Free Motion for Leave - District Court of Colorado - Colorado

Case 1:00-cv-01841-LTB-KLM

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Filed 04/06/2007

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 00-cv-01841-LTB-PAC RICKY EUGENE CLARK, on behalf of himself and all others similarly situated, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, an Illinois corporation, Defendant.

STATE FARM'S SUPPLEMENTAL BRIEF REGARDING HILL V. ALLSTATE IN OPPOSITION TO PLAINTIFF'S PROPOSED AMENDED CLASS DEFINITION

Defendant State Farm Mutual Automobile Insurance Company ("State Farm") hereby submits this supplemental brief, regarding the significance of the Hill v. Allstate Insurance Co. decision, in opposition to Plaintiff's proposed amended class definition. INTRODUCTION Plaintiff asserted at oral argument in this matter that the case of Hill v. Allstate Insurance Co., 479 F.3d 735 (10th Cir. Mar. 6, 2007), compels this Court to conclude: (1) that nonpedestrian claimants have standing to assert claims against State Farm based on the inclusion of the Pedestrian Limitation in State Farm's policies; and (2) that non-pedestrians are thus properly included within the class definition in this case. Hill does not compel either such result. Rather, as explained in more detail below, the Tenth Circuit's position on standing in the circumstances presented by this case is ­ at best ­ ambiguous, and certainly not dispositive of the issue. Moreover, this Court, in the exercise of its discretion, may decide to limit the class definition

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here to pedestrians without reaching the standing issue. For these reasons, the Court is not bound to reach any particular result as a consequence of the Hill decision. ARGUMENT I. The Tenth Circuit's position on standing in the circumstances of the Clark case is ­ at best ­ ambiguous. Plaintiff makes too much of the Hill decision. In that case, the injured claimant at issue was a minor resident relative of the policyholder. Because the claimant was a minor, the case was brought on her behalf by her father. The alleged policy defects at issue were stated as follows: Hill argues that the policy Allstate issued to the [policyholders] was not a complying policy under the No-Fault Act because it failed to explicitly state that pedestrians are eligible for minimum PIP benefits, or that pedestrians and nonresident relative passengers are eligible for extended PIP benefits. Hill, attached as Exhibit 1, at page 5, section I, ¶ 1.1 Allstate argued that the plaintiff lacked standing to complain about the alleged failure to specifically define pedestrians and/or nonresident relative passengers as beneficiaries because the minor child, on whose behalf the plaintiff asserted claims, was neither a pedestrian nor a non-resident relative passenger. Without any material analysis, the Tenth Circuit summarily concluded that "Hill has standing because, in this particular case, the complaint is explicitly framed as a contract/tort action, which raises the factual questions of whether he was offered a compliant policy." Hill at page 5, section I, ¶ 1. This sentence, based upon its wording and its lack of any meaningful explanation for the holding, is simply inscrutable.

Because of the currency of the Hill decision, publication page references are not yet available for the case. To avoid confusion, State Farm has attached the version of the case that it has reviewed, and has cited to the appropriate page of that printout.

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Moreover, the Tenth Circuit adds this footnote immediately after its summary holding on the standing issue, further confusing the issue: We note, however, that several courts have held that a non-pedestrian such as Hill, on behalf of Katelyn, lacks standing to seek reformation on the ground that coverage of pedestrians was allegedly not offered. See Reid v. Geico Gen. Ins. Co., 2006 WL 2844381, at *3 (D. Colo. Oct. 2, 2006); Wilson v. Titan Indem. Co., 2006 WL 2583133, at **1-2 (D. Colo. Sept. 6, 2006). Hill, at page 7, FN5. The Tenth Circuit neither approves nor disapproves of the Reid and Wilson cases, apparently understanding those cases to be distinguishable from the Hill case. This case, as did Reid and Wilson, presents precisely the situation of non-pedestrian plaintiffs seeking reformation on the ground that pedestrian coverage was not offered. Because the Tenth Circuit did not find it necessary to address the propriety of the Reid or Wilson decisions in connection with its conclusion that Hill had standing, the Tenth Circuit's ruling on standing in Hill can only be understood to have no bearing on Reid, Wilson, or Clark. This conclusion is bolstered by the fact that ­ on the very day it issued the Hill opinion ­ the Tenth Circuit also issued an opinion in Padhiar v. State Farm Mutual Automobile Insurance Co., 479 F.3d 727 (10th Cir. Mar. 6, 2007), attached as Exhibit 2. Indeed, the Hill and Padhiar opinions each refer to the other as "another case involving similar, but not identical, issues." Hill at page 7, FN1; Padhiar at page 6, FN1. In Padhiar, the Tenth Circuit explicitly declined to address the issue of standing for non-pedestrians asserting claims based on State Farm's inclusion of the Pedestrian Limitation in its policies: Setting aside whether Padhiar would even have standing to bring a claim based on the pedestrian limitation even though he is not a pedestrian, Padhiar in fact received an offer under § 710 . . . . Padhiar, attached as Exhibit 2, at page 6, column 2, paragraph 1.

