The Ninth Circuit has again confirmed that predominance may be absent if an individualized analysis is required to determine whether each class member has suffered actual injury. In Lara v. First National Insurance Co. of America, — F.4th —, 2022 WL 414691 (9th Cir. Feb. 11, 2022), the plaintiffs alleged that the defendant breached its insurance contracts with consumers when it failed to apply the formula required under Washington law to determine the pre-accident market value of totaled vehicles. The record showed that that the payments the defendant made to its policyholders were not consistently affected adversely by its failure to apply the allegedly required methodology, and that some class members could have received amounts equal to or greater than what they were entitled to under the plaintiffs’ theory of the case.
The Ninth Circuit held that the district court properly denied class certification. Even assuming arguendo that the class could demonstrate through common proof that the defendant breached a duty to apply a particular methodology in valuing the vehicles, the Ninth Circuit pointed out that each class member’s claim also required proof that this breach caused actual injury. Because individual inquiries were necessary to answer this question, predominance was properly found to be absent.
This case touches on a hot topic in class action law – whether a class can include uninjured members – which the Ninth Circuit is considering en banc in a separate case. It also serves as a reminder to defendants that while individualized issues of proof of the amount of damages suffered by class members may not be enough to defeat class certification, the need for individualized analysis to prove the existence of injury may be fatal to predominance.