backKing & Spalding obtained a victory on behalf of Progressive Paloverde Insurance Co. and Progressive Southeastern Insurance Co. (collectively “Progressive”), persuading the U.S. Court of Appeals for the Seventh Circuit to reverse the certification of a class action concerning the insurance companies’ estimates of the actual cash value of their insureds’ total-loss vehicles.
The Named Plaintiff – Heather Schroeder -- sought to represent a class of insureds in Indiana who had settled total-loss claims with Progressive. Plaintiffs claim 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 (“PSA”). The Seventh Circuit reversed the District Court’s certification of a class, which had similarly focused solely on the impact of the PSA. The Seventh Circuit explained that Progressive’s contractual duty is “to pay insureds the actual cash value of their cars” as defined in their policies and state law, and not to utilize any particular methodology in doing so. As a result, individualized issues associated with estimating vehicle values to prove underpayment would predominate over any purportedly common issues related to questioning the methodology Progressive utilizes in settling Plaintiffs’ total loss claims.
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.
Earlier this month, the King & Spalding team persuaded the U.S. Court of Appeals for the Third Circuit to reverse certification in a Pennsylvania class action against another Progressive insurance company on a similar theory.