Class Plaintiffs' Reply in Support of Limited Fund Class Certification — Society Insurance COVID-19 MDL

Record facts

U.S. District Court for the Northern District of Illinois · No. 1:20-cv-05965 · Doc. 258 · 2021-08-24 · Docket on CourtListener

Summary

Class Plaintiffs' reply in further support of their motion for certification of a limited fund class under Fed. R. Civ. P. 23(b)(1)(B), filed August 24, 2021 as Document 258 in In re: Society Insurance Co. COVID-19 Business Interruption Protection Insurance Litigation, MDL No. 2964, Master Docket No. 20-cv-5965, in the U.S. District Court for the Northern District of Illinois. It argues the business interruption losses of more than 25,000 policyholders likely exceed the insurer's available funds, stating that even risk-adjusted by 50% the plaintiffs' accounting puts those funds at 23% of class members' losses. It addresses numerosity, commonality, typicality and adequacy under Rule 23(a), noting 25,249 policyholders had coverage in effect during 2020. The 18-page reply also argues insurers are not exempt from Rule 23(b)(1)(B) and opposes deferring certification for further discovery.

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UNITED STATES DISTRICT COURT 
FOR THE NORTHERN DISTRICT OF ILLINOIS 
EASTERN DIVISION 
 
 
IN RE: SOCIETY INSURANCE CO. 
COVID-19 BUSINESS INTERRUPTION 
PROTECTION INSURANCE LITIGATION 
 
 
This Document Relates to All Cases 
 
 
MDL No. 2964 
 
Master Docket No. 20-cv-5965 
 
Judge Edmond E. Chang 
 
Magistrate Judge Jeffrey I. Cummings 
 
 
 
CLASS PLAINTIFFS’ REPLY IN FURTHER SUPPORT OF THEIR 
MOTION FOR CERTIFICATION OF A LIMITED FUND CLASS 
PURSUANT TO FED. R. CIV. P. 23(b)(1)(B) AND APPOINTMENT 
OF CLASS REPRESENTATIVES AND CLASS COUNSEL 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dated:  August 24, 2021 
 
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Class Plaintiffs submit this reply in further support of their motion for certification of a 
limited fund class pursuant to Rule 23(b)(1)(B).1 (Motion, Dkt. 214; Memorandum, Dkt. 215). 
INTRODUCTION 
In their opening motion, Plaintiffs made an evidentiary showing that the business 
interruption losses of the more than 25,000 Society policyholders with Special Property Coverage 
insurance likely exceed, by a generous margin, the resources at Society’s disposal to cover those 
losses.  Indeed, even when risk-adjusted by 50% (an adjustment the Supreme Court has held to be 
unnecessary),2 Plaintiffs’ accounting puts Society’s funds at just 23% of the proposed Class 
members’ losses.  Dkt. 215 at 2, 15–19.  Society claims that this accounting is inaccurate, but fails 
to provide an alternative one or, indeed, offer any solution to the fundamental problem bedeviling 
this litigation: that there are simply not enough funds available to cover the anticipated losses.  
Alternatively, Society, along with the Individual Plaintiffs, propose deferring class certification 
until further discovery can be conducted. Not only is such discovery unnecessary in light of the 
clear shortfall in Society’s funds, but allowing additional time for Society to deplete its funds 
through individual settlements would also defeat the whole purpose of Rule 23(b)(1)(B) class 
certification:  to ensure that all class members are treated fairly and equitably. This is the 
paradigmatic case calling for certification of a limited fund class, and Plaintiffs’ motion should 
therefore be granted. 
 
