On September 12, the U.S. Court of Appeals for the Eleventh Circuit reversed a trial court’s certification of a Rule 23(b)(2) “injunctive relief” class, holding that “because what this ‘injunction’ class really wants is damages—and more precisely, because the injunctive remedy that this class seeks would be improper—the answer to [whether the class is viable] is no.”

In sum, the plaintiffs improperly eschewed their monetary-damages claims, instead seeking injunctive relief under Rule 23(b)(2) to redress past harms. According to the appellate court, that “damages-to-injunction strategy” was improper because “an injunction must be geared toward preventing future harm.” See, e.g., Houston v. Marod Supermarkets, Inc., 733 F.3d 1323, 1328–29 (11th Cir. 2013).

The Eleventh Circuit’s decision in AA Suncoast Chiropractic Clinic, P.A. v. Progressive American Insurance Co., No. 17-13003 (11th Cir.) can be found here.

Background

In 2012, Florida amended a state law (Fla. Stat. § 627.736(1)) requiring car insurance policies to provide personal injury protection (“PIP”) benefits up to $10,000. The amendment capped coverage at $2,500 unless the injured motorist has an “emergency medical condition” (“EMC”) as defined by the statute.

The litigation centered around “who is allowed to make the negative EMC determination.” Two chiropractic clinics and a medical provider that treated injured motorists sued the defendant’s insurer and two of its underwriters in Florida state court, alleging that they “denied PIP benefits in an illegal manner” because they relied on negative EMC determinations from non-treating providers to limit coverage to $2,500, and that Florida law allows only treating providers to make negative EMC determinations.

District Court Litigation

The case was removed to federal court pursuant to the Class Action Fairness Act. The second amended complaint asserted two counts: one for declaratory and injunctive relief and another for damages based on breach of contract. The plaintiffs thereafter “moved to certify two classes: an injunction class under Federal Rule of Civil Procedure 23(b)(2) for count one, and a damages subclass under Rule 23(b)(3) for count two.”

The district court declined to certify the Rule 23(b)(3) damages subclass — because that would require the court to find predominance and superiority and would necessitate individualized assessments and case management. Nevertheless, the district court did certify the Rule 23(b)(2) injunction class, in part because” the plaintiffs “assured it that once the legal issue is determined, there will be no more supervision required to determine individual damages.”

Eleventh Circuit Litigation

The defendant insurer obtained leave and filed an interlocutory appeal to the Eleventh Circuit.  The sole issue raised in the appeal was “whether the injunction class should have been certified.” The plaintiffs claimed they were “not seeking any damages award at all (at least not as a class)[,]” but instead wanted a declaration that the insurer’s “practice of relying on non-treating physicians is unlawful, along with an injunction.”

Yet, the Eleventh Circuit held:

The problem with this argument is that the injunction that [the plaintiffs] requested is not an injunction at all, and its declaratory request is both minimal and unconnected to the members of its class. [The plaintiffs’] requested relief is not designed to address the treatment of future claims; it would instead, according to [plaintiffs themselves], “restore claimants to the claims-handling process free of the improper cap on PIP benefits imposed by Progressive.”

. . .

This strategy of converting its claim for damages into a claim for injunctive relief sidesteps the Rule 23(b)(3) problems by shaving away all the issues that would require individualized determinations. But what the damages-to-injunction strategy cannot manage to do is request relief that would prevent future injury rather than redress past harms.

Ultimately, the Eleventh Circuit concluded: “Simply put, this class is not suitably crafted for prospective relief. … In the end, the retrospective nature of [plaintiffs’] class and claim make clear that an injunction is not the right remedy in this case—indeed, it is not really the remedy that [the] class is seeking. And because an injunction is not the right remedy, Rule 23(b)(2) is not the right path to class certification: ‘the policies underlying the requirements of (b)(3) should not be subverted by recasting and bifurcating every class suit for damage as one for final declaratory relief of liability under (b)(2), followed by a class suit for damages under (b)(3).’”

The district court’s certification of the class under Rule 23(b)(2) was reversed and the case was remanded.