Legal Briefs

Allstate Insurance Co. v. Jacobsen

By John B. Lewis, Deborah H. Renner, Ilya Shapiro, Walter Olson, Theodore H. Frank & Adam E. Schulman
February 28, 2014

The chief characteristic of a class action that separates it from a typical lawsuit is its potentially enormous scale, with some class action suits having hundreds or even thousands of parties. Given this great size and consequence, legislatures and courts have developing a set of rules designed to eliminate any procedural unfairness that may result from the use the class action mechanism. Among these rules are a set of criteria that set out the conditions under which a class of plaintiffs may bring suit, depending on the type of relief they seek. The Federal Rules of Civil Procedure and the Supreme Court’s decisions in this area establish that certification of plaintiff classes that seek monetary relief require different and additional procedural safeguards beyond those that seek merely injunctive relief. These additional safeguards are intended to protect the constitutional due process rights of both plaintiffs and defendants.  Unfortunately, some state courts have proven more willing than others to cut corners when it comes to due process protections in class action contexts. Montana’s high court recently ruled that plaintiff classes may avoid the more stringent procedural safeguards that apply to monetary-relief classes by characterizing their claims as injunctive—then permitting subsequent individual-class-member proceedings for monetary relief. Allstate is now asking the U.S. Supreme Court to review the Montana Supreme Court’s ruling, arguing that the decision below fundamentally misapplied the proper procedural safeguards. We agree. Cato, joined by the Center for Class Action Fairness, filed a brief arguing that the Montana court’s corner-cutting ruling violates due process rights that both the Supreme Court and Congress have affirmed, and that it encourages opportunistic abuse of class action procedure. With so much at stake in complex civil litigation, it is imperative that the Court stand behind its rulings and ensure that everyone plays by the same rules.

Read the Full Legal Brief