Preliminary Injunctions in Insurance Class Actions: Is Losing "Peace of Mind" from Insurance Irreparable Harm?

Posted on July 27, 2012 by Wystan M. Ackerman

Two recent California federal court decisions have held that insureds’ loss of “peace of mind” when life insurance policies lapse constitutes irreparable harm sufficient to warrant granting a preliminary injunction where the other requirements for a preliminary injunction are found to be satisfied.  In an April 26, 2012 blog post, I wrote about Yue v. Conseco Life Ins. Co., 2012 U.S. Dist. LEXIS 46565 (C.D. Cal. Apr. 2, 2012), a Central District of California decision granting a preliminary injunction against Conseco Life, in favor of a class of life insurance policyholders.  The court concluded that, although money damages could compensate heirs if a policy was improperly cancelled, a policyholder’s loss of “peace of mind” and “security” from lapse of the policy would constitute irreparable harm.  A judge in the Northern District of California has now reached essentially the same conclusion with respect to irreparable harm in another class action, also brought against Conseco Life.  From the perspective of the insurance industry, this is a potentially disturbing trend if it continues.

The Northern District of California case, In re Conseco Life Insurance Company Life Trend Insurance Marketing and Sales Practice Litigation, No. C 10-02124 SI, 2012 U.S. Dist. LEXIS 99859 (N.D. Cal. July 17, 2012) involves a claim that Conseco improperly increased cost of insurance (COI) charges on “LifeTrend 3” and “LifeTrend 4” policies, allegedly in breach of the terms of the policies.  The increased COI charges, when implemented, likely would result in some class members allowing their policies to lapse because they could not afford to pay what would be necessary to keep their policies in force.  A central issue in dispute was whether, as a matter of contract interpretation, an increase in COI rates could be based only on an increase in mortality rates, which had not occurred (according to the opinion, mortality rates had gone down since the class members’ policies were issued).  The court found that the plaintiffs were likely to succeed on the merits of their breach of contract claim because it found the particular policy language at issue ambiguous on this point and, in the absence of relevant extrinsic evidence, construed the policy against the insurer.  Id. at *25-32.

The portion of the opinion that I see as potentially having a broader impact on the industry was the court’s analysis of irreparable harm.  The court granted an injunction with respect to one subgroup of policyholders and denied an injunction for a second group.  The court’s analysis focused on the “peace of mind” that life insurance potentially can provide, reasoning as follows:

With respect to the first subgroup — those whose accumulation account values will be exhausted before the end of trial — the Court agrees with th[e] analysis [of Judge Motz of the Central District of California], and adopts it here. For this subgroup, the fact that the policyholders will lose their insurance without substantial payments constitutes irreparable harm. This is particularly true for those plaintiffs who cannot afford the substantially increased COI charges. For example, plaintiff Myrna Noland will soon be charged $472 per month, and her account will be depleted by the end of next year. Browne Decl. ¶ 19. According to her supplemental declaration, she is unable to afford these payments. Noland Decl. ¶ 4. She, like others in the subgroup, will lose the peace of mind that comes with life insurance. That loss cannot be remedied by money damages after the fact.

Conseco  argues that plaintiffs have not provided evidence that all of the one hundred members in the first subgroup will find the payments unaffordable, or otherwise provide evidence that all of them will face irreparable harm. Def.'s Opp. at 19. That is not necessary. Plaintiffs have provided three declarations from the first subgroup, all of whom have stated that they cannot afford the payments now. Noland Supp. Decl. ¶ 3; Sroka Decl. ¶ 9; Fowler Decl. ¶ 7. Between this evidence and plaintiffs targeted subgroup, they have sufficiently demonstrated the affiants are representative of the subgroup. See LaForest v. Former Clean Air Holding Co., 376 F.3d 48, 57 (2nd Cir. 2004) (affirming district court's acceptance of six affidavits on behalf of six hundred classmembers). The Court does not find it necessary that the plaintiffs declare that all one hundred are unable to afford the increased payments. Even if some could technically afford the payments, many may be unwilling to do so for fear of diverting funds from other, more pressing expenses. They will still lose their life insurance before trial. Indeed, Judge Matz issued a preliminary injunction covering the entire class - not, as here, a small, targeted group of policyholders who will face complete depletion of their accounts before the end of trial.

