March 6, 2014

DRI amicus brief challenges constitutionality of Montana Supreme Court opinion allowing classwide adjudication of punitive damages (Allstate v. Jacobsen)

Our firm has filed an amicus curiae brief on behalf of DRI, asking the U.S. Supreme Court to decide whether the Montana Supreme Court violated Allstate's due process rights in a class action punitive damages case.

This lawsuit began when Robert Jacobsen sued to challenge Allstate's claims adjustment practices in Montana.  The trial court certified the case as a class action and approved a procedure calling for punitive damages to be awarded on a classwide basis.  The Montana Supreme Court determined that the trial court's procedure violated due process because it would permit the award of punitive damages to class members who may not have suffered any actual harm from the challenged claims-handling procedures. 

Unfortunately, the Montana Supreme Court "fixed" that problem in a way that still violates due process.  The court authorized the trial court to determine entitlement to punitive damages on a classwide basis, followed by individual trials to determine the amount of compensatory and punitive damages to be awarded to each class member.

Our brief argues that the revised procedure still runs afoul of the Due Process Clause because entitlement to punitive damages cannot be decided on a classwide basis when the defendant engaged in different conduct towards each class member.  An individualized assessment of the defendant's conduct towards each particular plaintiff is required.   

Other aspects of the Montana Supreme Court's opinion raise serious due process concerns, and as a result the case has attracted a lot of attention from defense-oriented interest groups.  At least five different amici have filed briefs supporting Allstate's petition for review.  There may still be others that haven't yet shown up on the docket

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