Pryce v. Progressive Corporation

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

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CECELIA PRYCE, individually and on

behalf of others similarly situated,

Plaintiff,

- against - MEMORANDUM AND ORDER

19-CV-1467 (RJD) (RER)

PROGRESSIVE CORPORATION;

PROGRESSIVE CASUALTY INSURANCE

COMPANY; and PROGRESSIVE DIRECT

INSURANCE COMPANY,

Defendants.

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DEARIE, District Judge

Before the Court is Magistrate Judge Reyes’ Report and Recommendation (“R&R”),

dated February 17, 2022, ECF No. 53, recommending that I grant as modified Plaintiff Cecelia

Pryce’s Motion for Class Certification pursuant to Federal Rule of Civil Procedure 23, ECF No.

41. Defendants Progressive Corporation, Progressive Casualty Insurance Company, and

Progressive Direct Insurance Company (collectively “Progressive” or “Defendants”) filed ten

objections to the R&R. See Def. Obj., ECF No. 54. Pryce did not object to the R&R but filed a

brief in opposition to Defendants’ objections. ECF No. 56. Following a careful review of the

R&R, Defendants’ objections, Pryce’s response, and the parties’ class certification briefs, the

Court largely adopts Judge Reyes’ thorough and well-reasoned R&R. We grant Pryce’s motion

to certify the class subject to the modifications delineated below.

BACKGROUND

Section 5102 of the NY Insurance Law (the “No-Fault Statute”), N.Y. INS. LAW § 5102,

requires Progressive to provide an insured with “First Party Benefits” comprised of:

1) reimbursement for Basic Economic Loss, which is capped at $50,000 and includes a

maximum recovery of $2,000 per month in lost wages, less

2) twenty percent of lost earnings,1 less

3) any government disability benefit received.

Pryce’s policy with Progressive Casualty Insurance Company incorporates this $50,000

Basic Economic Loss coverage, referred to as “Mandatory Personal Injury Protection” or “PIP.”

See Policy, ECF No. 39-4 at 11-12.

Following a July 7, 2015 car accident, Progressive paid Pryce’s claims to the tune of

$7,268.32 for five months of lost wages, $36,536.71 for medical expenses, and $785.89 for other

economic losses, totaling $44,590.92. See R&R at 3-4. Pryce also obtained $3,502 in state

disability benefits, resulting in a combined $48,092.92 in First Party Benefits. Id. at 4; Am.

Compl., ECF No. 34, ¶¶ 19-20. Progressive also counted a $200 deductible against Pryce’s

$50,000 PIP coverage. R&R at 4. On March 29, 2016, Progressive sent Pryce a denial of claim

letter notifying her that “No fault benefits available under the above captioned policy have

exhausted. All further No-Fault benefits will be denied.” See Progressive Ltr., attached hereto.

Pryce submits that upon being informed through this letter that her no-fault benefits had

exhausted, she resorted to paying for physical therapy and rehabilitation out of pocket and took

vacation days when physically unable to work due to her injuries. Pryce Aff., ECF No. 41-14, at

¶¶ 5-8.

Pryce subsequently initiated this action against Defendants for breach of contract,

violation of the No-Fault Statute, and deceptive acts or practices in violation of New York

1 We note, as we held in our Order denying Defendants’ Motion to Dismiss, an insured subject to the $2,000 lost

wage cap is not also subject to the 20% offset: “where the Plaintiff claims $2,500 per month or more in lost

earnings, Defendants cannot offset 20% of Plaintiff’s claimed lost wages from her maximum First Party Benefits

because the $2,000 statutory maximum in lost wages benefits already limits Plaintiff to receiving less than the

maximum 80% of her claimed lost wages envisioned by the Legislature.” MTD Order, ECF No. 18, at 7.

General Business Law (“GBL”) § 349 on the theory that she did not receive the full $50,000 in

PIP she was entitled to under the No-Fault Statute and her Progressive policy before receiving

the exhaustion letter. See Am. Compl. ¶¶ 26-39. Pryce seeks damages in addition to injunctive

and declaratory relief. Id. ¶¶ 40-44.

Pryce’s claims stem from her allegation that Progressive prematurely exhausted her

$50,000 PIP through a formula that allowed Progressive to offset more money in lost wages from

the $50,000 coverage than it paid her. Am. Compl. ¶ 21. Specifically, Progressive set Pryce’s

lost wages at $2,500 per month, even though they were $3,306, on the theory that applying the

20% deduction prescribed by the statute would reduce Pryce’s wages to the statutory cap of

$2,000 per month. See id. ¶¶ 18, 21. Progressive then deducted $2,500 — rather than $2,000 per

month — from Pryce’s $50,000 PIP cap, along with her state disability payments. See Denny

Dec., ECF No. 39-3, ¶ 16. As a result of this practice, Pryce’s $50,000 PIP coverage exhausted

before she actually received $50,000 in payments from Progressive and the state disability fund.

As we explained in our order denying Defendants’ Motion to Dismiss, Defendants’ practice

“operate[d] to let Defendants benefit twice, once by limiting Plaintiff’s lost wages benefits to

$2,000 per month and again by permitting Defendant to offset [an additional] $500 per month

from Plaintiff’s maximum First Party Benefits.” MTD Order at 5.

Pryce now seeks to represent a class of Progressive insureds who were subject to

Progressive’s exhaustion formula. The class definition, as revised by the R&R, includes:

All “Eligible Injured Persons” as that term is defined by 11 NYCRR §§ 65-1.1–65-1.3

covered under a policy of insurance issued or administered by Progressive Casualty

Insurance Company, and subject to the provisions of Insurance Law § 5102 who earned

(net of taxes, benefits, and voluntary deductions) monthly wages in excess of two

thousand dollars per month at any point during the period in which they were covered,

who have submitted First Party Benefit claims to, and received payment from,

Progressive Casualty Insurance Company for First Party Benefits that included claims for

lost wages, and which, after paying at least one month of First Party wage benefits,

Progressive Casualty Insurance Company claim coverage had fully exhausted on or after

March 13, 2013. Excluded from the Class are the defendant company; any entity that has

a controlling interest in the defendant company; and any current or former directors,

officers and counsel of the defendant company.

