Case No. CV 15-7870-DMG (AJWx)
CIVIL MINUTES—GENERAL Present: The Honorable DOLLY M. GEE, UNITED STATES DISTRICT JUDGE KANE TIEN
Deputy Clerk NOT REPORTED
Court Reporter Attorneys Present for Plaintiff(s)
None Present Attorneys Present for Defendant(s)
None Present Proceedings: IN CHAMBERS - ORDER RE DEFENDANT'S MOTION FOR CERTIFICATION OF THE COURT'S JUNE 22, 2016 ORDER AND REQUEST FOR STAY 
On December 4, 2015, Plaintiff Jennifer Bentley filed a First Amended Class Action Complaint ("FAC") against Defendant United Omaha Life Insurance Company ("United") alleging claims for (1) breach of contractual duty to pay a covered claim; (2) breach of the implied covenant of good faith and fair dealing; and (3) violation of Cal. Bus. & Prof. Code § 17200 et seq. ("UCL"). [Doc. # 16.]
Plaintiff's original class action complaint was filed in the Los Angeles County Superior Court on August 27, 2015. On October 7, 2015, United removed the action to this Court on the basis of diversity jurisdiction. [Doc. # 1.]
On January 15, 2016, United moved to dismiss Bentley's FAC or, in the alternative, strike the class allegations. [Doc. # 22.] On June 22, 2016, the Court granted in part and denied in part United's motion to dismiss. ("June 22, 2016 Order") [Doc #27.] Specifically, the Court dismissed Bentley's UCL claim, but denied United's motion with respect to the breach of contractual duty and implied covenant of good faith and fair dealing claims. The Court also denied United's alternative motion to strike the class allegations.
On July 22, 2016, United filed a motion requesting that the Court certify its denial order for interlocutory appeal and stay the case pending appeal. ("Mot.") [Doc. #30.] On July 29, 2016, Plaintiff filed an opposition. [Doc. #31.] On August 5, 2016, Untied filed its reply. [Doc. #33.]
United objects to and moves to strike the declaration of Samuel L. Bruchey. [Doc. # 33-1.] The Court DENIES the objection as moot—the Court did not rely upon Bruchey's declaration in resolving this motion. --------
For the reasons discussed below, the Court DENIES United's motion for certification and request to stay.
Federal Rule of Evidence 201 enables a court to take judicial notice of adjudicative facts. A fact may be judicially noticed if it is "not subject to reasonable dispute." Fed. R. Evid. 201(b). "Facts are indisputable, and thus subject to judicial notice, only if they are either 'generally known' under Rule 201(b)(1) or 'capable of accurate and ready determination by resort to sources whose accuracy cannot be reasonably questioned' under Rule 201(b)(2)." United States v. Ritchie, 342 F.3d 903, 909 (9th Cir. 2003). "Under Rule 201, [a] court can take judicial notice of public records and government documents available from reliable sources on the Internet, such as websites run by governmental agencies." U.S. ex rel. Modglin v. DJO Glob. Inc., 48 F. Supp. 3d 1362, 1381 (C.D. Cal. 2014) (collecting cases in which courts have taken judicial notice of the websites of government agencies).
Here, in connection with the motion for certification, United asks the Court to take judicial notice of the California Department of Insurance's ("DOI's") writings in the System for Electronic Rate and Form Filing ("SERFF"). [Doc. #30-3.] These documents are available on the SERFF website where the DOI, a governmental agency, places instructions for any insurance company seeking DOI approval. See Mot., Exs. A and B. The Court GRANTS United's request for judicial notice.
The Court incorporates its discussion of the facts from the June 22, 2016 Order and need not repeat it here. See June 22, 2016 Order at 2. //
Under 28 U.S.C. § 1292(b), a district court may certify for immediate appeal an otherwise unappealable interlocutory order where an order "involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation." 28 U.S.C. § 1292(b). The Ninth Circuit has construed section 1292(b) to constitute three separate requirements, specifically: (1) a controlling question of law; (2) on which there are substantial grounds for difference of opinion; and (3) an immediate appeal may materially advance the ultimate termination of the litigation. See In re Cement Antitrust Litig. (MDL No. 296), 673 F.2d 1020, 1026 (9th Cir. 1982).
