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Mooney v. Allianz Life Ins. Co. of N.A.: US District Court : CIVIL PROCEDURE - motion to decertify class denied; all alleged misrepresentations the same

Linda L. Mooney and Lieselotte
W. Thorpe, on behalf of
themselves and all others
similarly situated,
v. Civil No. 06-545 ADM/FLN
Allianz Life Insurance Company
of North America,
Karl L. Cambronne, Esq., Chestnut & Cambronne, P.A., Minneapolis, MN; Jason R. Doss, Esq.,
Page Perry, LLC, Atlanta, GA; Diane A. Nygaard, Esq., and Jason M. Kueser, Esq., The
Nygaard Law Firm, Leawood, KS, on behalf of Plaintiffs.
James F. Jorden, Esq., Denise A. Fee, Esq., and Roland C. Goss, Esq., Jorden Burt, LLP,
Washington, DC; Arthur G. Boylan, Esq., Leonard, Street and Deinard, P.A., Minneapolis, MN,
on behalf of Defendant.
On July 9, 2008, the undersigned United States District Judge heard oral argument on
Defendant Allianz Life Insurance Company of North Americas (Allianz) Motion to Decertify
the Class [Docket No. 109]. For the reasons set forth below, Allianzs Motion is denied.
The facts of this matter are recited in the Courts January 12, 2007, and May 10, 2007,
Orders [Docket Nos. 70 and 82] and will not be repeated here. In short, Plaintiffs Linda L.
Mooney (Mooney) and Lieselotte W. Thorpe (Thorpe) allege that Allianz fraudulently
marketed certain annuity products as providing an up-front or immediate bonus, when in
actuality the bonus was not available until years after the products were purchased. Plaintiffs
1 The Eighth Circuit issued another decision in the same matter in 2005. In re St. Jude
Med., Inc., 425 F.3d 1116 (8th Cir. 2005).
assert claims of consumer fraud under the Minnesota Prevention of Consumer Fraud Act
(MPCFA), Minn. Stat. 325F.68-.70, and unjust enrichment under Minnesota common law.
On May 10, 2007, this Court certified this matter as a class action under Federal Rule of
Civil Procedure 23(b)(3). The class is defined as:
All individuals who from February 9, 2000, to the present purchased one of the following
two-tiered annuities from Allianz Life Insurance Company of North America:
BonusMaxxx, BonusMaxxx Elite, BonusDex, BonusDex Elite, 10% Bonus PowerDex
Elite, MasterDex 10, and the InfiniDex 10 (Annuities). The Class excludes all persons
who purchased the above-listed Annuities from Allianz while they were California
residents and when they were 65 or older.
May 10, 2007, Order at 2. In certifying the class under Rule 23(b)(3), this Court determined that
questions of law or fact common to the class members predominate over individual issues, and
that a class action is the superior method of adjudicating the MPCFA and unjust-enrichment
claims. On July 9, 2007, the Eighth Circuit denied Allianzs petition for interlocutory review of
the class certification [Docket No. 87].
The Court previously rejected Allianzs argument that individual factual issues
concerning each class members reliance on the alleged misrepresentations predominate over
class-wide issues. Allianz now contends that the Eighth Circuits recent decision in In re St.
Jude Medical, Inc., 522 F.3d 836 (8th Cir. 2008) (St. Jude II),1 compels the conclusion that
individual issues predominate. Before addressing St. Jude II, the history of the parties earlier
arguments regarding predominance of common or individual issues of reliance should be
In support of class certification, Plaintiffs relied heavily on the Minnesota Supreme
Courts decision in Group Health Plan, Inc. v. Philip Morris Inc., 621 N.W.2d 2 (Minn. 2001).
The Group Health Court held that a plaintiff must establish a causal nexus between her injury
and the defendants wrongful conduct to recover damages under the MPCFA. Id. at 13-14.
Although recognizing that the causal nexus has a reliance component, the Group Health Court
held that in cases . . . where the plaintiffs damages are alleged to be caused by a lengthy course
of prohibited conduct that affected a large number of consumers, the showing of reliance that
must be made to prove a causal nexus need not include direct evidence of reliance by individual
consumers. Id. at 14. In such cases, the causal nexus and its reliance component may be
established by other direct or circumstantial evidence that . . . is relevant and probative as to the
relationship between the claimed damages and the alleged prohibited conduct. Id.
In light of Group Health, Plaintiffs argued they could establish a causal nexus on a classwide
basis without an individualized inquiry into the circumstances of each potential class
members purchase of an Allianz annuity. Plaintiffs relied on sales data showing that increases
in the up-front bonus amount increased Allianzs sales of annuities, and on expert witness
testimony that consumers are likely to infer from the references to an up-front and
immediate bonus that the bonus was immediately accessible.
