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OPPOSITION TO PLAINTIFFS' MOTION FOR PRE-CERTIFICATION NOTICE CASE NO.: M:10-CV-02124-SI
RAOUL D. KENNEDY (STATE BAR NO. 40892)
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
Four Embarcadero Center, Suite 3800
San Francisco, California 94111
Telephone: (415) 984-6400
Facsimile: (415) 984-2698
Email: Raoul.Kennedy@skadden.com
JAMES R. CARROLL (PRO HAC VICE)
DAVID S. CLANCY (PRO HAC VICE)
CHRISTOPHER A. LISY (PRO HAC VICE)
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
One Beacon Street, 31st Floor
Boston, Massachusetts 02108
Telephone: (617) 573-4800
Facsimile: (617) 573-4822
Email: James.Carroll@skadden.com
Email: David.Clancy@skadden.com
Email: Christopher.Lisy@skadden.com
Attorneys for Defendant
Conseco Life Insurance Company
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
SAN FRANCISCO DIVISION
IN RE CONSECO LIFE INSURANCE
COMPANY LIFETREND INSURANCE
SALES AND MARKETING LITIGATION
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CASE NO.: M:10-CV-02124-SI
ALL CASES
CONSECO LIFE'S OPPOSITION TO
PLAINTIFFS' MOTION FOR
APPROVAL OF PRE-CLASS
CERTIFICATION FORM OF
NOTICE AND TURNOVER OF
MAILING INFORMATION FOR
PUTATIVE CLASS MEMBERS
Date: July 16, 2010
Time: 9:00 a.m.
Place: Courtroom 10
Judge: The Honorable Susan Illston
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OPPOSITION TO PLAINTIFFS' MOTION FOR PRE-CERTIFICATION NOTICE CASE NO.: M:10-CV-02124-SI
TABLE OF CONTENTS
PRELIMINARY STATEMENT .................................................................................................... 1
ARGUMENT................................................................................................................................. 2
I. THE REGULATORY NOTICE ACCURATELY DESCRIBES THE BENEFITS OF
THE REGULATORY SETTLEMENT, AND IT ALREADY IDENTIFIES THIS
ACTION; IT DOES NOT CREATE CAUSE FOR THE UNUSUAL RELIEF
REQUESTED BY PLAINTIFFS........................................................................................ 2
II. PLAINTIFFS' PROPOSED PRE-CERTIFICATION NOTICE PLAN WOULD BE
UNNECESSARY, CONFUSING AND PREJUDICIAL .................................................... 4
A. If A Class Is Not Certified, Sending Plaintiffs' Notice Would Have Been A
Prejudicial Mistake ................................................................................................. 4
B. Conseco Life Recognizes The Possibility That A Class Could Be Certified, But
This Possibility Does Not Justify Pre-Certification Notice....................................... 6
C. Plaintiffs' Proposed Notice Is Independently Improper ............................................ 8
III. PLAINTIFFS CITE NO AUTHORITY SUPPORTING THEIR UNREASONABLE
PROPOSAL ....................................................................................................................... 9
A. Plaintiffs Cite No Case In Which A Court Granted Plaintiffs' Request For Pre-
Certification Notice................................................................................................. 9
B. Plaintiffs' Cases For The Proposition That The Regulatory Notice Is
"Problematic" Are Inapposite ................................................................................ 11
C. Plaintiffs' Privacy Cases Are Also Unsupportive Of Their Proposed Notice
Campaign.............................................................................................................. 12
CONCLUSION............................................................................................................................ 13
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OPPOSITION TO PLAINTIFFS' MOTION FOR PRE-CERTIFICATION NOTICE CASE NO.: M:10-CV-02124-SI
TABLE OF AUTHORITIES
CASE PAGE(S)
Babbitt v. Albertson's Inc.,
No. C-92-1883 SBA (PJH), 1992 WL 605652 (N.D. Cal. Nov. 30, 1992).........................10, 12
Bird Hotel Corp. v. Super 8 Motels, Inc.,
No. CIV 06-4073, 2007 WL 404703 (D.S.D. Feb. 1, 2007) ....................................................13
Brown v. Blue Cross and Blue Shield of Michigan Inc.,
167 F.R.D. 40 (E.D. Mich. 1996)............................................................................................. 5
Bublitz v. E.I. DuPont de Nemours & Co.,
196 F.R.D 545 (S.D. Iowa 2000) ......................................................................................10, 12
Cox Nuclear Med. v. Gold Cup Coffee Servs., Inc.,
214 F.R.D. 696 (S.D. Ala. 2003) ............................................................................................10
Gulf Oil Co. v. Bernard,
452 U.S. 89 (1981) .................................................................................................................10
Kamm v. Cal. City Dev. Co.,
