Act.”  It is intended to serve as a quick guide to removal under the Class Action Fairness Act and addresses the key recent decisions, although it does not attempt to cover the entire landscape.  It’s along the lines of a checklist with annotations and explanation.  The next time you have a CAFA removal it might well be worth a read as you work through the issues.

Subrogation Class Action Involving Climate Change-Related Claims Filed By Farmers Insurance

Posted in Subrogation

Illinois Farmers Insurance Company and Farmers Insurance Exchange recently filed in the Illinois Circuit Court for Cook County a putative class action against various municipalities and the Metropolitan Water Reclamation District of Greater Chicago (see the Illinois Farmers v Metropolitan Water complaint).  This case appears to be the first of its kind and has gotten significant media attention (see this Washington Post article and Claims Journal article for example). 

Farmers filed this as a subrogation case, on behalf of a proposed class of similarly situated insurance companies and property owners who suffered water damage on April 17 and 18, 2013, when heavy rainfall allegedly caused stormwater and sewer system overflows.  The complaint alleges generally that the defendants failed to take appropriate steps to mitigate problems of stormwater and sewer system overflows following climate change that has occurred over the last 40 years.  Climate change is alleged to have caused increased rainfall, necessitating higher capacity stormwater and sewer systems that the defendants failed to implement.

This will be an interesting case to follow.  A key challenge that Farmers is likely to face is to maintain consistency between its position in this case as a class action plaintiff that will be seeking to certify a class and its position in other cases as a class action defendant.  It seems clear that one of the key issues will be whether causation can be established on a classwide basis, where the allegations focus on two specific rainfall events but encompass large geographic areas.  The complaint suggests the possibility of subclasses.  Whether damages can and need to be proved on a classwide basis also could be a key battleground on class certification.

I wonder whether any insurers that are members of the proposed class will try to join this case in its early stages.  They might well wait to see whether a class is certified before deciding whether or not to participate in the lawsuit.  If Farmers is successful, this case might lead other insurers to file subrogation class actions.  But Farmers faces significant challenges, and insurers will need to be cautious about maintaining consistency of position as subrogation plaintiffs and as class action defendants.

Motion to Deny Class Certification in Insurance Case Granted, in Part, By Michigan Federal Court

Posted in Defense Strategy

Insurers and other corporations defending against putative class actions often struggle with how to try to achieve an early resolution of a putative class action, and thereby reduce legal expense, when the case is not appropriate for resolution on a motion to dismiss, or a motion to dismiss is denied.  One approach is to move to strike the class allegations on the pleadings.  But in some cases the class certification issues are not sufficiently developed in the pleadings, or the judge is unwilling to rule on them based on allegations alone.  Another approach that can be used, and is sometimes overlooked, is filing a motion to deny class certification.  On such a motion, the defendant typically introduces evidence in support of its position that the case is not appropriate for class certification, and argues that the issues are clear enough that the court need not await completion of discovery before denying certification.

A Michigan federal court recently granted a motion to deny class certification, in part, in an insurance case.  This decision is a good example of how a motion to deny class certification can be used successfully and should be considered as a potential defense strategy. 

In Monteleone v. Auto Club Group Memberselect Insurance Co., Case No. 13-cv-12716, 2014 U.S. Dist. LEXIS 56233 (E.D. Mich. Apr. 23, 2014), the plaintiffs had water damage to their basement allegedly caused by a faulty back flow preventer in the plumbing waste line.  They claimed that their insurer improperly paid them only the $5,000 limit under a sewer backup endorsement, relying on a provision in the main policy form that insured against “accidental discharge or overflow of water or steam from within a plumbing, heating, air conditioning or automatic fire protection sprinkler system or domestic appliance.”  Id. at *2-3.  They sought to bring a class action on behalf of two proposed classes:  (1) a “property damage” class consisting of policyholders who made water-related property damage claims and received less than $10,000 in claim payments; and (2)a “premium” class consisting of everyone who purchased homeowners’ insurance during the class period.  The claim on behalf of the “premium” class was that all policyholders paid excessive premiums for coverage that the defendants never intended to provide.  Id. at *4-5.

