Petition for Writ of Certiorari — State Farm Mutual Automobile Insurance Company, et al., Petitioners v. Faysal A. Jama, et al.

No. 24IN THE

Supreme Court of the United States

___________________

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

and STATE FARM FIRE AND CASUALTY COMPANY,

Petitioners,

v.

FAYSAL A. JAMA, JAMES KELLEY,

and ANYSA NGETHPHARAT,

Respondents.

___________________

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Ninth Circuit

___________________

PETITION FOR A WRIT OF CERTIORARI

___________________

PETER W. HERZOG III

WHEELER TRIGG O’DONNELL LLP

211 N. Broadway, Suite 2825

St. Louis, MO 63102

ERIC L. ROBERTSON

WHEELER TRIGG O’DONNELL LLP

370 17th Street, Suite 4500

Denver, CO 80202

THEODORE J. BOUTROUS JR.

Counsel of Record

BRADLEY J. HAMBURGER

DANIEL R. ADLER

MATT AIDAN GETZ

GIBSON, DUNN & CRUTCHER LLP

333 South Grand Avenue

Los Angeles, CA 90071

tboutrous@gibsondunn.com

OLIVIA GOLDBERG

GIBSON, DUNN & CRUTCHER LLP

1700 M Street, N.W.

Washington, D.C. 20036

Counsel for Petitioners

QUESTIONS PRESENTED

Auto insurance policies typically promise to pay

policyholders the “actual cash value” of insured vehicles that are deemed a total loss. To determine that

value, insurers use a variety of methods to estimate a

vehicle’s pre-accident fair market value. Policyholders

across the country have brought class actions against

insurers alleging that the methods they use to determine actual cash value violate a statute, regulation, or

contract. Disagreeing with the Fifth Circuit, the divided Ninth Circuit panel below held that plaintiffs are

entitled to class certification based on that allegation

alone, no matter whether any class member was actually shortchanged as a result of the insurer’s valuation

method.

The questions presented are:

1. Whether a Rule 23(b)(3) damages class can be

certified based on an alleged violation of a statute,

regulation, or contract, even if determining whether

the violation resulted in any real-world harm to each

class member would require highly individualized

proceedings.

2. Whether a Rule 23(b)(3) damages class can be

certified when some members of the proposed class lack

any Article III injury.

ii

PARTIES TO THE PROCEEDING AND

RULE 29.6 STATEMENT

1. Petitioners State Farm Mutual Automobile

Insurance Company and State Farm Fire and Casualty Company were the defendants in the district

court and the appellees below. State Farm Fire and

Casualty Company is a wholly owned subsidiary of

State Farm Mutual Automobile Insurance Company.

State Farm Mutual Automobile Insurance Company is

a mutual insurance company with no parent company

and no shareholders. Thus no publicly held company

owns 10 percent or more of stock in either petitioner.

2. Respondents Faysal A. Jama, James Kelley,

and Anysa Ngethpharat were the plaintiffs in the district court and the appellants below.

iii

STATEMENT OF RELATED PROCEEDINGS

Under this Court’s Rule 14.1(b)(iii), the following

proceedings are directly related to this case:

•

Jama v. State Farm Mutual Automobile Insurance Co., No. 22-35449 (9th Cir.) (judgment entered Aug. 19, 2024; rehearing en banc denied

Oct. 28, 2024);

•

Ngethpharat v. State Farm Mutual Automobile

Insurance Co., No. 2:20-cv-454 (W.D. Wash.)

(class certification granted July 1, 2021; consolidated with No. 2:20-cv-652 (W.D. Wash.) on

Aug. 2, 2021; class decertified May 4, 2022); and

•

Jama v. State Farm Fire & Casualty Co.,

No. 2:20-cv-652 (W.D. Wash.) (class certification granted July 1, 2021; consolidated with

No. 2:20-cv-454 (W.D. Wash.) on Aug. 2, 2021;

class decertified May 4, 2022).

iv

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ........................................i

PARTIES TO THE PROCEEDING AND

RULE 29.6 STATEMENT ................................... ii

STATEMENT OF RELATED PROCEEDINGS....... iii

PETITION FOR A WRIT OF CERTIORARI ............. 1

OPINIONS BELOW .................................................... 1

JURISDICTION .......................................................... 1

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED ................................... 1

STATEMENT .............................................................. 2

REASONS FOR GRANTING THE PETITION ....... 11

I.

THE COURT SHOULD GRANT THE PETITION

TO RESOLVE A RECOGNIZED SPLIT ON AN

IMPORTANT CLASS-CERTIFICATION ISSUE .............. 11

A. The Ninth Circuit’s Decision Conflicts With

Decisions Of Several Courts Of Appeals......... 12

B. The Ninth Circuit’s Decision Is Wrong ......... 17

C. The Question Is Important, And This Case

Is An Excellent Vehicle For Resolving It ........ 24

II. AT MINIMUM, THE PETITION SHOULD BE

HELD PENDING LABCORP ....................................... 30

CONCLUSION .......................................................... 32

v

TABLE OF APPENDICES

Page

APPENDIX A: Opinion of the U.S. Court of

Appeals for the Ninth Circuit

(Aug. 19, 2024) .................................................... 1a

APPENDIX B: Decision and Order of the U.S.

District Court for the Western District of

Washington in Nos. 2:20-cv-454 and -652

(May 4, 2022)..................................................... 38a

APPENDIX C: Decision and Order of the U.S.

District Court for the Western District of

Washington in No. 2:20-cv-454

(July 1, 2021)..................................................... 50a

APPENDIX D: Decision and Order of the U.S.

District Court for the Western District of

Washington in No. 2:20-cv-652

(July 1, 2021)..................................................... 83a

APPENDIX E: Order of the U.S. Court of

Appeals for the Ninth Circuit Denying

Rehearing En Banc

(Oct. 28, 2024) ................................................. 121a

APPENDIX F: Constitutional Provisions and

Statutes Involved ............................................ 123a

U.S. Const. art. III, §§ 1-2 .............................. 123a

28 U.S.C. § 2072 .............................................. 124a

Fed. R. Civ. P. 23 ............................................ 124a

vi

TABLE OF AUTHORITIES

Page(s)

Cases

Achziger v. IDS Prop. Cas. Ins. Co.,

772 F. App’x 416 (9th Cir. 2019)....................... 28

Am. Express Co. v. Italian Colors Rest.,

570 U.S. 228 (2013) ..................................... 12, 17

Amchem Prods., Inc. v. Windsor,

521 U.S. 591 (1997) ..................................... 11, 18

AT&T Mobility LLC v. Concepcion,

563 U.S. 333 (2011) ........................................... 28

Baker v. State Farm Mut. Auto. Ins. Co.,

2022 WL 3452469

(11th Cir. Aug. 18, 2022) .................................. 28

Bourque v. State Farm

Mut. Auto. Ins. Co.,

89 F.4th 525 (5th Cir. 2023)......... 3, 10, 13, 14, 22

C 1031 Props., Inc. v.

First Am. Title Ins. Co.,

301 P.3d 500 (Wash. Ct. App. 2013)................. 18

Comcast Corp. v. Behrend,

569 U.S. 27 (2013) ................................. 17, 18, 19

Costello v. Mountain Laurel Assurance Co.,

2024 WL 239849

(E.D. Tenn. Jan. 22, 2024) ................................ 25

Denney v. Deutsche Bank AG,

443 F.3d 253 (2d Cir. 2006) .............................. 31

DePhelps v. Safeco Ins. Co. of Am.,

65 P.3d 1234 (Wash. Ct. App. 2003)............. 5, 19

vii

Erica P. John Fund, Inc. v.

Halliburton Co.,

563 U.S. 804 (2011) ........................................... 18

Goldman Sachs Grp., Inc. v.

