They were against it before they were for it: Fladell (Part 2 of 3)

December 18, 2014

Insurance LawIn the Fladell case, the defendants pointed out in their opposition that the plaintiffs were seeking limited certification.  According to the Fladell defendants, the plaintiffs requested certification of a national class on three Federal LFPI claims but not of their Florida law claims, for which the plaintiffs requested certification “of a Florida-only class”.  DE 108 at page 1. That set the stage for the rest of the defendants’ opposition at the time, and contradicts the position taken afterward by the same defendants in other legal proceedings.

In approving the Fladell parties’ settlement agreement, the parties and the Federal Judge said that the Florida class action settlement complied with Federal Rules 23(a) and 23(b).  Rule 23 requires among other things that the proposed class action procedure be a superior means of adjudicating the alleged claims and that the current named plaintiffs are adequate to represent the alleged classes in pursuing those claims.

However, the defendants objected to certification in Fladell because of the very danger which the defendants now pose by asking other Courts to preclude the potential LFPI claims of other people in other lawsuits who did not participate in the Fladell settlement agreement:

Plaintiffs seek national certification only on federal-law claims, which are, at best, highly dubious.  If those claims are certified but fail on the merits, res judicata may prevent borrowers residing in 49 other states from bringing the more substantial state-law claims that Plaintiffs assert only for the proposed class of Florida borrowers.  This is not a superior method of adjudication, nor adequate representation of those absent borrowers.

DE 108 at pages 2-3.  [Emphasis added to the defendants’ words.]

Federal Rule 23 also requires that the named plaintiffs qualify as representatives of the entire alleged class in any alleged class action.  The plaintiffs asked for a nationwide class of three (3) Federal claims and a Florida class of their alleged Florida claims, as noted.  The defendants said that the named plaintiffs were not adequate class representatives, however, on at least one of the three alleged Federal claims.  DE 108 at page 11 (“Certification of the RICO claim should also be denied because none of the named Plaintiffs are typical or adequate class representatives.”).

At no time did the Federal Court ever hold in any publicly available Order that the Plaintiffs in Fladell were typical or adequate class representatives for any claims, let alone for any one of the Federal claims they alleged.

It bears repeating that, as the Fladell defendants pointed out, the Fladell plaintiffs requested certification only of Florida claims, and those Florida claims were four in number:  “contract, implied covenant, unjust enrichment, and fiduciary duty.”  DE 108 at 1.  Yet, the defendants tried to settle and the Federal Court purportedly approved their settlement in the Fladell case in Florida of every claim in every State in the nation involving also allegations of “alleged tortious interference,” alleged compliance with “disclosure” laws, “the receipt or non-disclosure of any benefit,” the making or failure to make any “communications” concerning LFPI insurance anywhere, and last but not least, “the regulatory approval or non-approval of any insurance policy, or the premium thereon, placed or charged by the Wells Fargo Defendants.”   Fladell v. Wells Fargo Bank, N.A., 2014 WL 5488167 *7 (S.D. Fla. October 29, 2014).  This is a startling reach into the laws of California, Utah, and Washington State in the previously cited Ursomano, Ali, and Keller cases, respectively.

It is an even more startling reach into the law of every other State in the Union, made even more startling by the Fladell defendants’ objections to this position which they themselves later took:

Plaintiffs are not adequately representing borrowers in every state other than Florida, and this action is an inferior way for them to litigate.

DE 108 at page 19