LEGAL STANDARD

Under Federal Rule of Civil Procedure 72(b)(3), when resolving objections to a report

and recommendation of a magistrate judge, the Court “must determine de novo any part of the

magistrate judge’s disposition that has been properly objected to” and then either “accept, reject,

or modify the recommended disposition; receive further evidence; or return the matter to the

magistrate judge with instructions.” FED. R. CIV. P. 72(b)(3). The court reviews for clear error

any conclusory objections, Chime v. Peak Sec. Plus, Inc., 137 F. Supp. 3d 183, 187 (E.D.N.Y.

2015), as well as any portions of the R&R not objected to, White v. W. Beef Props., Inc., No. 07-

cv-2345, 2011 WL 6140512, at *2 (E.D.N.Y. Dec. 9, 2011) (Dearie, J.); see also § 636(b)(1)(A).

DISCUSSION

Because of the comprehensive nature of Defendants’ ten objections, which span nearly

every Rule 23(a) and (b)(3) provision in addition to jurisdictional and other issues, we review the

following issues in turn: (i) standing; (ii) each Rule 23(a) and (b)(3) requirement; and (iii)

Defendants’ remaining objections.

1. Standing

A. Pryce’s Injury-in-Fact

Defendants object to the R&R on the ground that it failed to recognize that Pryce suffered

no injury and therefore lacks Article III standing. To establish an injury-in-fact sufficient to

confer Article III standing, “a plaintiff need only show that he or she suffered an invasion of a

legally protected interest that is concrete and particularized.” Dubuisson v. Stonebridge Life Ins.

Co., 887 F.3d 567, 574 (2d Cir. 2018).

Defendants first contend that Pryce suffered no injury because she actually received more

in lost wages under Progressive’s formula than she would have under her own proposed

calculation. Def. Obj. at 7-9. Even if true, Defendants misconstrue the nature of the injury

claimed by Pryce. Pryce does not allege that she is owed lost wages; her injury arises from a

failure to realize the full benefit of $50,000 in PIP, which includes “medical expense[s], work

loss, [and] other expenses.” Policy at 11. After learning from Progressive that her PIP coverage

had exhausted, Pryce did not to seek coverage for rehabilitation or the days she was physically

unable to work. In Pryce’s words, “if not for Defendants’ ‘creative accounting’ by unlawfully

increasing Basic Economic Loss from $2,000 to $2,500, Pryce would have been entitled to

receive the full $50,000 in Basic Economic Loss coverage,” not the lower amount she received.

Pl. MTD Opp., ECF No. 17, at 5. As the R&R astutely explained, Pryce’s injury is “predicated

not on the amount paid in first party benefits for lost wages in a given month, but on the

additional credit toward her PIP coverage limit that Progressive took, and the premature

exhaustion of her benefits that occurred as a result.” R&R at 14. Defendants’ contentions about

wage loss ignore the true source of Pryce’s claimed injury.

Defendants next argue that Pryce cannot establish injury because her “first-party benefits

never exhausted.” Def. Obj. at 8. This objection boils down to semantics. Progressive’s

definition of “first-party coverage” includes not only the statutorily mandated $50,000 PIP, but

also “[a]dditional PIP, Optional Basic Economic Loss and Medical Payments coverage.” Denny

Dec. ¶ 18. Defendants aver that “first-party coverage” does not expire until an insured has

exhausted each coverage bucket available to them. Id. But only the mandatory $50,000 PIP is at

issue in this case. The optional coverages that Progressive includes in its definition of “first party

coverage” have no effect on the exhaustion formula applied to PIP.

Defendants’ contentions as to the availability of additional coverages are also belied by

the plain language of Progressive’s policy and correspondence with Pryce. The policy provides

that the Medical Payment (“MedPay”) coverage she opted into covers “reasonable expenses

incurred for necessary medical services,” but does not mention rehabilitation or physical therapy.

Policy at 17. In contrast, the definition of “Medical Expenses,” which is not included in MedPay

but is included in Basic Economic Loss, includes “psychiatric, physical and occupational therapy

and rehabilitation” along with “nonmedical remedial care.” Id. at 12. Furthermore, Progressive’s

March 29, 2016 letter to Pryce informing her of the exhaustion of her “No Fault Benefits,” a

phrase that is not defined in the letter, does not reference the availability of any additional

coverage options, and states “All further No Fault benefits will be denied.” Progressive Ltr. It

was entirely reasonable for Pryce to conclude that she would receive no additional payments

from Progressive to cover her physical therapy or the days off she took due to physical ailments.

In sum, Defendants’ effort to paper over the exhaustion of PIP coverage by pointing to

other irrelevant coverage options is unavailing. Our review leads us to the same conclusion

reached by Judge Reyes: Defendants notified Pryce that she had exhausted Basic Economic Loss

coverage in March 2016 even though she had not received $50,000 in First Party Benefits. Am.

Compl. ¶ 20. As alleged, this premature exhaustion and consequent denial of a statutory and

contractual right constitutes a cognizable injury sufficient to confer Article III standing.

B. Putative Class Members’ Injury-in-Fact

Defendants also object to the R&R on the ground that Judge Reyes recommended the

certification of a class that would include uninjured class members. Def. Obj. at 16. Specifically,

the R&R modified the class definition to remove a carve out for individuals who were already

fully compensated for their lost wages. See R&R at 28. This modification, Defendants argue,

exposes the class to members that have been fully compensated for lost wages and not suffered

any injury.

But Defendants again confuse the injury alleged as one of lost wages as opposed to

premature coverage exhaustion. The revised class definition is designed to capture individuals

subject to the PIP exhaustion formula at issue, namely those who: (i) submitted claims to

Progressive, (ii) earned more than $2,000 per month in wages, and (iii) were informed by

Progressive that PIP coverage had exhausted. Under Plaintiff’s theory of liability, because

Progressive has apparently applied the same Basic Economic Loss formula for all policyholders,

see Def. Interrog. Resp., ECF No. 41-1, ¶ 5(c); Denny Dec. ¶¶ 12-16, individuals who meet these

criteria were injured when Progressive accelerated its own credits towards the PIP cap

preventing the realization of the $50,000 in PIP required by law. We are satisfied that the class

definition will reach class members who faced the relevant injury.2

C. Pryce’s Standing to Sue Progressive Direct and Progressive Corporation

Pryce has not objected to the R&R’s conclusion that she lacks standing to sue Progressive

Direct and Progressive Corporation. We review this conclusion for clear error and find none.