Ark. Teacher Ret. Sys.,

594 U.S. 113 (2021) ........................................... 20

Halvorson v. Auto-Owners Ins. Co.,

718 F.3d 773 (8th Cir. 2013) ................. 16, 29, 31

Kartman v. State Farm

Mut. Auto. Ins. Co.,

634 F.3d 883 (7th Cir. 2011) ............. 4, 15, 16, 29

Kronenberg v. Allstate Ins. Co.,

743 F. Supp. 3d 465 (E.D.N.Y. 2024) ............... 27

Lab’y Corp. of Am. v. Davis,

— S. Ct. —, 2025 WL 288305

(Jan. 24, 2025) ................................................... 30

Lara v. First Nat’l Ins. Co. of Am.,

25 F.4th 1134 (9th Cir. 2022)....... 9, 10, 14, 18, 27

Lewis v. GEICO,

98 F.4th 452 (3d Cir. 2024) ............... 5, 24, 27, 31

Lindsey v. Normet,

405 U.S. 56 (1972) ............................................. 21

Microsoft Corp. v. Baker,

582 U.S. 23 (2017) ....................................... 12, 28

Murphy v. State Auto. Mut. Ins. Co.,

2020 WL 13548251

(E.D. Ark. Feb. 18, 2020) .................................. 27

Olean Wholesale Grocery Coop., Inc. v.

Bumble Bee Foods LLC,

31 F.4th 651 (9th Cir. 2022) ............................. 29

viii

Ortiz v. Fibreboard Corp.,

527 U.S. 815 (1999) ........................................... 21

Owino v. CoreCivic, Inc.,

60 F.4th 437 (9th Cir. 2022) ............................. 29

Pain Diagnostics & Rehab. Assocs.,

P.S. v. Brockman,

988 P.2d 972 (Wash. Ct. App. 1999)................. 18

Panag v. Farmers Ins. Co. of Wash.,

204 P.3d 885 (Wash. 2009) ............................... 18

In re Rail Freight Fuel Surcharge

Antitrust Litig.,

934 F.3d 619 (D.C. Cir. 2019) ........................... 31

Reynolds v. Progressive Direct Ins. Co.,

346 F.R.D. 120 (N.D. Ala. 2024) ............. 2, 25, 27

Sampson v. USAA,

83 F.4th 414 (5th Cir. 2023) .................. 3, 10, 13,

14, 17, 22, 27

Schroeder v. Progressive Paloverde Ins. Co.,

713 F. Supp. 3d 523 (S.D. Ind. 2024) ................. 27

Senne v. Kan. City Royals Baseball Corp.,

934 F.3d 918 (9th Cir. 2019) .............................. 29

Sims v. Allstate Fire & Cas. Ins. Co.,

2024 WL 3908739

(W.D. Tex. Aug. 21, 2024) ................................. 29

Spokeo, Inc. v. Robins,

578 U.S. 330 (2016) ........................................... 23

In re State Farm Fire & Cas. Co. (LaBrier),

872 F.3d 567 (8th Cir. 2017) ......................... 4, 16

Stoneridge Inv. Partners LLC v.

Sci.-Atlanta, Inc.,

552 U.S. 148 (2008) ........................................... 28

ix

Tarrify Props., LLC v. Cuyahoga County,

37 F.4th 1101 (6th Cir. 2022) ........................... 19

TransUnion LLC v. Ramirez,

594 U.S. 413 (2021) ........................... 4, 12, 23, 31

Tyson Foods, Inc. v. Bouaphakeo,

577 U.S. 442 (2016) ........................................... 22

United States v. Holmes,

646 F.3d 659 (9th Cir. 2011) ............................... 5

Wal-Mart Stores, Inc. v. Dukes,

564 U.S. 338 (2011) ................. 3, 4, 12, 17, 20, 21

Constitutional Provisions

U.S. Const. art. III............................... 1, 4, 5, 10, 12,

17, 22, 23, 30, 31

Statutes

28 U.S.C. § 1254 ....................................................... 1

28 U.S.C. § 2072 ..................................... 1, 12, 20, 21

Regulations

Wash. Admin. Code § 284-30-320 ............. 5, 7, 19, 23

Wash. Admin. Code § 284-30-391 ............................. 7

Rules

Fed. R. Civ. P. 23 ................ 1, 3, 4, 12, 17, 20, 21, 29

Fed. R. Civ. P. 23(a)................................................ 18

Fed. R. Civ. P. 23(b)(3) .............. 2, 3, 5, 9, 11, 13, 14,

15, 16, 17, 18, 27, 30

Other Authorities

Araullo, Progressive Settles Michigan Class

Action over Total Loss Claims,

Ins. Bus. (Nov. 26, 2024) ................................... 28

x

Asis, Largest Auto Insurance Companies,

Business Insider (Aug. 5, 2024)........................ 27

Carlton Fields, Class Action Survey (2024) .......... 30

How Many Car Insurance Claims Are Filed

Each Year?: 2025, Consumer Affairs

(updated Feb. 22, 2024) .................................... 26

How Many People Drive in the U.S.?: 2025,

Consumer Affairs

(updated Jan. 24, 2024) .................................... 26

LexisNexis Risk Solutions, A Hard

Collision with Profitability (2023) .................... 26

LexisNexis Risk Solutions, Key Insights

for the Road Ahead (2024) ................................ 26

Lowery, Progressive Reaches $48M Class

Action Actual Cash Value Settlement,

Repairer Driven News (July 9, 2024) ............... 28

Mot. for Final Approval, Volino v.

Progressive Cas. Ins. Co., No. 1:21-cv6243, Dkt. 388 (S.D.N.Y. Nov. 26, 2024) .......... 27

U.S. Courts of Appeals—Cases Commenced,

Terminated, and Pending During the 12Month Periods Ending March 31, 2023

and 2024, U.S. Courts....................................... 15

Value, Black’s Law Dictionary

(12th ed. 2024)................................................. 5, 6

Wile, Consumer Prices Moved Higher in

March. Auto Insurance Costs Were a

Major Reason, NBC News

(Apr. 10, 2024) ................................................... 28

PETITION FOR A WRIT OF CERTIORARI

Petitioners State Farm Mutual Automobile Insurance Company and State Farm Fire and Casualty

Company respectfully petition for a writ of certiorari

to review the judgment of the United States Court of

Appeals for the Ninth Circuit.

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. 1a)

is reported at 113 F.4th 924. The decision and order

of the district court granting petitioners’ motions to

decertify the classes (Pet. App. 38a) is unreported but

available at 2022 WL 1404526. The prior decisions

and orders of the district court certifying the classes

in Nos. 2:20-cv-454 (Pet. App. 50a) and -652 (Pet.

App. 83a) are reported at 339 F.R.D. 154 and 339

F.R.D. 255, respectively.

JURISDICTION

The judgment of the court of appeals was entered

on August 19, 2024. Pet. App. 1a. A timely petition

for rehearing en banc was denied on October 28, 2024.

Pet. App. 121a-22a. On January 15, 2025, this Court

granted petitioners’ application to extend the time to

file this petition to February 25, 2025. This Court’s

jurisdiction is invoked under 28 U.S.C. § 1254(1).

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

Article III, §§ 1-2 of the Constitution are reproduced at Pet. App. 123a-24a. The Rules Enabling Act,

28 U.S.C. § 2072, is reproduced at Pet. App. 124a.

Federal Rule of Civil Procedure 23 is reproduced at

Pet. App. 124a-34a.

2

STATEMENT

Federal courts across the Nation face a “raft” of

“materially identical” class actions challenging the

way insurers resolve claims involving vehicles that

are declared a total loss. Reynolds v. Progressive Direct Ins. Co., 346 F.R.D. 120, 125 (N.D. Ala. 2024).

Plaintiffs have sought class certification based on allegations that the insurer’s method of valuing totaled vehicles violates a statute, regulation, or contract—

whether or not class members actually received less

than their vehicles were worth as a result of that valuation method. The question courts must resolve in

these cases is straightforward but significant: can

plaintiffs obtain certification under Rule 23(b)(3)

merely by alleging such a violation, or must they also

show that there will be evidence capable of resolving,

on a classwide basis, that each class member was actually shortchanged as a result?

As the dissent below recognized, the circuits are

now divided on that consequential question. The Fifth

Circuit holds that plaintiffs must show that each class

member suffered a real-world injury—and because

disputes over the value of vehicles involve so many individualized questions, that means class certification

is inappropriate. But the Ninth Circuit disagrees.

The resulting conflict on this critical, recurring issue

will have dramatic consequences for class actions

across the country in a variety of contexts.

Insurance policies typically promise that when a

vehicle is deemed a total loss, the insurer will pay the

“actual cash value”—i.e., fair market value—of the vehicle right before the accident. Plenty of datapoints

help shed light on a totaled vehicle’s fair market

value, including advertised prices for similar vehicles

3

offered by used car dealers. But because no two vehicles are the same, insurers adjust those datapoints to

make sure they reflect the fair market value of the totaled vehicle.

