Class action lawsuits can be very useful in that they allow a large group of people with similar legal disputes to bring their claims in a single lawsuit, thus reducing litigation costs and encouraging judicial economy.
In order to proceed as a class, the would-be class representative(s) must obtain the permission of the court. In South Carolina state courts, a plaintiff must proceed under South Carolina Rules of Civil Procedure 23, which establishes the requirements for class certification.
According to Rule 23, a class action may proceed if the court finds that the class contains so many members that joinder would be impractical, there are common questions of law or fact, the plaintiff’s claims are representative, the plaintiff would fairly and adequately represent the class, and the amount in controversy is at least $100 per class member (unless injunctive or declaratory relief is sought).
Allegations in the Plaintiff’s Complaint
Recently, a South Carolina woman filed suit on behalf of herself and others similarly situated, seeking a declaratory judgment against the defendant insurance companies on the basis that the companies’ practices regarding medical payment coverage and personal injury protection were in violation of both the companies’ own procedures and South Carolina state law. The woman also asserted claims for breach of contract, unjust enrichment, bad faith, unfair claims practice, and tortious interference with a contract.
After discovery, the Circuit Court of Horry County issued an order certifying the class. After the insurance companies moved for reconsideration, however, the court decertified the class.
Decertification of the Class
In the unpublished opinion of Smith v. Progressive Halcyon Insurance Company, the South Carolina Court of Appeals vacated the part of the trial court’s order that found that the plaintiff had no viable claim but affirmed the trial court as to its holding that she could not adequately represent the proposed class.
The court agreed with the insurance companies’ argument that, generally, class certifications are not immediately appealable but found that this particular appeal was properly before the court. The court then found that the trial court had erred when it had considered the merits of the underlying lawsuit when it was deciding whether to certify the class. Instead, a trial court should not engage in an analysis of the merits of the claim in deciding class certification.
Although the court found that the trial court correctly decertified the class based on the plaintiff’s failure to establish commonality and typicality, it emphasized that its ruling did not prevent the circuit court from revisiting the issue of class certification if later developments suggested a class would be proper.
If You Think You May Have a Class Action Complaint
Class actions can arise not only in the area of insurance company bad faith but in many other areas as well, including product liability claims. If you would like to speak to an attorney experienced in class action litigation about a possible lawsuit, call the Law Firm of Patrick E. Knie at 864-582-5118. We have offices conveniently located in both Spartanburg and Greenville, and we accept clients throughout the state.
Related Blog Posts
How much car insurance do I need in South Carolina?