No class action over Liberty’s adjustment of totaled cars - 9th Circ

No class action over Liberty’s adjustment of totaled cars – 9th Circ

Smashed cars litter at the scene of an earlier multi-car and truck pile up the Pennsylvania Turnpike near the Bensalem interchange in Pennsylvania. REUTERS/Tom Mihalek

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(Reuters) – Owners of totaled vehicles can’t bring a class action against Liberty Mutual or its valuation contractor for using a vague “condition adjustment” to reduce the amount it offers to pay on a claim, a federal appeals court held Friday in a case with implications for other insurers facing similar lawsuits.

The 9th U.S. Circuit Court of Appeals said a class action against Liberty and CCC Intelligent Solutions would be “unmanageable” because each individual plaintiff would have to show that they received less than their vehicle was worth.

The decision affirms a lower-court win for Liberty, represented on appeal by Ted Boutrous Jr of Gibson Dunn & Crutcher and others, and CCC Intelligent Solutions Inc, which provides claims-valuation services and software to the insurance industry, represented by former U.S. Solicitor General Gregory Garre and a team from Latham & Watkins.

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The 9th Circuit said the district court judge in Tacoma correctly applied “the old basketball phrase, ‘no harm, no foul’” to deny class-action status to the lawsuit for breach of contract and unfair trade practices, filed by Hagens Berman Sobol Shapiro on behalf of Leeana Lara and Cameron Lundquist.

“If there was no injury, then there was no breach of contract or unfair trade practice,” and “figuring out whether each plaintiff was injured would be an individualized process,” Circuit Judge Ryan Nelson wrote for the 9th Circuit.

Lara and Lundquist had argued that a class action was appropriate because the un-itemized condition adjustments violate Washington state insurance regulations.

“But that’s an argument for the Washington insurance commissioner,” Nelson wrote, joined by Circuit Judges Ronald Gould and Mark Bennett.

John DeStefano of Hagens Berman, who argued the appeal for Lara and Lundquist, said Friday they are “evaluating options” but had no other comment.

Boutrous referred requests for comment to Liberty Mutual, which declined to discuss the litigation.

In a joint statement, CCC’s lawyers at Latham called the decision “particularly impactful in light of numerous putative class actions – all involving similar claims against CCC and its insurer customers – that are still pending.”

The 9th Circuit put three of those actions – against CCC, Allstate, Geico, and USAA – on hold last summer, pending its decision in the Liberty Mutual case, the Latham team said.

The case is Lara et al. v. First National Insurance Co et al., 9th U.S. Circuit Court of Appeals, No. 21-35126.

For Lara et al: Steve Berman, Robert Carey, and John DeStefano III of Hagens Berman Sobol Shapiro

For First National et al.: Theodore Boutrous and Bradley Hamburger of Gibson, Dunn & Crutcher; James Morsch of Saul Ewing Arnstein & Lehr; John Silk of Wilson Smith Cochran Dickerson

For CCC: Gregory Garre, Marguerite Sullivan, and Jason Burt of Latham & Watkins

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