Because Section 1292(b) "is a departure from the normal rule that only final judgments are appealable," it "must be construed narrowly" and invoked only in "rare circumstances." James v. Price Stern Sloan, Inc., 283 F.3d 1064, 1067 n.6 (9th Cir. 2002). Section 1292(b) certification "requires the district court to expressly find in writing that all three § 1292(b) requirements are met." Couch v. Telescope Inc., 611 F.3d 629, 633 (9th Cir. 2010).
A. Substantial Ground for Difference
In determining whether a "substantial ground for difference of opinion" exists under Section 1292(b), "courts must examine to what extent the controlling law is unclear." Couch, 611 F.3d at 633. In general, a substantial ground for difference of opinion exists where (1) the circuits are in dispute on the question and the Ninth Circuit has not spoken on the point; (2) complicated questions arise under foreign law; or (3) the order at issue addresses novel and difficult questions of first impression. Id. Substantial grounds for difference of opinion thus exist where "novel legal issues are presented, on which fair-minded jurists might reach contradictory conclusions." Reese v. BP Exploration (Alaska) Inc., 643 F.3d 681, 688 (9th Cir. 2011). The Ninth Circuit has clarified that "[a] substantial ground for difference of opinion exists were reasonable jurists might disagree on an issue's resolution, not merely where they have already disagreed." Id. at 688 (emphasis added).
Here, United asserts that whether the Statutes in this case—sections 10113.71 and 10113.72 of the California Insurance Code—apply to the Policy that United issued long before the Statutes took effect presents a novel legal issue. Mot. at 9. United raises several factors it contends may serve as substantial grounds for differences in opinion. For instance, United argues that because the Statutes do not explicitly include the word "renewal," some courts may conclude that the California Legislature did not intend for the Statutes to apply to policy renewals. Mot. at 16. But as the Court noted in its June 22, 2016 Order, the Statutes do not apply retroactively to the Policy—rather, Section 10113.72(b) of the Insurance Code applies prospectively from the effective date of the Statutes and when a policy renews, it incorporates any changes in the law that occurred prior to the renewal. See June 22, 2016 Order at 8-9 (citing Stephan v. Unum Life Ins. Co. of Am., 697 F.3d 917, 927 (9th Cir. 2012)).
United also contends that enforcing the Statutes would constitute an unconstitutional impairment of the Policy, by binding "United to a newly-defined contract that it has no right to exit." Mot. at 12. United cites to two distinguishable cases. See Whirlpool Corp. v. Ritter, 929 F.2d 1318, 1323 (8th Cir. 1991); MONY Life Ins. Co. v. Ericson, 533 F. Supp. 2d 921,925 (D. Minn. 2008). The courts in those cases deemed the statutes in question unconstitutional because their application would change the beneficiary of a life insurance policy. But in this case, the Statutes merely add a protective measure to ensure insureds are notified of their right to identify third party designees to whom notice of a potential policy lapse or termination may be sent—there is no change in the beneficiary and, if notice has been provided, United maintains its right to exit from a policy when a lapse in payment occurs. See Cal. Ins. Code §§ 10113.71 and 10113.72.
United further argues that the SERFF interpretations of the Statutes conflict with the Court's interpretation. Mot. at 10-11. The SERFF documents, however, do not interpret or comment on section 10113.72(c), which was one of the focal points of the Court's June 22, 2016 Order. See June 22, 2016 Order at 7. Moreover, as for sections 10113.72 (a) and (b), the SERFF instructions simply restate the statute's language, only adding a few logistical details concerning notice. See Mot., Ex. B at 2.
Although this matter does present an issue of first impression relating to the interpretation of the Statutes, the statutory interpretation is not particularly complicated and represents a straightforward application of well-established canons of statutory construction. For this reason, the Court is not persuaded that this case presents a novel legal issue.
B. Material Advancement of Ultimate Termination of Litigation
This action is still in the early stages of litigation, with the Court just now issuing its Scheduling and Case Management Order. Because this is a class action, an immediate appeal would not hasten the ultimate termination of the litigation because there has yet to be a resolution of Plaintiff's motion for class certification.
Instead of certifying an interlocutory appeal, the Court is more inclined to issue a schedule that expedites the conclusion of this litigation in order that the parties may proceed to the appellate court, if they wish, with appealable orders and a more fully developed factual record.
In light of the foregoing, United's motion for certification and request for stay of proceedings is DENIED.