Nichols v. GEICO Gen. Ins. Co.

MERLE NICHOLS, on behalf of himself and all others similarly situated, Plaintiff, v. GEICO GENERAL INSURANCE COMPANY, a foreign automobile insurance company, Defendant.

Case No. 2:18-cv-01253-RAJ

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE

April 28, 2021

HONORABLE RICHARD A. JONES

ORDER

I. INTRODUCTION

Several motions are before the Court: Defendant's Motion for Summary Judgment (Dkt. # 73), Defendant's Motion to Deny Class Certification (Dkt. # 77), Plaintiff's Motion to Certify Class (Dkt. # 94), Second Joint Statement Regarding Filing Documents Under Seal (Dkt. # 123), and Third Joint Statement Regarding Filing Documents Under Seal (Dkt. # 130). Having considered the submissions of the parties, the relevant portions of the record, and the applicable law, the Court finds that oral argument is unnecessary. For the reasons below, Defendant's motions for summary judgment (Dkt. # 73) and to deny class certification (Dkt. # 77) are DENIED, Plaintiff's motion to certify class (Dkt. # 94) is GRANTED, and the parties' joint statements are ADOPTED (Dkt. ## 123, 130).

II. BACKGROUND

On January 15, 2015, Plaintiff Merle Nichols was injured in an automobile accident. Dkt. # 78 ¶ 9; Dkt. # 78-1 at 72. He then sought personal injury protection ("PIP") coverage from Defendant GEICO General Insurance Company ("GEICO"), which insured the vehicle that injured him. Dkt. # 78 ¶ 9. GEICO initially paid some benefits. Id. ¶ 11.

Later, GEICO asked Mr. Nichols to undergo an independent medical examination ("IME") conducted by a GEICO-hired chiropractor. Id. ¶¶ 11, 14; Dkt. # 125-2 at 56-68. The goal of the IME was "to determine the medical necessity and relatedness of the treatment to the accident." Dkt. # 78-1 at 53. Mr. Nichols attended the IME, and the chiropractor issued his report. Dkt. # 125-2 at 56-68. Soon after, on August 21, 2015, GEICO sent Mr. Nichols a letter terminating his coverage:

According to Dr. Jerry Torrence, "There were no objective findings today to support this patient's subjective findings," and "Merle Nichols has reached maximum medical improvement effective on this date." Therefore, we are suspending all medical payments for treatment your client receives after 8/11/2015. As the treatment up to that date is reasonable and related we will be issuing payments for billing received for dates of service on or before 8/11/2015.

Dkt. # 95-11 at 2 (emphasis added). In response, Mr. Nichols's counsel informed GEICO that maximum medical improvement ("MMI") could not "be the basis of discontinuation of PIP benefits" under WAC 284-30-395. Dkt. # 95-12.

On August 24, 2018, Mr. Nichols sued GEICO in King County Superior Court. Dkt. # 1-2. The same day, GEICO removed the action to this Court. Dkt. # 1.

Based on his Second Amended Complaint, Mr. Nichols alleges that GEICO violated WAC 284-30-395. Dkt. # 16 ¶¶ 1.1-1.2. According to Mr. Nichols, under that regulation, PIP benefits may be terminated only "if treatment is not (1) reasonable, (2) necessary, (3) related to the accident, or (4) incurred within three years of the accident." Id. GEICO violated the regulation, he says, when it terminated his PIP benefits on thebasis that he had achieved "maximum medical improvement," a basis not permitted by the regulation. Id. ¶¶ 1.1-1.2, 5.1-5.16. Because Mr. Nichols alleges that GEICO had a "systematic practice" of doing this to other insureds beyond Mr. Nichols, he is hoping to bring this suit on behalf of a class. Id. ¶¶ 3.1-3.10. He asserts claims for declaratory relief, violation of the Insurance Fairness Conduct Act ("IFCA"), violation of Washington's Consumer Protection Act ("CPA"), common law bad faith, and breach of the implied covenant of good faith and fair dealing. Id. ¶¶ 6.1-10.4.

Since bringing this action, Mr. Nichols has moved for class certification. Dkt. # 94. He has defined the class as:

All insured, as defined within GEICO's Automobile Policy, and all third-party beneficiaries of such coverage, under any GEICO insurance policy effective in the state of Washington between July 24, 2012 and the present, for whom GEICO limited or terminated benefits, or denied coverage based, even in part, upon its determination that its insured or beneficiary had reached "maximum medical improvement" or that such benefits were not "essential in achieving maximum medical improvement for bodily injury."