509 F.2d 205 (9th Cir. 1975) ................................................................................................... 5
Khalilpour v. CELLCO P'ship Co.,
No. C 09-02712 CW (MEJ), 2010 WL 1267749 (N.D. Cal. Apr. 1, 2010) ..............................12
Kleiner v. First Nat'l Bank of Atlanta,
751 F.2d 1193 (11th Cir. 1985)...............................................................................................10
In re M.L. Stern Overtime Litig.,
250 F.R.D. 492 (S.D. Cal. 2008).............................................................................................10
McArdle v. AT&T Mobility LLC,
No. C 09-1117 CW (MEJ), 2010 WL 1532334 (N.D. Cal. Apr. 16, 2010) ........................10, 12
In re McKesson HBOC, Inc. Sec. Litig.,
126 F. Supp. 2d 1239 (N.D. Cal. 2000).............................................................................10, 11
Oppenheimer Fund, Inc. v. Sanders,
437 U.S. 340 (1978) ...............................................................................................................13
Payne v. Goodyear Tire & Rubber Co.,
207 F.R.D. 16 (D. Mass. 2002)...............................................................................................10
Salazar v. Avis Budget Grp., Inc.,
No. 07cv64-IEG (WMc), 2007 WL 2990281 (S.D. Cal. Oct. 10, 2007) ............................10, 12
Upshaw v. Ga. Catalog Sales, Inc.,
206 F.R.D. 694 (M.D. Ga. 2002) ......................................................................................10, 12
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OPPOSITION TO PLAINTIFFS' MOTION FOR PRE-CERTIFICATION NOTICE CASE NO.: M:10-CV-02124-SI
Westerfield v. Quizno's Franchise Co., LLC,
2007 WL 1062200 (E.D. Wis. Apr. 6, 2007)......................................................................3, 4
STATUTES
Fed. R. Civ. P. 23............................................................................................................................. 7
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OPPOSITION TO PLAINTIFFS' MOTION FOR PRE-CERTIFICATION NOTICE CASE NO.: M:10-CV-02124-SI
PRELIMINARY STATEMENT
Defendant Conseco Life Insurance Company ("Conseco Life") respectfully
submits this opposition to Plaintiffs' Motion for Approval of Pre-Class Certification Form of
Notice and Turnover of Mailing Information for Putative Class Members (Docket No. 70)
("Motion").
Plaintiffs' request for pre-certification class notice is impractical, inappropriate
and legally unsupported.
Briefing on class certification will be complete this month, and Plaintiffs'
proposed class will either be rejected or certified.
If the proposed class is rejected, any pre-certification notice will have added no
value, and will have caused only confusion and prejudice to a Regulatory Settlement that is one
year in the making, and which as of today is signed by 42 state insurance regulators (representing
approximately 95% of the previously "underfunded" Lifetrend policyholders). Making matters
worse, a curative notice would likely need to be sent, informing policyholders that no class was
certified -- meaning that there would be two notices from this Court about a request for class
certification that was denied.
If on the other hand the Court certifies a class, members will receive an ordinary-
course class notice, duly negotiated and reviewed by the Court in a deliberate manner. And
those class members will by no means be "harmed" by the soon-to-be-sent notice of the
Regulatory Settlement. That notice -- again, approved by 42 regulators -- accurately describes
the benefits of the Regulatory Settlement (Plaintiffs have not contended otherwise), and, as to
this action (which was filed after the regulatory discussions began), discloses its existence, states
that it may result in different relief, and advises policyholders to consult an attorney.
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OPPOSITION TO PLAINTIFFS' MOTION FOR PRE-CERTIFICATION NOTICE CASE NO.: M:10-CV-02124-SI
In sum, there is no need for any pre-certification notice here, much less one as
substantively flawed as that proposed by Plaintiffs -- which reads as an advocacy piece, rather
than a simple statement of relevant facts. (Such a statement is already in the Regulatory Notice.)
Further, as shown herein, Plaintiffs' unusual request is legally unsupported.
Plaintiffs cite no case in which a court authorized a notice of the kind suggested here, much less
in analogous circumstances, e.g., where the class certification ruling is soon to be made, and
where the notice to potential class members of which Plaintiffs complain was approved and
ordered by regulators, and discloses the existence of the class action.
Plaintiffs' request should be denied.