1 For brevity, Class Plaintiffs are also simply referred to herein as “Plaintiffs,” but that reference in this 
brief does not include the Individual Plaintiffs.   
2 In Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999), the Court held that when determining whether a fund 
is limited, the claims should be “set definitely at their maximums.” Id. at 838. 
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ARGUMENT 
Although Society and Individual Plaintiffs argue that Plaintiffs have not satisfied their 
burden of proof under Rule 23, many of the facts critical to the question of class certification 
remain undisputed.  As discussed below, there can be little question that: (1) Society sold business 
interruption coverage to proposed Class members; (2) the COVID-19 pandemic and related closure 
orders wreaked havoc on businesses nationwide; (3) policyholders made claims pursuant to 
Society’s Business Interruption and Extra Expense provisions; and (4) Society has not paid those 
claims.  Society takes issue with the extent to which Class members’ businesses were detrimentally 
affected, but class certification is not “a dress rehearsal for the trial on the merits,” and those 
questions need not be resolved pre-certification.  See Bell v. PNC Bank, Nat. Ass’n, 800 F.3d 360, 
376–77 (7th Cir. 2015) (the Court should weigh competing evidence and resolve threshold disputes 
before certifying the class when there are “material factual disputes that bear on the requirements 
for class certification”) (emphasis added).  Here, there are no material factual disputes that preclude 
certification.   
I. 
Plaintiffs Have Satisfied Rule 23(a). 
A. 
The proposed Class is sufficiently numerous because joinder of all members 
would be impracticable. 
Society’s chief complaint as to numerosity is that Plaintiffs do not identify precisely how 
many Society policyholders fall within the proposed class definition.  But, as Society correctly 
recognizes, the numerosity requirement is not a “counting exercise, but rather, focuses on the 
infeasibility of joining all members of the proposed class.”  Dkt. 240 at 4.  This Court has 
consistently found that joinder of forty or more plaintiffs would be sufficiently impracticable to 
warrant class certification, even when the exact number is unknown or disputed.  Schneider v. 
Ecolab, Inc., No. 14 C 01044, 2016 WL 7840218, at *3 (N.D. Ill. Sept. 2, 2016); Starr v. Chi. Cut 
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Steakhouse, LLC, 75 F. Supp. 3d 859, 871 (N.D. Ill. 2014).  And while Plaintiffs bear the burden 
of showing their proposed class is sufficiently numerous, they “need not make that showing to a 
degree of absolute certainty.”  Bell, 800 F.3d at 377.  Instead, the Court can rely on common sense 
and good faith estimates to determine whether an estimate of class size is reasonable.  Chavez v. 
Don Stoltzner Mason Contractor, Inc., 272 F.R.D. 450, 454 (N.D. Ill. 2011). 
The undisputed facts here are telling.  Society has not disputed that 25,249 of its 
policyholders had business interruption coverage in effect during 2020.  It has not disputed that 
“virtually every restaurant in every community has been impacted” by the COVID-19 pandemic 
and related closure orders.3  And, it has not disputed that there are more than 40 plaintiffs among 
the bellwether plaintiffs alone.  Instead, Society urges that not every policyholder who purchased 
business interruption coverage will meet the class definition because some businesses—like 
grocery stores and pharmacies—were exempted from closure orders and allowed to remain open 
as essential businesses.  But Society is missing the forest for the trees.  Even if Society correctly 
contends that not all 25,249 policyholders will ultimately fall within the class definition, the fact 
that a number large enough to make joinder impracticable will be included is undeniable.  The 
Court is acutely aware of the breadth and severity of the damage caused by COVID-19 and related 
closure orders on the business community.  Common sense, along with the undisputed facts, 
compel the conclusion that Plaintiffs have satisfied their burden here.  
B. 
The proposed Class members’ claims share common questions of law and 
fact. 
Next, Society argues that Plaintiffs have not established commonality because Class 
members’ claims will vary by type of business, locality, and applicable closure orders.  But the 
 