Pryce’s lack of any business relationship with Progressive Direct or Progressive Corporation, or

any other means to trace her injuries to those entities, preclude her from meeting the Article III

standing requirement that those defendants caused her injury. TransUnion LLC v. Ramirez, 141

S. Ct. 2190, 2203 (2021).

2 As Judge Reyes recognized, even if the class were to include some uninjured individuals, the existence of class

members without injury is not fatal to certification. See e.g., In re Restasis (Cyclosporine Ophthalmic Emulsion)

Antitrust Litig., 335 F.R.D. 1, 16 (E.D.N.Y. 2020) (collecting cases in which courts certified classes with uninjured

members and finding “no support for defendant’s contention that the mere existence of uninjured class members in

this putative class compels denial of” class certification).

Having found that Pryce lacks standing to sue Progressive Corporation, the Court need

not address Defendants’ contention that the Court lacks personal jurisdiction over Progressive

Corporation. We note, for the avoidance of doubt, that Defendants waived the defense of

personal jurisdiction by waiting to assert it until after their motion to dismiss the complaint. See

Transaero, Inc. v. La Fuerza Aerea Boliviana, 162 F.3d 724, 730 (2d Cir. 1998); FED. R. CIV. P.

12(h). While Defendants offer a single case, Simon v. Ultimate Fitness Group., LLC, No. 19-cv-

890, 2019 WL 4382204 (S.D.N.Y. Aug. 19, 2019), in support of the proposition that courts may

defer personal jurisdiction questions until the class certification stage, they neglect to mention

that the defendant in that case raised the defense in its first significant defensive move, and,

while encouraging the court to defer its decision until class certification, recognized the need to

“preserve the issue of personal jurisdiction, which is waived if not raised in a responsive

pleading or motion to dismiss.” Id. at *4. In this case, Defendants failed to preserve the defense.

D. Pryce’s Standing to Pursue Injunctive and Declaratory Relief

Pryce does not object to Judge Reyes’ conclusion that she has no standing to seek

injunctive or declaratory relief. Reviewed for clear error, we will not disturb the finding that

Pryce’s failure to establish ongoing harm precludes her claim for injunctive relief. We also find

no error in Judge Reyes’ conclusion that declaratory relief is unnecessary because the legal

issues raised by Pryce will be resolved through the prosecution of her contractual and statutory

causes of action against Defendants.

2. Rule 23(a) Objections

Defendants object to the R&R’s conclusion that Rule 23(a)’s numerosity, adequacy, and

typicality requirements are satisfied. For the reasons below, we accept the R&R’s

recommendations on each of those issues.

A. Numerosity

Defendants accuse the R&R of failing to meet the Rule 23(a)(1) requirement that a class

be “so numerous that joinder of all members is impracticable” because, according to Defendants,

Pryce has presented “no methodology” and no evidence of sufficient numerosity. Def. Obj. at

10-11. Pryce, however, has devised a formula sufficient to estimate class membership and satisfy

the numerosity requirement: through a sampling exercise, she identifies at least 83 insureds who

meet the class definition by virtue of having their PIP coverage exhausted through Progressive’s

deduction of $2,500 from its Basic Economic Loss formula. See Pl. Rep., ECF No. 42, at 11-12.

Defendants do not dispute the evidence or formula that Pryce submits. Instead, they

accuse her of relying on “pure speculation” and failing to provide any “admissible evidence of

numerosity.” Def. Obj. at 10. This is both inaccurate as to Pryce’s evidence and a misstatement

of the law. Courts do not require evidence of the exact size or identity of the class, see Spread

Enters., Inc. v. First Data Merch. Servs. Corp., 298 F.R.D. 54, 67 (E.D.N.Y. 2014), and courts

routinely find that the numerosity requirement is met through the extrapolation of sampled data,

see e.g., Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 293 F.R.D. 287, 299

(E.D.N.Y. 2013) (finding putative class to be sufficiently numerous where plaintiff’s “estimate is

based on its review of the randomly selected claims files, which . . . revealed 72 [potential class

members]”).

The Court is especially unmoved by Defendants’ demand for the precise number and

identity of class members in light of Progressive’s apparent practice of not tracking the

exhaustion of PIP coverage. Def. Cert. Opp., ECF No. 41-9, at 19; Denny Dec. II, ECF 47-1 ¶¶

8, 12 (stating “Progressive cannot readily ascertain in its systems or otherwise whether an

insured’s PIP benefits exhausted” and noting an inability to index claim files including as a result

of handwritten claim files). Progressive’s questionable recordkeeping will not be a bar to

certification. See Harte v. Ocwen Financial Corp. (numerosity “may be fulfilled by extrapolating

from a sample, particularly where, as here, the Defendant has categorically failed to provide

detailed primary records as to the record files and identities of the proposed class members.”)

No. 13-cv-5410, 2018 WL 1830811, at *27 (E.D.N.Y. Feb. 8, 2018), report and recommendation

adopted, 2018 WL 1559766 (E.D.N.Y. Mar. 30, 2018).

Pryce has supplied more than mere speculation that the number of class members will

exceed the threshold for Rule 23(a) numerosity. See Consol. Rail Corp. v. Town of Hyde Park,

47 F.3d 473, 483 (2d Cir. 1995) (numerosity is presumed at 40 members). Indeed, Defendants

themselves conceded during discovery that there are “thousands of claims potentially at issue.”

Def. Interrog. Resp. at ¶ 5(b). Notwithstanding Defendants’ conclusory assertions, we concur

with Judge Reyes that Pryce has stablished by a preponderance of the evidence that the class will

be sufficiently numerous.