ARGUMENT
I. THE REGULATORY NOTICE ACCURATELY DESCRIBES
THE BENEFITS OF THE REGULATORY SETTLEMENT, AND
IT ALREADY IDENTIFIES THIS ACTION; IT DOES NOT CREATE
CAUSE FOR THE UNUSUAL RELIEF REQUESTED BY PLAINTIFFS
To date, forty-two state insurance regulators have approved the soon-to-be-sent
Regulatory Notice.1 (Regulatory Settlement Agreement, Ex. E.1 (attached as Exhibit A to the
accompanying Declaration of Christopher A. Lisy ("Lisy Decl.")).)
The Regulatory Notice accurately describes the substance of the Regulatory
Settlement and its benefits. Plaintiffs have not contended otherwise.
It also, in plain English, discloses the existence of this action, states that it may
result in other remedies than are provided under the Regulatory Settlement, states that election of
1 The process of mailing the Regulatory Notice will commence on July 16, 2010; the mailings
will be made on a rolling basis over the next two weeks.
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OPPOSITION TO PLAINTIFFS' MOTION FOR PRE-CERTIFICATION NOTICE CASE NO.: M:10-CV-02124-SI
the Regulatory Settlement optional benefits will bar participation in the class action, and suggests
consultation with an attorney:
Important Notice: It is important for you to be aware that if you agree to accept
the options available to you under the Agreement, you will be required to waive
your rights to individual legal action against the Company regarding your
Lifetrend policy or be part of any class action remedies that may exist in the
future. At this time, there is a lawsuit pending entitled In Re Conseco Life
Insurance Company Lifetrend Insurance Sales and Marketing Litigation, Case No.
M:10-CV-02124-SI, in the United States District Court for the Northern District
of California, San Francisco Division. The Court has not approved or certified a
class action as of the date of this Notice. However, if this proposed class action is
approved and successful, you may be offered other remedies than what is
available through this Regulatory Settlement Agreement.
If you have already started legal action related to your policy, please provide a
copy of this letter to your attorney as soon as possible so that he or she might
advise you concerning your options. If you have not started legal action related to
your policy, but feel you require legal advice on the consequences of this process,
you should retain private counsel.
Id. (emphasis original).
In addition, the "Frequently Asked Questions" brochure that will be appended to
the Regulatory Notice states:
[Q:] There is an outstanding Class Action Lawsuit for Lifetrend III,
Lifetrend IV '87 Series, Lifetrend IV '93 series and Lifetrend IV '95 Series
policyowners. Is it better to accept this settlement or wait to see what
happens with the Class Action?
[A:] We cannot assist you with this decision. You should seek the advice of an
attorney who can discuss your options with you. Please refer to your Election
Notice for more information regarding the outstanding Class Action Lawsuit.
"Lifetrend Settlement -- Frequently Asked Questions" Brochure, at 4 (attached as Exhibit B to
the Lisy Decl.).
This content is precisely what courts expect to see in mailings from defendants to
putative class members concerning potential releases. See, e.g., Westerfield v. Quizno's
Franchise Co., LLC, 2007 WL 1062200, *3 (E.D. Wis. Apr. 6, 2007). In Westerfield, the court
denied the plaintiffs' effort to bar the defendant from soliciting a pre-certification release from
putative class members. Id. at *3. The court stated, though, that any communications should
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OPPOSITION TO PLAINTIFFS' MOTION FOR PRE-CERTIFICATION NOTICE CASE NO.: M:10-CV-02124-SI
"alert the recipient (1) that presently pending before this court is an action by several Wisconsin
franchisees against Quizno's that seeks class action status; (2) that signing the release may
prevent the recipient from later joining this action if the class is certified; and (3) that the
recipient may wish to consult with an attorney before signing the release. The notice must also
provide the name of the instant action." Id.
The Regulatory Notice should be afforded particular deference here given that it
was approved and ordered by nearly every state insurance regulator in the country (42 regulators
have joined the settlement to date, and others may still do so). It is fair and appropriate, and does
not create any cause for the unusual relief that Plaintiffs seek.
II. PLAINTIFFS' PROPOSED PRE-CERTIFICATION NOTICE
PLAN WOULD BE UNNECESSARY, CONFUSING AND PREJUDICIAL
Conseco Life understands the Court to have scheduled the hearing on Plaintiffs'
renewed motion for class certification for August 6, 2010, which will decide the motion in one of
two ways: either a class will be certified, or not.2 In either situation, sending pre-certification
notice as Plaintiffs propose would be unnecessary, confusing, and/or prejudicial to the affected
Lifetrend policyholders and to Conseco Life.