3 See Ex. 1 to Dkt. 215; National Restaurant Association Releases 2021 State of the Restaurant Industry 
Report (Jan. 26, 2021), available at https://tinyurl.com/b7dt3tsm.  
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commonality inquiry looks to Society’s common conduct, and not Class members’ individual 
circumstances.  Suchanek v. Sturm Foods, Inc., 764 F.3d 750, 756 (7th Cir. 2014) (commonality 
is found when “the same conduct or practice by the same defendant gives rise to the same kind of 
claims from all class members.”).  Here, all of the Class’s claims are premised on Society’s 
uniform denials of Business Income and Extra Expense claims.  Common questions related to the 
interpretation and application of Society’s policy provisions, which formed the basis of those 
denials, are central to all of the Class members’ claims and are readily susceptible to classwide 
resolution. 
As this Court has recognized, varying degrees of injury suffered by Plaintiffs and the other 
Class members are not a barrier to a finding of commonality because “individual variability in 
injury is taken into account at the damages, rather than the liability, phase of a case.”  Rogers v. 
Sheriff of Cook Cty., No. 1:15-CV-11632, 2020 WL 7027556, at *4 (N.D. Ill. Nov. 29, 2020) 
(emphasis in original).  Society’s ardent reliance on comments made by counsel for the Individual 
Plaintiffs is misguided for this exact reason; it ignores that all claims, regardless of the amount of 
individual damages, are predicated on and are traceable to Society’s common conduct.  
Although Society relies on Dukes for the proposition that dissimilarities among class 
members can sometimes defeat commonality, this Court has clarified that “Dukes requires a 
common injury and a common answer only in the sense that class members’ injuries are all 
allegedly caused by the same conduct of the defendant and can be answered with the same liability 
decision.”  Id. (emphasis in original).  More importantly, there is no requirement that every 
question necessary for resolution be common to all class members.  Bell, 800 F.3d at 379 (“The 
fact that the plaintiffs might require individualized relief or not share all questions in common does 
not preclude certification of a class.”).  In light of the questions that are clearly common to all 
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Class members’ claims—including, inter alia, the questions relating to Society’s interpretation 
and blanket denial of its uniform insurance contracts discussed above—Plaintiffs have readily met 
their commonality burden here.   
C. 
The proposed class representatives’ claims are typical of the Class’s claims as 
a whole. 
As to typicality, Society largely reiterates its commonality argument to suggest that factual 
differences among individual Plaintiffs preclude certification.  But “factual variations will not 
destroy typicality” when Plaintiffs’ claims “have the same essential characteristics as the claims 
of the class at large.”  Zollicoffer v. Gold Standard Baking, Inc., 335 F.R.D. 126, 157 (N.D. Ill. 
2020).  As discussed above, Plaintiffs have established as much here.  
Society’s contention that differing defenses among Class members “defeat the typicality 
prong” is similarly flawed for at least two reasons.  First, Society’s cited authority supports the 
opposite conclusion.  Society relies on Mullins v. Direct Digital, LLC, 795 F.3d 654 (7th Cir. 2015) 
for the proposition that “class action defendants have a due process right to raise individualized 
defenses against each class member.” Dkt. 240 at 9 (citing Mullins, 795 F.3d at 671). Yet Mullins 
also holds that the availability of such defenses will not preclude certification. Id. (“It has long 
been recognized that the need for individual damages determinations at this later stage of the 
litigation does not itself justify the denial of certification.”).  “As long as the defendant is given 
the opportunity to challenge each class member’s claim to recovery during the damages phase, the 
defendant’s due process rights are protected.” Id.  
Second, this Court has recognized that typicality “is determined with reference to a 
defendant’s actions, not with respect to specific defenses a defendant may have against certain 
class members.” Zollicoffer, 335 F.R.D. at 157 (emphasis added).  Stated differently, Society’s 
available defenses do not enter the equation at this stage.  The present question is whether Class 
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members’ claims arise from the same course of conduct and are based on the same legal theories. 
Wright v. Nationstar Mortgage LLC, No. 14 C 10457, 2016 WL 4505169, at *6 (N.D. Ill. Aug. 
29, 2016).  Because both of those criteria are met here, Plaintiffs’ claims are typical of the Class’s 
claims as a whole.  
D. 
The proposed class representatives and proposed class counsel will fairly and 
adequately protect all Class members’ interests. 
Finally, Society challenges both the adequacy of the class representatives and the adequacy 
of class counsel.  At this stage of litigation, the Court is familiar with both.  
In arguing against the adequacy of the proposed class representatives, Society relies 
exclusively on cases where the representatives either had radically divergent interests from the 
remainder of the class or demonstrable credibility problems.  See Dkt. 240 at 9.  Neither of those 
concerns are present here.  And, if at some point they presented themselves, nothing would prevent 
the Court from taking appropriate action.  Scholes v. Stone, McGuire & Benjamin, 143 F.R.D. 181, 
187 n. 11 (N.D. Ill. 1992).  Moreover, there should be little doubt as to the adequacy of class 
counsel.  When assessing adequacy of counsel, courts consider “counsel’s work on the case to 
date, counsel’s class action experience, counsel’s knowledge of the applicable law, and the 
resources counsel will commit to the case.”  Savanna Grp. v. Truan, No. 10 C 7995, 2013 WL 
626981, at *7 (N.D. Ill. Feb. 20, 2013) (quoting Reliable Money Ord., Inc. v. McKnight Sales Co., 
704 F.3d 489, 498 n. 7 (7th Cir. 2013)).  All of those factors weigh in favor of certification here.  
Through the course of this litigation, Co-Lead Counsel have shown they are “qualified, 
experienced and able to conduct the litigation.”  Smith v. Aon Corp., 238 F.R.D. 609, 615 (N.D. 
Ill. 2006) (citing Scholes, 143 F.R.D. at 186); see also Dkt. 40, 55.  Plaintiffs have thus satisfied 
all of the Rule 23(a) criteria.   
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II. 
Plaintiffs Have Satisfied Rule 23(b)(1)(B). 
A. 
Insurance companies are not excepted from Rule 23(b)(1)(B). 
Society argues that insurance companies are exempt from limited fund treatment but 
identifies no provision in Rule 23(b)(1)(B) and no cases that establish that exemption.  Rule 23 
itself makes no industry-specific distinctions, of course, and there is no dispute that state insurance 
law does not regulate common law contract disputes between policyholders and insurers.  
Moreover, this case is not preempted by federal or state law.  Society, however, relies on the mere 
