Buffington v. The Progressive Corporation

Background

Steven Buffington brought the action individually and on behalf of a proposed class against Progressive Advanced Insurance Company, Progressive Casualty Insurance Company, Progressive Specialty Insurance Company, and Progressive Max Insurance Company, which the order collectively calls “Progressive.” The dispute concerns New York personal automobile insurance policies and total-loss claims. Buffington alleged that Progressive was required under its policy language and New York law to pay full New York sales tax, but paid no sales tax on some claims and less than 8% of the assigned actual cash value on others.

The court had previously certified a class against Progressive Advanced Insurance Company. Buffington later amended the complaint to add the other Progressive entities and proposed a settlement class covering individuals with qualifying New York policies and total-loss claims from September 10, 2014, through March 27, 2024, the date of the order. The order states that the parties had conducted discovery, litigated class-certification and summary-judgment motions, and reached the settlement with help from an experienced mediator.

Preliminary Approval and Settlement Class

The court preliminarily approved the settlement agreement. It found, based on its preliminary review, that the negotiations occurred at arm’s length, that there had been sufficient discovery, that the agreement had no obvious deficiencies, and that there was no evidence of fraud or collusion. The court also found that the settlement appeared to fall within the range of possible approval under Federal Rule of Civil Procedure 23(e)(2).

The court conditionally certified the following class for settlement purposes only: individuals with personal automobile insurance policies issued in New York and underwritten by one of the four named Progressive entities who, between September 10, 2014, and March 27, 2024, made a comprehensive- or collision-coverage claim adjusted as a total loss, settled on an actual-cash-value basis, and either received $0 in New York sales tax or received less than 8% of the vehicle’s assigned actual cash value in sales tax. The order refers to the complete exclusions in the settlement agreement rather than listing them.

The court explained that Buffington and other “Unpaid Insureds” would have the opportunity to recover 77.5% of their sales-tax payments under the settlement. “Underpaid Insureds” would have the opportunity to recover up to 100%, but not less than 77.5%, of their sales-tax payments. The court found the different treatment appeared reasonable because Progressive asserted that Unpaid Insureds were not entitled to any sales-tax payment, while Underpaid Insureds may have been entitled to payments but received less than the 8% amount used in the settlement.

Notice, Claims, and Objections

The court approved the proposed mail notices, email notices, long-form notice, claim forms, and electronic claim form without material alteration, subject to possible modification by agreement of the parties and court approval. It directed that notice and claim forms be sent according to the settlement agreement and appointed Simpluris, Inc. as the third-party settlement administrator. Progressive must pay the costs of distributing notice and administering the settlement.

Class members who want to participate must submit a paper claim form by the claims-submission deadline or an electronic claim form by 11:59 p.m. Eastern on that date. Class members may exclude themselves by submitting a timely, individually executed written request. Those who timely exclude themselves will not share in the settlement, will not have rights under the settlement agreement, and will not be bound by a final order or judgment approving it.

Class members who do not exclude themselves may object. The order requires objections to be mailed to the settlement administrator and filed with the court by July 16, 2024, and requires information including the objector’s identity, proof or information showing class membership, the specific reasons for the objection, and whether the objector intends to appear at the fairness hearing. Additional information is required from objectors who intend to speak or present evidence.

Schedule and Disposition

The court scheduled the fairness hearing for August 6, 2024, at 10:00 a.m. At that hearing, the court would consider whether to grant final approval of the settlement as fair, reasonable, and adequate; whether to enter a final order and judgment; and the amount of any attorneys’ fee, expense, or service award. The order states that the proposed final judgment would dismiss the action with prejudice and on the merits, but the court did not enter that final judgment in this order.

The order set July 16, 2024, as the deadline to opt out or object, July 30, 2024, for the administrator to file notice-completion materials and related lists, and August 21, 2024, as the claims-submission deadline. All other proceedings were stayed except limited proceedings needed to implement the settlement. Judge Vincent L. Briccetti issued the preliminary-approval order; the order did not finally approve the settlement or decide the underlying sales-tax claims on the merits.