August 29, 2013
ROBERT JACOBSEN, and all others similarly situated, Plaintiff and Appellee,
ALLSTATE INSURANCE COMPANY, Defendant and Appellant. 
SYNOPSIS OF THE CASE
A split Montana Supreme Court decided that the District Court correctly certified a class action comprised of Allstate insurance policy holders whose claims were adjusted according to a process known as the "Casualty CCPR." However, the Supreme Court also decided that the District Court's certification of class-wide punitive damages violated Allstate's right to due process and modified the class relief available at trial.
Plaintiff Robert Jacobsen suffered bodily injuries and property damage in an automobile collision with an Allstate insured in 2001. Allstate admitted liability and negotiated a settlement with Jacobsen, who did not have a lawyer, for $3, 500 using the "Casualty CCPR" process. Jacobsen began to experience significant pain and retained counsel, who persuaded Allstate to re-open Jacobsen's claim and settle for $200, 000.
Thereafter, Jacobsen sued Allstate, including for alleged violations of Montana's Unfair Trade Practices Act (UTPA). A jury returned a verdict in 2006, finding that Allstate had violated the UTPA and awarded damages to Jacobsen.
Both Allstate and Jacobsen appealed several of the District Court's rulings. We resolved these appeals in a 2009 opinion and remanded the case for a new trial. Jacobsen then amended his complaint to include new class action claims. The class action claims asserted that the "Casualty CCPR" violated the UTPA. Jacobsen sought an injunction, a declaration that the "Casualty CCPR" was unlawful, and class-wide punitive damages.
The District Court certified Jacobsen's proposed class, applying the U.S. Supreme Court's standards from its 2011 opinion in Wal-Mart Stores, Inc. v. Dukes. Allstate appealed, arguing that the certified class did not meet the requirements of Montana's class action statutes and that the District Court had improperly determined that the Montana Rules of Evidence did not apply to class certification proceedings.
In this case, the Montana Supreme Court affirmed the District Court's conclusion that Jacobsen's proposed class met the requirements of Montana law. The Supreme Court applied the reasoning of the Wal-Mart opinion but declined to decide whether it was conclusively adopting the U.S. Supreme Court's analysis for use in future class action cases.
The Supreme Court did modify the class relief available on remand, however. The Supreme Court specifically reversed the certification of class-wide punitive damages based on its conclusion that such an award would violate Allstate's right to due process.
Finally, Allstate had entered several objections concerning what it claimed was inadmissible evidence presented to the District Court during class certification proceedings. The District Court ruled that evidence presented in these proceedings did not need to be in "trial-admissible form, " and Allstate appealed this decision. The Supreme Court upheld the District Court's conclusion, applying federal precedent to decide that the Montana Rules of Evidence need not apply because of the preliminary nature of class certification proceedings.
In dissent, Justice Baker and Justice Rice argued that Jacobsen's proposed class claim did not satisfy the requirements of Montana's class action rules. The Dissent noted that the portion of the rule under which the class had been certified was intended to reach situations where final injunctive relief would resolve the legality of the defendant's behavior with respect to the class as a whole. A class should not be certified under that section of the rule where recovery of damages is at the heart of the complaint, as it is in this case. The dissenting justices also took issue with language in the Court's opinion that they argued unnecessarily speculated about how the Court might view a future case.
In her separate dissent, Justice McKinnon argued that the Court had inappropriately remade the class claim and remedies that Jacobson had requested and the District Court had certified. Jacobson sought, and the District Court certified, injunctive relief to reopen and readjust class claims, in addition to punitive damages. Jacobson did not seek compensatory damages for each class member as this Court now has allowed. Justice McKinnon maintained that the rule on which Jacobson and this Court relies permits only incidental monetary relief and would not allow individualized trials on damages. Regarding the criteria of commonality and typicality, Justice McKinnon does not subscribe to the view that the fact-finder in a class trial can determine whether the CCPR is per se invalid pursuant to the UTPA by disregarding individualized inquiry plainly required by the statute. Finally, Jacobson's claim is not typical of the class because he does not contend that his ultimate settlement was unfair or inequitable.