fact of state regulation to preempt it from Rule 23(b)(1)(B) in this breach of contract case.  Dkt. 
240 at 12.  Society provides no case law in support of its position, Dkt. 240 at 12, because no such 
case law exists.  
Society opportunistically singles out limited fund class actions for insurance industry 
exemption.  However, Society’s theory that a limited fund class action could consume all available 
funds of an insurance company is equally true for all class actions.  Indeed, Society faces the same 
massive shortfall if the class is certified under any of Rule 23(b)’s provisions.  The difference is 
that the limited fund class protects all policyholders, while non-mandatory classes allow Society 
to favor some policyholders at the expense of others.    
The rhetorical heart of Society’s motion is the second sentence of Society’s Introduction, 
which completely misrepresents what Plaintiffs seek by their motion:  “[Plaintiffs] purport to lay 
claim to all of Society’s assets, substituting their judgment for the determination of the Wisconsin 
Insurance Commissioner, which oversees Society’s financial condition, ignoring the existence of 
state guaranty funds, and otherwise attempting to elevate their interest above those invested in the 
ongoing operation of Society’s business and the rights of other policyholders.”  Dkt. 240 at 1.  No, 
no, no and no. Society knows better, and the slightest glance at Plaintiffs’ motion shows that 
Plaintiffs do nothing of the sort. 
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First, Plaintiffs make no effort to lay claim to the entirety of Society’s assets.  Since the 
beginning of this case, Plaintiffs have recognized that Society is an ongoing insurance concern and 
that it is in everyone’s interest for Society to remain as such.  In fact, Plaintiffs seek to resolve this 
case in a way that will also allow Society to maintain its current financial ratings—because, for 
Plaintiffs and the other proposed Class members to be fully compensated, Society will likely have 
to make payments over a number of years, and Society’s ability to do so is tied to its ability to 
continue to sell insurance, which, in turn, is tied to its financial ratings.  See Dkt. 215 at 2–3, 17–
20.  Far from seeking all of Society’s assets, Plaintiffs are merely seeking to ensure that the limited 
assets that Society has available to pay Plaintiffs and the other Class members’ COVID-19 
business interruption insurance claims are equitably divided among the claimants.  Id. at 1–2, 17–
20 (addressing Society’s reinsurance, its remaining capital after accounting for the assets Society 
must maintain to satisfy its insurance regulators of its solvency, and the reserves Society has 
established for non-COVID-19 claims by its policyholders). 
Second, Plaintiffs’ proposed limited fund accounts for Society’s need to maintain a certain 
level of assets to avoid supervision by insurance regulators.  Id. at 17.  Plaintiffs recognize that the 
outer bounds of the limited fund must keep Society above the “the authorized control level” 
necessary to satisfy regulators.  Id. at 17–18.  Thus, Plaintiffs’ motion does not, in any way, thwart 
the Wisconsin Insurance Commissioner’s stated requirements for maintaining the solvency of a 
Wisconsin insurance company. 
Third, because Plaintiffs’ Motion does not impinge upon Society’s required financial 
wherewithal, the concerns of state guaranty funds similarly are not involved.  See id. at 17–19. 
Finally, Plaintiffs’ proposed limited fund, by definition, recognizes and respects that 
Society has set aside reserves to pay its policyholders’ non-COVID-19 claims.  Id. at 17.  Plaintiffs, 
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in no way, are attempting to invade those reserves.  Thus, Plaintiffs’ motion does not elevate its 
interest above the rights of Society’s policyholders’ other claims. 
Society’s rhetoric, although completely off the mark, does make one thing clear:  Society’s 
financial condition is such that not even Society can contend that it has anything approaching 
sufficient free assets to pay the Class’s claims.  Otherwise, why the concern with insurance 
regulators on Society’s part?  Why the concern with guaranty funds on Society’s part?  Society’s 
response confirms that this is a limited fund case that requires the very type of class certification 
that Plaintiffs seek here. 
B. 
Society offers no facts to rebut insufficiency. 
The Court may consider unliquidated claims in assessing the insufficiency of Society’s 
funds.  Although Justice Souter referred to liquidated claims in Ortiz v. Fibreboard Corp., 527 
U.S. 815, 838 (1999), he left room for unliquidated claims if they are ascertainable, as they are 
here.  As the Fourth Circuit observed: 
[I]n assessing the first condition set forth in Ortiz, the Supreme Court commented 
that although the Ortiz district court essentially found that the damages were 
unliquidated and unascertainable for the subset of plaintiffs previously described, 
the Ortiz district court could have used experience with prior similar cases as a 
guide to approximate the damages figure. 
Herrera v. Charlotte Sch. of L., LLC, 818 F. App’x 165, 174 (4th Cir. 2020). Indeed, “in the post-
Ortiz era, federal courts have approved limited fund class action settlements involving tort claims.” 
Id. (citing, with the district court’s parenthetical, Stott v. Capital Fin. Servs., Inc., 277 F.R.D. 316, 
328–29 (N.D. Tex. 2011) (“… the district court was able to reach a ‘sufficiently reliable conclusion 
regarding the probable total of the aggregated liquid damages.’”)).  Thus, the presence of liquidated 
damages is not a per se test.  Instead, reasonable approximation is acceptable. That is precisely 
what Plaintiffs have done here.  
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Society does not challenge the reasonableness of Plaintiffs’ estimate of the average amount 
of policyholder claims in this case, based on the average decline in net income, which is $49,300. 
Dkt. 215 at 12.  Plaintiffs prepared that estimate based on information available at this point in the 
litigation, and the estimate is suitable for the limited fund motion.  It is inconceivable that 
policyholder claims would drop below the $146.3 million that Society has available to satisfy those 
claims. Id. at 18 (Table 2).   
Society offers no alternative estimate, and no information from which to establish an 
alternative estimate, but challenges Plaintiffs’ estimate because, inter alia, it is based on 
information from seventeen restaurants.  Society, apparently, suggests that an unspecified larger 
sample size would be appropriate and argues that more information should be evaluated for each 
restaurant—apparently, a full forensic examination including line-item cost analysis, and 
evaluation of mitigation efforts, historical trends, and “changes in the market.”  Dkt. 240 at 14–
15.  Society’s large-scale, plaintiff-by-plaintiff approach is not practical for a limited fund motion, 
nor is it necessary or efficient, because the fact that Society is underwater upon a finding of liability 
