TEXAS SUPREME COURT’S DECISION SHEDS LIGHT ON DEFENCE STRATEGIES TO DEFEAT CLASS CERTIFICATION

TEXAS SUPREME COURT’S DECISION SHEDS LIGHT ON DEFENCE STRATEGIES TO DEFEAT CLASS CERTIFICATION

On, May 24, 2024, Texas Supreme Court while deciding a case titled USAA Cas. Ins. Co. v. Letot[1] has answered three major questions and in the process has paved the way for defence attorneys to defeat class certification. The Court took consideration of three significant issues while deciding the matter, first being whether the plaintiff was eligible to make injunctive relief claim, followed by the second question of whether the predominance requirement can be met, if it can be inferred that substantial variation exists among the class regarding standing, and last but not least the third issue being does the atypical nature of the complaint render it not eligible for typicality requirement.

The court mentioned that the plaintiff has failed to prove beyond doubt that non-grant of injunction would cause an irreparable damage to her or the certified class of plaintiffs. The Court stated that, since the plaintiff has failed to prove irreparable harm or loss, that monetary damages are insufficient, and/or legal remedy is inadequate to cover loss, she does not have a locus-standi to file an individual injunctive relief suit and thus, she is not eligible to represent the class plaintiffs in an injunctive relief suit on behalf and hence, there is no ground to certify a class of plaintiff drivers whose vehicles are marked as salvage by the insurer.

Secondly, the court took upon the issue of predominance requirement and decided that the common issues of the individual does not outweigh the common issue of the class plaintiffs. In this case, the court held that, Plaintiff’s issues are outweighing, the issues of the class plaintiffs. While deciding this point, the court considered the fact that, among the class of plaintiffs, there could be several individuals who won’t mind the insurer to disclose the salvage-status of their vehicles to Texas Department of Transportation (“DOT”) to expedite their payments by the insurer. Thus, by seeking damages against the insurer on the fact that the insurer did not wait for her approval before disclosing the status of her vehicle to DOT, might be causing delay for other class plaintiffs, thus it defeats the purpose of class certification.

Thirdly, the court found that the grounds on which the plaintiff has claimed injunction on insurers’ actions and has got the class certification are not typical to the grounds, on which these suits generally are based and thus, making the plaintiff’s suit an atypical one. In view of the above, the Texas Supreme Court held that the class cannot be certified in this case.

The case offers valuable insights for defense counsel, outlining strategies to challenge attempts at certifying injunctive relief classes, emphasizing the individualized nature of standing determinations, and cautioning against choosing overly strong class representatives. By navigating these legal considerations adeptly, defense counsel can effectively defend against class action lawsuits and protect the interests of their clients.

[1] No. 22-0238 (Tex. May. 24, 2024)