Salcido v. Farmers Insurance Exchange

2004 NMCA 006, 82 P.3d 968, 134 N.M. 797
CourtNew Mexico Court of Appeals
DecidedNovember 6, 2003
DocketNo. 24,104
StatusPublished
Cited by10 cases

This text of 2004 NMCA 006 (Salcido v. Farmers Insurance Exchange) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Salcido v. Farmers Insurance Exchange, 2004 NMCA 006, 82 P.3d 968, 134 N.M. 797 (N.M. Ct. App. 2003).

Opinion

OPINION

KENNEDY, Judge.

{1} Defendants apply to this. Court for review of the district court’s order granting class certification to claims adjusters employed by Farmer’s Insurance Exchange (FIE). We are presented .with the threshold question of what factors will guide our discretion when considering requests for interlocutory review of class certification decisions under Rule 1-023(F) NMRA 2003. Applying the guidelines we adopt herein, we deny Defendant’s application for appeal.

I. FACTUAL AND PROCEDURAL. BACKGROUND

{2} In July 2001, Plaintiffs brought this action under NMSA 1978, § 50-4-22(0 (2003), of the New Mexico Minimum Wage Act, seeking to recover overtime payments for work they performed as claims adjusters for FIÉ. Defendants represent that FIE is a reciprocal insurance exchange'company that sells insurance policies, collects insurance premiums, and reinsures risks and invests premiums. FIE’s sales of insurance and reinsurance business appears to primarily involve the adjustment and settlement of claims. The claims adjusters who sought class certification held the titles of personal lines claims representative, senior claims representative, and special claims representative.

{3} Before Plaintiffs brought this action, several other classes of claims adjusters throughout the country were certified in similar class action suits brought against FIE. Three months after Plaintiffs initiated the case at bar, the class action suits in Colorado, Illinois, Michigan, Minnesota, New Mexico, Oregon, and Washington were consolidated into one multi-district litigation (MDL), by stipulation of the parties. That action was bifurcated into two phases: liability and damages. The classes in the MDL agreed to argue FIE’s liability under the Federal Labor Standards Act (FLSA) and the overtime laws of the seven states where the actions originated. Also as part of the agreement, FIE stipulated to the certification of a class composed of those claims adjusters who have worked in one or more of the seven states during the class period, while holding the titles of personal lines claims representatives, senior claims representatives, and special claims representatives. The parties further agreed to jointly submit a proposed class certification order.

{4} Soon after the MDL stipulation was approved, Plaintiffs in the present action filed an emergency motion to certify their proposed class, strike Defendants’ response to the certification motion, and to send notice to class members. Plaintiffs argued that Defendants should be precluded from opposing class certification based on FIE’s stipulation in the MDL. Plaintiffs stated that they were willing to accept the MDL class definition even though it varied slightly from the definition they originally proposed. Rejecting Plaintiffs’ argument, the district court concluded it had an obligation to evaluate the proposed class under Rule 1-023(F) independent of Defendants’ stipulation in the MDL.

{5} Following a hearing on the merits of Plaintiffs’ motion for class certification, the district court certified a class composed of personal lines claims representatives, senior claims representative, and/or special claims representative who worked for FIE while in New Mexico between September 17, 2000, and the date the court approved notice to the class members is mailed. In their application for interlocutory review of the class certification, Defendants challenge certification of the class on two grounds: (1) the district court improperly relied on the class stipulation in the MDL without a separate finding that the Plaintiffs had satisfied each of the elements required under Rule 1-023; and (2) the named Plaintiffs are not members of the purported class they seek to represent.

{6} Defendants ask us to grant the application for appeal, arguing that certification in this case was manifestly erroneous, will make settlement inevitable, and that our decision would resolve an unsettled legal issue that is important to the litigation and important in itself. Although we find this case inappropriate for interlocutory review, we take this opportunity to discuss for the first time in New Mexico the factors we will consider in granting or denying review of class certification decisions.

II. DISCUSSION

{7} In 1998, Federal Rule of Civil Procedure, Rule 23(f), became effective, allowing the courts of appeals discretion to permit appeal of district court decisions granting or denying class action certification. Shortly thereafter, in 2000, New Mexico adopted Rule 1 — 023(F), mirroring the language of its federal counterpart. The federal decisions establishing guidelines under Rule 23(f) recognize the highly discretionary role of the courts of appeals to grant or deny these appeals. Looking to the advisory committee note for Rule 23(f), circuit courts emphasize that “[t]he court of appeals is given unfettered discretion whether to permit the appeal, akin to the discretion exercised by the Supreme Court in acting on a petition for certiorari.” See, e.g., Blair v. Equifax Check Servs., Inc., 181 F.3d 832, 833 (7th Cir.1999) (internal quotation marks and citation omitted). Further, the committee recommends that “[t]he courts of appeals [to] develop standards for granting review that reflect the changing areas of uncertainty in class litigation,” explaining that “[p]ermission to appeal may be granted or denied on the basis of any consideration that the court of appeals finds persuasive.” See, e.g., Lienhart v. Dryvit Sys., Inc., 255 F.3d 138, 142 (4th Cir.2001) (alteration in original) (internal quotation marks and citation omitted). We find guidance in the body of federal case law on the issue as we work to establish a criterion for applying Rule 1-023(F) in New Mexico.

A- Federal Circuit Standards

{8} In the first decision to apply Rule 23(f),' the Seventh Circuit Court of Appeals chose not to invent a brightdine rule opting instead to craft an organic and experimental approach informed by the reasons that inspired the rule’s adoption. Blair, 181 F.3d at 833-34. The court explained that the expansion of allowable, immediate appeals was needed to address three scenarios the advisory committee deemed appropriate for appellate review. Id. at 834. In the first scenario, known as a “death knell” case, an appeal may be appropriate for review where the denial of class certification effectively terminates-the litigation because the individual claims are too insignificant to justify the expense of litigation. Id. In the second scenario, a mirror image of the “death knell” case, an appeal may be appropriate where the grant of class certification places irresistible pressure on the defendant to settle, regardless of the class’s likelihood of success on the merits. Id. at 834-35. In the third scenario, the court explained that an appeal may be -granted where it will greatly contribute to the development of the law of class actions. Id. at 835.

{9} Some courts have b'een reluctant'to accept class certification appeals, 'describing ' them as “inherently disruptive, time-consuming, and expensive.” Prado-Steiman v. Bush, 221 F.3d 1266, 1276 (11th Cir.2000) (internal quotation marks and citation omitted).

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Bluebook (online)
2004 NMCA 006, 82 P.3d 968, 134 N.M. 797, Counsel Stack Legal Research, https://law.counselstack.com/opinion/salcido-v-farmers-insurance-exchange-nmctapp-2003.