is not seriously in dispute.  Instead, as Plaintiffs noted in response to Society’s motion to compel 
broad swaths of financial and accounting data, “damages discovery should be directed at damages 
models as they are presented through experts during the progress of this case.”  Dkt. 228 at 9.  
Society attempts to rebut Plaintiffs’ numerical analysis as to the drastic insufficiency of 
funds available to pay policyholder claims, not with numerical arguments, but with procedural 
arguments about the development and presentation of an unspecified, future numerical analysis.  
Society hides behind its procedural arguments to assiduously avoid providing any numerical 
analysis of its own.  Nonetheless, Society’s scorched earth conduct in this litigation reveals that 
Society understands that this is “bet the company” litigation.  Society has not, and cannot, claim 
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that it has sufficient funds to satisfy claims if there is a finding of liability in this case.  The 
pragmatic reality of this case is that Society is deeply underwater, and Plaintiffs’ estimates reliably 
confirm that reality.  Additional damages models can be built after Society has complied with its 
discovery obligations.  In the meantime, the risk of the “early feast, later famine” problem increases 
as each day passes.  
Society makes passing reference to its reinsurance program, but merely notes that the 
program is described in the Report of Examination, which is discussed below (and was provided 
with Plaintiffs’ motion, Dkt. 215-4), and Society notes the obvious fact that the reinsurance is 
subject to “retentions, terms, … and the applicable facts.”  Dkt. 240 at 16.  Society does not, 
however, contest the reinsurance limits, which Plaintiffs included in their estimate of Society’s 
available funds.  See Dkt. 215 at 18 (Table 2).  Because the reinsurance is already set at its 
maximum, Society’s vague reference to retentions, etc., is irrelevant, because additional 
information—which Society refuses to produce—can only show that the available reinsurance is 
less than the policy limits, and therefore show an even greater insufficiency of funds.   
Society’s reliance on the Report of Examination from the Wisconsin Office of the 
Commissioner of Insurance to support its claim of solvency, Dkt. 240 at 15, is further undermined 
by that report’s obsolescence.  Indeed, that report reflects Society’s condition as of December 31, 
2019, before the onset of the pandemic.  The report included a short statement about the pandemic 
as a “subsequent event,” Dkt. 215-4 at 29, but did not take a stand on the likely outcome of the 
business interruption litigation against Society and did not assess whether Society could pay all 
claims if there is a finding of liability.  Instead, the report merely parroted Society’s own assertion 
that “Society does not anticipate that coverage will be triggered for these property claims requiring 
any loss reserves or payments.”  Id.  The report made no independent assessment of Society’s 
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assertion, but, instead, wrote down whatever Society said.  Thus, while the report contains some 
useful information, it offers no assurance about either the likelihood or impact of a finding of 
liability against Society for COVID-19 business interruption claims.  On this critical point, the 
“watchdog” neither sniffed nor barked. 
C. 
Society’s blanket denials establish standing. 
The proposed class includes all policyholders with covered losses, both those who filed a 
claim and those who did not (repudiated policyholders). Dkt. 215 at 9.  Society argues that 
repudiated policyholders must be excluded from the class, because they are purportedly 
“uninjured” for not having filed a claim for Society to deny.  Dkt. 240 at 17.  However, as the 
Court described the situation, Society denied claims “preemptively and en masse.” Dkt. 131 at 8.  
Thus, repudiated policyholders are also injured and have Article III standing. 
The law of anticipatory repudiation in Illinois, which is illustrative of the law in each state 
relevant to this litigation, establishes that Society’s preemptive and en masse denial gives rise to a 
claim for breach of contract by all policyholders with a covered loss. 
Under Illinois law, a party commits an anticipatory repudiation when it manifests a 
clear, unequivocal intent not to perform under the contract when performance is 
due. The repudiation has to render unattainable the point of the contract. When one 
party has committed a repudiation, the other party can treat the contract as ended. 
Arlington LF, LLC v. Arlington Hosp., Inc., 637 F.3d 706, 713 (7th Cir. 2011) (citations and 
quotations omitted).  Society’s repudiation relieved policyholders of any duty under the 
Businessowners Policies to file a claim with Society, and there is no doubt that their claims are 
presently disputed by Society.  Indeed, Society does not claim that it has paid any COVID-19 
business interruption claims for Business Income losses.   
In TransUnion LLC v. Ramirez, 141 S. Ct. 2190, 2214 (2021), the Supreme Court held that 
all class members must suffer “concrete harm.”  Society argues that Plaintiffs run afoul of this rule 
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by including repudiated policyholders in the proposed class.  However, repudiated policyholders 
are not like the consumers in TransUnion who did not have their credit reports disseminated.  
Consumers without standing in TransUnion “did not factually establish a sufficient risk of future 
harm to support Article III standing.”  Id. at 2212.  In contrast, repudiated policyholders have 
actual covered losses that, as alleged, occurred in the past, not potential covered losses that might 
occur in the future. 
Society cites cases, mostly from outside of the states involved in this litigation, that reject 
standing where the plaintiff did not make a claim.  Moreover, those cases are not repudiation cases 
and differ from this case on the legal theories and facts at issue.  For example, Society relies on 
Weaver v. Aetna Life Ins. Co., 370 F. App’x 822, 823 (9th Cir. 2010), but that case did not even 
involve a dispute about coverage or claims, but instead concerned premium refunds for a “group 
policy that allegedly was not finalized.”  Similarly, the plaintiffs in Impress Commc’ns v. 
Unumprovident Corp., 335 F. Supp. 2d 1053, 1061 (C.D. Cal. 2003) brought, inter alia, a 
fraudulent inducement claim, and did not allege repudiation. Likewise, the plaintiff in Anderson 
v. Nationwide Ins. Enter., 187 F. Supp. 2d 447, 455 (W.D. Pa. 2002) was not the policyholder, but 
sought remedies based on a claim brought by the policyholder—that is not this case.4  
D. 
Society identifies no class issues to resolve with class discovery. 
In a last-ditch effort to prolong this process and defer justice to Plaintiffs and the other 
Class members, Society demands class discovery if the Court believes that Plaintiffs “have 
provided an evidentiary basis for their motion.”  Dkt. 240 at 19.  Society’s request fails, because 
 
