Day v. GEICO Casualty Company ( 2023 )

1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 JESSICA DAY, Case No. 21-cv-02103-BLF 8 Plaintiff, ORDER GRANTING MOTION TO 9 v. STRIKE JURY REQUEST 10 GEICO CASUALTY COMPANY, et al., [Re: ECF No. 118] 11 Defendants. 12 13 This lawsuit concerns a premium credit program run by Defendants GEICO Casualty 14 Company, GEICO General Insurance Company, and GEICO Indemnity Company (“GEICO”). At 15 the beginning of the COVID-19 pandemic in April 2020, GEICO announced the “GEICO 16 Giveback,” a program that provided a 15% discount on new and renewed insurance policies. 17 Plaintiff Jessica Day, representing a class, alleges that GEICO engaged in unfair business practices 18 by failing to provide additional refunds despite fewer claims resulting from fewer miles driven and 19 fewer vehicle accidents. 20 GEICO filed a motion to strike the jury demand. ECF No. 118 (“Mot.”); see also ECF No. 21 133 (“Reply”). Plaintiff opposes. ECF No. 128 (“Opp.”). The Court vacated the hearing on this 22 motion. ECF No. 139. For the reasons explained below, the Court GRANTS GEICO’s motion to 23 strike. 24 I. BACKGROUND 25 As alleged in the Complaint, there has been “a dramatic reduction in driving, and an 26 attendant reduction in driving-related accidents” due to COVID-19 stay-at-home orders. ECF No. 27 68 (“FAC”) ¶¶ 2–3. Compared to the January 2020 average, California motorists drove 1 approximately 50% fewer crashes. Id. ¶¶ 22–23. This decrease in driving and accidents reduced 2 the number of claims paid by auto insurance companies, resulting in an alleged increase in profits. 3 Id. ¶¶ 3, 21. At least one published report estimates that a 30% refund of premiums to insured 4 drivers would be required to make up for the excess premiums paid from mid-March to late April 5 2020. Id. ¶¶ 4, 26. 6 In response, GEICO instituted the “GEICO Giveback,” under which GEICO gave new or 7 renewing customers a 15% credit on their personal auto insurance premiums for six-month 8 policies between April 8, 2020 and October 8, 2020, or for twelve-month policies between April 8, 9 2020 and April 7, 2021. FAC ¶ 28. In connection with the program, GEICO stated that “shelter in 10 place laws have reduced driving, and we are passing these savings on to our auto, motorcycle, and 11 RV customers.” Id. ¶ 30. Plaintiff renewed her GEICO policy in February 2020 and August 2020 12 and was charged a premium of $871.20. Id. ¶ 32. With the Giveback credit of $130.68, she paid 13 $740.52 in premiums for the policy renewed in August 2020. Id. 14 Following the Court’s Orders on GEICO’s two motions to dismiss, see ECF Nos. 64, 87, 15 Plaintiff has one remaining claim under the California Unfair Competition Law (“UCL”). FAC ¶¶ 16 66-77. Plaintiff alleges that GEICO “engaged in unfair business acts and practices in violation of 17 the UCL” by (1) failing to give an appropriate refund of premiums based on excess profit and an 18 accurate risk assessment; (2) giving the refund only to customers who renewed their policies; (3) 19 falsely claiming that the Giveback provided “substantial and full relief”; and (4) failing to disclose 20 its excessive profits. Id. ¶¶ 69-70. The Court certified a class of “[a]ll California residents who 21 purchased personal automobile, motorcycle, or RV insurance from GEICO covering any portion 22 of the time period from March 1, 2020 to the present.” ECF No. 116. 23 II. LEGAL STANDARD 24 Under Rule 38, a party may demand a jury trial by a serving the other parties with a written 25 demand no later than 14 days after the last pleading directed to the issue is served. Fed. R. Civ. P. 26 38(b)(1). Once a jury demand has been made, the trial must be made by jury unless the parties 27 stipulate otherwise or “the court, on motion or on its own, finds that on some or all of those issues III. ANALYSIS 1 GEICO moves the Court to strike Plaintiff’s jury demand. See Mot. Following the 2 motions to dismiss, only a UCL claim remains. GEICO argues that there is no right to a jury trial 3 on a UCL claim, and the Court should therefore strike Plaintiff’s jury demand. Id. 4 The Seventh Amendment guarantees the right to a jury trial “[i]n suits at common law, 5 where the value in controversy shall exceed twenty dollars.” U.S. Const., amend VII. “[T]he right 6 to a jury trial in the federal courts is to be determined as a matter of federal law in diversity as well 7 as other actions.” Simler v. Conner, 372 U.S. 221, 222 (1963). “When the right to a jury trial is 8 invoked in an action based on a statute, as is the case here, Tull v. United States, provides the 9 appropriate analysis.” Smith v. Barton, 914 F.2d 1330, 1337 (9th Cir. 1990) (citing Tull v. United 10 States, 481 U.S. 412 (1987)). In that case, the Court stated that the Seventh Amendment requires 11 a jury trial in actions that are “analogous to ‘Suits at common law.’” Tull, 481 U.S. at 417. 