The court found that the class allegations with respect to the proposed “property damage” class could be resolved early because “[n]o additional discovery will alter the fact that adjudication of the ‘property damage’ claims would require individual coverage determinations as to every member of the class.”  Id. at *11.  The court explained that the determination of each putative class member’s claim “would require analysis of the type of water damage, the cause of the water damage, and whether coverage for the water damage was subject to an exclusion in the policy depending on the origination of the water,” and in some cases “the source [of the water] may be unclear or in dispute.”  Id. at *12.  An individual investigation of each claim would be necessary to analyze coverage.  Regardless of whether the insurer had an improper claim handling practice, the court could not determine whether class members were entitled to relief without determining the facts of each individual claim.  Id. at *16.

With respect to the “premium” subclass, the insurer introduced evidence demonstrating that it paid some overflow claims.  The court found that this raised a factual dispute and did not demonstrate that class certification should be denied.  Id. at *19-20.  The court appeared to suggest, however, that the claims of the “premium” subclass may be subject to dismissal on other grounds, stating that “it is unclear how policyholders, who have not suffered any insured loss, can pursue claims for breach of the policy at all.”  Id. at *23.

DRI Class Action Seminar 2014

Posted in Seminars/Programs, Uncategorized

The Defense Research Institute (DRI) is planning another excellent class action seminar to be held in Washington, DC on July 24 and 25, 2014 (see the seminar website).  I’m on the committee that has been planning the seminar.  Last year’s seminar was excellent, for some highlights see my July 31, 2013 and August 1, 2013 blog posts.  This year’s seminar will include discussions of the Supreme Court’s decisions in Mississippi v. AU Optronics, Halliburton and Proskauer Rose LLP v. Troice by defense lawyers who litigated those cases.  The sessions on the impact of Comcast Corp. v. Behrend, the evolution of the issue class action, Canadian class actions, class action settlements (including cy pres), constitutional limits on class actions and emerging issues (among others) should be very engaging. 

I hope to see some of my blog readers there.  Space may be limited, so sign up soon.  Registration is free for in-house counsel or claim executives who are members of DRI.  Companies are also encouraged to host meetings of their class action defense counsel during the seminar.  If you can’t make it, I’ll probably post some highlights on my blog after the seminar.

“Late” Removal Under CAFA Permissible According to Second Circuit

Posted in Class Action Fairness Act

In my July 9, 2013 blog post, I wrote about a Ninth Circuit decision allowing removals under the Class Action Fairness Act (“CAFA”) more than 30 days after service of the complaint, where the complaint and other documents received from the plaintiff did not demonstrate on their face that the case was removable. 

In Cutrone v. Mortgage Electronic Registration Systems, Inc., No. 14-455-cv, 2014 U.S. App. LEXIS 7350 (2d Cir. Apr. 17, 2014), the Second Circuit recently agreed with the Ninth Circuit.  The Second Circuit explained that:

We agree with [other] circuits and hold that, in CAFA cases, the removal clocks of 28 U.S.C. § 1446(b) are not triggered until the plaintiff serves the defendant with an initial pleading or other document that explicitly specifies the amount of monetary damages sought or sets forth facts from which an amount in controversy in excess of $5,000,000 can be ascertained. While a defendant must still apply a “reasonable amount of intelligence” to its reading of a plaintiff’s complaint, we do not require a defendant to perform an independent investigation into a plaintiff’s indeterminate allegations to determine removability and comply with the 30-day periods of 28 U.S.C. §§ 1446(b)(1) and (b)(3). Thus, a defendant is not required to consider material outside of the complaint or other applicable documents for facts giving rise to removability, and the removal periods of 28 U.S.C. §§ 1446(b)(1) and (b)(3) are not triggered until the plaintiff provides facts explicitly establishing removability or alleges sufficient information for the defendant to ascertain removability.

Id. at *20-21 (citations omitted).

This ruling provides some welcome flexibility to defendants when they are unable to readily ascertain information necessary for removal, typically the amount in controversy.  I agree with the court’s observation, however, that “in most cases, defendants will likely remove as soon as the existence of federal jurisdictional predicates becomes apparent.”  Id. *29.

