Taqueria El Primo LLC v. Farmers Group, Inc.

Background

The plaintiffs brought a class action against Illinois Farmers Insurance Company, Farmers Insurance Exchange, Farmers Group, Inc., Truck Insurance Exchange, Farmers Insurance Company, Inc., and Mid-Century Insurance Company. They alleged that the defendants sold automobile insurance in Minnesota while entering agreements with health care providers that prevented those providers from billing the defendants for care given to the defendants’ insureds. According to the plaintiffs, the defendants did not disclose these billing limitations, which allegedly restricted insureds’ ability to obtain care from providers of their choice and violated Minnesota law, including the Minnesota No-Fault Insurance Act.

The plaintiffs sought monetary damages and injunctive relief. The court had previously certified an Injunctive Class under Federal Rule of Civil Procedure 23(b)(2) and a Damages Class under Rule 23(b)(3) for some claims. The class had not yet been notified, however, because the parties had not resolved their dispute over the proposed class-notice forms and plan.

Motions and governing principles

The defendants filed a motion for summary judgment and three motions to exclude expert testimony. The plaintiffs filed a partial motion for summary judgment on behalf of the Damages Class, a motion for summary judgment on behalf of the Injunctive Class, and two motions to exclude expert testimony.

The court explained that Rule 23(b)(3) requires notice to class members and an opportunity to opt out. That notice is intended to protect due-process rights. A decision on the merits before notice generally would bind only the named plaintiffs, not absent class members. The court also explained that deciding the motions before notice could undermine or nullify the earlier class-certification order and could create an unfair situation in which potential class members wait to see the merits outcome before deciding whether to participate.

The court noted that there is no absolute rule prohibiting summary judgment before class notice. In some cases, a defendant may choose to accept the risk that a favorable judgment will not bind absent class members. Here, however, the court found little benefit in resolving the motions before notice. The parties and court had already invested substantial time and resources in class certification, and deciding the motions early could cause additional litigation or a new class action if the class were undermined. The court also found substantial overlap among the summary-judgment motions and between the Damages Class’s and Injunctive Class’s claims. Because the expert testimony was central to the summary-judgment motions, the court concluded that the expert motions should be considered together with the summary-judgment motions.

Ruling

The court declined to decide any of the summary-judgment motions or motions to exclude at that time. It ordered the following:

- Defendants’ motions to exclude expert testimony, Docket Nos. 342, 346, and 349, were DENIED without prejudice as premature. - Plaintiffs’ motions to exclude expert testimony, Docket Nos. 359 and 376, were DENIED without prejudice as premature. - Defendants’ motion for summary judgment, Docket No. 368, was DENIED without prejudice as premature. - Plaintiffs’ partial motion for summary judgment on behalf of the Damages Class and motion for summary judgment on behalf of the Injunctive Class, Docket No. 386, were DENIED without prejudice as premature.

The parties may refile their motions within 30 days after the period for a putative class member to opt out of the class action has expired. The opinion did not decide the merits of the parties’ claims or defenses.