B. Commonality

Defendants’ objections do not address Judge Reyes’ conclusion that Pryce established

commonality among the putative class, so we review that finding for clear error. Pryce readily

satisfies the commonality requirement because Progressive’s practice of applying a Basic

Economic Loss formula to policyholder claims causing premature exhaustion of PIP coverage

constitutes a course of action common to all class members. See FED. R. CIV. P. 23(a)(2).

C. Typicality

Two of Defendants’ objections relate to the Rule 23(a)(3) requirement that the claims or

defenses of the class representative be typical of the claims or defenses of the class. These

arguments overlap considerably with Defendants’ contentions about Pryce’s standing. Typicality

is satisfied when “each class member’s claim arises from the same course of events, and each

class member makes similar legal arguments to prove the defendant’s liability.” Robinson v.

Metro N. Commuter R.R. Co., 267 F.3d 147, 155 (2d Cir. 2001).

i. Pryce’s Class Membership

Defendants insist that Pryce is not a member of the putative class as defined by Judge

Reyes. Because Pryce never exhausted her MedPay coverage, they argue that she cannot be

included among a class of individuals whose “Progressive Casualty Insurance Company claim

coverage had fully exhausted on or after March 13, 2013.” Def. Obj. at 6-7. This is a valid

objection to the class definition. Rather than “First Party wage benefits,” which, as discussed,

subjects the class to Progressive’s expansive definition of first party benefits, the class must be

construed such that only mandatory PIP is at issue. Accordingly, we modify the class definition

to add the following bolded language:

“. . . and which, after paying at least one month of First Party wage benefits, Progressive

Casualty Insurance Company claimed full exhaustion of mandatory $50,000 coverage,

whether defined as Personal Injury Protection (PIP), no fault coverage, or

Economic Loss Benefits, on or after March 13, 2013.

This modification aligns the language in the class definition with Progressive’s

terminology for the $50,000 Basic Economic Loss cap and with the “no fault” language used by

Progressive in the letter informing Pryce that her coverage had exhausted. With that change,

Pryce’s unused optional coverage does not render her atypical of the class she seeks to represent.

ii. Unique Defenses

Defendants also object to the R&R for a purported failure to recognize that Pryce is

atypical because she is subject to unique defenses. Def. Obj. at 18-19. While Defendants are

correct that typicality is generally not met where a class representative is subject to unique

defenses, this rule is not rigidly applied in this Circuit, and is generally applied only where a full

defense is available against a class representative’s action. Madden v. Midland Funding, LLC,

237 F. Supp. 3d 130, 157 (S.D.N.Y. 2017). “The test is whether the defenses will become the

focus of the litigation, thus overshadowing the primary claims, and prejudicing other class

members.” In re Methyl Tertiary Butyl Ether (“MTBE”) Prods. Liab. Litig., 209 F.R.D. 323, 338

n. 22 (S.D.N.Y. 2002).

The defenses that Defendants allude to, principally setoff and recoupment, concern

Progressive’s overpayment of lost wages and the availability of optional coverages to Pryce. See

Def. Obj. at 19. These defenses are not necessarily unique to Pryce and are not full defenses to

Defendants’ liability; in effect, they are damages questions, framed as defenses, which could be

addressed at the claims administration stage. See In re WRT Energy Sec. Litig., No. 96-cv-3610,

2006 WL 2020947, at *2-3 (S.D.N.Y. July 13, 2006) (finding typicality satisfied despite

defendant’s assertion of setoff defense); Levinson v. Westport Nat’l Bank, No. 09-cv-269, 2011

WL 13237887, at *2 (D. Conn. May 10, 2011) (“[I]ndividual class members’ varying damages

are not usually a legitimate basis to deny class certification because these issues may be dealt

with through a claims administration process after a determination of liability.”); On House

Syndication, Inc. v. Fed. Exp. Corp., 203 F.R.D. 452, 458 (S.D. Cal. 2001) (defendant’s defense

of setoff with respect to individual class members could be addressed through a claims

administration process following a finding of liability).

We find no reason to disturb the R&R’s findings as to typicality based on the possibility

of damages-based defenses. Defendants point to no authority supporting a denial of certification

based on the specific defenses they claim to be available. Pryce’s theory of liability derives from

the same facts and legal issues as other individuals meeting the class definition. Differences

among the class in amounts owed by Progressive — whether framed as damages or defenses —

do not counteract this.

For the reasons discussed here and in the R&R, Pryce has demonstrated typicality by a

preponderance of the evidence.

D. Adequacy

Defendants lodge familiar objections as to adequacy, arguing that Pryce is an inadequate

class representative because she did not suffer any injury and is subject to unique defenses. See

Def. Obj. at 15-16. Rule 23(a)(4) requires a finding that Pryce will fairly and adequately protect

the interests of the class. The adequacy inquiry asks whether the class representative has interests

that are antagonistic to other members of the class. See Cordes & Co. Fin. Servs. v. A.G.

Edwards & Sons, 502 F.3d 91, 99 (2d Cir. 2007). Defendants offer no substantive arguments

connecting Pryce’s purported lack of injury or any potential defenses with the adequacy

requirement. Defendants have identified no conflicts of interest between Pryce and other putative

class members. We accept the R&R’s conclusion that Pryce will adequately represent the class.

E. Ascertainability

Defendants’ seventh objection argues that the R&R’s recommended class definition

suffers from a lack of ascertainability because of imprecision in the definition of wages as being

“net of taxes, benefits, and voluntary deductions.” Def. Obj. at 17-18.

The implied requirement of ascertainability is satisfied where the class is defined “using

objective criteria that establish[es] a membership with definite boundaries.” In re Petrobras

Secs., 862 F.3d 250, 257 (2d Cir. 2017). The ascertainability standard is “not a demanding one”

and is designed to filter out indeterminable classes. Shady Grove, 293 F.R.D. at 299.

We agree with Defendants that the R&R’s inclusion of net pay rather than gross pay is

potentially problematic. Progressive calculates its lost wage cap based on gross wages, see

Denny Dec. ¶ 16, and Progressive’s wage calculation and policyholder spreadsheets, which will

assist in the identification of class members, speak in terms of gross wages, see ECF No. 39-2;

ECF No. 42-2. Moreover, the purpose of the statutory 20% reduction in lost wages is to avoid a

windfall for insureds because First Party Benefits otherwise do not account for taxes on wages.

