Free Status Report - District Court of Colorado - Colorado

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

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Filed 09/27/2006

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IN THE UNITED STATES DISTRICT COURT FOR THE STATE 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' STATUS CONFERENCE STATEMENT S

Defendant State Farm Mutual Automobile Insurance Company (" State Farm" by and ), through its counsel, in anticipation of the Status Conference scheduled before this Court on September 28, 2006 at 2:00 p.m., submits the following Status Conference Statement: 1. The parties jointly requested the pending Status Conference for the purpose of

addressing the disposition of any and all remaining issues. State Farm provides this Status Conference Statement in order to invite the attention of the Court to the need for threshold resolution of a key issue that is ignored by Plaintiff' recently filed " s Case Management Proposal." 2. This case has been the subject of three appeals to the United States 10th Circuit

Court of Appeals in the matters of Clark v. State Farm Mutual Auto. Ins. Co., 319 F.3d 1234 (10th Cir. 2003) (" Clark I" Clark v. State Farm Mutual Auto. Ins. Co., 443 F.3d 703 (10th Cir. ),

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2005) (" Clark III" and Clark v. State Farm Mutual Auto. Ins. Co., 170 Fed. Appx. 554 (10th ), Cir. 2006) (unpublished decision) (the " Fees Appeal" On November 3-5, 2003, between the ). initial and the most recent two appeals, this Court conducted an evidentiary hearing which resulted in the reformation of the subject insurance policy and entry of final judgment on Plaintiff' individual claims, which decision was reported in Clark v. State Farm Mutual Auto. s Ins. Co., 292 F. Supp.2d 1252 (D. Colo. 2003) (" Clark II" That decision was affirmed by the ). Tenth Circuit in Clark III, and has now been remanded for further proceedings in the District Court. 3. Prior to the November 2003 evidentiary hearing, the parties completed

comprehensive discovery on numerous issues including scope of the class and the effective date of reformation of the insurance policy under which Plaintiff sought benefits. This discovery included Plaintiff' propounding of seventeen interrogatories, thirteen requests for production of s documents, and eighteen requests for admissions, and the conduct of seven depositions of various individuals including State Farm representatives, expert witnesses, and the Plaintiff. 4. The evidentiary record developed during the November 2003 hearing contained

testimony from several key witnesses, including Everett Truttman, the head of the Policy Forms Group at State Farm, as well as State Farm claims personnel, namely, Cindy Marshall and Steve Hassoldt. 5. Based upon this record, this Court made extensive findings of fact regarding,

among other things: the accident giving rise to Plaintiff' claims; the benefits initially paid to s Plaintiff pursuant to the relevant State Farm policy; the level of coverage provided by that policy; the history of the policyholder' coverage with State Farm; the history of State Farm' s s

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policy language containing the Pedestrian Limitation; State Farm' elimination of that language s and modification of its claims processing in response to the decision rendered by the Colorado Court of Appeals in Brennan v. Farmers Alliance Mutual Ins. Co., 961 P.2d 550 (Colo. App. 1998), cert. denied (Colo. Aug. 24, 1998); the reasons State Farm did not anticipate the decision announced in Brennan; and other facts relevant to the reformation date analysis. 6. The Court also found that the Plaintiff is permanently disabled and therefore

entitled to the difference between the benefits previously paid and the maximum amount of enhanced PIP benefits available, up to the $200,000 aggregate limit contained in the subject policy. 7. Judgment was entered in Plaintiff' favor in the amount of $132,276.02, and State s

Farm has satisfied that judgment. 8. The Court has also determined the effective date of reformation of the contract

under which Plaintiff claimed benefits. 9. adjudicated. 10. Against this procedural background, Plaintiff' counsel have now filed a " s Case Plaintiff' individual claims have therefore now been fully and finally s

Management Proposal"(about which they did not consult with Defendant) in which they propose to undertake material additional discovery, purportedly on the question of class certification. 11. Before engaging in further discovery, State Farm submits that it is first critical to

resolve a question left open by the Tenth Circuit in Clark III ­the issue of class definition. In Clark III, the court referenced Mr. Clark' intention to bring a class action on behalf of additional s groups of claimants other than pedestrians. Clark III, 433 F.3d at 713. The Tenth Circuit