A. If A Class Is Not Certified, Sending Plaintiffs'
Notice Would Have Been A Prejudicial Mistake
Conseco Life submits that no class can properly be certified here. The reasons
will be fully developed in Conseco Life's forthcoming opposition to Plaintiffs' renewed motion
for class certification (currently due July 21, 2010), but, in brief, they include the following:
2 Plaintiffs disagree that a hearing on the class certification motion is scheduled for August 6,
and believe that class certification could be decided by the Court even earlier, as soon as
briefing on the motion is complete (currently, July 21). If true, that further supports Conseco
Life's arguments that no pre-certification notice is necessary, as discussed herein.
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OPPOSITION TO PLAINTIFFS' MOTION FOR PRE-CERTIFICATION NOTICE CASE NO.: M:10-CV-02124-SI
(i) Conseco Life has reached the Regulatory Settlement with now 42 state
insurance regulators on the subject matter of this lawsuit, which offers -- in those regulators'
words -- "substantial benefits." (Agreement ¶ 125.) Relevant case law (already provided, and to
be addressed in Conseco Life's class certification opposition) counsels this court not to certify a
class in the face of that settlement. See, e.g., Kamm v. Cal. City Dev. Co., 509 F.2d 205, 210
(9th Cir. 1975); Brown v. Blue Cross and Blue Shield of Michigan Inc., 167 F.R.D. 40 (E.D.
Mich. 1996). Deferring in that manner does not deprive any policyholder of litigation rights:
any policyholder who remains aggrieved will be free to pursue individual claims. (Tellingly,
only twelve policyholders have done so to date.)
(ii) Certification of a class threatens the Regulatory Settlement, in two ways.
First, it (and the associated notice) will result in policyholders -- advertently, inadvertently or due
to confusion -- failing to avail themselves of the benefits of the Regulatory Settlement. Second,
it will give Conseco Life the option to exclude the members of the certified class from the
Regulatory Settlement:
Conseco Life may elect to exclude a Lifetrend Policyowner from the CAP if . . .
the Lifetrend Policyowner has a pending litigation against the Company.
(Regulatory Settlement Agreement ¶ 53.) This provision encompasses members of a certified
class, and, if a class is certified, it could result in the effective dissolution of the Regulatory
Settlement and its substantial, concrete, currently available benefits -- in favor of a lawsuit that
Conseco Life believes is meritless, and that may result in no damages or other relief whatsoever.
But the provision is fair and appropriate: Conseco should not have to provide regulatory
settlement benefits, only to be sued by the same group that is enjoying those benefits.3
3 Paragraph 54 of the Agreement provides that Conseco Life may not exclude policyholders
"on the basis of membership in a purported class in any class action lawsuit pending against
(cont'd)
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OPPOSITION TO PLAINTIFFS' MOTION FOR PRE-CERTIFICATION NOTICE CASE NO.: M:10-CV-02124-SI
(iii) Plaintiffs' class certification motion is otherwise flawed. For example, as
explained at the July 2 hearing, three of the named plaintiffs signed letters reflecting the very
same interpretation of the "guaranteed cash value" provision of the Lifetrend policy that
Plaintiffs now prominently contest. Individualized issues will therefore predominate, an
independent basis for denial of class certification, which combines with the existence of the
Regulatory Settlement to form an unusually powerful basis for denial of class certification.
If for one or all of these reasons the Court does not certify a class (the result
Conseco Life believes is clearly appropriate), any pre-certification notice would clearly have
been unnecessary, and a significant mistake. Further, a curative notice would likely need to be
sent informing policyholders that the proposed class was not certified. This would result in
policyholders being bombarded with at least three separate notices, two of which relate to a class
that was never certified.
B. Conseco Life Recognizes The Possibility That A Class Could Be
Certified, But This Possibility Does Not Justify Pre-Certification Notice
Conseco Life recognizes that the Court could instead certify a class, but that
possibility does not justify pre-certification notice.
The Regulatory Notice identifies this action, states that it may result in "other
remedies," states that electing the optional benefits of the Regulatory Settlement will bar
participation in the class action, and suggests consultation with an attorney. With that disclosure,
policyholders will have 60 days to consider their options and decide whether to elect into the
________________________
(cont'd from previous page)
the Company," but, by its terms, that provision is inapplicable once a class is certified and is
no longer "purported." (Regulatory Settlement Agreement ¶ 54 (emphasis added).)
(This clarifies the discussion on this issue at the July 2, 2010 hearing, when paragraphs 53
and 54 of the Regulatory Settlement Agreement were raised by the Court.)
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OPPOSITION TO PLAINTIFFS' MOTION FOR PRE-CERTIFICATION NOTICE CASE NO.: M:10-CV-02124-SI
settlement. (See Regulatory Settlement Agreement, Exhibit E.1.) Some policyholders will
exercise their option to release Conseco Life, but if they do, they will have done so voluntarily,
with full knowledge of this action.