See MTD Order at 4. Finally, as Defendants posit, the quantum of taxes, benefits and voluntary

deductions is unique to each class member and would cause unnecessary individualized

inquiries. Accordingly, the Court revises the class definition to apply to individuals “ . . . who

earned gross monthly wages in excess of two thousand dollars per month at any point during the

period in which they were covered . . .”

Subject to that change, the Court finds the class to be sufficiently ascertainable.

3. Rule 23(b)(3) Objections

A. Predominance

Two of Defendants’ objections challenge Judge Reyes’ finding that Pryce satisfied the

Rule 23(b)(3) requirement that questions of law or fact common to class members predominate

over questions affecting only individual class members.

i. Generalized Proof of Coverage Exhaustion

Defendants dispute Judge Reyes’ conclusion that a determination of coverage exhaustion

is susceptible to generalized proof. Defendants argue that this inquiry would require an

individual review of each claim, causing individualized issues to predominate over classwide

issues. Def. Obj. at 14. But “[t]he predominance inquiry should focus on the liability issue — ‘if

the liability issue is common to the class, common questions are held to predominate over

individual questions.’” In re Nigeria Charter Flights Cont. Litig., 233 F.R.D. 297, 304 (E.D.N.Y.

2006) (quoting Dura-Bilt Corp. v. Chase Manhattan Corp., 89 F.R.D. 87, 93 (S.D.N.Y. 1981)).

Here, as discussed, if Progressive is held liable for breach of contract or violation of the No-Fault

Statute, that liability can be generalized across the class because every class member was subject

to the same Basic Economic Loss offset formula and was informed by Progressive that their

coverage had exhausted.

Shady Grove provides an analog. Judge Gershon certified a class action against an

automobile insurer for violations of the same laws at issue in this case, the No-Fault Statute and

GBL § 349. In rejecting a predominance challenge similar to Progressive’s here, Judge Gershon

noted that “the factual inquiries that will be required will not necessitate mini-trials . . . . Rather,

such determinations will be made by reference to mechanical calculations common to the class

as a whole.” 293 F.R.D. at 303. The court found that the “narrow scope of the class” allowed for

a determination of class membership through “a review of the claim files” and noted the

existence of an “extensive array of management tools available to a district court to address any

individualized damages issues that might arise in a class action.” Id. at 306 (internal quotation

marks and citations omitted). The same is true here: the same theory of liability and course of

action — PIP exhaustion — will apply to each class member. Class membership can be

determined through a review of claim records and mechanical calculations of coverage

exhaustion, if needed. The process of determining which policyholders are class members will

not predominate over common questions of fact and legal liability.

ii. Predominance as to the Elements of Pryce’s Claims

The R&R concluded that the predominance requirement was not met as to Pryce’s claim

under the No-Fault Statute. R&R at 42. That statute provides a cause of action for overdue

benefits, defined as “[benefits] not paid within thirty days after the claimant supplies proof of the

fact and amount of loss sustained.” N.Y. INS. LAW § 5106(a). In other words, liability under the

No-Fault Statute does not accrue until benefits are claimed and their payment becomes

delinquent. Judge Reyes concluded that the structure of the No-Fault Statute meant that

individual issues relating to the existence, timing and amounts of overdue benefits for each class

member would predominate. R&R at 42. Pryce does not dispute this conclusion and we find no

error.

Defendants, however, attempt to extend this same reasoning to Pryce’s two other causes

of action for breach of contract and GBL § 349. Def. Obj. at 7-9. First, according to Defendants,

Judge Reyes should have found that predominance was not met as to the breach of contract claim

because such a claim requires damages, which cannot be presumed on a classwide basis. But

Defendants’ insistence that the element of damages must be established classwide overstates the

predominance requirement. Predominance weighs individual versus classwide issues; it does not

require that every aspect of the class be uniform. Brown v. Kelly, 609 F.3d 467, 484 (2d Cir.

2010) (“Rule 23(b)(3) requires that common questions predominate, not that the action include

only common questions.”); Amgen Inc. v. Conn. Ret. Plans & Tr. Funds, 568 U.S. 455, 469

(2013) (“Rule 23(b)(3), however, does not require a plaintiff seeking class certification to prove

that each element of her claim is susceptible to classwide proof.”) (cleaned up).

As recited above, each individual contemplated by the class definition was allegedly

injured as a result of Progressive’s premature exhaustion of mandatory PIP. The amount of

injury may not be known precisely, but liability does not require an exact amount of damages.

“Common issues—such as liability—may be certified, consistent with Rule 23, even where other

issues—such as damages—do not lend themselves to classwide proof.” Johnson v. Nextel

Commc’ns Inc., 780 F.3d 128, 138 (2d Cir. 2015); see also In re Restasis, 335 F.R.D. at 31

(“[C]lass certification under Rule 23(b)(3) does not require a court to conclude ‘that damages are

capable of measurement on a classwide basis.’” (quoting Roach v. T.L. Cannon Corp., 778 F.3d

401, 402 (2d Cir. 2015))); In re U.S. Foodservice Inc. Pricing Litig., 729 F.3d 108, 124, 130 (2d

Cir. 2013) (affirming certification of class where damages differed among individuals but where

contracts were uniform and damages could be calculated through a classwide formula).

Defendants’ understanding of predominance would seemingly preclude from certification

any proposed class lacking uniform damages. This rather absurd result is belied by the fact that

courts routinely certify classes, including those sounding in breach of contract, where damages

determinations vary among class members. See, e.g., In re Nigeria Charter Flights, 233 F.R.D. at

306 (certifying class in breach of contract action despite “the difficulties of managing this class

action — namely the individual damage determinations”); Dupler v. Costco Wholesale Corp.,

249 F.R.D. 29, 45 (E.D.N.Y. 2008) (certifying class in breach of contract action because “even if

some portion of the class may have some non-common factual issues as to . . . damages, such

issues are not so complex or overwhelming to defeat the predominance requirement”).