For the second subgroup — those who are facing COI charges in excess of $400 per month but whose accounts will not be depleted before trial — the Court finds that plaintiffs have not established a likelihood of irreparable harm. This group will not be required to make additional payments in order to keep their insurance. That they face a difficult decision as to whether to surrender now and retrieve the guaranteed cash value of their accumulation accounts or continue to incur high COI charges is a type of harm, but it does not rise to the level of those who will lose their insurance without affirmative payment. The members in this group, like Brady and McNamara, still have a choice to remain insured; and, if they so choose and plaintiffs prevail at trial, they will likely receive monetary damages that can remedy the harm. Nobody in the second subgroup will lose their insurance due to inability to pay, nor have to divert funds from other of life's necessities to keep their insurance. See Los Angeles Mem'l Coliseum Comm'n v. Nat'l Football League, 634 F.2d 1197, 1202 (9th Cir. 1980) ("It is well established . . . that such monetary injury is not normally considered irreparable."). The Court therefore finds that preliminary injunctive relief is inappropriate for this subgroup.

Id. at *39-42 (emphasis added).

The Yue and In re Conseco Life decisions, if followed, have the potential to make insurers more susceptible to preliminary injunctions than other large corporations, based on a rationale that seems weak to me.  To the extent that insurance provides policyholders with peace of mind, that is because they expect that, when they die (in the case of a life insurance policy) or when some other type of covered event occurs (in the case of other types of policies), money will be paid by the insurer.  To conclude that cancellation or lapse of a policy causes irreparable harm, where it can easily be remedied by payment of monetary damages equivalent to what would have been paid if the policy had remained in effect, seems inconsistent with the basic definition of irreparable harm.  This rationale also seems to treat insurers differently from other kinds of businesses that consumers also can place some trust and confidence in.

Preliminary Injunctions in Insurance Class Actions: California Federal Court Enjoins Life Insurer From Implementing Rate Increase

Posted on April 26, 2012 by Wystan M. Ackerman

Preliminary injunctions in insurance class actions are relatively rare, which is why the recent decision granting such an injunction in Yue v. Conseco Life Ins. Co., 2012 U.S. Dist. LEXIS 46565 (C.D. Cal. Apr. 2, 2012), caught my attention.  The case involves life insurance products sold by Conseco Life that apparently became a particularly bad deal for the company.  There were fewer policy terminations than projected, and the death benefits projected to be paid out would result in substantial losses to the company.  (The business lesson here may be not to rely on such an assumption that many people will not continue to hold their policies.)  The policy had the following provision allowing a change in cost of insurance (COI) charges, which the company tried to take advantage of:

Current monthly cost of insurance rates will be determined by the Company based on its expectation as to future mortality experience.  Any change in such rates will apply uniformly to all members of the same age, sex, and premium class.

Id. at *2.  Conseco first tried to impose a future rate increase starting in the 21st year of policies, which would rein in its projected losses, but not result in any profits.  The court rejected that approach in a summary judgment decision, holding that the policy provision only allowed immediate, “current” changes, not future changes in rates, and that “expectation as to future mortality experience” was limited to increases in the rate of deaths, not increases in the payment of death benefits due to lower policy termination rates.

Conseco then tried another approach in 2011, implementing immediate and substantial rate increases for the vast majority of policyholders.  If, for example, the mortality rate for a particular class of policyholders was 47.466 per 1000 policyholders, the rate would become $47.466 per $1000 of coverage.  These rate increases were implemented notwithstanding that morality rates for the vast majority of policyholders had decreased.

The court came down hard on Conseco’s second attempt to implement a rate increase.  It certified a class of those policyholders who had not surrendered their policies, finding Rule 23(b)(2) certification proper because the class was seeking only injunctive and declaratory relief preventing implementation of the rate increase.  The court concluded that “[a]ny monetary relief sought by the class, such as the return of any additional COI charges deducted after the rate increase, would be incidental to the equitable relief sought by Plaintiff.”  Id. at *27.  The court also indicated that it would consider certification of a class of policyholders who had surrendered their policies if an appropriate representative of that proposed class joined the suit. 

The court went on to grant a preliminary injunction.  It found a likelihood of success on the merits because it concluded that the policy provision quoted above likely did not allow a rate increase where it was the insurer’s expected losses, not actuarial mortality rates, that were increasing.  The court explained that “in order to ‘base’ COI rates on expected mortality rates, Conseco must consider the relationship between current and past expected mortality rates and determine how those rates have changed.”  Id. at *35.