Further, briefing on the class certification motion will be complete in July, and the
Court may rule on class certification soon. (Plaintiffs certainly think so: yesterday they denied
Conseco Life's request for a one-week extension on the July 21 deadline for Conseco Life's class
certification opposition, on the basis that this could delay the Court's class certification ruling.)
If the Court chooses to certify a class, therefore, ordinary-course class notice pursuant to Rule 23
of the Federal Rules of Civil Procedure may well be sent in August, during policyholders' 60-day
window to elect into the Regulatory Settlement.
Moreover, any form of notice from Plaintiffs should come after class certification
has been fully briefed. This approach is consistent with the Court's establishing a schedule to
permit just that -- i.e., briefing and a hearing to permit the Court to fully understand the
developing, complex class certification issues with all deliberate speed, before doing anything
inconsistent with or potentially harmful to the Regulatory Settlement.4
The fact that Plaintiffs have substantially broadened their proposed class
definition is one illustration of why notice should await full development of the issues. Under
4 Plaintiffs contend that their proposed notice is necessary to "balance the interests" of the
parties in this action and that, without it, putative class members will be "deprived of
information that is essential to their ability to make informed decisions." (Motion at 5-6.)
That argument is especially unavailing given Plaintiffs' continual morphing of their case
theory. As explained in Conseco Life's previously-filed opposition to Plaintiffs' first joint
motion for class certification, Plaintiffs asserted one theory in their complaint (belated
underfunding), another in their class certification motion (improper calculation of guaranteed
cash values) and a third in their depositions (oral misrepresentations about premium
payments). (See Docket No. 25, at 3-5.) And as discussed herein, Plaintiffs have just
rewritten their proposed class definition. Conseco Life could not be expected to hit those
moving targets in the Regulatory Notice.
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OPPOSITION TO PLAINTIFFS' MOTION FOR PRE-CERTIFICATION NOTICE CASE NO.: M:10-CV-02124-SI
the previous class definition, Plaintiffs were seeking to represent Lifetrend policyholders who
had actually been sent the October 2008 Letter from Conseco Life (a finite universe of
individuals). (See Joint Motion for Class Certification filed March 13, 2010 (Docket No. 15), at
5.) Now, however, Plaintiffs wish to include not only those policyholders, but also any other
Lifetrend policyholder who might ever receive a notice that their annual premium is due (if the
policyholder formerly elected the "OPP" option), or that the fees on their policy might increase.
(See Amended Motion for Class Certification filed July 7, 2010 (Docket No. 76) at 3.) That is a
much larger -- and far more nebulous -- group of people. While Conseco Life understood from
the July 2, 2010 hearing that Plaintiffs were to clarify their posture with respect to class
certification, Conseco Life did not understand that to be a license to considerably broaden their
proposed class -- and Conseco Life strongly disagrees with Plaintiffs' attempt to do so now, at
this late stage of the class certification proceedings. This issue -- among the many others
relevant to class certification -- should be briefed and resolved before any form of class notice is
sent.
C. Plaintiffs' Proposed Notice Is Independently Improper
Aside from being an ill-conceived idea, the execution of the proposed pre-
certification notice is flawed. It is, simply put, an advocacy piece that is both coercive and
misleading and is designed to persuade policyholders to reject the Regulatory Settlement. By
way of example only, the following independent provisions of the proposed notice are
objectionable:
The proposed notice states that "Conseco announced that, under a settlement
agreement it has reached with various state insurance regulators (the "Regulatory
Settlement"), Conseco has modified its planned administrative changes." (Docket No.
71 at 4.) While facially true, this fails to mention that the Regulatory Settlement is in
fact an order prescribing a number of terms and conditions that Conseco Life is
compelled to follow, and that (to date) 42 regulators have endorsed this order. As
written here and elsewhere, Plaintiffs' proposed notice conveys the impression that
Conseco Life is following its course of conduct voluntarily.
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OPPOSITION TO PLAINTIFFS' MOTION FOR PRE-CERTIFICATION NOTICE CASE NO.: M:10-CV-02124-SI
The proposed notice sets out in bullet format five separate, detailed paragraphs
containing Plaintiffs' allegations. By contrast, the fact that Conseco Life disputes
Plaintiffs' allegations is afforded one sentence. This lack of balance is objectively
misleading and unfair.
The proposed notice sets out a list of documents that Plaintiffs will host for viewing
on a website. Insufficient regard is given to documents filed by Conseco Life (e.g.,
Plaintiffs anticipate including complaints, but not Conseco Life's answers or motion
to dismiss). Again, Plaintiffs' one-sided presentation is misleading.
This impropriety stretches beyond mere phraseology. The entire point of the
notice is to coerce policyholders into rejecting the terms of the Regulatory Settlement in favor of
remaining in the class. That is improper.