Defendants make a similar argument that Pryce’s GBL § 349 claim requires proof of

subjective reliance on a deceptive practice, which is an individualized inquiry not susceptible to

classwide proof. We have reviewed Judge Reyes’ well-reasoned findings and do not disturb his

conclusion that the weight of authority supports an objective definition of “misleading,” which

allows for the use of generalized proof on the § 349 claim. As Judge Reyes identified, a number

of courts have certified GBL § 349 classes based on the availability of classwide proof of

reliance. See R&R at 43-44.

The Court is satisfied that the predominance requirement is met as to Pryce’s breach of

contract and GBL § 349 claims.

B. Superiority

Defendants’ next object that the R&R “improperly brushes aside serious problems with

the manageability of class litigation.” Def. Obj. at 15. This argument recycles Defendants’

concerns about the difficulty of calculating injury on a case-by-case basis. Rule 23(b)(3)

provides four factors for courts to consider in evaluating superiority: (a) the class members’

interests in individually controlling separate actions; (b) the extent and nature of any other

litigation concerning the controversy; (c) the desirability of concentrating litigation of the claims

in the particular forum; and (d) the difficulties in managing a class action. See FED. R. CIV. P.

23(b)(3). Courts also consider fairness and efficiency in determining whether a class action is a

superior method of adjudication. See Shady Grove, 293 F.R.D. at 306.

We agree with the R&R that efficiency and fairness are best served through class

litigation. As we have found, Pryce’s theory of liability is amenable to generalized proof based

on Defendants’ uniform calculation of PIP exhaustion. The possible burden of calculating class

members’ damages would be far outweighed by the time and resources necessary to conduct

hundreds of isolated proceedings in which the facts and questions of liability would need to be

established on behalf of each individual plaintiff. See Kaplan v. S.A.C. Cap. Advisors, L.P., 311

F.R.D. 373, 383 (S.D.N.Y. 2015) (finding superiority requirement met where individual suits

would lead to the inefficient result of a multiplicity and scattering of proceedings). Moreover, as

Judge Reyes concluded, class members like Pryce are likely to receive small recoveries which

would be dwarfed by the cost of litigation, bolstering the superiority of proceeding as a class

because each putative class member has a minimal interest in controlling the litigation. See

Genden v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 114 F.R.D. 48, 53 (S.D.N.Y. 1987)

(“[W]here the claims are numerous and relatively small, individual claimants are unlikely to take

on the burden and cost of litigation. The superiority of the class action in such cases is beyond

dispute.”).

In light of the efficiencies of class adjudication, Pryce has satisfied the superiority

requirement.

4. Statutory Cap Issues

Finally, we address Defendants’ assertion that the R&R incorrectly interpreted the No-

Fault Statute to provide that an individual can recover more than $2,000 per month in lost wage

benefits. Def. Obj. at 20. Defendants appear to misread the R&R. The R&R unequivocally

recognized that New York law caps lost wages at $2,000. See R&R at 3, 13, 35, 36, 42-43.

Defendants provide no substantive support for their allegation that the R&R’s purported failure

to recognize this fact “results in improper findings relating to Pryce’s standing,” typicality,

adequacy, or predominance. Def. Obj. at 20. The R&R’s statement about the ability of an insured

to recover more than $2,000 factors in the addition of state disability payments to lost wage

payments owed by Progressive. See R&R at 13 n. 4 (“The Court concludes that § 65-3.19(f)

permits a covered individual receiving disability benefits to recover more than $2,000.”)

(emphasis added). This is not a misinterpretation of the No-Fault Statute and, notwithstanding

Progressive’s unsupported statements to the contrary, had no bearing on any of the R&R’s

conclusions.

CONCLUSION

The Court arrives at the conclusion that the proposed class is well-suited for class action

litigation notwithstanding Progressive’s attempts to pile confusion onto the inquiry by referring

to extraneous coverage options, the purportedly herculean task of determining PIP exhaustion,

which it curiously does not track, and an insistence, unsupported by law, that damages must be

uniform classwide. But Progressive’s approach to coverage exhaustion lends itself to an

objective class definition as well as a course of conduct and theory of liability that are

generalizable across the class. Incorporating the changes to the class definition described herein,

the Court certifies a class consisting of the following:

All “Eligible Injured Persons,” as that term is defined by 11 NYCRR §§ 65-1.1–65-1.3,

covered under a policy of insurance issued or administered by Progressive Casualty

Insurance Company, and subject to the provisions of Insurance Law § 5102 who earned

gross monthly wages in excess of two thousand dollars per month at any point during the

period in which they were covered, who have submitted First Party Benefit claims to, and

received payment from, Progressive Casualty Insurance Company for First Party Benefits

that included claims for lost wages, and which, after paying at least one month of First

Party wage benefits, Progressive Casualty Insurance Company claimed full exhaustion

of mandatory $50,000 coverage, whether defined as Personal Injury Protection

(PIP), no-fault coverage, or Economic Loss Benefits, on or after March 13, 2013.

Excluded from the Class are the defendant company; any entity that has a controlling

interest in the defendant company; and any current or former directors, officers and

counsel of the defendant company.

The Court appoints Kevin P. Fitzpatrick of Marschhausen & Fitzpatrick, P.C., and John

K. Weston of Sacks Weston, LLC as class counsel. We thank Judge Reyes for his thoughtful and

comprehensive report and recommendation.

SO ORDERED.