Id. at 9. GEICO moved to deny class certification.¹ Dkt. # 77. GEICO has also moved for summary judgment, arguing that collateral estoppel bars Mr. Nichols's claims. Dkt. # 73. All motions are now ripe for review.

III. LEGAL STANDARD

A. Summary Judgment

Summary judgment is appropriate if there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Where the moving party will have the burden of proof at trial, it must affirmativelydemonstrate that no reasonable trier of fact could find other than for the moving party. Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007). On an issue where the nonmoving party will bear the burden of proof at trial, the moving party can prevail merely by pointing out to the district court that there is an absence of evidence to support the non-moving party's case. Celotex Corp., 477 U.S. at 325. If the moving party meets the initial burden, the opposing party must set forth specific facts showing that there is a genuine issue of fact for trial to defeat the motion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). The court must view the evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in that party's favor. Reeves v. Sanderson Plumbing Prods., 530 U.S. 133, 150-51 (2000).

B. Class Certification

A court's decision to certify a class is discretionary. Vinole v. Countrywide Home Loans, Inc., 571 F.3d 935, 944 (9th Cir. 2009). Federal Rule of Civil Procedure 23 guides the court's exercise of discretion. A plaintiff "bears the burden of demonstrating that he has met each of the four requirements of Rule 23(a) and at least one of the [three alternative] requirements of Rule 23(b)." Lozano v. AT&T Wireless Servs., Inc., 504 F.3d 718, 724 (9th Cir. 2007). Rule 23(a) requires a plaintiff to demonstrate that (1) the proposed class is sufficiently numerous ("numerosity"); (2) it presents common issues of fact or law ("commonality"); (3) it will be led by one or more class representatives with claims typical of the class ("typicality"); and (4) the class representative will adequately represent the interests of the class ("adequacy"). Gen. Tel. Co. of the S.W. v. Falcon, 457 U.S. 147, 161 (1982); Fed. R. Civ. P. 23(a). If a plaintiff satisfies the Rule 23(a) requirements, he must also show that the proposed class action meets one of the three requirements of Rule 23(b). Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180, 1186 (9th Cir. 2001).

Here, Mr. Nichols seeks certification under Rule 23(b)(3). Dkt. # 94 at 3. A class may be certified under this subdivision if (1) common questions of law and factpredominate over questions affecting individual members and (2) if a class action is superior to other means to adjudicate the controversy. Fed. R. Civ. P. 23(b)(3). The "predominance" and "superiority" prongs of Rule 23 work together to ensure that certifying a class "would achieve economies of time, effort, and expense, and promote . . . uniformity of decision as to persons similarly situated, without sacrificing procedural fairness or bringing about other undesirable results." Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 615 (1997) (internal citation and quotation omitted). A "central concern of the Rule 23(b)(3) predominance test is whether 'adjudication of common issues will help achieve judicial economy.'" Vinole, 571 F.3d at 944 (quoting Zinser, 253 F.3d at 1189). Thus, the court must determine whether resolution of common questions would resolve a "significant aspect" of the class members' claims such that there is "clear justification" for class treatment. Hanlon v. Chrysler Corp., 150 F.3d 1011, 1022 (9th Cir. 1998) (citations omitted).

In considering Rule 23's requirements, the court must engage in a "rigorous analysis," but a "rigorous analysis does not always result in a lengthy explanation or in depth review of the record." Chamberlan v. Ford Motor Co., 402 F.3d 952, 961 (9th Cir. 2005) (citing Falcon, 457 U.S. at 161). The court is neither permitted nor required to conduct a "preliminary inquiry into the merits" of the plaintiff's claims. Blackie v. Barrack, 524 F.2d 891, 901 (9th Cir. 1975) (citing Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177 (1974)); see also Fed. R. Civ. P. 23 advisory committee's note (2003) ("[A]n evaluation of the probable outcome on the merits is not properly part of the certification decision."). But see Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 351 (2011) (suggesting that Rule 23 analysis may be inextricable from some judgments on the merits in a particular case). The court may assume the truth of a plaintiff's substantive allegations but may require more than bare allegations to determine whether a plaintiff has satisfied the requirements of Rule 23. See, e.g., Blackie, 524 F.2d at 901, n.17; Clark v. Watchie, 513 F.2d 994, 1000 (9th Cir. 1975) ("If the trial judge has made findings as tothe provisions of the Rule and their application to the case, his determination of class status should be considered within his discretion.").

IV. DISCUSSION

A. Joint Statements Regarding Filing Documents Under Seal (Dkt. ## 123, 130)

Explained in a previous order, this Court requires the parties to submit their sealing requests in the form of a joint statement. Dkt. # 118. The parties already submitted one such joint statement, the "First Joint...