In response, Allianz argued that individualized inquiries would be necessary to establish
whether each potential class member can show a causal nexus between Allianzs alleged
misrepresentation and damages to the class member. Allianz contended, inter alia, that:
(1) some annuity purchasers could have read the marketing materials and understood how the
bonus worked; (2) some purchasers may not have read the marketing materials; (3) some
purchasers may have bought the annuities for reasons other than the bonus; and (4) independent
insurance agents oral communications differed in explaining how the bonus works.
Applying the guidance of Group Health, this Court found that common questions of fact
predominate because Plaintiffs can prove a causal nexus on a class-wide basis through direct and
circumstantial evidence that policyholders were misled to their detriment by the references to an
up-front and immediate bonus. Such evidence could include consumer testimony, expert
witness testimony, consumer surveys, and market research.
Allianz argues that St. Jude II compels the conclusion that individualized issues
predominate. In St. Jude II, patients implanted with a recalled prosthetic heart valve brought a
products liability action against the manufacturer. 522 F.3d at 837. The district court certified a
class under Rule 23(b)(3). On interlocutory review, the Eighth Circuit reversed the class
certification order. The St. Jude II Court concluded that common issues would not predominate
the inquiry into St. Judes liability. The St. Jude II Court relied on evidence that: (1) some
implant patients did not receive any material representation about the heart valve; and (2)
treating physicians learned about St. Judes heart valve in different ways. Id. at 838-39.
Despite this evidence, the St Jude II plaintiffs argued class certification was still
appropriate because the MPCFA, as interpreted in Group Health, does not require proof of
individual reliance. Rejecting this argument, the Eighth Circuit explained:
Whatever Group Health means about the need for these plaintiffs to present direct
evidence of individual reliance, it does not eliminate the right of a defendant to
present evidence negating a plaintiffs direct or circumstantial showing of
causation and reliance. Given the showing by St. Jude that it will present
evidence concerning the reliance or non-reliance of individual physicians and
patients on representations made by St. Jude, it is clear that resolution of St.
Judes potential liability to each plaintiff . . . will be dominated by individual
issues of causation and reliance.
Id. at 840. The St. Jude II Court also determined that individual issues would predominate in the
remedial phase of the litigation because plaintiffs sought the highly individualized remedies of
medical monitoring and consequential damages for each plaintiff. Id. at 840-41.
Allianz argues St. Jude II compels decertification in the case at bar because Allianz will
present evidence regarding whether individual annuity purchasers relied on the alleged
misrepresentations in the consumer brochures and statements of understanding. As discussed
above, such evidence could include testimony regarding whether a plaintiff read and understood
Allianzs consumer brochure and statement of understanding, whether the independent sales
agent explained how the bonus feature worked, and whether the bonus was important to a
plaintiffs decision to purchase an Allianz annuity. Allianz argues that, as in St. Jude II,
presentation of such evidence will result in individual issues of causation and reliance
predominating over common issues.
The Court finds St. Jude II distinguishable from the instant case. In St. Jude II, there was
evidence that some heart valve patients did not receive any representations about St. Judes heart
valve. Here, there is evidence that each class member received Allianzs alleged
misrepresentations regarding an up-front or immediate bonus. Each class member
acknowledged in writing that he or she read the relevant statement of understanding and
consumer brochure. The written materials included the allegedly misleading references to an
up-front or immediate bonus. Thus, whereas significant factual issues existed in St. Jude II
regarding whether an individual plaintiff received a representation from St. Jude, here each class
member received and acknowledged reading the materials that recited Allianzs representations
regarding the bonus. Another distinction is that the treating physicians in St. Jude II learned
about the heart valve in different ways and therefore conveyed different information to the
plaintiffs. In contrast, Allianz required its independent sales agents to sign a form
acknowledging they did not make statements that differed from the disclosures in the written
materials provided to the annuity purchasers. Finally, whereas St. Jude presented evidence
regarding individual issues of causation and reliance, here the only evidence currently in the
record is that Mooney and Thorpe were confused by the information in their respective consumer
brochures and statements of understanding, and as a result they focused on the statements that
the bonus was up-front or immediate. Mooney Dep. (Fee Decl. [Docket No. 111] Ex. 1) at
53-65; Thorpe Dep. (Fee Decl. Ex. 2) at 72-73, 77-78.
In light of these differences from the facts in St. Jude II, the Court finds common issues
continue to predominate over individual issues. Therefore, Allianzs Motion to Decertify the
Class is denied.
Based upon the foregoing, and all the files, records, and proceedings herein, IT IS
HEREBY ORDERED that Defendant Allianz Life Insurance Company of North Americas
Motion to Decertify the Class [Docket No. 109] is DENIED.
s/Ann D. Montgomery
Dated: July 28, 2008.


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