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acknowledged that it did not need to " address Mr. Clark' standing to raise claims for other s injured persons to resolve the controversy before [it]" and noted that this issue remains , unresolved. Clark III, 433 F.3d at 714. 12. Courts in several districts, including this one, have recognized class definition as a threshold issue that drives the class certification analysis. The existence of an identifiable class, and the plaintiff' membership in that class, is so fundamental to the class certification process s that it is recognized as a " prerequisite or an ` implicit condition'to Rule 23." See, e.g. In re General Motors Corp., No. MDL 04-1600, slip op. at 2, fn. 7 (W.D. Okla. 2006) (collecting cases referring to class identification as a prerequisite to class certification under Rule 23); see also Colorado Cross-Disability Coalition v. Taco Bell Corp., 184 F.R.D. 354 (D. Colo. 1999) (Babcock, C.J.) (calling the existence of an identifiable class " essential prerequisite of an an action under Rule 23" Courts regularly examine the proposed class definition first, before ). Connor v. Boeing addressing the requirements for class certification under Rule 23. See, e.g. O' North American, Inc., 180 F.R.D. 359, 367-71 (C.D. Cal. 1997); see also Daigle, 133 F.R.D. at 602-03. Where, for example, the proposed class definition bears no logical relationship to the allegedly wrongful conduct of the Defendant, the class may be deemed too indefinite to warrant class certification. See Daigle, 133 F.R.D. at 602-03. In such an instance, a reviewing Court need not consider the other Rule 23 requirements in order to deny class certification. See O' Connor, 180 F.R.D. at 370. 13. The preliminary issue of class definition will profoundly impact the class

certification analysis in this case. Mr. Clark has broadly defined the class as: All injured persons covered under a State Farm automobile insurance policy who were not offered extended coverage as required by C.R.S. § 10-4-710 of the

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Colorado Auto Accident Reparations Act, and who were not provided the additional benefits provided for therein. Class Action Complaint and Jury Demand, ¶ 9 (filed August 24, 2000). More specifically, however, Plaintiff' counsel have repeatedly argued to this Court and in the Court of Appeals s that the putative class includes all State Farm PIP claimants, and is not limited to pedestrian PIP claimants. Mr. Clark' proposed class does not bear any logical relationship to the conduct s giving rise to Plaintiff' claim ­State Farm' use of the Pedestrian Limitation. s s 14. State Farm, on the other hand, contends that because the only policy defect at

issue is a defect that impacts pedestrian PIP claimants in the form of the Pedestrian Limitation, any putative class even arguably eligible for the class certification analysis must be limited to pedestrian PIP claimants with potential claims for reformation and extended PIP benefits. State Farm does not concede that this defined class would meet the Rule 23 requirements for class certification. Rather, State Farm merely proposes that this class definition would be " sufficiently ascertainable"to allow the class certification analysis to proceed. 15. Given the extensive evidentiary record already developed in this case, adoption of

an appropriate class definition will significantly narrow the amount of any additional discovery necessary to brief the issue of class certification. 16. Because the issue of class definition is so fundamental to the class certification

analysis, and will have such an impact on further proceedings in this case, it should be determined first. State Farm therefore respectfully requests the Court first establish a briefing schedule and adjudicate the threshold issue of class definition before authorizing any further discovery or other proceedings on the issue of class certification.

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Respectfully submitted this 27th day of September, 2006. FAEGRE & BENSON LLP By: /s Michael S. McCarthy Michael S. McCarthy Mark W. Fischer 1700 Lincoln Street, Suite 3200 Denver, Colorado 80203 Telephone: (303) 607-3500

CERTIFICATE OF SERVICE I hereby certify that on this 27th day of September, 2006, I electronically filed the foregoing STATE FARM' STATUS CONFERENCE STATEMENT with the Clerk of the S Court using the CM/ECF system which will send notification of such filing to the following email addresses:
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Robert Bruce Carey [email protected]; [email protected] Leif Garrison [email protected]; [email protected] Leo Daniel Rector [email protected]

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s/____Mark W. Fischer_____________

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