Dated: Brooklyn, New York /s/ Raymond J. Dearie

March 31, 2022 RAYMOND J. DEARIE

United States District Judge

DENTAL OF CLA FORM

Camplele this form, including tem 38, Send two copies to applicant. Upon lie reques of ite injured person, ihe ingacer “ □

shoawe send lo the inpvrect person a copy af all prescribed clai forms aud documents submilied by of on behall of the injured person,

□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□ epee □□□

NAME, ADDRIESS AND NAIC NUMBER OF INSURER OR NAMIE AND

ADDRESS OF SELF-INSURER

Progressive Casualty Insurance Gompany NAICH 24266

PO BOX 22031

Adbany, NY 42204-2834 for Amerinan Atbiration Assouintion use

A. B POLICY NUMBER | C.DATE OR ACCISENT ° DUNJURED PERSON

Pryce, Cecilia A 63270457 -4 Jul 107 £15 Pryce, Cecilia

CLAD NUMBER APPLICANT FOR BENEFITS (Nimo aad Addiass) G.AS ASSIGNEE

15$331991-AMBO016 Cecifia Pryce c/o Marschhausen & Fitzpatlick P.C, Attn: Mavin P. Fitzpatrick,

Esq. i. ves 2.No

836 Old Country Road VWestbury, NY 11590

TO APPLICANT: SEE REVERSE SIDE [IF YOU WISH TO CONTEST THIS DENIAL

YOU ARE ADVISED THAT FOR REASONS NOTED BELOW:

to Your estire claim is denled as follows:

mr 2. A portion of your glalm is aenied a5 follows:

ry} A, Loss af Eaiings: □ 1D. Interest:

Health Service Benefits 5 a & Anomey's Fees: ™

C, Oller Necessary Expenses Ci Death Benefit &

REASONS(3) FOR DENIAL OF CLAIM (Check reaians and explain below in ile 33)

POLICY ISSUES

QO 3. Polity not in force on date of accident oO G. injured persen sot an “Eligible Injured Peron.”

4. Injured person excluded under policy conditions 7, injuries did not adge out of use oF operatien of a

or exclusion motor vehicle.

5. Policy conditions violaled Cl a. Ginim not within the scope of your dlecilon under

Cy a, No saasonable justification given [or late Optlonal Basic Economie Loss Coverage.

notice of claim,

C b, Reasonable justification not established. You

tnay quallfy far spacial expeditad arbitration.

See page 2 of this form for Instructions,

LOSS OF EARNINGS BENEFITS DENIED

Period of disabllily contested: pedod in dispute ti 11. Exaggerated earnings claim

FO eananeveanes TOTOWGE oc neanecengee off par manth denied.

CT 10. Claimed loss not provers 12. Statutory offses laken.

lz] 73. Other, explained below,

OTHER REASONABLE AND NECESSARY EXPENSES DENIED

Ci 14. Amount of cialta exceeds dally limil of coverage tj 16. Incurred afier one year fron dala of accident

CI 18, Unfeasonable or unnecessary axpanses EE 47, Olhar, explained below

HEALTH SERVICE BENEFITS DENIED

18. Fees notin accordance with fee schedules EI 20. Trealmant nol related 40 accident

19, Excessive lreakiient, service or hogpilalization tl 21. Unnecassary treatment, service of hospitalization,

™ From ou PAOUgh From oc TOUR aces

BR] 22.Other, explained below

ee COMPLETE ITEMS 238 THROUGH 32 IF CLAIM FOR HEALTH SERVICE BENEFITS IS DENIED :

23. Provider of Health Service (Name, Address and Zip Code} 25. Partod of bill - treatmant dates 28, Date final vorificallon received

56. Bate of bit 30. Amount of bil °

$

aa. Tyne ofservica rondared SSS 87, Date bil recelvad by Insurer 3. Amand patd by insurer

3A, Date final verification requasied ‘132. Amouat an dispute

33. State reason for deniaz, tuly and expliciliy (atlach extra shaets if needed):

Mar 29, 2016 nese Angel M Boyerfwi- Medical Claims Representative co STBG8081BE

BATE Name and lille of Representative of Insurer Telepnone No. & Ext

PO BOX 22031 Albany, NY 12207-2041

□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□ remaster nem Yt data tm □□□ At tS MEATY Ha antl dll dae PA nearer ty AARP aA habia EA/TIT Female

Name and adcrass of Insurer claim processor (fhitd Pany Administrator), f applicable Telephone No. & Ext

FORM NEG (Rev 2G! ay

PLTF 000001

TERE nL EEE hhh SARE OF ERR ORR BRR

Cecilia A secre OS OAET oO □□□□□□□□□□□□□□□□□□□□□ OFT od Payee, Cecitis

AR. reason forslenial. tilly aud axpiicttiy (attact extia ghyvta neeuyil:

Please be advised that No Fault benefits available under the above captioned policy have exhausted. AH

further No Fauh benefits will be denied,

ec! Pryce

PLTF 000002

BIHIAL OF CLAIM -- PAGE Tyr

YOU WISH TO CONTEST THIS DENIAL, YOU HAVE THE FOLLOWING OF TIONS:

1. Should you wish jo fake this matics up wht ihe Now York Siale Deparimern, of Financia! Services. you may file witli the Deparment either on ils

wabsite al □□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□ of you may waite 10 oF visil he Gonstimer Assistance Unil, Fisanckil Frauds and

Conauever Pralaclion Division, New York State Deparment of Financlal Services, at: One State Sieoet, Mew York, NY 10004; Commerce

Plaza, Albany, NY 12797; 1935 Mincole Bovievard, Minegla, NY T8607, ar Waker J, Mahonuy Gifice Building, 65 Cour Street, Buffalo, NY 14202.

Allhough ihe Dapariment of Financlat Services will atlempt to resclve dispuled claiing, 1 cannot order or require an insurer te pay a disputed

dain. H you wish lo file @ written complalnt, and one copy of this Dealal of Claim Form with copias of other pértinenl documents with a

tully explaining your complaint te the Depariment of Flaancial Services al one of the atiove adigrasses.

chooge thie option, you may ata later date still sabmilihis dispute to arbivation or bring & lawsuit: af

2. You may submilihts dispute to arbitration, If you wish to submil this Glain to arbiiration, thee mait or amalla copy of Ihis Denlal of Clain. Form

along wilh a compicié submission of all alhar pecinant doauments and table of conlenis lsling your submivelions, in Guplicate

Logatner wita £40 filing fea, payable by check, money order, or credi( card fo the American Arbitration Association (AAA) to:

AMERICAN ARBITRATION ASSOCIATION [AAA]

NEW YORK INSURANCE CASE MANAGEMENT CENTER

1230 BROADIVAN

NEW YORK, NEW yore 10006

□□□□□□□□□□□□□□□□□□□□□□□□□□□ orn

contact the American Arbilralion Association's cuslamer service department al (017) 434-1650 with any questions abaul crue filing.