The Local Action Doctrine: Potentially Relevant to Property Insurance Cases?

Posted in Property Insurance

Have you ever heard of the local action doctrine?  The distinction between local and transitory actions?  If you’re a lawyer, you might have heard something about this in law school.  But perhaps not since then.  The Supreme Court has not addressed it since 1912.  But the Ninth Circuit held last week that the local action doctrine required dismissal of a putative class action for lack of jurisdiction.  Eldee-K Rental Properties, LLC v. DIRECTV, Inc., No. 11-17994, 2014 U.S. App. LEXIS 6510 (9th Cir. Apr. 9, 2014).  If the Ninth Circuit is correct that this doctrine remains valid and is a jurisdictional requirement, could it potentially apply to property insurance cases in some jurisdictions?  Determining the answer to that, based on the Ninth Circuit’s method of analysis, could require extensive research of state law in the applicable jurisdiction, delving back many years.  However, the doctrine, to the extent applicable, would only apply where a property insurance lawsuit is brought outside of the federal district where the property is located.

In Eldee-K Rental Properties, the plaintiff, which owns an apartment building in Hartford, Connecticut, brought a putative nationwide class action lawsuit against DIRECTV.  The suit sought to challenge a practice whereby DIRECTV will install a satellite dish on an apartment building if the tenant signs a form stating that the landlord verbally approved the installation, or that approval is not required under the rental agreement.  I’m guessing that the plaintiff’s theory was that many tenants either do not bother to read the form, or sign the form without actually having permission from their landlord.  One might argue that the landlord benefits from having satellite TV available.  But apparently this landlord did not want the dish.  A bunch of these dishes on one apartment building can sometimes be an eyesore.  But that was not what the Ninth Circuit was dealing with.  The issue was whether this lawsuit could properly be brought all the way across the country in the Northern District of California, given that the plaintiff’s apartment building was in Connecticut.  (Plaintiff sought to apply California law to a nationwide putative class.)  DIRECTV argued that, under the local action doctrine, because the claims in essence involved trespass on real property, there was no federal jurisdiction in California.  And the Ninth Circuit agreed.

The Ninth Circuit’s opinion traces the origins of the local action doctrine to pre-15th century England.  At that time, jurors relied on their personal knowledge to decide disputes, with no witness testimony, and thus suits had to be brought locally where people would have heard of whatever the dispute was.  Deciding cases based on local rumors and hearsay was eventually, and wisely, eliminated.  But a remaining vestige of this ancient practice was that at least some cases involving real estate had to be brought only where the real estate was located.  An early decision by Chief Justice John Marshall, sitting as a circuit judge, adopted this local action rule as a matter of federal common law.  The Supreme Court confirmed its continued existence in the late 19th century, and the Ninth Circuit concluded last week that the Supreme Court’s 19th century precedent was still binding today (even though it is not embodied in any of the federal jurisdictional statutes).

According to the Ninth Circuit opinion, state law governs the issue of whether an action is local or transitory in nature.  The opinion held that, under California law, claims for violation of the California Unfair Competition Law and for negligence were “local” in nature because they arose from injury to real property, i.e., an unauthorized installation of a satellite dish.  The suit therefore could only be brought where the property was located.  (Ironically, the “local” satellite dish downloads television programming from around the world via a massive device that orbits the Earth, and that neither a 15th century juror nor Chief Justice Marshall could ever have imagined.)

So what does all of this have to do with property insurance, or with class actions involving property insurance?  Well, here are some questions this decision raises in my mind:  Is there any state in which a “local” action (based on the old distinction between “local” and “transitory” actions) would encompass a property insurance dispute, in which the issues focus on damage to real property?  Or is a contract dispute universally considered a transitory suit even if it involves real property?  What if the suit is brought against both a tortfeasor who caused property damage as well as a property insurer (if both can properly be sued in the same lawsuit)?  How does the local action doctrine interact with the Class Action Fairness Act (an issue not addressed in Eldee-K)?  Would state law differences in defining local vs. transitory actions be another basis for defendants to argue that class treatment is improper in multistate or nationwide class actions?  Perhaps these are just ruminations most appropriate for a law school final exam question.  But maybe not.