These commonplace valuation methods have come

under attack in a spate of class actions involving plaintiffs from over 40 states. But disputes over the fair

market value of thousands of vehicles would require individualized mini-trials incompatible with Rule 23. So

plaintiffs have asked courts to overlook those valuation

issues and focus only on their allegations that the insurer’s valuation method somehow violates a statute,

regulation, or contract.

The Fifth Circuit rejects that shortcut. It holds

that plaintiffs must show that a valuation method actually caused real-world harm by leading the insurer

to pay less than fair market value for each totaled vehicle. Because it’s impossible to determine the fair

market value of thousands of individual vehicles “in

one stroke,” Wal-Mart Stores, Inc. v. Dukes, 564 U.S.

338, 350 (2011), such Rule 23(b)(3) classes can’t be certified. Sampson v. USAA, 83 F.4th 414, 422-23 (5th

Cir. 2023) (Higginson, J.); Bourque v. State Farm Mut.

Auto. Ins. Co., 89 F.4th 525, 528-29 (5th Cir. 2023)

(Clement, J.).

The Ninth Circuit now disagrees. Reversing the

district court’s denial of certification in this case, the

Ninth Circuit embraced the same theory the Fifth Circuit rejected—that a class can be certified under

Rule 23(b)(3) whether or not the insurer’s valuation

method caused an actual injury to class members by

undervaluing their vehicles. That decision departs

from the Fifth Circuit and creates significant tension

4

with decisions of the Seventh and Eighth Circuits,

which in related contexts have required plaintiffs to

prove that an insurer’s “unlawful” valuation method

actually caused them harm. E.g., Kartman v. State

Farm Mut. Auto. Ins. Co., 634 F.3d 883, 889-91 (7th

Cir. 2011); In re State Farm Fire & Cas. Co. (LaBrier),

872 F.3d 567, 576-77 (8th Cir. 2017).

The Ninth Circuit’s decision can’t be reconciled

with this Court’s precedents, either. The court of appeals approved certification based on what amounts

to a presumption rather than actual proof of realworld injury. That approach relieved respondents of

their burden to prove that Rule 23’s requirements were

“in fact” met and stripped State Farm of its right to

present individualized evidence concerning whether

particular class members can recover. Dukes, 564 U.S.

at 350, 357. And it created a class covering members

who received every dollar to which their policies entitled them and who lack Article III standing as a result. See TransUnion LLC v. Ramirez, 594 U.S. 413,

427, 431 (2021).

The question presented is exceptionally important. The Ninth Circuit’s permissive approach will

result in class actions that wouldn’t be certified in the

Fifth Circuit or elsewhere. Those erroneous certification decisions, in turn, will create the potential for

staggering damages awards—resulting in hydraulic

pressure to settle even meritless claims and harming

insurers and policyholders alike. This Court’s intervention is needed now to avoid that outcome, restore

the consensus, and dispel the confusion.

5

At minimum, the Court should hold this petition

pending the disposition of Laboratory Corp. of America v. Davis, No. 24-304. Labcorp involves the second

question presented here—whether a Rule 23(b)(3) class

can be certified when it contains members who suffered no Article III injury. Indeed, in a class action

materially identical to this one, the Third Circuit ordered dismissal based on the same Article III problems that the Ninth Circuit sidestepped below.

Lewis v. GEICO, 98 F.4th 452, 459-61 (3d Cir. 2024).

1. A vehicle is deemed a total loss (i.e., “totaled”)

when, following an accident or similar incident, “the

cost of repair exceeds [the vehicle’s] pre-accident market value.” United States v. Holmes, 646 F.3d 659, 661

(9th Cir. 2011). When a vehicle insured under one of

its policies is totaled, State Farm owes the policyholder the “actual cash value” of the vehicle before it

was totaled. Pet. App. 5a. Actual cash value means

“fair market value.” Value, Black’s Law Dictionary

(12th ed. 2024); accord, e.g., Wash. Admin. Code

§ 284-30-320(1) (“‘Actual cash value’ means the fair

market value of the loss vehicle immediately prior to

the loss.”). And fair market value in turn means the

price “an informed buyer would willingly pay and an

informed seller would accept.” DePhelps v. Safeco Ins.

Co. of Am., 65 P.3d 1234, 1240 (Wash. Ct. App. 2003);

accord Value, supra. Actual cash value—as a measure

of an insured vehicle’s worth—is central to auto insurance in general and total-loss claims in particular.

Estimating a totaled vehicle’s fair market value

involves many variables. After all, once a vehicle has

been totaled, it can’t be offered for sale in its pre-accident condition. And the price on which a willing seller

and buyer would settle depends on countless factors,

6

including the condition and features of the vehicle and

available alternatives in the local market.

For help with estimating a vehicle’s pre-accident

value, State Farm, like other major insurers, turns to

third-party valuation services. Pet. App. 6a-7a. Those

services typically collect and use available data showing the prices that dealers have listed for comparable

used vehicles in the local market. Id. at 7a. Such advertised prices often are more current and easily accessible than the prices at which vehicles are ultimately sold. The valuation services then adjust the

data on nearby comparable vehicles to better approximate the pre-accident fair market value of the totaled

vehicle. Ibid.

State Farm has used software called Autosource

for that purpose. Pet. App. 7a. Autosource draws from

a database of over 70 million vehicles, identifying potentially comparable vehicles of the same make, model,

year, and fuel type in the local market. No. 2:20-cv454, Dkt. 86, at 3. The listed prices of those comparable vehicles provide a useful starting point. But to ensure that they accurately estimate the fair market

value of the totaled vehicle, Autosource adjusts the

prices in multiple ways.

Most of the figures in Autosource’s database are

the prices at which dealers advertised the used vehicles for sale. But as every savvy buyer knows, most

vehicles sell for less than the advertised price after

bargaining between the seller and buyer.

Pet.

App. 7a. Because the final sale price more accurately

reflects “[t]he price that a seller is willing to accept

and a buyer is willing to pay,” Value, supra, Autosource (where appropriate) adjusts the advertised

7

prices to better estimate the price that the policyholder’s totaled vehicle would have fetched in an

arm’s length transaction. Pet. App. 54a-55a. Autosource works hard to ensure that the negotiation adjustments it applies are sound—for example, it doesn’t

apply the adjustment to prices from “no-haggle” dealerships that don’t negotiate prices with customers. Id.

at 54a.

Another key determinant of a vehicle’s fair market value is its condition. So in estimating a totaled

vehicle’s value, Autosource compares the pre-accident

condition of that vehicle to the typical condition of vehicles of the same type and age in the same area. Pet.

App. 5a. If the policyholder’s vehicle was in aboveaverage condition before it was totaled, the valuation

goes up. See id. at 14a. If the condition was below

average, the valuation goes down. Ibid.

2. Washington regulations governing total-loss

claims define “[a]ctual cash value” as “the fair market

value of the loss vehicle immediately prior to the loss.”

Wash. Admin. Code § 284-30-320(1). The regulations

then detail methods insurers can use to estimate a totaled vehicle’s pre-accident fair market value. Id.

§ 284-30-391. Insurers can rely on comparable vehicle

data, licensed dealer quotes, advertised-price comparisons, or a statistically sound computerized estimate.

Id. § 284-30-391(2). If the insurer and policyholder

can’t agree, then either “may invoke * * * appraisal” to

have the vehicle valued by an experienced neutral. Id.

§ 284-30-391(3).

3. Respondents are Washington residents who

filed insurance claims with State Farm after their vehicles were totaled. Pet. App. 39a. State Farm paid

8

respondents Kelley and Jama based on the value estimated in the Autosource reports prepared on their totaled vehicles. Id. at 54a, 86a-87a. Respondent

Ngethpharat objected to that estimated value, so

State Farm paid her instead based on quotes from local dealers. Id. at 53a-54a.

Respondents then brought putative class actions

against State Farm, alleging that Autosource’s adjustments for negotiation and condition violate Washington regulations governing total-loss claims. Pet.

App. 39a. Although the regulations don’t expressly

prohibit adjustments for negotiation, respondents argued that such a prohibition should be implied. See id.

at 8a. And while Washington law permits condition

adjustments in many circumstances, respondents alleged that State Farm’s adjustments “lack sufficient

empirical foundation.” Ibid.