4 Society’s declaratory judgment cases brought by insurance companies, Kincaid v. Erie Ins. Co., 944 
N.E.2d 207 (Ohio 2010), Atlanta Int’l Ins. Co. v. Atchison, Topeka & Santa Fe Ry. Co., 938 F.2d 81, 83 
(7th Cir. 1991), and Northland Ins. Co. v. Crane, 2005 WL 831282, at *2 (N.D. Ill. Apr. 7, 2005) do not 
involve repudiation, and the last two cases acknowledge that the threat of a demand is enough to establish 
standing.  
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its only basis for this request is its vague contention that such discovery would enable it “to obtain 
information that would further demonstrate why class certification must be denied.”  Id.  Society 
does not identify any relevant and proportional topics of discovery and does not explain how 
discovery is likely to overcome the $476.1 million shortfall in this case.  In any event, should the 
Court see fit to grant Society’s request to conduct class discovery, any class discovery must be 
reciprocal; if Society is permitted discovery, so too should Plaintiffs be permitted to take discovery 
of, e.g., the policyholder list, a list of claims made, claims filed, claims approved, claims denied, 
Society’s assets and liabilities, and the availability of reinsurance.  
III. 
Individual Plaintiffs’ Concerns Should Not Prevent Class Certification. 
 
Individual Plaintiffs are in substantial agreement with Class Plaintiffs on the suitability of 
class certification for proceeding with this massive multidistrict litigation.  Individual Plaintiffs do 
not dispute that the four requirements of Rule 23(a)—numerosity, commonality, typicality, and 
adequacy—are all met.  Individual Plaintiffs further acknowledge that they share the concerns of 
Class Plaintiffs underlying their request for a limited fund class, both “about Society’s ability to 
make its policyholders’ whole for their losses” and “potential collusion between Society and state 
court class plaintiffs that undermine this MDL.”  Dkt. 241 at 2, 3.  Nevertheless, Individual 
Plaintiffs make two objections to certification under Rule 23(b)(1)(B), neither of which should 
prevent certification of a limited fund class here.   
 
