from the United States District Court for the Western
District of Louisiana
OWEN, GRAVES, and HIGGINSON, Circuit Judges.
STEPHEN A. HIGGINSON, Circuit Judge.
court has carefully considered this appeal in light of the
briefs, oral argument, and pertinent portions of the record.
Having done so, we REMAND the certification of the contract
and Louisiana-insurance law class. We REVERSE the district
court's certification of a fraud class. We elaborate on
only three points.
Progressive Security Insurance Company
("Progressive") contends that Comcast Corp. v.
Behrend, 133 S.Ct. 1426 (2013), requires reversal; it
does not. In Comcast, plaintiffs brought antitrust
claims asserting four separate liability theories.
Id. at 1430-31. The district court rejected all but
one. Id. at 1431. Nonetheless, the district court
certified a class action after finding that damages could be
calculated on a class-wide basis. Id. at 1431. The
district court based its certification decision on
plaintiffs' damages model, which calculated damages based
on all four liability theories and did not isolate damages
from any one theory. Id. The Supreme Court reversed.
Id. at 1432. It reasoned that "a model
purporting to serve as evidence of damages in this class
action must measure only those damages attributable to that
theory. If the model does not even attempt to do that, it
cannot possibly establish that damages are susceptible of
measurement across the entire class . . . ."
Id. at 1433. Accordingly, Comcast held that
when plaintiffs argue that damages can be decided on a
class-wide basis, plaintiffs must put forward a damages
methodology that maps onto plaintiffs' liability theory.
Id. at 1433.
cases interpreting Comcast confirm that what
Comcast demands is fit between plaintiffs'
class-wide liability theory and plaintiffs' class-wide
damages theory. See, e.g., Ludlow v. BP,
P.L.C., 800 F.3d 674, 683 (5th Cir. 2015), cert.
denied, 136 S.Ct. 1824 (2016); In re Deepwater
Horizon, 739 F.3d 790, 817 (5th Cir.), cert. denied
sub nom. BP Expl. & Prod. Inc. v. Lake Eugenie Land &
Dev., Inc., 135 S.Ct. 754 (2014). For example, in
Deepwater Horizon, we noted that "[t]he
principal holding of Comcast was that a model
purporting to serve as evidence of damages must measure only
those damages attributable to the theory of liability on
which the class action is premised." Deepwater
Horizon, 739 F.3d at 817 (internal quotation marks,
citation, and alterations removed).
Plaintiffs' liability theory is that Defendant unlawfully
used WorkCenter Total Loss (WCTL) to calculate the base value
of total loss vehicles. Plaintiffs claim that using WCTL,
instead of lawful sources such as the National Automobile
Dealers Association (NADA) Guidebook or the Kelly Blue Book
(KBB), resulted in their vehicles being assigned a lower base
value and accordingly resulted in Plaintiffs receiving lower
payouts on their insurance claims.
damages theory aligns with that liability theory. Plaintiffs
contend that damages can be calculated by replacing
Defendant's allegedly unlawful WCTL base value with a
lawful base value, derived from either NADA or KBB, and then
adjusting that new base value using Defendant's current
system for condition adjustment. Plaintiffs contend that such
a calculation can be done on a class-wide basis because
Defendant already possesses NADA scores for most of the
class, NADA or KBB scores are otherwise publicly available,
and Defendant already has condition scores for each vehicle.
In fact, Plaintiffs' damages expert opined that she could
apply Defendant's condition adjustment to Defendant's
NADA scores or publicly available NADA or KBB data. This
damages methodology fits with Plaintiffs' liability
scheme because it isolates the effect of the allegedly
unlawful base value. That is, by essentially rerunning
Defendant's calculation of actual cash value but with a
lawful base value, Plaintiffs' damages theory only pays
damages resulting from the allegedly unlawful base value.
Plaintiffs' damages methodology is sound. Defendant
calculates the base value and the condition adjustment
separately. Under either the WCTL system or a NADA or KBB
system, base value purports to measure the retail cost of a
vehicle of the same make, model, and year of the loss
vehicle. From this base value, an adjustment can be made to
consider the condition of the loss vehicle. Because this
condition adjustment is a separate and unrelated step from
the calculation of base value, there is no principled reason
why Defendant's own condition adjustment scores could not
be used to adjust base values derived from NADA or KBB.
Indeed, Plaintiffs' damages expert testified that it
would not be difficult to apply Defendant's condition
adjustment to NADA base values.
court finds, for essentially the reasons stated by the
district court, that Plaintiffs' damages methodology does
not preclude class treatment.
argues-for the first time on appeal-that by accepting
Defendant's condition score calculation as is, Plaintiffs
may have impermissibly waived unnamed class members'
ability to assert a future claim contesting Defendant's
computation of the condition factor. Because this argument was
not expressly raised to the district court, and may present
important certification questions, we remand.
outset, it is important to position Defendant's argument
into the broader class certification framework. If Plaintiffs
had raised challenges to both the condition adjustment and
the base value calculation, Plaintiffs' class
certification motion may have run into predominance problems
because condition adjustments appear to be highly
individualized. Perhaps recognizing this concern, Plaintiffs
disclaimed any challenge to the condition adjustment. This
waiver may have resolved the predominance
problem-all parties agree that the base value
calculation is ...