In urging class treatment, respondents argued

that because the negotiation and condition adjustments were “unlawful,” all class members were necessarily injured by, and entitled to recover in the exact

amount of, those adjustments. See Pet. App. 5a, 72a73a. Given that theory, respondents contended that

the district court wouldn’t “need to make any individual determination” of the fair market value of either

their totaled vehicles or those of potential class members. Id. at 98a.

4. The district court initially certified classes of

State Farm policyholders who received payments for

totaled vehicles based on Autosource valuations including a negotiation or condition adjustment. Pet.

App. 81a, 118a-19a. The court reasoned that respond-

9

ents and all class members could “challenge only the legality of the deduction[s]” and didn’t need to prove that

they received less than their vehicles’ fair market value.

Id. at 67a. Without those individualized valuation

questions, the court reasoned, respondents could prove

compliance with Rule 23(b)(3)’s predominance requirement, which precludes certification when resolving the

claims of all class members would require the court to

answer too many questions for which the evidence

“‘varies from member to member.’” Id. at 108a.

After an intervening Ninth Circuit decision, the

district court decertified the classes. It reasoned that

even where a valuation practice is alleged to be “‘illegal’ and impermissible,” a plaintiff still must provide

“evidence of injury” resulting from the alleged violations. Pet. App. 46a (citing Lara v. First Nat’l Ins. Co.

of Am., 25 F.4th 1134, 1139-40 (9th Cir. 2022)). The

district court explained that a plaintiff cannot satisfy

that requirement “merely by proving that the insurer

failed to follow [a state’s] regulatory process” for estimating actual cash value. Id. at 43a. Instead, the

plaintiff must show that the challenged method

caused an actual injury—i.e., that he received less

than fair market value for his vehicle. Id. at 43a-44a.

Because in this case respondents didn’t show that the

fair market value of each class member’s vehicle could

be resolved on a classwide basis, the district court vacated its certification order. Id. at 44a-47a, 49a.

5. The Ninth Circuit reversed in relevant part in

a published, divided opinion. The majority left undisturbed the district court’s decision to decertify the

class relating to Autosource’s condition adjustment.

10

Pet. App. 23a-24a. But it held that the claims challenging Autosource’s negotiation adjustment were fit

for class treatment. Id. at 14a-23a.

The Ninth Circuit’s holding rested on the notion

that while adjustments for condition are sometimes

permissible under Washington law (though not, respondents alleged, in the way State Farm used them),

adjustments for negotiation are “flatly prohibit[ed].”

Pet. App. 16a-17a (distinguishing Lara). Because

“Washington law does not permit State Farm to apply

a discount for typical negotiation at all,” the Ninth

Circuit reasoned, every class member necessarily was

injured in the exact “amount of the negotiation adjustment that State Farm made.” Id. at 17a-18a. The

Ninth Circuit concluded that under that theory, any

illegal adjustment would yield a “‘classic pocketbook

injury’” sufficient for Article III standing. Id. at 27a.

Judge Rawlinson dissented, recognizing that the

panel decision “creates an unnecessary circuit split.”

Pet. App. 29a; accord id. at 33a-34a. As she explained,

the Fifth Circuit, in two cases involving similar totalloss claims, has rejected the notion that plaintiffs can

obtain class certification merely by contending that an

insurer used an illegal valuation method. Id. at 33a35a (citing Sampson, 83 F.4th at 422-23, and Bourque,

89 F.4th at 528-29). By departing from those decisions and permitting certification based on nothing

more than an alleged legal violation, Judge Rawlinson

concluded, the majority inappropriately relieved

plaintiffs and class members of their burden to prove

injury. Id. at 35a-37a.

The Ninth Circuit denied panel and en banc rehearing. Pet. App. 121a-22a.

11

REASONS FOR GRANTING THE PETITION

I.

THE COURT SHOULD GRANT THE PETITION TO

RESOLVE A RECOGNIZED SPLIT ON AN IMPORTANT CLASS-CERTIFICATION ISSUE.

The Ninth Circuit’s decision created a circuit split

on a discrete, recurring class-action issue with immense practical importance across the country: is an

allegation that an insurer’s valuation method violates

a statute, regulation, or contract—even if it causes no

actual injury by depriving policyholders of the value

to which they’re entitled—enough to justify certifying

a damages class under Rule 23(b)(3)?

The Fifth Circuit says no, holding in two essentially identical cases that a Rule 23(b)(3) class can’t be

certified unless the plaintiff shows that the fair market value of each vehicle can be established on a classwide basis. But the Ninth Circuit here said yes—over

a dissent that recognized the split the majority created—holding that allegations that a valuation

method is unlawful are all a plaintiff needs for class

certification. That decision creates a split with the

Fifth Circuit as well as considerable tension with the

decisions of other circuits, which have held that plaintiffs must be able to show that a challenged valuation

method caused each class member a real-world loss.

The Ninth Circuit’s decision can’t be squared with

this Court’s precedents, either. Rule 23(b)(3)’s “demanding” predominance requirement bars courts

from relying on any class model that either suppresses

individualized issues affecting each class member’s

ability to recover or requires hundreds or thousands

of mini-trials to resolve those issues. E.g., Amchem

Prods., Inc. v. Windsor, 521 U.S. 591, 623-25 (1997).

12

Classes likewise can’t be certified “on the premise that

[the defendant] will not be entitled to litigate” its defenses “to individual claims.” Wal-Mart Stores, Inc. v.

Dukes, 564 U.S. 338, 367 (2011) (citing 28 U.S.C.

§ 2072(b)). And the class-action device can’t be used

to award damages to people who suffered no Article III injury. TransUnion LLC v. Ramirez, 594 U.S.

413, 431 (2021). But the Ninth Circuit’s decision violates each rule, approving a class that suppresses key

individualized questions and that’s loaded with uninjured members.

That untoward result has serious practical consequences—and not just for the insurance class actions

exploding across the country. Courts are giving short

shrift to Rule 23’s “stringent requirements,” Am. Express Co. v. Italian Colors Rest., 570 U.S. 228, 234

(2013), and as a result defendants are facing staggering demands, crushing costs, and the well-recognized

pressure to settle even meritless claims once wrongly

certified, Microsoft Corp. v. Baker, 582 U.S. 23, 41-42

(2017). This case is an excellent vehicle to resolve the

split, restore uniformity on a recurring, important issue of class-action law, and provide clarity on the importance of faithful adherence to Rule 23’s requirements.

A. The Ninth Circuit’s Decision Conflicts

With Decisions Of Several Courts Of

Appeals.

The Ninth Circuit’s decision openly splits from decisions of the Fifth Circuit and is irreconcilable with

decisions of the Seventh and Eighth Circuits as well.

1. As Judge Rawlinson’s dissent recognizes (Pet.

App. 29a, 33a-35a), the Ninth Circuit’s decision creates

13

a direct conflict with multiple decisions of the Fifth

Circuit in virtually identical class actions.

The Fifth Circuit holds that even where class members can “show that an insurer’s use of [a valuation

method] was unlawful,” they still must “prove an actual

underpayment” to each class member. Sampson v.

USAA, 83 F.4th 414, 422-23 (5th Cir. 2023). Because

that showing cannot “be made on a class-wide basis,”

no class can be certified consistent with Rule 23(b)(3).

Bourque v. State Farm Mut. Auto. Ins. Co., 89 F.4th

525, 528-29 (5th Cir. 2023).

Sampson involved a challenge to the insurer’s reliance on market-valuation reports that the plaintiffs

claimed violated state statutes. 83 F.4th at 416. Like

respondents here, the plaintiffs there argued that because the insurer’s valuation method was unlawful,

they were necessarily injured. Id. at 416-17. The

Fifth Circuit disagreed. In a unanimous opinion authored by Judge Higginson, the Sampson panel reasoned that even where a challenged method is “unlawful,” the plaintiffs still must be able to “prove an

actual underpayment by class-wide proof.” Id. at 422.

Emphasizing that “no less than due process is implicated in class certifications,” the Fifth Circuit vacated

class certification for lack of predominance. Id. at

422-23 (cleaned up).

