18th Annual Workplace Class Action Report - 2022 Edition

612 Annual Workplace Class Action Litigation Report: 2022 Edition received, which did not equate to a valid theory of recovery. Id . at 241. Finally, the Tenth Circuit explained that unconscionability was an affirmative defense to enforcement of a contract, and not a cause of action under which Plaintiffs were able to recover damages from Defendants. Accordingly, the Tenth Circuit found that the District Court did not err in dismissing the claims, and it affirmed the District Court’s ruling granting Defendants’ motion to dismiss. Belin, et al. v. Health Insurance Innovations, Inc., 2021 U.S. Dist. LEXIS 21768 (S.D. Fla. Feb. 1, 2021). Plaintiffs, a group of individual consumers not covered by employer health plans, brought a putative class action alleging that Defendants’ fraudulent scheme misled them and others into believing that they were purchasing major medical insurance when, in reality, they were purchasing “limited benefit indemnity plans” and "medical discount plans" that, at best, defrayed a fraction of the out-of-pocket costs. Id . at *3. Plaintiffs moved for class certification, and the Court granted the motion by certifying four subclasses. Plaintiffs’ complaint primarily alleged claims under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), as well as common law claims. At the outset, Defendants argued that Plaintiffs did not have standing because of the so-called doctrine of reverse preemption under the McCarran-Ferguson Act ("MFA"), which preserves the business of insurance for states and expressly provides that state law preempts federal law. The Court rejected this argument by noting that reverse preemption was an affirmative defense that may be raised later in litigation, but was irrelevant to class certification and the jurisdictional issue of standing. The Court also rejected each of Defendants’ arguments as to ascertainability, including that the proposed subclasses were too broad and too vague and that the proposed subclasses expanded the scope of the litigation to include Defendants’ ancillary products among other things. As to numerosity, the putative class purported to number more than tens of thousands, which the Court found to be more than sufficient to establish numerosity. As to commonality, Plaintiffs put fourth four questions that went to the heart of their claims and were capable of common resolution. The Court sided with Plaintiffs by ruling that commonality was met and noting that the RICO claims, by their very nature, raised common questions that focus on the existence of a scheme rather than whether individual Plaintiffs were wronged. Likewise, the Court was satisfied that typicality was met as well. Further, the Court saw no issue with the adequacy requirements because there were no conflicts or concerns that class representative would adequately prosecute the action. Finally, as to Rule 23(b)(3)’s requirements, the Court determined that common issues predominated as to several issues in the case, including the overarching RICO claims. It opined that the Eleventh Circuit had held multiple times that the common issues of fact in a RICO action tended to predominate over all the individual issues. Likewise, the Court concluded that class action was the superior method of adjudicating the claims. The Court rejected Defendants’ argument that it would be too difficult to litigate Plaintiffs’ common law claims on a class-wide basis because the Court would be required to perform a choice-of-law analysis for the claims of each of Plaintiff. The Court determined that because class members paid their fees and premiums to the Florida-based company and, therefore, the alleged injury occurred in Florida, the common law claims could be litigated on a class-wide basis under Florida law. As such, the Court granted Plaintiffs’ motion for certification in its entirety. Elegant Massage, LLC, et al. v. State Farm Mutual Automotive Insurance Co., 2021 U.S. Dist. LEXIS 157304 (E.D. Va. Aug. 19, 2021). Plaintiff, a massage spa, filed a class action alleging that Defendant failed to reimburse claims from its "all risk" commercial property policy following business losses from the COVID-19 pandemic. Plaintiff filed a motion for class certification pursuant to Rule 23, which the Court granted in part and denied in part. Defendant’s policy included coverage of "Loss of Income and Extra Expense," which provided for the loss of business income sustained as a result of the suspension of business operations. Following the national emergency declaration by President Trump due to the COVID-19 pandemic, Virginia Governor Northam issued Executive Order No. 53, which ordered the closure of "recreational and entertainment businesses," including "spas" and "massage parlors." Id . at *3. On May 8, 2020, the Governor issued Executive Order No. 61, which provided that beginning on May 15, 2020, some of the restrictions would be eased and thus, spas and message centers were permitted to open subject to certain restrictions, including limiting occupancy to 50% as well as requiring six feet between workstations, the wearing of face coverings by workers and patrons, and hourly cleaning and disinfection while in operation. Id . at *4. As a result of the policies on social distancing and restrictions on its business, Plaintiff voluntarily closed the spa through May 15, 2020. Id. Plaintiff thereafter submitted a claim for loss of business income and extra expenses under the policy. Defendants denied Plaintiff’s claim ("Denial Letter"), stating that because Plaintiff voluntarily closed its business on March 16, 2020, there was