United States: Eleventh Circuit Decision In AA Suncoast Chiropractic Clinic v. Progressive Am. Ins. Co.

Key Issue

Whether the district court erred in certifying an injunction class under Federal Rule of Civil Procedure 23(b)(2) where the putative class sought retrospective relief and the proposed class may be both under- and over-inclusive.

Background

The appeal in AA Suncoast Chiropractic Clinic v. Progressive American Insurance Co. arises from a dispute concerning Florida's provisions governing the amount of insurance coverage available to motorists in automobile accidents, and when that coverage may be limited.²⁹ Under Florida law, car insurance policies must provide personal injury benefits up to $10,000, but only injured motorists who have an "emergency medical condition" ("EMC") are eligible to receive the full $10,000. For non-EMC accidents, coverage is capped at $2,500.³⁰ Florida law also governs who decides whether an accident involves an EMC (an "EMC Determination").

Plaintiffs are chiropractic and medical providers who treated injured motorists insured by Progressive; the motorists paid for plaintiffs' services by assigning their insurance benefits to plaintiffs. After plaintiffs provided services to the motorists, Progressive capped payment at $2,500, relying upon a "negative EMC Determination" (i.e., a determination that the accident did not involve an emergency medical condition). Plaintiffs claim that the caps violated Florida law because the Negative EMC Determinations were made by non-treating healthcare providers, and that coverage may only be capped if a treating healthcare provide makes a Negative EMC Determination.³¹

Plaintiffs sought certification of an injunction class and a damages sub-class. Whereas Rule 23(b)(3) requires plaintiffs to establish that "questions of law or fact common to class members predominate" over individualized questions, under Rule 23(b)(2), plaintiffs seeking certification of an injunction class must instead show that the party opposing the class "has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole."³²

The proposed injunction class sought, among other relief, an injunction to "restore coverage limits to $10,000 for affected policies," and a declaration that Progressive's practice of relying on Negative EMC Determinations by non-treating providers is unlawful.³³

Applying the respective Rule 23 standards, the District Court for the Middle District of Florida denied certification of the proposed damages class for failure to satisfy Rule 23(b)(3)'s predominance and superiority requirements.³⁴ However, it granted certification of an injunction class that included medical providers who (1) "received an assignment of benefits" under a Progressive policy; (2) provided medical services; and (3) were "given notice by Progressive that available PIP benefits were reduced to $2,500 because of a Negative EMC Determination that Progressive obtained from a Non-Treating Provider."³⁵

Progressive sought interlocutory appeal of the injunction class certification; plaintiffs did not appeal the court's denial of certification of the proposed damages class.

Decision

The Eleventh Circuit panel reversed the district court's certification of the injunction class as an abuse of discretion. The court concluded that the purported "injunction class" was really a damages class in disguise, seeking to circumvent the predominance and superiority inquiries under Rule 23(b)(3), and that the proposed relief—restoring coverage limits and requiring Progressive to reprocess affected claims— was designed to remedy past harm from plaintiffs' inability to receive the full $10,000 coverage and not to protect future interests.³⁶

In reaching its conclusion, the court first assessed plaintiffs' own framing of their injury as "the loss of an opportunity to have received money in the past."³⁷ The requested declaratory relief was similarly designed to remedy retrospective harm by allowing class members to receive benefits beyond the $2,500 cap for services already performed.³⁸ Second, the court considered the class definition. The court acknowledged that there may be parties with a future interest in changes to Progressive's EMC Determination policy, but plaintiffs' class definition would include only members who had already performed services under a capped Progressive policy, underscoring that its aim was retrospective and not prospective relief.

Separately, the court found that the proposed class was both over-inclusive because it was not limited to providers who are likely to treat Progressive insureds in the future, and under-inclusive because it did not include providers who had not yet faced denied or capped claims.³⁹

Thoughts & Takeaways

AA Suncoast is instructive in its discussion of the separate requirements for certification under Rule 23(b)(2) and Rule 23(b)(3), and for its in-depth rejection of plaintiffs' attempt to recast a remedy for past harm into injunctive relief. Significantly, the court refused to allow plaintiffs to proceed as a class for relief that, while styled as "injunctive," really amounted to a request for damages—or for a determination that would allow plaintiffs to seek damages from past wrongs. The court's order is consistent with the conclusion reached by at least one other circuit that has addressed a similar set of proposed classes that likewise refused to certify under Rule 23(b)(2) a class that actually sought damages.⁴⁰

Read about the opinion here.

Footnotes

29. AA Suncoast Chiropractic Clinic, P.A. v. Progressive Am. Ins. Co., 938 F.3d 1170 (11th Cir. 2019).

30. See id. at 1172.

31. See id. at 1172-73.

32. Fed R. Civ. P. 23(b)(2).

33. AA Suncoast, 938 F.3d at 1173.

34. See id.

35. See id.

36. See id. at 1174-75 (the injunctive relief sought "is not an injunction at all, and [plaintiffs'] declaratory request is both minimal and unconnected to the members of its class.")

37. Id. at 1175-76.

38. See id. at 1176.

39. See id. at 1177-78.

40. See Kartman v. State Farm Mut. Auto. Ins. Co., 634 F.3d 883 (7th Cir. 2011).

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