What I found most significant was the court’s finding of imminent irreparable injury in a manner that seems to have potentially broader application:

The Court finds that without a preliminary injunction, policyholders are likely to suffer imminent irreparable harm. It is common knowledge that people purchase insurance policies for "security" and "peace of mind." See Weinberger v. Wiesenfeld, 420 U.S. 636, 642, 95 S. Ct. 1225, 43 L. Ed. 2d 514 (1975) (comparing social security benefits to insurance because they provide "security" and "peace of mind"). In the context of life insurance, the "security" being purchased is the knowledge that the policies' designated beneficiaries will be left with some degree of financial support when the insured passes away. When policyholders face large, unanticipated increases in charges, the "peace of mind" they paid for is irreparably lost — instead, they are left with stress, anxiety, and uncertainty regarding the state of their life insurance.

 . . .

If a policyholder surrenders her account while this case is pending, she may never be made whole, even if Plaintiff is ultimately successful in this case. Some surrendered policyholders may pass away without life insurance, resulting in their having suffered an emotional injury — failure to provide for their loved ones — that no monetary award could ever compensate. Others may be eligible for reinstatement but may have purchased a policy with another insurer, making it difficult to calculate damages. Still others may have invested their accumulation accounts elsewhere, making reinstatement impossible. These are but some of the irreparable injuries that may result. The Court recognizes that the aforementioned injuries are speculative, but these are not the injuries that warrant a preliminary injunction here. The immediate irreparable threat common to all class members is that without a preliminary injunction, they will be deprived of the opportunity to make an informed decision that would help them avoid the above scenarios. In other words, if Plaintiff is correct, policyholders are currently being forced to make a choice that they should not have to consider in the first place. Monetary damages cannot turn back time and return to any class member the right to be free from being compelled to make a choice that would prevent irreparable harm. It is precisely this type of situation that warrants preserving the status quo until a decision is made on the merits.

Id. at *40-43 (boldface added).

What troubles me is that, aside from bad faith claims, which the court is not dealing with here, the concept that people buy insurance for “security” and “peace of mind” is not something that the law of contracts generally finds to be relevant to judicial analysis, let alone grounds for a preliminary injunction.  There are all kinds of situations in which “security” and “peace of mind” are factors in consumer relationships with businesses.  When people put money in a bank they presumably do so because they have a sense of security that the bank is a better place than holding cash in a safe at home, and they have some sense of security in the bank they choose (and perhaps the FDIC).  When the court talks about people dying without life insurance and sustaining a non-compensable emotional injury (presumably pre-death?), again I’m wondering why that is not the kind of loss that money damages really can compensate – all the beneficiaries would be entitled to is money, i.e., the policy proceeds, and those can be paid later, with interest.  Difficulty in calculating damages also is typically not grounds for an injunction.  Preliminary injunctions are appealable as of right, and perhaps the Ninth Circuit will weigh in here.

Injunctions of State Court Proceedings Pending Approval of a Proposed Class Action Settlement in Federal Court: Injunction Issued in Chinese Drywall MDL

Posted on July 05, 2011 by Wystan M. Ackerman

When a federal court grants preliminary approval to a proposed class action settlement, can it enjoin parallel state court proceedings while the notice and final approval process take place?  Judge Fallon of the Eastern District of Louisiana recently found such an injunction appropriate in In re Chinese-Manufactured Drywall Products Liability Litigation, 2011 U.S. Dist. LEXIS 62222 (E.D. La. June 9, 2011). 

In this case, a proposed class action settlement was reached between the Plaintiffs’ Steering Committee and Interior Exterior Building Supply, LP, Arch Insurance Company and Liberty Mutual Fire Insurance Company, involving tendering the policy limits for the coverage provided by Arch and Liberty Mutual.  Southern Homes, LLC, a homebuilder, had also sued Interior Exterior in Louisiana state court in Orleans Parish, and had a summary judgment motion pending in state court when the federal class action settlement came up for preliminary approval.

Judge Fallon’s opinion focuses on the exception to the Anti-Injunction Act that allows a federal court to enjoin state proceedings “where it is necessary in aid of jurisdiction.”  The opinion states that ordinarily this exception is applicable where the federal court has in rem jurisdiction, and is rarely applicable to in personam jurisdiction.  Judge Fallon explains that there is a circuit split on the question of whether, or under what circumstances, such an injunction is appropriate in aid of an MDL court’s jurisdiction given the nature and complexity of MDL proceedings.  Judge Fallon concludes that the injunction in the Chinese Drywall litigation was appropriate because the MDL proceeding was analogous to an in rem proceeding:

The Court finds that a conceptional res has been created in this MDL litigation, as evidenced by the complexity of the proceedings and claims, the fact the litigation has been underway for almost two years, and the substantial amount of effort and expense put into the litigation by the parties and Court alike. The MDL litigation, as it more specifically pertains to the present Motion, is sufficiently progressed: the parties have engaged in extensive discovery and depositions, a motion for class certification seeking to create a class with claims against InEx was filed and set for hearing, a trial against InEx was scheduled and a case management order issued, and most importantly, the InEx Settlement Agreement is a class action settlement agreement of the InEx-related claims, the Court has preliminarily approved this Agreement, and notice is in the process of issuance. Additionally, an actual res has been created now by the InEx Settlement Agreement which involves the tendering of all of InEx's primary insurance coverage. Because there is a possibility that Southern's state court hearing and proceedings could affect and potentially disrupt the InEx Settlement Agreement and the res created thereby, these proceedings should be stayed. Notably, the stay is only temporary and contingent upon the successful final approval by the Court of the InEx Settlement Agreement; thus, in the case the Court does not give its final approval, Southern will then be free to pursue its state court case against InEx, and if the Agreement is finally approved then presumably Southern will benefit as a class member or choose to opt-out.  (In re Chinese-Manufactured Drywall Litigation, 2011 U.S. Dist. LEXIS 62222, at *18-19.)

This is an important issue because when a class action settlement is reached, both sides understandably want to bring other litigation on the same issues to a halt, both to avoid litigation costs and to prevent developments in parallel litigation that might impact the settlement or its approval.  The availability of this kind of temporary stay to allow a proposed class action settlement to be considered should not depend on whether the litigation is an MDL or other complex litigation, or how much work has been done in the case.  An amendment to the Anti-Injunction Act or to the Federal Rules of Civil Procedure might be appropriate to address this narrow but important issue. 

 

Seventh Circuit Injunction Against Repetitive Class Action Remanded For Reconsideration In Light Of Smith v. Bayer

Posted on June 29, 2011 by Wystan M. Ackerman

On the final day of the Supreme Court term, the Court vacated and remanded the Seventh Circuit’s decision in Thorogood v. Sears, Roebuck & Co. for reconsideration in light of the Court’s opinion in Smith v. Bayer Corp. (see my blog post on Smith).  In Thorogood, the Seventh Circuit, after previously ruling that class certification was improper, subsequently had instructed the federal district court to issue an injunction against a copycat class action on the same issue filed by the same plaintiffs’ lawyer, but with a different named plaintiff, in the Northern District of California. 

It will be interesting to see what the Seventh Circuit does in this case.  The Seventh Circuit has been aggressive in trying to address the pressing problem of serial relitigation of class certification on the same issue.  The portion of Smith that addresses the Anti-Injunction Act appears to be clearly inapplicable in Thorogood because in Thorogood the copycat class action was filed in federal court.  But the portion of Smith that says that nonparties may not be bound by denials of class certification could make the injunction in Thorogood improper, unless there is something unique about that case that makes it distinguishable from Smith.

As I blogged about in my post on Smith v. Bayer, the problem of relitigation in class actions is an important one, and, absent Congressional action or an amendment to the Federal Rules of Civil Procedure, it likely will take some creative lawyering and judges willing to develop new law if this problem is going to be solved. 

Smith v. Bayer Corp. Opinion: Potential Impact on Insurance Class Actions

Posted on June 17, 2011 by Wystan M. Ackerman

The Supreme Court failed to take the opportunity to resolve the pressing problem of relitigation in class actions, but suggested some potential solutions.  On June 16, the Supreme Court issued its opinion in Smith v. Bayer Corp., addressing whether a federal court, after denying class certification, can enjoin a state court from adjudicating a putative class action on the very same issue.  Unfortunately, the result was not what corporate America had hoped for.  In a unanimous opinion authored by Justice Kagan, the Court held that, at least in the vast majority of circumstances, such an injunction is not available.  

The case involved the relitigation exception to the Anti-Injunction Act, under which a federal court can enjoin a state court from relitigating issues fully and finally decided by a federal court.  Applying this exception involves an issue preclusion (collateral estoppel) analysis, focusing on: (1) whether the issue presented to the state court is the same as the issue previously decided by the federal court; and (2) whether the plaintiff in the state case was a party to the federal case or a nonparty that can be bound (such as a nonparty that was in privity with a party to the federal case). 

