A New Jersey appeals court last week upheld the denial of class certification to plaintiffs with claims against automotive insurers relating to the diminished value of policyholders’ vehicles. See Myska, et al. v. New Jersey Manufacturers Insurance Co., et al., No. A-4398-13T4 and A-0275-14T4 (Super. Ct. N.J.).
Plaintiffs had been involved in separate accidents with uninsured or underinsured drivers, and were unhappy with the response of their insurance companies. What will be of interest to our readers is the class action legal issue. We have extolled the importance and value of motions to strike class allegations and other procedural mechanisms for getting the class action issue resolved as early as possible, before expensive and wasteful discovery (even bifurcated class discovery). Here, prior to discovery, the Law Division judge concluded class certification was improper. And after review, the appeals court affirmed the denial of class certification, agreeing the controversy did not lend itself to a class action because the facts underpinning each plaintiff’s claims were dependent upon the individual insurance policy provisions, the distinct vehicle damaged and the specific calculation of damages alleged, which require separate litigation of every action.
The court noted that no precise procedures are established for granting or denying class certification at the incipient stage of litigation. Rather, the NJ rules state “the court shall, at an
early practicable time, determine by order whether to certify the action.” Rule 4:32-2(a). The court rejected the view that would preclude dismissal, following the required analysis, when a court determines alleged claims do not properly lend themselves to class certification. The certification test does not merely turn on the stage of the litigation. Rather, dismissal is dependent on the nature of the claims and the propriety of their presentation as a class action. Thus, said the court, “we flatly reject plaintiffs’ urging to impose a bright-line rule prohibiting examination of the propriety of class certification until discovery is undertaken.”
Here, individualized facts and circumstances of the relationship between each insurer and its insured precluded a finding of predominance. And the court also noted that the individual claims were not so small (approx. $15,000) as to make separate litigation impossible.