Martin & Seibert, L.C. has defended many companies in class action cases, both in state and federal courts and defended those actions in West Virginia, regionally and nationally. With the dramatic rise in the number of class actions, clients have consistently turned to Martin & Seibert for assistance on the substantive defense as well on technical, document management and production issues.
Our firm has litigated class issues involving:
* Unsecured leases and securities fraud
* Life insurance
* Wage Payment Collection Act claims
* Fair Labor Standard Act claims
* Casualty Insurance practices with specific claims of violations
of statutory schemes, unfair trade practices, unfair claim settlement
practices and fraud.
* Institutional actions based upon misleading forms and practices
* Institutional claim evaluation processes
* Banking practices and mortgage lending
* Auto insurance total loss servicers and vendors
The Firm’s experience in class action litigation began in the early 1980’s when it was first involved in a securities fraud class action in Federal Court stemming from the sale of unsecured lease agreements to investors purportedly represented as securitized instruments. The Firm then began a long and arduous period of defending individual orchardists who were named as defendants in a series of class action lawsuits brought by Jamaican migrant orchard workers. In large part, those claims arose under the West Virginia Wage Payment Collection Act, W.Va. Code § 21-5-3 ("WPCA"), which contained specific restrictions on amounts withheld from an employee's pay, as well as providing for liquidated damages for violations of those requirements. Orchardists throughout the State were being sued in multiple venues for similar class action claims. Many of those cases were ultimately removed to the Federal Courts where the Firm was successful in securing temporary restraining orders resulting in the maintenance of the prevailing wage rate for the orchardists’ employment of H2A workers. Those cases extended over a number of harvesting seasons and covered thousands of workers who had been involved in the apple industry in West Virginia.
Those cases led to appeals to the West Virginia Supreme Court of Appeals, which developed the leading case law on the Wage Payment Collection Act, Jones v. Tri-County Growers, Inc., 179 W.Va. 218, 366 S.E.2d 726, 28 Wage & Hour Cas. (BNA) 1590, 110 Lab.Cas. P 55,946 (1988). In Jones, the Court held that suits brought under the Wage Payment and Collection Act were governed by a five-year contract statute of limitations and an attempted assignment of wages under a master contract, that was not signed by individual workers, violated the Act. Further, the Firm was involved in appeals to the U.S. Court of Appeals, Fourth Circuit, on the issue of Federal preemption and the authority of a District Court to issue a TRO in contravention of a permanent injunction, as more fully discussed in the case of Feller v. Brock, 802 F.2d 722, 105 Lab.Cas. P 34,854, 6 Fed.R.Serv.3d 43 (4th Cir.1986)(No. 85-1912(L), 85-2276, 85-1949, 85-2275).
The Firm was next retained to defend a class action arising out of the use of a deed of trust document that purported to release or waive the homestead exemption. While the class was certified as a form-based class action, the Firm was able to establish that, while the language may be a violation of law, the Class could prove no actionable damages. This defense was upheld by the West Virginia Supreme Court of Appeals in Orlando v. Finance One, 179 W.Va. 447, 369 S.E.2d 882 (1988).
Based upon our involvement with cases of first impression within the employment practices field, the Firm was again retained in labor-related matters to defend against class allegations arising out of the payment of contract employees performing work for the U.S. Postal Service. Those cases primarily dealt with compliance with the WPCA and the Fair Labor Standards Act. This massive litigation involved the production and analysis of five years of daily time sheets and payroll records for hundreds of class members which coincided with the advent of electronic discovery technology which the Firm leveraged to the client’s benefit. Simultaneously, the Firm defended a variety of class action claims brought about by factory and facility closings with allegations those closings were in violation of the WARN Act., 29 U.S.C. §2101, et seq. The Firm also filed as Amicus Curiae on behalf of the West Virginia Chamber of Commerce, the West Virginia Retailer's Association, and the West Virginia Manufacturer's Association in a class action filed against K-Mart, subsequently joined with a similar action against Wal-Mart. The Court favorably found that, pursuant to W.Va. Code § 21-5-1(c) (1987), whether fringe benefits have accrued and are payable directly to an employee is determined by the terms of employment that may condition the vesting of a fringe benefit rights on eligibility requirements, including that unused fringe benefits will not be paid to employees upon separation from employment. Meadows v. Wal-Mart Stores, Inc., 207 W. Va. 203, 530 S.E.2d 676 (1999).