Moreover, it is clear that Plaintiffs have given no thought to the details of their
proposed notice. For example, they wish to hire a third party to administer a phone bank for
policyholders who have questions about the class action, but they have provided no information
as to what the administrator would say about this lawsuit or the claims and defenses of the
parties, or who would be involved in providing that content to the administrator. (Similarly, they
have not explained who would select the documents to be maintained on the administrator's
website.) Nor do Plaintiffs address how this phone bank would co-exist with the 1-800 hotline
that Conseco Life is required to establish under the Regulatory Settlement Agreement. These
details are anything but minor, and without a well-crafted plan, even more confusion will result.
III. PLAINTIFFS CITE NO AUTHORITY
SUPPORTING THEIR UNREASONABLE PROPOSAL
A. Plaintiffs Cite No Case In Which A Court
Granted Plaintiffs' Request For Pre-Certification Notice
Plaintiffs cite no case in which a court ordered that pre-certification notice be sent
to absent class members, much less in circumstances analogous to those here. Each of the cases
Plaintiffs cite is distinguishable on this basis, as well as others.
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OPPOSITION TO PLAINTIFFS' MOTION FOR PRE-CERTIFICATION NOTICE CASE NO.: M:10-CV-02124-SI
In Gulf Oil Co. v. Bernard, 452 U.S. 89, 102-04 (1981), the U.S. Supreme Court
vacated an order flatly barring all parties from communicating with absent class
members without prior court approval, on the basis that the district court failed to
make proper findings supporting that sweeping order. There was no order granting
plaintiffs license to send their proposed pre-class certification notice. Id.
In Cox Nuclear Med. v. Gold Cup Coffee Servs., Inc., 214 F.R.D. 696, 698 (S.D. Ala.
2003), the court permitted communication by defendant with putative absent class
members (the defendant's customers), which included a request for a
release. Similarly, in In re M.L. Stern Overtime Litig., 250 F.R.D. 492, 500-01 (S.D.
Cal. 2008), with certain modifications, the court permitted communication by
defendant with absent class members (the defendant's employees), which included a
request for a release.
In Bublitz v. E.I. DuPont de Nemours & Co., 196 F.R.D 545, 548-49 (S.D. Iowa
2000), the court permitted (with certain modifications) defendant's solicitation of
settlement/release from putative absent class members (the defendant's employees).
In Payne v. Goodyear Tire & Rubber Co., 207 F.R.D. 16, 20-21 (D. Mass. 2002), the
court permitted defendant to continue offering to putative absent class members (the
defendant's customers) free in-home inspections of a contested product, and to
continue advertising those inspections on its website.
In In re McKesson HBOC, Inc. Sec. Litig., 126 F. Supp. 2d 1239, 1245-46 (N.D. Cal.
2000) (Whyte, J.), the court ordered two plaintiffs' firms to make a curative notice to
putative absent class members where they distributed an improper initial notice
designed to steer claimants away from the court-chosen lead counsel.
In Kleiner v. First Nat'l Bank of Atlanta, 751 F.2d 1193, 1197-98 (11th Cir. 1985), a
certified class action, the court sanctioned defendant for a "secret" campaign of purely
telephonic communications with absent class members in violation of two court
orders (timed to coincide with the judge's vacation, and to compete with a previously-
ordered official notice program).
In McArdle v. AT&T Mobility LLC, No. C 09-1117 CW (MEJ), 2010 WL 1532334,
at *5-6 (N.D. Cal. Apr. 16, 2010), for purposes of discovery, plaintiffs
were given contact information for certain potential class members (namely, those
who had already complained about the issue in the suit). There was no issue in this
case concerning sending notice to absent class members. Id. Similarly, in Salazar v.
Avis Budget Grp., Inc., No. 07cv64-IEG (WMc), 2007 WL 2990281, at *1-3 (S.D.
Cal. Oct. 10, 2007) and Babbitt v. Albertson's Inc., No. C-92-1883 SBA (PJH), 1992
WL 605652, at *1-6 (N.D. Cal. Nov. 30, 1992), the court ordered defendants to
produce the names of certain absent class members for discovery purposes, not for
notice purposes.
In Upshaw v. Ga. Catalog Sales, Inc., 206 F.R.D. 694, 702 (M.D. Ga. 2002), the
court ordered the defendants to produce a class list with contact information after the
court granted certification of plaintiffs' class.