The Fifth Circuit did the same thing in Bourque,

a “nearly identical” case involving a challenge to the

insurer’s reliance on Autosource reports. 89 F.4th at

526-27. As in Sampson, the Fifth Circuit in Bourque

held that even where a valuation method is alleged to

be “unlawful,” “proof of injury is required.” Id. at 529.

Because the plaintiffs there “failed to establish [that

14

such a showing] can be made on a class-wide basis,”

Rule 23(b)(3) forbade class certification. Id. at 528-29.

Initially, the Ninth Circuit had its foot in that

camp. In Lara v. First National Insurance Co. of

America, 25 F.4th 1134 (9th Cir. 2022), it held that

plaintiffs had to show not only that a challenged

method “violate[d] * * * state regulations,” but also

that each class member was injured as a result—a

showing that would “require an individualized determination for each” class member inconsistent with

Rule 23(b)(3). Id. at 1138; see id. at 1138-40.

But in the decision below, the Ninth Circuit abandoned Lara for valuation methods claimed to be wholly

“impermissible.” Pet. App. 19a. As the majority saw

it, where state law “flatly prohibits” a valuation

method, each class member necessarily suffers an injury “equal to the amount of” the challenged adjustment, and no individualized inquiries into each vehicle’s fair market value are required. Id. at 17a.

Judge Rawlinson, dissenting, instead would have

hewed to the approach taken in Lara and by the Fifth

Circuit in Sampson and Bourque. Pet. App. 29a-37a.

Under that view, plaintiffs who claim that a valuation

method is illegal “still have to show harm,” necessitating “individualized inquiries” into “the actual pre-accident value of the car” as compared to “what each person was offered.” Id. at 32a-33a (cleaned up).

So as things stand, the Fifth and Ninth Circuits—

which together decide over one-third of the cases in

the regional courts of appeals—are in open conflict

15

over a recurring, important issue of federal class-action law. 1

2. More broadly, the Ninth Circuit’s decision is in

considerable tension with decisions of the Seventh

and Eighth Circuits involving other insurance valuation disputes.

The Seventh Circuit holds that when policyholders bring class actions challenging the way insurers

resolve claims, they must prove that each member of

the proposed class wasn’t “fully compensated” as a result. Kartman v. State Farm Mut. Auto. Ins. Co., 634

F.3d 883, 890 (7th Cir. 2011). Kartman involved

homeowners’ insurance covering “accidental direct

physical loss” to property, such as hail damage. Id. at

887. The plaintiffs sued their insurer, claiming that

it was violating the law by failing “to implement a uniform ‘reasonable, objective’ standard for assessing

hail-damaged roofs.” Ibid. The Seventh Circuit held

that those claims weren’t susceptible to class treatment under Rule 23(b)(3). Id. at 889-91.

As the Seventh Circuit explained, the “essence of

an insurance policy is a promise by the insurer to compensate the insured for the loss of something of value.”

Kartman, 634 F.3d at 890. No matter the method used,

“[i]f a given policyholder was fully compensated for the

[covered] damage,” then the insurer has fulfilled that

promise, and the policyholder can’t recover. Ibid. And

given Rule 23(b)(3)’s requirements, “the class-action

1

U.S. Courts of Appeals—Cases Commenced, Terminated, and

Pending During the 12-Month Periods Ending March 31, 2023

and 2024, U.S. Courts, https://tinyurl.com/r4933jbw (accessed

Feb. 15, 2025).

16

device is not appropriate for resolving * * * highly individualized questions of fact” about whether each

class member was in fact underpaid. Id. at 891.

The Eighth Circuit’s rule is the same. Take In re

State Farm Fire & Casualty Co. (LaBrier), 872 F.3d

567 (8th Cir. 2017). There, homeowners’ policies provided that State Farm would pay the “actual cash

value” of damaged property, and the plaintiffs claimed

that State Farm’s “practice of deducting ‘labor depreciation’ from estimated replacement cost in determining actual cash value” violated the policies “every time

State Farm employ[ed]” that method. Id. at 570-71,

576 (emphasis omitted). The Eighth Circuit reversed

class certification. Id. at 576-77. It reasoned that the

key question for class-certification purposes wasn’t

whether the labor-depreciation method was permitted, but whether it yielded a reasonable estimate of

actual cash value—and that question “may only be determined based on all the facts surrounding a particular insured’s * * * loss.” Ibid. Because those individualized inquiries would predominate over common

questions, no class could be certified. Id. at 577; see

also Halvorson v. Auto-Owners Ins. Co., 718 F.3d 773,

779-80 (8th Cir. 2013) (rejecting certification under

Rule 23(b)(3) in a case challenging an insurer’s use of

a percentile-based reduction of the cost of local medical services, reasoning that “individual inquiries regarding what is ‘usual and customary’ for each class

member will predominate” over common questions).

*

*

*

Had this case been filed in the Fifth Circuit, no

Rule 23(b)(3) class could have been certified because

17

there’s no “class-wide proof” capable of showing “an actual underpayment” to each class member. Sampson,

83 F.4th at 422. The decisions of the Seventh and

Eighth Circuits in similar cases indicate that they

would reach the same conclusion. But in the Ninth

Circuit, allegations of an “unlawful” valuation method

were all respondents needed to obtain certification.

That stark conflict is untenable, and this Court’s review is needed to resolve it.

B. The Ninth Circuit’s Decision Is Wrong.

The decision below is wrong in far-reaching ways.

In trying to avoid the individualized inquiries needed

to resolve fact-intensive valuation disputes, the Ninth

Circuit relieved class-action plaintiffs of their burden

to prove all elements of their claims. It stripped classaction defendants of their rights to present valid defenses to individual claims. And it approved certification of classes containing untold numbers of members

who suffered no injury and lack standing under Article III.

1. “The class action is ‘an exception to the usual

rule that litigation is conducted by and on behalf of

the individual named parties only.’” Comcast Corp. v.

Behrend, 569 U.S. 27, 33 (2013). The party seeking

certification bears the burden of “justify[ing] a departure from that rule.” Dukes, 564 U.S. at 348. That’s

no light burden. Rule 23’s requirements are “stringent” by design, and “in practice [they] exclude most

claims.” Italian Colors, 570 U.S. at 234.

The burden is heavier still for damages classes under Rule 23(b)(3), “an adventuresome innovation” “designed for situations in which class-action treatment

is not as clearly called for.” Comcast, 569 U.S. at 34

18

(cleaned up). That’s why Congress created additional

“safeguards” for damages class actions, including

“Rule 23(b)(3)’s predominance criterion,” which is

“even more demanding than Rule 23(a).” Ibid. Predominance precludes certification wherever resolving

each class member’s entitlement to relief would require the court to conduct extensive individualized

proceedings. Amchem, 521 U.S. at 623-25.

Any analysis of “whether ‘questions of law or fact

common to class members predominate’ begins, of

course, with the elements of the underlying cause of

action.” Erica P. John Fund, Inc. v. Halliburton Co.,

563 U.S. 804, 809-10 (2011). But in approving certification here, the Ninth Circuit sidestepped a core element necessary to the claims of respondents and all

class members, and for which highly individualized

factfinding would be required—proof of injury.

The Washington regulations respondents invoked

here don’t create any private right of action. Pain Diagnostics & Rehab. Assocs., P.S. v. Brockman, 988 P.2d

972, 975-76 (Wash. Ct. App. 1999); Lara, 25 F.4th at

1140. So respondents instead sued State Farm for

breach of contract, claiming that the regulations were

“incorporated into” their policies. Pet. App. 6a. To prevail on those contract claims, respondents must prove

not only breach of a contractual duty, but also that

“the breach proximately cause[d] [them] damage.”

E.g., C 1031 Props., Inc. v. First Am. Title Ins. Co., 301

P.3d 500, 503 (Wash. Ct. App. 2013). Respondents also

asserted consumer-protection claims, Pet. App. 6a,

which likewise require proof of an “injury” caused by

the defendant’s asserted violation, Panag v. Farmers

Ins. Co. of Wash., 204 P.3d 885, 889 (Wash. 2009). So

both sets of claims require proof that because of the

19

valuation method they challenge, respondents received less for their vehicles than what their policies

promised.

State Farm’s policies entitle policyholders only to

the “actual cash value” of totaled vehicles. Pet.