In addition, the Firm served as participating local counsel national counsel in a class action in Berkeley County involving 11,000-plus class members who were former employees of a telemarketing company that operated at various sites throughout West Virginia. Issues surrounding payment and hours worked were successfully resolved with the Firm’s assistance in a mediation session, where the Firm again strives to push cases for successful and cost-effective resolution.
Throughout each of these series of labor-related cases, the Firm developed early experience in mass production of documents and engaged in extensive deposition practice of clients, as well as governmental officials who were involved in the supervision of the impacted state and Federal programs. Drawing upon our roots as an insurance defense firm, we then began developing an industry-based program to assist offices of general counsel of national property/casualty insurers in responding to discovery requests across jurisdictional boundaries. This approach helped to ensure consistency and accuracy in a company’s discovery response. Thereafter, the Firm was called upon to assist the Office of General Counsel in the development of an internal discovery management group whose sole function was to identify, secure, and produce, in an efficient manner, common responses to discovery requests to be used across the country. This work expanded to include the preparation of common witnesses for depositions, including, but not limited to, Rule 30(b)(6) or (7) deposition witnesses on company processes, policies, and procedures. The Firm is known for its ability to engage in efficient discovery practices and to vigorously defend “bet the company” cases. Moreover, the development of cost-controlled discovery plans has been a hallmark of the Firm’s defense strategy. We have developed Best Practices in the processing of requests and engaged in electronic data searches to provide consistent discovery responses. In partnership with forensic electronic data consultants, the Firm developed significant cost-saving programs utilizing stored and electronically recoverable data.
One of the first insurance-related class actions in which the Firm was involved was the landmark case of Barker v. Nationwide, arising from the manner in which settlements for minor claimants were conducted. While the litigation was initially directed at a single insurer, every insurer licensed and doing business in the State of West Virginia was later named as a party defendant. The West Virginia Supreme Court of Appeals in 1998 rejected the theory of a juridical link between the insurers, and dismissed all but the originally-named defendants. The Firm was retained to defend that claim within two weeks of the class certification hearing. While the Court granted Class Certification in the absence of a qualified Class Representative, the Firm filed a Petition for Writ of Prohibition to the West Virginia Supreme Court of Appeals to review the holding since West Virginia Courts had been silent as to the interpretation of Rule 23 as adopted from the Federal Rules. The Firm utilized persuasive testimony from Professor Geoffrey C. Hazard of the University of Pennsylvania Law School. Professor Hazard had worked as the Director of the American Bar Foundation and taught Civil Procedure at Chicago, Berkeley, and Yale law schools. He was the author of the Restatement of Judgments for the American Law Institute and had been recognized as an expert witness in various matters including the ethical aspects of representation by counsel in Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1999), and as an expert witness in Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999).
After assumption of the defense, the Firm continued to defend the claims and to develop a settlement strategy which included compensatory and equitable relief. The settlement, which involved 1,000-plus class members, was developed to not only change the practices of the industry through the use of an affirmative injunction, but also was designed to eliminate a windfall in compensation to class members who had suffered little to no injury-in-fact. The primary focus of the settlement, which was the first of its kind identified throughout the country, provided, as part of the equitable relief, the availability of secondary educational or vocational training reimbursement or future educational benefits. The settlement operated similar to a pre-paid education plan as has been adopted and promoted throughout many states. Since this type of creative settlement had never been judicially reviewed, the Firm negotiated as part of the settlement a mandated certification of questions to the West Virginia Supreme Court of Appeals which would, in effect, judicially approve the format of the settlement and its compliance with due process requirements. For the first time, the Court found the settlement to be legally appropriate in its Order issued on November 10, 2004. In this case, the insurer was able to promote its settlement in very positive terms of providing a substantial benefit to the citizens of West Virginia without encouraging other copy-cat actions against other carriers in the State. The Firm was then retained as the Claims Administrator to administer the education class benefits. In addition to distributing the compensatory payments, the Firm entered into contractual relationships with the various educational institutes across the State to more efficiently handle disbursements. In addition, the Firm secured and coordinated the necessary actuarial studies to seek indemnification under appropriate E & O coverages for future payments.