First, Individual Plaintiffs argue that class certification is premature.  However, they offer 
no specific criticism of the showing Class Plaintiffs have already made of the insufficiency of the 
funds available to Society to satisfy all of the proposed class members’ claims.  Instead, they 
incorrectly assert that Class Plaintiffs have offered “no evidence” that Society’s funds are limited, 
Dkt. 241 at 7, disregarding the detailed accounting that Class Plaintiffs offered in their motion, see 
Dkt. 215 at 16–19.  As Plaintiffs discuss in Section IV.B, above, this accounting has gone 
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uncontested by both the Individual Plaintiffs and Society.  Even if more precise accounting could 
be done with further information from Society (information it has so far refused to provide), Class 
Plaintiffs need not establish with absolute precision the limit of Society’s funds.  See Baker v. 
Wash. Mut. Fin. Group, LLC, 193 F. App’x 294, 297 (5th Cir. 2006) (sustaining Rule 23(b)(1)(B) 
certification and rejecting the argument that “the upper limit of the fund” was “not demonstrated 
with precision” where there was sufficient evidence that it would be exceeded by the “claims 
against that fund, set definitely at their maximums.’”) (quoting Ortiz, 527 U.S. at 838). 
 
Second, Individual Plaintiffs object on due process grounds to being bound by a class 
judgment.  Class Plaintiffs agree that Individual Plaintiffs “have invested considerable time and 
resources retaining counsel and litigating their individual claims.”  Dkt. 241 at 9.  Individual 
Plaintiffs’ efforts have played no small part in advancing the overall litigation against Society to 
this point.  In recognition of these contributions, Class Plaintiffs have no objection to Individual 
Plaintiffs being permitted to opt out of the proposed Rule 23(b)(1)(B) class. See County of Suffolk 
v. Long Island Lighting Co., 907 F.2d 1295, 1303–05 (permitting plaintiffs who had expended 
significant resources litigating their claims on an individual basis to opt out of a Rule 23(b)(1)(B) 
class). Such an accommodation would resolve the second of the Individual Plaintiffs’ due process 
concerns and thus should not impede certification of the limited fund that Class Plaintiffs seek. 
CONCLUSION 
For the reasons set forth herein, and in Plaintiffs’ opening memorandum of law (Dkt. 215), 
Plaintiffs have demonstrated that all of the requirements for certification of a limited fund class 
action pursuant to Rules 23(a) and 23(b)(1)(B) are met in this litigation, and that the policy 
rationale undergirding the limited fund mechanism also supports certification of the Class so that 
all policyholders have equal access to Society’s limited resources. 
Case: 1:20-cv-05965 Document #: 258 Filed: 08/24/21 Page 16 of 18 PageID #:4377