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Thus, the Tenth Circuit's position on standing for non-pedestrians to pursue claims based on the inclusion of State Farm's Pedestrian Limitation is ambiguous, at best. The Tenth Circuit apparently concluded that Hill was distinguishable from cases where non-pedestrians bring claims based on the Pedestrian Limitation. At the same time, the Tenth Circuit explicitly declined to reach the very issue presented here in the Padhiar decision. For all of these reasons, the Hill case cannot be construed to require this Court to find that non-pedestrians have standing to assert claims based on State Farm's inclusion of the Pedestrian Limitation in its policies. II. This Court may decide not to include non-pedestrians in the class definition, regardless of whether they have standing to assert claims based on the Pedestrian Limitation. Moreover, this Court need not reach the standing issue. The approval of an appropriate class definition is left to the sound discretion of this Court. See, e.g., Vaszlavik v. Storage Tech. Corp., 175 F.R.D. 672, 684 (D. Colo. 1997) (Babcock, J.) (declining to permit a class definition that was overinclusive). The Court may decide that it would be inappropriate to permit a class definition that contains both pedestrians and non-pedestrians, on grounds that the challenged conduct does not affect the latter category of persons, thus making the class "simply too broad." Vaszlavik, 175 F.R.D. at 685; see also Daigle v. Shell Oil Co., 133 F.R.D. 600, 602 (D. Colo. 1990) ("[t]he important distinguishing characteristic of [a class] . . . is that . . . [its] scope is defined by the activities of the defendants." (quoting Alliance to End Repression v. Rochford, 565 F.2d 975, 978 (7th Cir. 1977))). Thus, regardless of the impact of the Hill case, it would be proper for the Court to limit Plaintiff's proposed class definition to only persons who received benefits as pedestrians.

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CONCLUSION Plaintiffs engage in an overly broad and unduly optimistic reading of the Hill decision, as they have tried to do with the prior Clark decisions from the Tenth Circuit in their earlier briefing on the question of an appropriate class definition. Examining the specific facts and language of Hill, combined with the related decision in Padhiar, the Tenth Circuit simply has never ruled on the issue of whether non-pedestrians have standing to assert claims based on State Farm's Pedestrian Limitation. Thus, this Court is not compelled to conclude that non-pedestrians have standing in this case, or that non-pedestrians are properly included within the class definition. In addition, this Court may decide, in the exercise of its discretion, not to permit the class definition to contain non-pedestrians, without ever reaching the issue of standing. For all of these reasons, and the reasons articulated by State Farm in its briefing and at oral argument, State Farm respectfully requests that the Court reject Plaintiff's proposed amended class definition. Respectfully submitted this 6th day of April, 2007.

s/ Michael S. McCarthy Michael S. McCarthy Mark W. Fischer Marie E. Williams FAEGRE & BENSON LLP 1700 Lincoln Street, Suite 3200 Denver, Colorado 80203 Phone: (303) 607-3500 Fax: (303) 607-3600 E-mail: [email protected] [email protected] [email protected] ATTORNEYS FOR DEFENDANT STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

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CERTIFICATE OF SERVICE I hereby certify that on this 6th day of April, 2007, I electronically filed the foregoing STATE FARM'S SUPPLEMENTAL BRIEF REGARDING HILL V. ALLSTATE IN OPPOSITION TO PLAINTIFF'S PROPOSED AMENDED CLASS DEFINITION with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following e-mail addresses:
· · ·

Robert Bruce Carey [email protected],[email protected] Leif Garrison [email protected],[email protected] L. Daniel Rector [email protected],[email protected]

s/ Marlene E. Beliveau Marlene E. Beliveau Legal Secretary
fb.us.1948479.01

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