None of these cases are precedent for Plaintiffs' demand here. And certainly,
Plaintiffs cite no case in which such an order was issued in circumstances like those before the
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OPPOSITION TO PLAINTIFFS' MOTION FOR PRE-CERTIFICATION NOTICE CASE NO.: M:10-CV-02124-SI
Court -- for example, where a class certification decision will be made soon anyway, and where
the noticed demanded by plaintiffs would confuse a regulatory settlement that nature of which
already addresses the proposed class action.
B. Plaintiffs' Cases For The Proposition That The
Regulatory Notice Is "Problematic" Are Inapposite
Plaintiffs cite two cases for the proposition that the Regulatory Notice, standing
alone, is "problematic" (Motion at 11), but these cases are similarly distinguishable.
(i) In re McKesson HBOC, Inc. Sec. Litig., 126 F. Supp. 2d 1239, 1245-
46 (N.D. Cal. 2000) (Whyte, J.). Plaintiffs describe this case, incorrectly, as follows: "finding
that communications from the defendant to the putative class can be misleading if they do not
identify the court-appointed lead plaintiff and counsel or the procedures that safeguard the
appropriateness of class certification, or if the communications provide an inadequate disclosure
of the comparative costs and benefits of participating in a class action." (Motion at 5 (emphasis
added).)
This is incorrect. In McKesson, the court had appointed lead Plaintiffs' counsel in
a securities action, and two rejected Plaintiffs' firms sent a mass mailing urging putative class
members to abandon that proceeding and engage the rejected firms for individual lawsuits. 126
F. Supp. 2d at 1241. The mailing was misleading in multiple ways (e.g., suggesting that it was
court-approved, and conveying a "gratuitous air of urgency"), and the "opt out" that was sought
"would be as easy as pressing a 'click here' button on a web page." Id. at 1244. Also, there is no
suggestion in the decision that the solicitation counseled the recipient to consult his or her
attorney. In that very different context, the court was concerned about the absence in the notice
of information regarding the proposed class action. By no means does this case express any
generic "rule" about the proper content of a class notice.
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(ii) Bublitz v. E.I. DuPont de Nemours & Co., 196 F.R.D 545, 548-49 (S.D.
Iowa 2000). Plaintiffs cite this case for the proposition that "in-person" solicitations are
disfavored. (Motion at 5.) Again, the holding is different and narrower. At issue in Bublitz was
Defendant's proposed settlement solicitation to absent class members. The court permitted it,
with certain guidelines -- one of which was that "any communication" on the relevant topics
"must be in writing." 196 F.R.D. at 549. The court imposed this guideline (and others) because
of a unique circumstance not present here: the absent class members were in an at-will
employment relationship with the defendant, a situation where "the risk of coercion is
particularly high." Id. at 548. ("The court is of the opinion that the at-will employer-employee
relationship . . . produces a strong potential for coercion and thus justifies minimal protections."
Id. at 547.) No at-will employment relationship exists here. Further, the notices at issue are in
writing, and merely -- as ordered by the regulators -- include a 1-800 number for any questions. 5
C. Plaintiffs' Privacy Cases Are Also
Unsupportive Of Their Proposed Notice Campaign
Plaintiffs cite multiple cases in which courts gave plaintiffs access to names
and/or other information concerning putative absent class members. (Motion at 6-7.)
In those cases, the plaintiffs persuaded the court that the information was
necessary to develop facts relevant to whether a class should be certified; in none of those cases
was the information sought in order to support a pre-certification notice.6 In general, access to
5 To the extent that any questions are asked about the class action, the answer will not go
beyond what is already in the written materials.
6 See Khalilpour v. CELLCO P'ship Co., No. C 09-02712 CW (MEJ), 2010 WL 1267749 (N.D.
Cal. Apr. 1, 2010) (for purposes of discovery, plaintiffs were given contact information for
certain potential class members); McArdle, 2010 WL 1532334 at *5-6 (same); Salazar, 2007
WL 2990281 at *1-3 (same); Babbitt, 1992 WL 605652, at *1-6 (same). And in Upshaw,
206 F.R.D. at 702, the court ordered the defendants to produce a class list with contact
information after the court granted certification of plaintiffs' class.
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OPPOSITION TO PLAINTIFFS' MOTION FOR PRE-CERTIFICATION NOTICE CASE NO.: M:10-CV-02124-SI
this information at the pre-certification stage depends on whether it is necessary to develop facts
relevant to whether a class should be certified; where that is not the case, courts deny access to
the information.7 Plaintiffs have made no such showing here; indeed, they do not even argue that
the information is relevant to satisfaction of the Rule 23 requirements. If they thought it was,
they would have asked for it long ago.