16 
Dated: August 24, 2021 
Respectfully submitted, 
 
 
 
 
/s/ Adam J. Levitt 
 
 
Adam J. Levitt 
DICELLO LEVITT GUTZLER LLC 
Ten North Dearborn Street, Sixth Floor 
Chicago, Illinois  60602 
Telephone: 312-214-7900 
alevitt@dicellolevitt.com 
 
Timothy W. Burns 
BURNS BOWEN BAIR LLP 
One South Pinckney Street, Suite 930 
Madison, Wisconsin  53703 
Telephone: 608-286-2302 
tburns@bbblawllp.com 
 
Shannon M. McNulty 
CLIFFORD LAW OFFICES, P.C. 
120 North LaSalle Street, #3100 
Chicago, Illinois 60602 
Telephone: 312-899-9090 
smm@cliffordlaw.com 
 
W. Mark Lanier 
THE LANIER LAW FIRM PC 
10940 West Sam Houston Parkway North 
Suite 100 
Houston, Texas  77064 
Telephone: 713-659-5200 
WML@lanierlawfirm.com 
 
Plaintiffs’ MDL Co-Lead Counsel and 
Proposed Class Counsel 
 
 
 
Case: 1:20-cv-05965 Document #: 258 Filed: 08/24/21 Page 17 of 18 PageID #:4378

 
 
CERTIFICATE OF SERVICE 
 
I hereby certify that a copy of the foregoing was filed electronically using the Court’s 
CM/ECF service, which will send notification of such filing to all counsel of record on this 24th 
day of August, 2021. 
 
Respectfully submitted, 
 
 
 
/s/ Adam J. Levitt 
 
 
Adam J. Levitt 
DICELLO LEVITT GUTZLER LLC 
Ten North Dearborn Street, Sixth Floor 
Chicago, Illinois  60602 
Telephone: 312-214-7900 
alevitt@dicellolevitt.com 
 
One of Plaintiffs’ MDL Co-Lead Counsel 
and Proposed Class Counsel 
 
 
 
 
 
 
 
 
Case: 1:20-cv-05965 Document #: 258 Filed: 08/24/21 Page 18 of 18 PageID #:4379

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