App. 5a; see No. 2:20-cv-454, Dkt. 186-1, at 31 (32 of

45). Everyone—the Ninth Circuit majority included—

agrees that means “fair market value,” Pet. App. 6a

(quoting Wash. Admin. Code § 284-30-320(1)), or what

“an informed buyer would willingly pay and an informed seller would accept,” DePhelps v. Safeco Ins.

Co. of Am., 65 P.3d 1234, 1240 (Wash. Ct. App. 2003).

At bottom, then, the policies require determining

what price the vehicle would have sold for right before

it was totaled.

That’s the sticking point here. Claims that hinge

on deprivation of fair market value are generally unsuitable for class treatment because they “require[] an

independent and individualized assessment of each absent class member’s property.” Tarrify Props., LLC v.

Cuyahoga County, 37 F.4th 1101, 1106 (6th Cir. 2022).

Total-loss valuation is a particularly individualized enterprise, turning on myriad features of each vehicle

and each local market. In a case like this, resolving

whether each class member received less than fair

market value would require the district court to conduct endless mini-trials over each vehicle’s value.

Nothing about that is consistent with the “demanding”

predominance requirement. Comcast, 569 U.S. at 34.

The Ninth Circuit sought a way around that problem, reasoning that any “illegal” adjustment applied

in valuing a vehicle could be deemed to cause an injury in the exact amount of the adjustment, no matter

20

the vehicle’s true value. Pet. App. 12a, 17a-19a. But

in doing so, the court of appeals contradicted this

Court’s precedents in two further ways.

For one, “Rule 23 does not set forth a mere pleading

standard”—instead, the “party seeking class certification must affirmatively demonstrate his compliance

with the Rule” by being “prepared to prove that there

are in fact sufficiently numerous parties, common

questions of law or fact, etc.” Dukes, 564 U.S. at 350.

As this Court has repeatedly emphasized, all aspects of

Rule 23 “‘must be satisfied’ by plaintiffs ‘before class

certification.’” Goldman Sachs Grp., Inc. v. Ark.

Teacher Ret. Sys., 594 U.S. 113, 119 (2021) (emphasis

added). To the extent it deferred questions affecting

each class member’s injury until trial, the Ninth Circuit violated the correct order of operations.

For another, the Rules Enabling Act “forbids interpreting Rule 23 to ‘abridge, enlarge or modify any

substantive right.’” Dukes, 564 U.S. at 367 (quoting

28 U.S.C. § 2072(b)). The decision below thumbs its

nose at that prohibition, too. If a policyholder came to

court as an individual plaintiff, challenging an insurer’s valuation method but declaring that he would

refuse to offer any proof or engage in any factfinding

about his vehicle’s fair market value, his claim would

fail. Under the Rules Enabling Act, the policyholder’s

claim can’t be made stronger through the class-action

device. But that’s exactly the effect of the Ninth Circuit’s decision, which approves certification of a class

containing members who couldn’t show the injury

that their claims require.

2. The Ninth Circuit’s decision is equally problematic with respect to State Farm’s rights.

21

Courts can no more “abridge” a defendant’s substantive rights than they can “enlarge” a plaintiff’s.

28 U.S.C. § 2072(b). Accordingly, “a class cannot be

certified on the premise that [the defendant] will not

be entitled to litigate” whatever defenses it has “to individual claims.” Dukes, 564 U.S. at 367. The Due

Process Clause lends that command further support:

it ensures that defendants have the “‘opportunity to

present every available defense.’” Lindsey v. Normet,

405 U.S. 56, 66 (1972); see Ortiz v. Fibreboard Corp.,

527 U.S. 815, 842, 845-46 (1999) (highlighting that the

Rules Enabling Act and Due Process Clause “counsel

against adventurous application[s]” of Rule 23).

In an individual total-loss case, an insurer would

have every right at trial to present its own evidence

about the fair market value of the totaled vehicle. The

insurer might marshal alternative valuation reports

or guidebooks, solicit testimony from local dealers,

present expert testimony, or request appraisals. See

supra at p. 7. All that evidence would be relevant to

the fair market value of the individual plaintiff’s vehicle, and thus to his ability to recover.

But once the claims of thousands of policyholders

are lumped together in a sprawling class, the insurer

no longer can present such evidence, at least not without requiring extensive individualized proceedings

that would render any class trial unmanageable. As

this Court’s decisions underscore, the defendant can’t

be faulted for insisting on its rights, and the necessary

outcome is to deny certification—not to suppress the

defendant’s rights and press forward with class litigation anyway. Dukes, 564 U.S. at 367.

22

That’s the insight animating the Fifth Circuit’s

opinions on the other side of the split. In Sampson

and Bourque, the plaintiffs challenged the insurers’

reliance on third-party valuation reports, claiming

that the insurers instead should have used the values

found in a guidebook published by the National Automobile Dealers Association. Sampson, 83 F.4th at

416-17; Bourque, 89 F.4th at 527. The problem, the

Fifth Circuit explained, was that the plaintiffs’ theory

required the court to focus on “NADA and NADA

alone,” to the exclusion of “other valuation methods,

including Kelley Blue Book and others,” that might

shed light on each vehicle’s fair market value. Bourque, 89 F.4th at 528-29 (cleaned up) (quoting Sampson,

83 F.4th at 419). Focusing on NADA alone may have

been convenient for the plaintiffs—but only because it

would have impermissibly suppressed other evidence

affecting each class member’s ability to recover.

The Ninth Circuit committed the same error the

Fifth Circuit rectified in Sampson and Bourque. The

Ninth Circuit focused exclusively on respondents’ preferred valuation method—the Autosource reports—

and merely “add[ed] back * * * the amount of the unlawful negotiation discount.” Pet. App. 19a. By treating that contrived value as the sole measure of injury

and damages, the decision impedes State Farm’s right

to present competing evidence showing that, in reality, class members were paid as much as (or even more

than) their vehicles were actually worth.

3. The Ninth Circuit’s decision also contravenes

Article III. “Article III does not give federal courts the

power to order relief to any uninjured plaintiff, class

action or not.” Tyson Foods, Inc. v. Bouaphakeo, 577

U.S. 442, 466 (2016) (Roberts, C.J., concurring). So as

23

this Court has held, “[e]very class member must have

Article III standing in order to recover individual

damages.” TransUnion, 594 U.S. at 431. Not only

that, but conforming to that requirement requires

proof of real harms, not mere “‘legal infractions,’” because “an injury in law is not an injury in fact.” Id. at

427; accord Spokeo, Inc. v. Robins, 578 U.S. 330, 341

(2016) (“Article III standing requires a concrete injury

even in the context of a statutory violation.”).

The Ninth Circuit’s decision cannot be reconciled

with those precedents. It gives undue weight to a mere

injury in law—i.e., that State Farm performed adjustments that supposedly were “flatly prohibit[ed].” Pet.

App. 17a. It then treats that asserted legal violation

as if it were, on its own, an injury in fact, deeming respondents and all class members injured “in the exact

amount of the impermissible negotiation deduction.”

Id. at 19a. And it relieves respondents and class

members of the central burden Article III imposes: to

show that the supposed violation caused them realworld harm.

The Ninth Circuit dismissed these Article III concerns by theorizing that absent the adjustments, all

class members “would have been paid more,” yielding

“‘a classic pocketbook injury.’” Pet. App. 27a. But the

relevant comparator is what each class member is

owed—i.e., “the fair market value of the loss vehicle

immediately prior to the loss,” Wash. Admin. Code

§ 284-30-320(1)—not whatever value the Autosource

reports would have yielded without negotiation adjustments. And there’s no way to determine whether

each class member received fair market value without

considering individualized evidence unique to each vehicle. Respondents cannot simply “stake their claim

24

on an isolated intermediate step” in a broader valuation process without showing “real-world financial injury” at the end of the process. Lewis v. GEICO, 98

F.4th 452, 460 (3d Cir. 2024).

A hypothetical highlights the Ninth Circuit’s error. Say a driver totals a car that before the accident

had a fair market value of $10,000. The insurer, in a

flight of fancy, decides to resolve all total-loss claims

by randomly generating a value between $1,000 and

$20,000 and discounting that value by 5 percent. The

insurer clicks a button, gets a value of $20,000, applies

the 5 percent discount, and cuts the driver a check for

$19,000. The driver may have all sorts of objections

to the insurer’s method. But the one thing the driver

can’t say is that he suffered an actual injury because

of the method—after all, he walked away with $19,000

for a car worth $10,000 and so was $9,000 better off.

