recently upheld the denial of class certification in a § 17200 case
alleging deceptive marketing of insurance products, on the ground that the
defendant did not use a common marketing strategy, and therefore "whether
any proposed class member actually heard any alleged misrepresentation was
an issue incapable of common proof, requiring denial of the class
A copy of the opinion is available at:
The appellate court noted that, under the California Unfair Competition
Law (Bus. & Prof. Code § 17200), the putative class plaintiffs were
required to prove only that the alleged misrepresentations made to the
public were likely to deceive, not that members of the public were
actually deceived, relied on the misrepresentation, or suffered damages.
See In re Tobacco II Cases (2009) 46 Cal. 4th 298. However, the appellate
court also noted that "when the class action is based on alleged
misrepresentations, a class certification denial will be upheld when
individual evidence will be required to determine whether the
representations at issue were actually made to each member of the class."
The appellate court first addressed the plaintiffs' argument that there
was a common marketing scheme generated from the defendant's headquarters.
The defendant presented evidence contradicting this argument, and the
trial court found the defendant's evidence persuasive.
The appellate court affirmed the trial court's decision, based in part on
the holding in Kaldenbach v. Mutual of Omaha Life Ins. Co. (2009) 178 Cal.
App. 4th 830. In Kaldenbach, the court affirmed denial of class
certification in an action brought against an insurance provider based on
evidence that, although the insurance agents were provided with sales
presentations and illustrations, the agents were also "taught to tailor
their presentations to each customer." The appellate court therefore
found that because "the trial court determined, based on substantial
evidence, that the alleged misrepresentations of permanence were not
commonly made to members of the class," the denial of class certification
must be upheld.
The appellate court also affirmed that the materiality of the alleged
misrepresentations was not subject to common proof. While acknowledging
that materiality is determined based on an objective standard, the
appellate court agreed with the trial court that "the issue is nonetheless
subject to individual proof under the circumstances of this case."
The Court noted that the plaintiffs "assume that anyone who purchases
universal insurance does so because of one such difference [from term
insurance]: a universal policy (if sufficiently funded) can be permanent,
while term insurance is not." However, because "there are many other ways
in which universal insurance varies from term insurance," and the
policyholders "may have purchased their insurance for any of these
reasons," the materiality of the alleged misrepresentations made by
insurance agents was not subject to common proof.
Accordingly, the trial court's order denying class certification was
affirmed, and the appellate court remanded the matter for further
proceedings consistent with its opinion.
Ralph T. Wutscher
McGinnis Tessitore Wutscher LLP
The Loop Center Building
105 W. Madison Street, 18th Floor
Chicago, Illinois 60602
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