backKing & Spalding obtained a victory on behalf of Progressive Direct Insurance Company, persuading the U.S. Court of Appeals for the Fourth Circuit to reverse the certification of a class action concerning the insurance company’s estimate of the actual cash value of their insureds’ total-loss vehicles.
The Named Plaintiff – Lynn Freeman -- sought to represent a class of insureds in South Carolina who had settled total-loss claims with Progressive. Plaintiff claimed that Progressive breached its insurance contracts by failing to pay the actual cash value of their totaled vehicles -- challenging one component of the methodology Progressive uses to estimate actual cash value, the Projected Sold Adjustment.
Although the district court certified the class, the Fourth Circuit reversed. The Court held that Plaintiff’s individual circumstances demonstrated that she lacked standing. And the Court further explained that Plaintiff failed to establish commonality or predominance because her claims of underpayment ultimately turn on individualized issues associated with estimating vehicle values.
The King & Spalding Business Litigation and Appellate Practice Groups collaborated to prevail on appeal, with a team including Jeff Cashdan, Zach McEntyre, Matthew Brigman, Paul Mezzina, Amy Upshaw, Allison White, and Nicole Bronnimann. Last month, the King & Spalding team persuaded the U.S. Court of Appeals for the Seventh and Third Circuits to reverse certification in class actions against other Progressive insurance companies on a similar theory.