But that’s the Ninth Circuit’s reasoning in a nutshell:

it would ignore the bottom-line question of what the

car was worth and instead treat the driver as injured

simply because the insurer applied an improper discount that took $1,000 off the initial estimate.

That reasoning buries, rather than answers, the

relevant questions (how much was each vehicle worth,

and what did the policyholder get for it?)—and the

highly individualized factual issues involved in answering those questions for every member of a sweeping class.

C. The Question Is Important, And This Case

Is An Excellent Vehicle For Resolving It.

The question that has divided the circuits has

enormous implications not just for the many total-loss

class actions across the country, but also for insurance

25

litigation and class actions more generally. This is the

ideal case for this Court to address the issue.

1. As things stand, dozens of “materially identical” total-loss class actions are pending in federal

courts from coast to coast. Reynolds v. Progressive Direct Ins. Co., 346 F.R.D. 120, 125 (N.D. Ala. 2024); accord, e.g., Costello v. Mountain Laurel Assurance Co.,

2024 WL 239849, at *1 n.1 (E.D. Tenn. Jan. 22, 2024)

(describing the case as “one of many similar actions

pending in districts across the country”). 2 Those cases

2

E.g., Abbassy v. Gov’t Emps. Ins. Co., No. 2:24-cv-5853

(D.N.J.); Ambrosio v. Progressive Preferred Ins. Co., No. 2:22cv-342 (D. Ariz.); Bartee v. Progressive Advanced Ins. Co.,

No. 4:22-cv-342 (E.D. Mo.); Bibbs v. Allstate Ins. Co., No. 1:23cv-1968 (N.D. Ohio); Chadwick v. State Farm Mut. Auto. Ins.

Co., No. 4:21-cv-1161 (E.D. Ark.); Chick v. GEICO Gen. Ins.

Co., No. 2:24-cv-1124 (E.D.N.Y.); Clippinger v. State Farm

Mut. Auto. Ins. Co., No. 2:20-cv-2482 (W.D. Tenn.); Costello v.

Mt. Laurel Assurance Co. (TV3), No. 2:22-cv-35 (E.D. Tenn.);

Curran v. Progressive Direct Ins. Co., No. 1:22-cv-878 (D.

Colo.); Dinicola-Ortiz v. GEICO Indem. Co., No. 1:22-cv-6228

(D.N.J.); Drummond v. Progressive Specialty Ins. Co.,

No. 5:21-cv-4479 (E.D. Pa.); Ellis v. State Farm Mut. Auto. Co.,

No. 6:22-cv-1005 (M.D. Fla.); Fennell v. Safeco Ins. Co. of Ill.,

No. 1:23-cv-2125 (N.D. Ohio); Free v. Artisan & Truckers Cas. Co.,

No. 6:24-cv-1945 (D. Or.); Freeman v. Progressive Direct Ins. Co.,

No. 1:21-cv-3798 (D.S.C.); Golla v. Allstate Ins. Co., No. 1:23-cv1469 (N.D. Ohio); Gulick v. State Farm Mut. Auto. Ins. Co., No. 2:21cv-2573 (D. Kan.); Holmes v. Progressive Universal Ins. Co.,

No. 1:22-cv-894 (N.D. Ill.); Jones v. Progressive Universal Ins. Co.,

No. 2:22-cv-364 (E.D. Wis.); Knight v. Progressive Nw. Ins. Co.,

No. 3:22-cv-203 (E.D. Ark.); Lewis v. GEICO, No. 1:18-cv-5111

(D.N.J.); Milligan v. GEICO Gen. Ins. Co., No. 2:16-cv-240

(E.D.N.Y.); Muhammad v. State Farm Indem. Co., No. 2:22-cv6149 (D.N.J.); Narcisse v. Progressive Cas. Ins. Co., No. 1:23-cv4690 (S.D.N.Y.); Newton v. Progressive Haw. Ins. Corp., No. 4:24cv-47 (E.D. Tenn); Nichols v. State Farm Mut. Auto. Ins. Co.,

No. 2:22-cv-16 (S.D. Ohio); Petri v. Drive N.J. Ins. Co., No. 1:21-cv-

26

are turbocharged by plaintiffs’ efforts to obtain certification of classes that, together, would include millions of class members.

Take auto-collision claims alone. In 2021, nearly

ten million such claims were filed, and about 25 percent of them—nearly two and a half million—involved

a total loss. 3 Total-loss claims are on the rise in general, “having increased 29% since 2020.” 4 And all major insurers, like State Farm here, have turned to valuation reports with adjustments to estimate the

20510 (D.N.J.); Rancher v. ALFA Mut. Ins., No. 2:24-cv-439 (N.D.

Ala.); Reynolds v. Progressive Direct Ins. Co., No. 5:22-cv-503 (N.D.

Ala.); Schmidt v. State Farm Mut. Auto. Ins. Co., No. 2:22-cv-12926

(E.D. Mich.); Schroeder v. Progressive Paloverde Ins. Co., No. 1:22cv-946 (S.D. Ind.); See v. Gov’t Emps. Ins. Co., No. 2:21-cv-547

(E.D.N.Y.); Sibert v. Progressive Select Ins. Co., No. 1:22-cv-1179

(D. Md.); Taxer v. Progressive Universal Ins. Co., No. 3:22-cv-1255

(D. Or.); Thurston v. Progressive Cas. Ins. Co., No. 1:22-cv-375 (D.

Me.); Varela v. State Farm Mut. Auto. Ins. Co., No. 0:22-cv-970 (D.

Minn.); Wade v. Progressive N. Ins. Co., No. 1:23-cv-4434 (N.D. Ill.);

Watson v. Progressive Direct Ins. Co., No. 5:22-cv-203 (E.D. Ky.);

Wensel v. Progressive Direct Ins. Co., No. 4:24-cv-400 (D. Idaho);

Wiggins v. State Farm Mut. Auto. Ins. Co., No. 8:21-cv-3803

(D.S.C.); Williams v. State Farm Mut. Auto. Ins. Co., No. 1:22-cv1422 (N.D. Ill.); Wright v. Progressive Direct Ins. Co., No. 2:24-cv761 (D. Nev.).

3

There were over 232 million drivers in the United States as

of 2021. How Many People Drive in the U.S.?: 2025, Consumer

Affairs (updated Jan. 24, 2024), https://tinyurl.com/yck2ajku.

About 4.2 collision claims were filed per 100 drivers that year.

How Many Car Insurance Claims Are Filed Each Year?: 2025,

Consumer Affairs (updated Feb. 22, 2024), https://tinyurl.com/

ytdv8rwx. Of those claims, 24 percent were total losses. LexisNexis Risk Solutions, A Hard Collision with Profitability 4

(2023), https://tinyurl.com/mr4cmpa2.

4

LexisNexis Risk Solutions, Key Insights for the Road Ahead 6

(2024), https://tinyurl.com/48u4eupj.

27

actual cash value of totaled vehicles. E.g., Schroeder v.

Progressive Paloverde Ins. Co., 713 F. Supp. 3d 523,

529-30 (S.D. Ind. 2024) (Progressive); Lewis, 98 F.4th

at 457 (GEICO); Kronenberg v. Allstate Ins. Co., 743

F. Supp. 3d 465, 479 (E.D.N.Y. 2024) (Allstate);

Sampson, 83 F.4th at 417 (USAA); Lara, 25 F.4th at

1136-37 (Liberty Mutual). 5

The financial exposure in these cases is staggering. Plaintiffs often claim that the adjustments they

challenge automatically entitle each class member to

more than $500 per vehicle, no matter what each class

member was already paid, e.g., Murphy v. State Auto.

Mut. Ins. Co., 2020 WL 13548251, at *4 (E.D. Ark.

Feb. 18, 2020) ($966 adjustment); Reynolds, 346

F.R.D. at 138 n.4 ($847 adjustment)—to say nothing

of statutory penalties and punitive damages on top of

that. And the size and sweep of the proposed classes

in these cases can make the exposure figures astronomical. In just one total-loss case involving a challenge to one adjustment made by one insurer in one

state, the plaintiffs estimated a class size of over 80,000

and damages of about $70 million. See Mot. for Final

Approval, Volino v. Progressive Cas. Ins. Co., No. 1:21cv-6243, Dkt. 388 at 11-12 & n.3, 19 (S.D.N.Y. Nov. 26,

2024). Combining the many pending cases involving

different insurers, valuation methods, and states

yields exposure in the billions.