12 “Determining whether statutory actions are ‘more similar to cases that were tried in court of law 13 than to suits tried in courts of equity or admiralty,’ requires an analysis of both the nature of the 14 action and the remedy sought.” Smith, 914 F.2d at 1337. “First, we compare the statutory action 15 to 18th-century actions brought in the courts of England prior to the merger of the courts of law 16 and equity.” Tull, 481 U.S. at 417. “Second, we examine the remedy sought and determine 17 whether it is legal or equitable in nature.” Id. at 417-18. The second inquiry is the more important 18 of the two. Smith, 914 F.2d at 1337. 19 GEICO points the Court to Hope Medical Enterprises, Inc. v. Fagron Compounding 20 Services, LLC, in which court granted a motion to strike a jury demand for a UCL claim. No. 21 2:19-CV-07748-CAS-PLAx, 2021 WL 2941546 (C.D. Cal. July 12, 2021). Other district courts in 22 the Ninth Circuit have also stated, as dicta, that there is no federal right to a jury trial for a UCL 23 claim. See Comin v. Int’l Bus. Machs. Corp., No. 19-CV-07261-JD, 2021 WL 463431, at *5 24 (N.D. Cal. Feb. 9, 2021) (“It is true that the UCL, as an equitable claim, does not trigger a 25 constitutional right to a jury trial.”); Kingsbury v. U.S. Greenfiber, LLC, No. CV 08-151 DSF 26 (AGRx), 2013 WL 12121540, at *1 (C.D. Cal. Nov. 4, 2013) (noting “Plaintiff concedes that there 27 is no right to a jury trial for a claim brought under the UCL”). In another case, the Ninth Circuit in 1 dicta “note[d] that defendants’ [UCL] counterclaim was not subject to a jury trial . . . .” Cargill 2 Inc. v. Progressive Dairy Sols., Inc., 362 F. App’x 731, 733 (9th Cir. 2010). 3 The Court turns to the first inquiry outlined in Tull: “compar[ing] the statutory action to 4 18th-century actions brought in the courts of England prior to the merger of the courts of law and 5 equity.” 481 U.S. at 417. In Hope Medical Enterprises, the court stated that the UCL “parallel[s] 6 section 5(a)(1) of the Federal Trade Commission Act.” Id. at *2. It then continued that because 7 the Supreme Court has held that section 5(a)(1) “extends beyond common law concepts of unfair 8 competition,” the UCL “do[es] not necessarily parallel a common law cause of action for unfair 9 methods of competition.” Id. *3. It thus found that the first factor of the test outlined in Tull 10 “weighs against finding a Seventh Amendment right to a jury trial on these claims.” Id. The 11 Court agrees. 12 The Court now turns to the second inquiry from Tull: the nature of the remedy sought. The 13 court in Hope Medical Enterprises noted that the remedy sought for the UCL claim—injunctive 14 relief and attorneys’ fees—was equitable in nature. Id. at *5. Plaintiff here asserts that the relief 15 allowed by the UCL is not necessarily equitable in nature. Opp. at 2-4. A plaintiff can seek 16 injunctive relief and/or restitution under the UCL. See Cal. Bus. & Prof. Code § 17203. And “not 17 all relief falling under the rubric of restitution is available in equity.” Great-W. Life & Annuity 18 Ins. Co. v. Knudson, 534 U.S. 204, 212 (2002). Instead, a court must “look to the substance of the 19 remedy sought rather than the label placed on that remedy.” Depot, Inc. v. Caring for Montanans, 20 Inc., 915 F.3d 643, 661 (9th Cir. 2019) (quoting Mathews v. Chevron Corp., 362 F.3d 1172, 1185 21 (9th Cir. 2004)). Plaintiff here seeks “[d]isgorgement of, restitution of, and/or imposing a 22 constructive trust upon, the ill-gotten gains derived by Defendants from their unjust enrichment.” 23 Compl., Prayer for Relief, ¶ F. But Plaintiff provides no discussion or argument as to why the 24 restitution here would properly be characterized as legal. See Opp. The Court therefore finds that 25 the second inquiry also weighs against finding a Seventh Amendment right to a jury trial. 26 The Court, agreeing with other courts in this circuit that have stated as much, determines 27 that Plaintiff has no Seventh Amendment right to a jury trial on her UCL claim in this case. The IV. ORDER For the foregoing reasons, IT IS HEREBY ORDERED that GEICO’s motion to strike the 2 jury demand is GRANTED. 3 4 Dated: February 27, 2023 6 ETH LABSON FREEMAN 5 United States District Judge 8 9 10 11 12 15 16 = 17 Z 18 19 20 21 22 23 24 25 26 27 28