A complete copy of this filing, fisting all bills and proofs os weil as a tably of conlents listing your submissions must be provided to the ASA and the insurer

atthe time of fitieg for arbitralien. The {ine must bo complete with all necessary documentation, as any late suhiuission may nat be aclmissible at

aruilalion, ‘The tiling fee wil be requrned to yeu if the arbiliator awards you any portion of your claim. However, you may be susessed the costs of live

arbitealion progecding if the arbilvator finds your glam to be frivolous, wilhoul factual o: legal merit or wag fied for the puipese of harassing the respondgil.

The decléion ofan arbilater ig bindiag. except for limiled grounds far review sel forlh in the Low end regulations pronwigaied thereunder.

i you are comesiing the denial of claim and wish la submit the dispule to arbitration, stele on accompanying shaats the frasen(s) you belizve the deniad or

overdue banetis should be paid. Allach proof of disubility and verificallon of logs of earnings in dispute, Sign below, and send the cormpleted ta the

American Adbitralion Association al the address give in tem 2 above,

Loos of exmiags: Dale claim made: Gross enralngy pel moath $

Parlod of Digputa: From Throwgh Amount caimad: $

Health Services: [Atlach bills in dispute and each one separalety)

Sane of Provider(s) nee DawotSewics | cmounrat Bil | ount in Disnule Dale Claim Maiied

Giher Necessary Expenses. (Allach biloin depulegndlisjeachouesepamiely) ~~ ~~ OOt*~=<CSs‘“‘—‘;7;7 OS

of Exasneas (Glalmed —— | Dale incurred | Sane Mailed | Amouns in Cisputs

Other: (allach additional sheet if necessary)

- Upon your request, if you file tor arbitration within 90 days of the date of this denial ar the claim becoming overdue, your case vill be scheduled for

ablation on & priory basis. .

You qualify for special expedited arbitration 4 the Insurer has deienmined (hat your written jusdilcation far sulialtiing iate notes of claim falled to meet 4

‘raasonabloness standard”. Your spacilic raquest for spacial expedited arbitration must be fllad withiy 30 days of the date of dental. Your fiting must be

Lomplele aed contain all dvformation thal you are submilling at ihe ime of filing.

FORM NEE (Rey 272003)

Rage tof 3

PLTF 060003

DERIAL OF CLAIM FORM - PAGE THREE

3. You may bring & lawsuit to recover the amount of benefits you claim ta be entitind to.

THE UNDERSIGNED AFFIRMS AND CERTIGES AS TRUE UNDER THE PENALTY OF PERJURY THAT THIS FILING iS BEING MADE IN GOOD

CANTY AND THAT UPON INFORMATION, BEUMEF AND REASONABLE INQUERY THE DOCUMENTS BEING SUBMITTED HEREWITH ARE NOT

FRAUGULENT AND THAT EXACT COMES OF ALL DOCUMENTS PROVICED HERGATH HAVE BEEN MAILED TO THE INSURER AGAINST

WHOM THIE ARBITRATION iS BEING REQUESTED. UNLESS DISCLOSED WITH THIS SUBMISSION, THE DISPUTED AMOUNTS REMAIN

UNPAID TO THE APPLICANT 8Y ANY PAYOR AND THERE HAS BEEN NO OTHILR PLING OF AN ARBITRATION REQUEST OR LAWSUIT TO

RESOLVE THE DISPUTED MATTERS CONTAINED IM THIS SUBMISSION,

ANY PERSON WHO KNOWINGLY AND WHTH INTENT TO DEFRAUD ANY INSURANGE COMPANY OR OTHER PERSON FILES AN

APPLICATION FOR COMMERCIAL INSURANCE OR A STATEMENT OF CLAIM FOR ANY COMMERCIAL OR PERSONAL INSURANCE

BENEFITS CONTAINING ANY MATERIALLY FALSE INFORMATION, O2 CONCEALS FOR THE PURPOSE OF MISLEADING, INFORMATION

CONCERNING ANY FACT MATERIGL THERETO, AND ANY PERSON WHO, IN CONNECTION WITH SUCH APPLICATION OR CLAIM,

KNOWINGLY MAKES OR KNOWINGLY ASSISTS, ABETS, SOLICITS OR CONSPIRES WITH ANOTHER TO MAKE A FALSE REPORT OF THE

THEET, DESTRUCTION, DAMAGE OR CONVERSION OF ANY MOTOR VEHICLE TO & LAW ENFORCEMENT AGENCY, THE DEPARTMENT OF

MOTOR VEHICLES OR AN INSURANCE COMPANY, COMMITS 4 PRAUDULENT INSURANCE AGT, WHICH IS A CRIME, AND SHALL ALSO BE

SUBJECT 10.4 CIVIL PENALTY NOY TO EXCEED FIVE THOUSAND DOLLARS AND THE VALUE OF THE SUBJECT MOTOR VEHICLE OF

STATED CLAIM FOR EACH VIOLATION,

RBTRATON REQUESTED AY ” eee ~ —_—

LAST NAME TFRST MAME RAME OF LAW FIRM, iF ANY cseesenme teens nee

ELEPHORE NUMBER:

KATE: Ry

EMAR. ADDRESS, _—

ADRESS oe, etna ns

RE YDU AM ATTORNEY? DATE.

SIGNATURE no

IMPORTANT NOTICE TO APPLICANT

ik, numbed 2 ("Pokey ned in torce on date of caida’) ox the (and of his fon fs checked as a rearon for this denial, you may fe entitled to No-oubt

béavlilé from the Moler Vehicle Accidonl Indansniication Caiparation (MLV ALC) (646-208-7000) lovslad ot 100 William Sieoet. New York,

Maw York 10034. The fasurance lave toques Ihel you masta an Adtidévil of Injention (0 Make Clalavith MAGALC. Theratarg, 11s 1

your ingest lo contées Iho WLAWALG. lonnediately andl dla sad an affidavit, oven if yey intone is egedeet (his dural,

NYS FORM NEG {Rev aac)

Page 3

PLTF 000004