The Court concluded that: (1) the issue of whether to certify a class in state court is not identical to the issue of whether to certify a class in federal court if the state has a different class action rule, or even if the text of the state rule is identical, but the state supreme court applies the rule differently; and (2) a putative class member in a case in which class certification is denied is not a “party” or the kind of nonparty that can be bound by a denial of certification.  The Court concluded that “[n]either a proposed class action nor a rejected class action may bind nonparties.”  (Slip op. at 15.)

This opinion has not gotten much attention in the media or blogs from what I can find.  There was a short AP piece published in the Washington Post and other places, but it doesn’t say much. 

I found most interesting the Court's discussion of the problem that is presented, for corporate defendants and the legal system, by allowing plaintiffs' lawyers to keep pursuing class certification on the same issue, even after certification has been denied multiple times:

Bayer’s strongest argument comes not from established principles of preclusion, but instead from policy concerns relating to use of the class action device.  Bayer warns that under our approach class counsel can repeatedly try to certify the same class “by the simple expedient of changing the named plaintiff in the caption of the complaint.”  Brief for Respondent 47-48.  And in this world of “serial relitigation of class certification,” Bayer contends, defendants “would be forced in effect to buy litigation peace by settling.”

The Court suggested several solutions to this problem:

  1. Stare decisis and comity among courts can mitigate the problem of repetitive class action litigation.  The problem I see here is that this does not help when you have a few "rogue" state courts that largely ignore what the federal courts and majority of state courts are doing on class certification.  These states become meccas for class action litigation, particularly against insurers.
  2. The Court concluded that CAFA might solve the problem because "Congress enabled defendants to remove to federal court any sizable class action involving minimal diversity of citizenship."  (Slip op. at 17.)  This might work, as long as the federal courts do not allow gamesmanship by plaintiffs’ lawyers seeking to frame their cases so that numerous $4.9 million class actions can be brought in state courts in places favorable to class certification.
  3. The Court suggested, in footnote 12, that Congress could enact a statute, or the Federal Rules of Civil Procedure could be amended, so as to restrict relitigation of class certification.  I think those options are worth pursuing and insurance and other industry associations should consider supporting them.

A couple other potential solutions I see are: (1) an effort by the defendant, perhaps through a declaratory judgment claim against a putative class, to try to obtain one final, binding resolution by a federal court on the issue of class certification; and (2) the Supreme Court using the federal Due Process Clause to place some limitations on state court class certification rulings.  On the due process point, there is currently a petition for certiorari pending in Philip Morris USA Inc. v. Jackson, No. 10-735 (docket), involving due process issues in a state court class action. 

Injunctive Relief in Insurance Class Actions: New Third Circuit Decision Raises Interesting Issues

Posted on June 09, 2011 by Wystan M. Ackerman

Can a court certify a class action to decide an insurance coverage issue, and then issue an injunction requiring an insurer to apply the court’s ruling to claims of class members?  A recent Third Circuit opinion danced around that question, without directly taking it on, holding only that the district court could not issue that type of injunction while simultaneously decertifying the class, but purporting to retain jurisdiction to enforce the injunction.

Meyer v. CUNA Mutual Insurance Society involved coverage under a credit disability insurance policy, under which the insurer would cover car loan payments if the insured became totally disabled.  The central issue was how to construe the policy’s definition of “total disability,” which was as follows:

during the first 12 consecutive months of disability means that a member is not able to perform substantially all of the duties of his occupation on the date his disability commenced because of a medically determined sickness or accidental bodily injury. After the first 12 consecutive months of disability, the definition changes and requires the member to be unable to perform any of the duties of his occupation or any occupation for which he is reasonably qualified by education, training or experience.

The plaintiff argued that, after the first 12 months, if an insured was “unable to perform any of the duties of his occupation,” the insured would be totally disabled.  The insurer argued that, after the first 12 months, an insured must show not only that he was unable to perform duties of his or her pre-injury occupation, but also that he or she could not perform duties of “any occupation for which he is reasonably qualified by education, training or experience.”  The district court certified a class on this issue, and then, on cross motions for summary judgment, ruled that the policy language was ambiguous and must be construed in favor of the insured, reasoning that the use of the word “or”  supported the insured’s interpretation, making it a reasonable one.  The district court then entered a permanent injunction requiring the insurer to review claim forms of class members in accordance with the coverage ruling, with the court retaining jurisdiction to resolve future disputes between class members and the insurer through adjudication of motions for contempt.  After entering this injunction, the district court decertified the class, finding that the remaining issues were inappropriate for class treatment.

