Insurance and Financial Services Litigation

Maynard Cooper has routinely served as national counsel for some of the nation's largest insurers in class actions filed in federal and state courts throughout the country. We have defended nationwide class actions in the recognized “tort hell“ hotspots such as Illinois, Alabama, and Mississippi. Additionally, we have defended insurance-related class suits in Florida, Georgia, Kentucky, Minnesota, New Hampshire, New Jersey, New York, Ohio, South Carolina, and Tennessee.

Currently, Maynard Cooper is defending a purported nationwide class action against New York Life Insurance Company venued in the Southern District of New York arising out of so-called Retained Asset Account (“RAA”) claims alleging breach of contract and bad faith. Patel v. New York Life Ins. Co., No. 11-cv-04895-JPO (S.D.N.Y.).

Recently, Maynard Cooper obtained key victories resulting in the complete dismissal of purported nationwide class actions, venued in the Southern District of New York and:

In addition, Maynard Cooper was successful at the federal appellate level in upholding a trial court's denial of class certification in a nationwide insurance class action alleging the use of race-based life insurance premiums (Hunter v. American General Life & Accident Ins. Co., No. 05-1249 (4th Cir. 2006)). The Firm also obtained dismissals of purported class actions in the following nationwide insurance and annuity class actions:

Individually assessing the litigation and business needs of each of its clients, Maynard Cooper also has extensive experience in negotiating innovative nationwide class settlements for a variety of clients in a variety of venues. Recent settlements include allegations arising from the alleged failure to refund unearned premiums for single premium products including credit life and disability insurance, as well as GAP and IUI coverage:

These claims-made settlements were approved by the respective courts in 2007 and 2008.

In addition to its extensive class action experience, Maynard Cooper served as lead counsel for the Defendant in In re American General Life Insurance Co. Industrial Life Insurance Litigation in the United States District Court for the District of South Carolina, Columbia Division, which was a multidistrict litigation (“MDL“) created to provide a single forum for discovery and pre-trial proceedings in the numerous cases filed in the wake of the nationwide class action settlement in McNeil v. American General Life and Accident Insurance Company. Most of the cases were filed as individual or multiple plaintiff cases and all included allegations similar to those alleged by the plaintiff class in McNeil - namely, allegations arising out of the alleged race-based pricing of insurance policies by American General Life and Accident Insurance Company or companies it acquired.

In addition to the individual or multiple plaintiff cases, however, several of the cases filed and transferred to this MDL included class allegations. Mack v. Independent Life sought certification of a class of individuals who owned policies that would have been included in the McNeil settlement except for the fact that the policies terminated before January 1, 1982, which was the beginning date for the McNeil class period (the Mack class has sometimes been referred to as the “Pre-82 Class“). On December 2, 2004 the District Court entered an Order denying certification as to the Mack class (the “Pre-82 Class“) and that Order was affirmed by the United States Circuit Court of Appeals for the Fourth Circuit on November 13, 2006. Hunter, et al. v. American General sought certification of a class of individuals who owned or were insured by certain groups of policies that were not part of the McNeil settlement. Judge Currie denied class certification of the proposed Hunter class on March 9, 2007.

• Following a CAFA removal, obtained strategically critical transfer of venue between federal circuits and then a complete dismissal with prejudice of a purported nationwide class action involving claim handling and interpretation of “incurred medical expenses“ in catastrophic major medical coverage. Maynard Cooper then won the appeal in the Second Circuit affirming the district court’s order granting defendant's motion to dismiss. Metz v. United States Life Ins. Co. in the City of New York, 662 F.3d 600 (2d Cir. 2011).
• Obtained complete dismissal with prejudice of a purported nationwide class action involving bad faith, sales practices and claims handling in catastrophic major medical coverage. Schandler v. New York Life Ins.Co. et al., No. 09 Civ. 10463, 2011 WL 1642574 (S.D.N.Y. Apr. 26, 2011).
• Defeated plaintiff's motion for certification of nationwide class seeking refunds of credit life insurance/credit disability insurance premium payments following early loan payoffs, which was the first outright defeat of class certification in unearned premium litigation nationwide. Bishop v. Protective Life Ins. Co., 255 F.R.D. 619 (M.D. Ga. 2009).
• Maynard Cooper handled two extremely dangerous national class actions for American General Assurance Company and North Central Life Insurance Company in 2008: Desportes v. American General Assurance Company and Carter v North Central Life Insurance Company. The cases were in state court in Columbus, Georgia and were not removable. The class allegations related to the failure of these companies to refund unearned premiums on credit life policies. The potential exposure in these cases were well over $100 million. A similar insurer, with identical facts but much less exposure, was ordered by the same court to pay over $75 million in damages and fees. After aggressive and skillful litigation, Maynard Cooper was remarkably able to negotiate “claims made” settlements that resulted in payouts by the Companies of less than $5 million. This was not achieved by any other insured under similar circumstances.
• Rule 12(b)(6) dismissal of class actions alleging improper pricing and disclosures relating to bonus annuity sales. Phillips v. American Int'l Group, Inc., 498 F. Supp. 2d 690 (S.D.N.Y. 2007); Delaney v. American Express Co., 2007 WL 1420766 (D. N.J. May 11, 2007)
• summary judgment in favor of insurer in purported nationwide class actions alleging improper use of smoker-based premium rates for juvenile insureds Thompson v. American General Life & Accident Ins. Co., 448 F. Supp. 2d 885 (M.D. Tenn. 2006)
• summary judgment in favor of insurer in class action alleging imporoper cancellation of war risk insurance coverage after September 11, 2001 Burkhalter Transport v. AIG Aviation, 1:02 CV 109-M-D (N.D. Miss. 2003)
• Deportes, et al. v. American General Assur. Co., SU-04-CV-3637 and Carter, et al. v. North Central Life Insurance Co., SU-2006-CV-3764
• Neal v. XL Life Insurance and Annuity Co., C.A. 04-C-834 (NH 2008)

