Whitman v. State Farm Life Insurance Company ( 2021 )

1 The Honorable Barbara J. Rothstein 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE WESTERN DISTRICT OF WASHINGTON 7 AT SEATTLE 8 WILLIAM T. WHITMAN, Individually and on behalf of all others similarly 9 situated 10 Plaintiff, 11 Civil Action No. 3:19-cv-6025-BJR v. 12 ORDER GRANTING MOTION TO STAY 13 STATE FARM LIFE INSURANCE CLASS NOTICE COMPANY, 14 an Illinois corporation 15 Defendant. 16 17 I. INTRODUCTION 18 19 Plaintiff William T. Whitman brings this class action against Defendant State Farm Life 20 Insurance Company (“State Farm”), challenging the insurance company’s implementation of its 21 Form 94030 Universal Life Insurance Policy. Currently before the Court is State Farm’s motion 22 to stay dissemination of the class notice until its Rule 23(f) petition (and any subsequent appeal) 23 to the Ninth Circuit is resolved. Dkt No. 130. Having reviewed the motion and opposition thereto, 24 the record of the case, and the relevant legal authority, the Court will grant the motion. The 25 26 reasoning for the Court’s decision follows. 27 1 II. BACKGROUND 2 On September 20, 2021, this Court granted Plaintiff’s motion for class certification. Dkt. 3 No. 125. On October 4, 2021, State Farm filed a Rule 23(f) petition with the Ninth Circuit seeking 4 review of the class certification order. See Whitman v. State Farm Life Ins. Co., No. 21-80104 5 (9th Cir. Oct. 4, 2021), ECF No. 1. One day later, on October 5, 2021, Plaintiff filed a motion to 6 7 approve and disseminate class notice. Dkt. No. 127. State Farm now seeks to stay dissemination 8 of the class notice until its Rule 23(f) petition has been resolved. Notably, State Farm does not 9 seek to stay the entire case; rather, it only requests that this Court stay distribution of the class 10 notice. 11 III. DISCUSSION 12 Federal Rule of 23(f) provides a mechanism for interlocutory appeal of a court’s order 13 granting or denying class certification. Such appeals do “not stay proceedings in the district court 14 15 unless the district court or the court of appeals so orders.” Fed. R. Civ. P. 23(f). The decision to 16 grant a stay is an “exercise of judicial discretion” and “the propriety of its issue is dependent upon 17 the circumstances of the particular case.” Nken v. Holder, 556 U.S. 418, 434 (2009). A court must 18 balance four factors in determining how to exercise its discretion: (1) whether the movant is likely 19 to succeed on the merits; (2) whether the movant is likely to suffer irreparable harm in the 20 absence of a stay; (3) whether the issuance of the stay would not substantially harm 21 the nonmoving party; and (4) whether a stay will serve the public interest. Reyes v. Educ. Credit 22 23 Mgmt. Corp., 2017 WL 4640418, *2 (S.D. Cal. Oct. 17, 2017). The factors are examined on a 24 “flexible continuum” or “sliding scale approach.” Id. (quoting Aguayo v. U.S. Bank, 2015 WL 25 13344756, at *1 (S.D. Cal. June 26, 2015)). A stay may be appropriate if the party moving for a 26 stay demonstrates that serious legal questions are raised and the balance of hardships tips sharply 27 1 in its favor. Id. (quoting Morse v. Servicemaster Global Holdings, Inc., 2013 WL 123610, at *2 2 (N.D. Cal. Jan. 8, 2013)). 3 The Court concludes that staying dissemination of the class notice is warranted in this 4 case. State Farm raises three “serious legal questions” in its Rule 23(f) petition to the Ninth 5 Circuit, including issues related to the appropriate legal standard governing class certification, the 6 7 insurance company’s ability to present individualized defenses on class certification, and the 8 reliability of Plaintiff’s expert’s damages model. State Farm has also demonstrated that the 9 balance of hardships tips sharply in favor of delaying disseminating the class notice. State Farm 10 argues, and this Court agrees, that sending the notice now risks harm to class members who likely 11 would be confused if the Ninth Circuit reversed this Court’s certification decision. See Brown v. 12 Wal-Mart Stores, Inc., 2012 WL 5818300, at *4-*5 (N.D. Cal. Nov. 15, 2012) (staying 13 dissemination of class notice over concerns about potential class confusion should the notice have 14 15 to be modified or the class decertified); Bally v. State Farm Life Ins. Co., 2020 WL 3035781, *4 16 (N.D. Cal. June 5, 2020) (same). The Court is not persuaded by Plaintiff’s claim that this potential 17 confusion can be obviated through “curative language” in the notice that informs the class of the 18 appeal. Dkt. No. 133 at 11. If anything, such curative language may add to the potential confusion 19 of the lay class members. Bally, 2020 WL 3035781, at *5 (expressing concern that “lay class 20 members will be confused by the posture of the case even if …any notice explains that 21 certification is potentially subject to appeal”); Brown, 2012 WL 5818300, at *4 (“a curative 22 23 notice would not be sufficient” to obviate potential confusion to lay class members).1 Lastly, and 24 importantly, Plaintiff has not demonstrated that he would be harmed by the stay. This narrowly 25 26 1 The Court also finds that staying the class notice serves the public interest because “there is a 27 public interest in avoiding confusion among class members.” Bally, 2020 WL 3035781, at * 5. 1 tailored stay will not impact the progress of this litigation because the parties will continue to 2 move forward with fact and expert discovery, dispositive motions, and other pretrial 3 proceedings.2 Thus, because State Farm has raised serious legal questions in the Rule 23(f) 4 petition and the balance of hardships tips sharply in favor of staying dissemination of the class 5 notice, the Court will grant the motion. 6 7 IV. CONCLUSION 8 For the foregoing reasons, the Court HEREBY GRANTS State Farm’s motion to stay 9 dissemination of the class notice. Dkt. No. 130. 10 Dated this 8th day of December 2021. 11 A 12 13 B arbara Jacobs Rothstein U.S. District Court Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 2 On the other hand, State Farm claims that it will suffer “serious reputational harm” if the class 27 notice was disseminated and then later rescinded. Dkt. No. 130 at 7.