On June 26, 2020, the Eighth Circuit upheld a $34 million jury award made possible by the trial court’s deeply flawed certification of an unwieldy class of insurance policyholders. In its amicus brief in the case, WLF had argued that, by defining class membership based on whether a policyholder ultimately prevails on the merits of her claims, the district court created an impermissible “fail-safe” class. Fail-safe classes raise serious due-process concerns. They are unfair to defendants because they allow class members to evade the bar of res judicata, as plaintiffs are bound only by a favorable judgment. And they are unfair to absent class members, who too often are deprived of the requisite notice and ability to opt out of the class prior to final judgment. WLF’s brief contended that both of those defects were present in this case. The Eighth Circuit disagreed, however, affirming the class certification in every respect. The appeal arose from a class action by Missouri life-insurance policyholders who allege that State Farm breached their policies by including unlisted factors in their cost-of-insurance rates during the class period.
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