The propriety of the original certification of the class and the later decertification were not raised on appeal.  The Third Circuit affirmed with respect to the policy interpretation issue, focusing on the word “or” in the definition of “total disability” and agreeing with the district court (this is discussed further on a Pennsylvania appellate law blog).  The Third Circuit, however, vacated the injunction, finding that it was an abuse of discretion to retain jurisdiction to issue the injunction and retain jurisdiction while at the same time decertifying the class – “[o]nce decertification became effective, the District Court had no jurisdiction over any of the claims of the putative class members and therefore no ability to order that any relief be granted to any claimant other than Meyer [the named plaintiff].” 

What is most interesting here is what the Third Circuit did not address.  Insurance coverage issues frequently can be decided as a matter of law (at least where policy language is unambiguous), but the application of any such ruling to the facts of hundreds or thousands of individual claims is typically inappropriate for class treatment.  The unique approach taken by the district court here was procedurally improper because of how it was implemented, but what if the district court had not decertified the class?  What if somehow the class could be re-certified on remand?  Would this approach be viable?  The Seventh Circuit’s decision in Kartman v. State Farm, which I previously blogged about, says the answer is “No.”  The Supreme Court’s forthcoming opinion in Wal-mart v. Dukes, which I also blogged about, likely will speak on this – the Court is expected to address under what circumstances putative classes seeking injunctive/declaratory relief can be certified under Rule 23(b)(2). 

Smith v. Bayer Corp.: Potential Impact on Insurance Class Actions

Posted on April 27, 2011 by Wystan M. Ackerman

I previously posted on Wal-Mart Stores, Inc. v. Dukes.  Another pending Supreme Court case that could affect insurance class actions is Smith v. Bayer Corp., No. 09-1205 (docket).

Smith involves the scope of a federal court’s power to enjoin members of a proposed (not certified) class from continuing to seek class certification on the same issues in state court after a federal court has denied class certification.  The case involves a multidistrict litigation concerning Baycol, a cholesterol-reducing drug that was withdrawn from the market by Bayer.  The federal judge denied class certification, and shortly thereafter a plaintiff in another case filed a motion for class certification in a West Virginia state court.  The federal judge enjoined the plaintiff in the West Virginia state court case from continuing to pursue class certification.  The Eighth Circuit upheld the injunction, and the Supreme Court granted certiorari.  The Class Action Countermeasures Blog set out some highlights from the oral argument. 

The same tactic used by the plaintiffs’ attorneys in Smith happens frequently in insurance class actions – the same insurer is sued on the same issue in various jurisdictions, sometimes by the same plaintiffs’ lawyers, and in some instances they lose many times but keep trying to find a judge somewhere who will certify a class.

If the Court allows these types of injunctions, one unique issue insurers will face is that insurance policies are issued by individual underwriting companies that are part of a family of insurers.  An issue will arise as to whether a denial of class certification against one company can bar another class action on the same issue brought against a different entity that is part of the same corporate family. 

Based on the transcript of the oral argument in the Supreme Court, my guess (it is only a guess) is that the Court will allow these types of injunctions to be issued but may narrow the circumstances under which such injunctions are appropriate.

Justice Ginsburg expressed a concern about a plaintiffs’ attorney being able to keep trying until they find a judge who will certify a class: 

You pick up a different plaintiff, and you go to a different forum.  How – and I guess your answer is that you could go on and on and on until – until maybe you find a judge who will certify this class.  (Transcript, at 17.)

In response to a question from Justice Kagan, plaintiffs’ counsel conceded, that the Class Action Fairness Act was intended to prevent this type of forum-shopping: 

JUSTICE KAGAN:  When – when Congress enacted CAFA, did Congress think about this precise issue, the issue that Justice Ginsburg is raising about a lawyer going from State to State with a different named plaintiff?  Was that – was that part of what Congress was reacting to?

MR. MONAHAN:  Yes, Justice Kagan, it’s my understanding that that was something they were concerned about.  And they were concerned about, again, some States being too permissive in granting class certifications . . . .  (Transcript, at 21-22.) 

Justice Alito also pointed out that there is no due process right to have a class action, and Congress could do away with class actions altogether if it wanted to.  (Transcript, at 23.) 

Justice Ginsburg, however, later suggested to defense counsel that “maybe you could be right about preclusion but wrong about use of the anti-suit injunction” (Transcript, at 33), but that could mean that the state court would be the one deciding the preclusion issue, not the federal court.  Some justices also appeared to be concerned about whether the Court, if it affirmed, would be taking away states’ ability to set somewhat different standards for class certification than the federal standards.  Justice Sotomayor expressed a concern about how these injunctions should be framed narrowly.