As a result of that settlement and the publicity created from the notice program, a similar action was filed in the State of Ohio with the same allegations and a much larger potential class member group. The Firm was retained to defend that case as subject matter experts and with the assistance of co-counsel, who served in the capacity as national class counsel, defeated class certification. That ruling was upheld on appeal by the First District Court of Appeals of Ohio. During the pendency of these actions, the Firm continued in the defense of a number of other West Virginia class actions which were again based upon some form of discrimination, wage payment or reporting violations. These cases seemed to be prevalent in West Virginia, and generally were cases in which the Firm could manage either actuarially, in terms of large segments of employees, or from an accounting standpoint where smaller classes were asserted.
The Firm’s next retention in an insurance-related class action was as national discovery counsel in the well-known case pending in the Circuit Court of Miller County, Arkansas, styled Hensley, et al. v. Computer Sciences Corp., Case No. 2005-59-3. That case was a direct, national class action against a number of insurers who utilized Colossus©, COA© or other algorithm-based systems to assist in the valuation of bodily injury claims. Bodily injury evaluation tools became the focus of litigation in several cases nationally and, in anticipation of future litigation, our client opted to preserve all data related to the piloting, implementation, and use of such tools. We were retained to manage the discoverable information utilizing Summation/iBlaze©, a powerful litigation support application. In the event of future litigation, such as Hensley, Martin & Seibert, L.C. would review the discoverable materials and would produce the responsive documents to local counsel across the country.
More than 61,000 documents were converted to Summation-compatible format. The preponderance of natively electronic documents in the collection underscored the foresight of our client in its document management choices. Imminent changes to the Federal Rules of Civil Procedure had addressed the discoverability of electronically stored information and state courts have entered a variety of opinions on the subject. Management of these materials by the litigation support specialists and counsel at Martin & Seibert, L.C. provided a powerful platform from which to respond to pending and future discovery demands originating from any state or federal court in the nation. This was a unique retention for the Firm. While it provided anonymity in terms of the production of discovery materials, the Firm was able to develop a more extensive expertise in the e-discovery process which has again been put to use to the advantage of other Firm clients.
The Firm also defended a host of class actions challenging the use of the CCC Valuescope Services© in the handling of total loss automobile insurance claims where claimants contended the use of the tool per se violated West Virginia law. Despite such allegations, the Firm was successful in defeating class certification.
The next case of significance to the insurance industry came about after summary judgment was entered in favor of the class representatives. The class action asserted claims for uninsured/underinsured motorist coverage and challenged the validity of the insurer’s offers of UM and UIM coverage and specifically the insurer’s selection/rejection forms which claimants alleged violated W.Va. Code §33-6-31d. While ultimately certified as a class, the case was actuarially valued and resolved and is presently in the class administration phases. A number of interesting issues arose in the defense of that case involving the management of class members who elected, prior to the provision of class notice, to file independent actions against the company in an attempt to mimic the class action claims. Those issues were presented to the West Virginia Supreme Court of Appeals, and while the West Virginia Court refused to allow the consolidation of three individually-filed cases, the Court did not order all cases which had been consolidated to be returned to the courts of original jurisdiction. State ex rel. Taylor v. Nibert, 220 W.Va. 129, 640 S.E.2d 192 (2006). While the decision allowed limited constructive opt-outs to proceed, the settlement was preserved, was approved at the fairness hearing without objection, and is currently in the early stages of claims administration.
Also arising in the UM/UIM context is our recent success in denying class certification in favor of Allstate in Falls v. Allstate, et al., Circuit Court of Marshall County, West Virginia, Civil Action No. 00-C-200M. In Falls, plaintiff sought class certification to challenge whether stacking should have been applied during the pendency of her UIM claim. Plaintiff alleged the insurer took inconsistent positions between courts of record and the Offices of the West Virginia Insurance Commissioner with respect to stacking, vis-à-vis rate increases purportedly based upon stacking. Plaintiff also alleged fraud, unjust enrichment, and sought disgorgement of profits for the applicable timeframe. In addition to arguing against the class representative’s standing, the Firm also argued against commonality since each UIM claim must be individually evaluated regardless of the amount of limits – stacked or unstacked - that may be available. The Circuit Court of Marshall County denied class certification and the case now proceeds as a single bad faith claim.
Martin & Seibert’s lengthy history and involvement in class actions of first impression also gives us unique insight to identify the formulation of class allegations in singular cases. Armed with that knowledge, the Firm has been able to advise clients, especially insurers, early on of potential class claims and to ward off such with early resolution of claims, which has been economically advantageous to a number of clients.
For more information about our qualifiations, please contact our
Managing Shareholder, Walter
M. Jones, III.