Further, Plaintiffs themselves argue that when presented with a pre-certification
request for information about putative class members, the Court should balance the plaintiffs'
need for the information against the privacy interests of the putative class members. (Motion at
6-7.) Here, Plaintiffs' showing of need is wanting, and plainly trumped by privacy interests --
they want disclosure of this personal information for purposes of sending a pre-certification
notice, and, for all the reasons already set forth, that proposed notice is improper and
unwarranted.
CONCLUSION
One purpose of class action litigation is to address situations where the amount in
question does not justify individual plaintiffs hiring lawyers. Here, no one who receives two or
more notices from Plaintiffs will be able to make an informed decision without hiring their own
lawyer. To compound the matter, if the Court does not certify a class (or certifies a class that
consists of fewer policyholders than received notice), policyholders will have been forced to
7 See, e.g., Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 350-53 (1978) (holding that
plaintiffs are not entitled to discover putative class members' contact information under Fed.
R. Civ. P. 26 where they seek the information solely for notice purposes; Rule 26 only
permits discovery of putative class members' identities where the information is relevant to a
claim or defense of any party); Bird Hotel Corp. v. Super 8 Motels, Inc., No. CIV 06-4073,
2007 WL 404703, at *2-4 (D.S.D. Feb. 1, 2007) (denying plaintiffs' motion to compel the
disclosure of the names, telephone numbers and addresses of all putative class members
where the information was "not helpful or necessary to establish or decide certification of the
class" and noting that "[n]o cases have been supplied which support pre-certification
discovery of identification, telephone, and address information for potential class members").
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OPPOSITION TO PLAINTIFFS' MOTION FOR PRE-CERTIFICATION NOTICE CASE NO.: M:10-CV-02124-SI
retain a lawyer for no purpose. In sum, there is no way to satisfy all of the competing interests,
and the Court must decide how to satisfy the greater part of them. That weighs against sending
notice now, at least until the Court and the parties are aware of whether a class will be certified,
and, if so, what the requirements for membership will be.
For all the foregoing reasons, Conseco Life respectfully requests that the Court
deny Plaintiffs' Motion for Approval of Pre-Certification Notice.
Dated: July 14, 2010 Respectfully submitted,
/s/ James R. Carroll
RAOUL D. KENNEDY (State Bar No. 40892)
Skadden, Arps, Slate, Meagher & Flom LLP
Four Embarcadero Center, Suite 3800
San Francisco, California 94111
Telephone: (415) 984-6400
Facsimile: (415) 984-2698
Email: Raoul.Kennedy@skadden.com
JAMES R. CARROLL (Pro Hac Vice)
DAVID S. CLANCY (Pro Hac Vice)
CHRISTOPHER A. LISY (Pro Hac Vice)
Skadden, Arps, Slate, Meagher & Flom LLP
One Beacon Street, 31st Floor
Boston, Massachusetts 02108
Telephone: (617) 573-4800
Facsimile: (617) 573-4822
Email: James.Carroll@skadden.com
Email: David.Clancy@skadden.com
Email: Christopher.Lisy@skadden.com
Attorneys for Defendant
Conseco Life Insurance Company
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OPPOSITION TO PLAINTIFFS' MOTION FOR PRE-CERTIFICATION NOTICE CASE NO.: M:10-CV-02124-SI
CERTIFICATE OF SERVICE
I, James R. Carroll, hereby certify that the foregoing document has been filed on behalf
of Conseco Life Insurance Company on July 14, 2010 through the ECF filing system.
I further certify that a copy of the foregoing document is being served by overnight
courier on July 14, 2010 upon those counsel listed below not registered on the ECF filing
system:
Michael J. Pucillo
BERMAN DeVALERIO
4280 Professional Center Drive
Suite 350
Palm Beach Gardens, FL 33410
Dated: July 14, 2010 Respectfully submitted,
/s/ James R. Carroll
RAOUL D. KENNEDY
Skadden, Arps, Slate, Meagher & Flom LLP
Four Embarcadero Center, Suite 3800
San Francisco, California 94111
Telephone: (415) 984-6400
Facsimile: (415) 984-2698
Email: Raoul.Kennedy@skadden.com
JAMES R. CARROLL (Pro Hac Vice)
DAVID S. CLANCY (Pro Hac Vice)
CHRISTOPHER A. LISY (Pro Hac Vice)
Skadden, Arps, Slate, Meagher & Flom LLP
One Beacon Street, 31st Floor
Boston, Massachusetts 02108
Telephone: (617) 573-4800
Facsimile: (617) 573-4822
Email: James.Carroll@skadden.com
Email: David.Clancy@skadden.com
Email: Christopher.Lisy@skadden.com
Attorneys for Defendant
Conseco Life Insurance Company
Case3:10-md-02124-SI Document85 Filed07/14/10 Page19 of 19
