In a case against Progessive for breach of contract, statutory insurance law, and fraud claims relating to the adjustment of total-loss claims, the U.S. Fifth Circuit Court of Appeals rejected Progressive’s challenge under Comcast: “Plaintiffs’ liability theory is that Defendant unlawfully used WorkCenter Total Loss (WCTL) to calculate the base value of total loss vehicles. Plaintiffs claim that using WCTL, instead of lawful sources such as the National Automobile Dealers Association (NADA) Guidebook or the Kelly Blue Book (KBB), resulted in their vehicles being assigned a lower base value and accordingly resulted in Plaintiffs receiving lower payouts on their insurance claims.  Plaintiffs’ damages theory aligns with that liability theory.  Plaintiffs contend that damages can be calculated by replacing Defendant’s allegedly unlawful WCTL base value with a lawful base value, derived from either NADA or KBB, and then adjusting that new base value using Defendant’s current system for condition adjustment. Plaintiffs contend that such a calculation can be done on a class-wide basis because Defendant already possesses NADA scores for most of the class, NADA or KBB scores are otherwise publicly available, and Defendant already has condition scores for each vehicle. In fact, Plaintiffs’ damages expert opined that she could apply Defendant’s condition adjustment to Defendant’s NADA scores or publicly available NADA or KBB data. This damages methodology fits with Plaintiffs’ liability scheme because it isolates the effect of the allegedly unlawful base value.”

The Court reversed certification, however, with respect to the class’ claim for fraud.

Despite the Court’s approval of the class damage model, the case was nevertheless remanded for further consideration of a potential waiver issue: “Defendant argues—for the first time on appeal—that by accepting Defendant’s condition score calculation as is, Plaintiffs may have impermissibly waived unnamed class members’ ability to assert a future claim contesting Defendant’s computation of the condition factor….  At the outset, it is important to position Defendant’s argument into the broader class certification framework. If Plaintiffs had raised challenges to both the condition adjustment and the base value calculation, Plaintiffs’ class certification motion may have run into predominance problems because condition adjustments appear to be highly individualized. Perhaps recognizing this concern, Plaintiffs disclaimed any challenge to the condition adjustment. This waiver may have resolved the predominance problem—all parties agree that the base value calculation is formulaic and non-individualized. But resolving the predominance problem with a waiver of claims raises a separate potential bar to class certification — adequacy.

“Of course, not all purported conflicts between a class representative and members of the class will defeat adequacy…. Instead, deciding whether a class representative’s decision to forego certain claims defeats adequacy requires an inquiry into, at least: (1) the risk that unnamed class members will forfeit their right to pursue the waived claim in future litigation, (2) the value of the waived claim, and (3) the strategic value of the waiver, which can include the value of proceeding as a class (if the waiver is key to certification)….

“We note that the risk to unnamed class members is smaller than usual here because of the opportunity for opt outs….

“On remand, the district court can consider the risk of preclusion, the value of the potentially waived claims, and the relative strategic value of Plaintiffs’ proffered waiver. In doing so, we note that the district court has a number of options at its disposal, each of which may or may not be appropriate depending on how the case develops, including, but not limited to:
• Concluding the risks of preclusion are too great and declining to certify the class;
• Certifying the class as is and then tailoring the notice and opt-out procedure to alert the class of the risk of preclusion;
• Concluding that the benefits of proceeding as a class outweigh the risks of future preclusion and certifying the class as is; or
• Defining the class in a way to exclude unnamed plaintiffs who may quarrel with the condition adjustment.”
Slade v. Progressive Ins. Co., No.15-30010, 2017 WL 1843737 (5th Cir. May 9, 2017).