Without stricter policing of Rule 23(b)(3)’s limits,

this sort of financial pressure will have harmful consequences. Even an erroneous class-certification order

“may force a defendant to settle rather than run the

5

See Asis, Largest Auto Insurance Companies, Business Insider (Aug. 5, 2024), https://tinyurl.com/ypjpn3af (with State

Farm, these companies comprise over two-thirds of the private

car-insurance market).

28

risk of potentially ruinous liability.” Baker, 582 U.S. at

41-42 (cleaned up). That’s because the prospect of reversal on appeal from a final judgment doesn’t erase

the “extensive discovery and the potential for uncertainty and disruption” that forces class-action defendants to settle in the first place. Stoneridge Inv. Partners LLC v. Sci.-Atlanta, Inc., 552 U.S. 148, 163

(2008); accord, e.g., AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 350 (2011). Those pressures are

real and already have led to settlements in total-loss

cases. 6 Ultimately, the more insurers are saddled

with the financial burden of liability beyond the true

value of the vehicles they’ve contracted to insure, the

more consumers will bear some of that cost through

higher rates. 7

2. The question presented reverberates beyond

the total-loss context. Many other insurance class actions involve similar issues. Auto insurers often need

to estimate the value of damaged (but not totaled) vehicles, and policyholders frequently challenge those

estimates in class actions, resulting in disputes over

whether the predominance requirement is met. See,

e.g., Baker v. State Farm Mut. Auto. Ins. Co., 2022 WL

3452469, at *1 (11th Cir. Aug. 18, 2022) (per curiam)

(involving method for estimating diminished value of

vehicle after repair); Achziger v. IDS Prop. Cas. Ins.

6

E.g., Araullo, Progressive Settles Michigan Class Action over

Total Loss Claims, Ins. Bus. (Nov. 26, 2024), https://tinyurl.com/

3btah674; Lowery, Progressive Reaches $48M Class Action Actual

Cash Value Settlement, Repairer Driven News (July 9, 2024),

https://tinyurl.com/2vd7u3wp.

7

E.g., Wile, Consumer Prices Moved Higher in March. Auto Insurance Costs Were a Major Reason, NBC News (Apr. 10, 2024),

https://tinyurl.com/2h7w33hz (identifying litigation costs as a

reason for increased rates).

29

Co., 772 F. App’x 416, 417 (9th Cir. 2019) (same). Similar disputes arise in other cases where insurers must

estimate some covered value, such as real property or

medical services. See, e.g., Halvorson, 718 F.3d at

779-80; Kartman, 634 F.3d at 889-90; Sims v. Allstate

Fire & Cas. Ins. Co., 2024 WL 3908739, at *1 (W.D.

Tex. Aug. 21, 2024). And the theory the court of appeals embraced below could easily rear its head in any

case in which plaintiffs challenge the lawfulness of an

isolated step of a broader valuation process. Answering the question here will provide much-needed guidance to the lower courts in those contexts, too.

More broadly, a course correction is needed (especially in the Ninth Circuit) to ensure that Rule 23’s

requirements (especially predominance) are diligently observed. All too often, the Ninth Circuit has

allowed plaintiffs to “sidestep” Rule 23’s requirements. Senne v. Kan. City Royals Baseball Corp., 934

F.3d 918, 962-63 (9th Cir. 2019) (Ikuta, J., dissenting);

accord, e.g., Olean Wholesale Grocery Coop., Inc. v.

Bumble Bee Foods LLC, 31 F.4th 651, 686 (9th Cir.

2022) (en banc) (Lee, J., dissenting) (majority’s decision on predominance was “no[t] true to the rule”);

Owino v. CoreCivic, Inc., 60 F.4th 437, 456 (9th Cir.

2022) (VanDyke, J., dissenting from denial of rehearing en banc) (majority had “created a new rule of commonality”). That overly permissive approach has

made the Ninth Circuit a magnet for class actions.

These problems are not going away. Class actions have exploded in recent years, with “around

10,000” filed each year. Olean, 31 F.4th at 686 (Lee,

J., dissenting). The costs of defending those suits

have ballooned, too, more than doubling over the last

30

decade. 8 And if class-action plaintiffs can further inflate their demands by funneling an indeterminate

number of uninjured members into their proposed

classes, then the hydraulic settlement pressure on defendants will only get worse.

3. This is an excellent vehicle for addressing the

problem, resolving the split, and restoring uniformity

on a recurring, important issue of class-action law.

The question whether respondents had to offer classwide proof that the challenged adjustment caused

each class member to receive less than actual cash

value was squarely pressed and passed upon in the

district court, Pet. App. 43a-48a (decertification); id.

at 61a-68a, 71a-77a, 95a-105a, 107a-14a (certification), and the court of appeals, id. at 14a-23a (panel

majority), 29a-37a (dissent). By denying panel and en

banc rehearing, the Ninth Circuit has declined to resolve the conflict it created. And no factual or prudential roadblocks stand in the way of this Court’s review.

II. AT MINIMUM, THE PETITION SHOULD BE HELD

PENDING LABCORP.

This Court recently granted certiorari to decide

“[w]hether a federal court may certify a class action

pursuant to Federal Rule of Civil Procedure 23(b)(3)

when some members of the proposed class lack any Article III injury.” Lab’y Corp. of Am. v. Davis, — S. Ct.

—, 2025 WL 288305 (Jan. 24, 2025) (No. 24-304). At

minimum, this petition should be held for that case.

The second question presented here is the same

one this Court granted certiorari to resolve in Labcorp. Under the Ninth Circuit’s approach in this case,

8

Carlton Fields, Class Action Survey 7 (2024), https://tinyurl.com/5as9thwc.

31

the certified class unquestionably includes members

who suffered no injury in fact because they were fully

compensated for the fair market value of their vehicles. That approach wouldn’t have flown in circuits

holding that classes can’t be certified when they contain more than a de minimis number of uninjured

members, e.g., In re Rail Freight Fuel Surcharge Antitrust Litig., 934 F.3d 619, 624-25 (D.C. Cir. 2019),

and certainly not in circuits where “no class may be

certified that contains members lacking Article III

standing,” e.g., Denney v. Deutsche Bank AG, 443 F.3d

253, 264 (2d Cir. 2006); accord, e.g., Halvorson, 718

F.3d at 778.

In fact, the Third Circuit has squarely disagreed

with the Ninth Circuit’s approach to Article III standing in this exact context. In Lewis, another total-loss

case, the plaintiffs challenged the insurer’s use of condition adjustments, arguing that because the adjustments were supposedly unlawful, the insurer had necessarily caused a financial injury to them and all

members of the proposed class. 98 F.4th at 460. The

Third Circuit rejected that argument as “impermissibly divorc[ing] their standing to sue from any realworld financial injury.” Ibid. As it explained, a “bare

violation of [state] insurance rules,” “divorced from

any concrete harm,” does “not suffice for Article III

standing.” Id. at 461 (quoting TransUnion, 594 U.S.

at 440).

This Court is poised to address these same questions. At the very least, then, this petition should be

held for Labcorp.

32

CONCLUSION

The petition for a writ of certiorari should be

granted. At minimum, the petition should be held for

Laboratory Corp. of America v. Davis, No. 24-304, and

then granted and disposed of as appropriate in light

of this Court’s decision in that case.

Respectfully submitted.

PETER W. HERZOG III

THEODORE J. BOUTROUS JR.

WHEELER TRIGG O’DONNELL LLP

Counsel of Record

211 N. Broadway, Suite 2825

BRADLEY J. HAMBURGER

St. Louis, MO 63102

DANIEL R. ADLER

MATT AIDAN GETZ

ERIC L. ROBERTSON

GIBSON, DUNN & CRUTCHER LLP

WHEELER TRIGG O’DONNELL LLP 333 South Grand Avenue

370 17th Street, Suite 4500

Los Angeles, CA 90071

Denver, CO 80202

tboutrous@gibsondunn.com

OLIVIA GOLDBERG

GIBSON, DUNN & CRUTCHER LLP

1700 M Street, N.W.

Washington, D.C. 20036

Counsel for Petitioners

February 25, 2025