Maynard, Cooper & Gale has been at the forefront of national STOLI litigation over the past several years and serves as lead counsel for multiple life insurance carriers across the country seeking to rescind hundreds of millions of dollars in STOLI coverage in jurisdictions including California, New York, Delaware, Florida, Texas, Georgia and North Dakota. We have counseled carriers on how to identify potential STOLI applications, as well as existing STOLI coverage, and aggressively and proactively represent insurance carriers in their efforts to eliminate existing STOLI business. In 2008, the firm obtained a Summary Judgment in a STOLI case in federal court in Georgia that has been one of the seminal cases in the industry on this issue. Maynard, Cooper & Gale attorneys speak regularly on STOLI litigation at national events in both the life insurance and life settlement industries. Stranger-Owned Life Insurance (“STOLI“) litigation is a major recent trend in the life insurance industry, sometimes referred to as “investor-originated life insurance.“ Over the last decade, a secondary market has emerged in which speculative investors, often through complex transactions, have sought to obtain an interest in life insurance policies that insure the lives of people with whom the investors have no familial relationship nor a legitimate interest in the insured's continued life. STOLI transactions often run afoul of state insurable interest laws and universal public policy, which protect the integrity of life insurance by requiring that a policy owner have a recognized interest in the life of the insured at the time the policy is issued.

The firm currently represents insurance companies in defense of claims arising out of insureds' and their employers' participation in defined benefit pension plans intended to meet the requirements of Section 412(i) of the Internal Revenue Code (the “Code“). and welfare benefit plans intended to meet the requirements of Section 419A(f)(6) of the Code (for multiple employer plans) and Section 419(e) of the Code (for single employer plans) (together, the so-called “419 plans“). The firm's representation includes the defense of purported nationwide class actions, individual lawsuits in state and federal courts in Alabama, Texas, Florida, North Carolina and California and pre-litigation matters in numerous jurisdictions across the country. Maynard Cooper is the forefront nationally in handling defense of these cases for its clients.

Litigation concerning employee benefits is on the rise. As employees find themselves without a job or with a reduction in pay/benefits, they are filing claims regarding their severance packages, retirement/pension plans, life, health and disability benefits with increased regularity. In addition, the plaintiff's bar has embraced ERISA theories and discovered creative ways to present claims, especially in the class action context. On top of all of this, the United States Supreme Court and many appellate courts across the country have released watershed ERISA opinions in recent years expanding both theories of recovery and the scope of discovery. In light of these developments, plans, employers, administrators and fiduciaries need an ERISA litigation team with the depth and experience to protect their interests.

Maynard Cooper's ERISA litigation advantage is its ability to obtain the desired outcome at a lower cost. Our nationally-recognized expertise and substantial experience allow us to delve into the problems at hand and bring practical considerations to bear for our clients. The attorneys practicing in this group regularly appear in federal courts in jurisdictions across the country and have accumulated extensive experience in discovery, summary judgment and appellate motion practice and argument. In addition to our established record in achieving summary judgment, we also have successfully fashioned innovative and bottom-line settlements, both informally and through alternative dispute resolution, yielding significant cost savings for our clients. Our clients know that Maynard Cooper's ERISA litigation attorneys will listen to their needs and objectives and will collaborate with them to reach the desired result.

Maynard Cooper routinely represents annuity insurers in individual and class actions alleging claims related to the development, marketing, sale and administration of fixed and variable annuity products, including deferred and equity indexed annuities. Recent examples include:

• Recently obtained summary judgment in putative nationwide class action alleging claims related to the design and administration of “bonus” annuities.
• Obtained dismissal of bonus annuity class actions in federal courts in New York and New Jersey.
• Currently representing annuity issuers in cases alleging claims related to senior sales.
• Successfully defeated three separate variable annuity class actions in Alabama.
• Recently obtained summary judgment in a variable annuity fraud action pending in one of the most plaintiff friendly venues in Alabama.

Maynard Cooper has been at the forefront of the defense of insurance sales practices and market conduct litigation since the late 1980s. The Firm has defended thousands of individual sales practice claims and cases in venues across the United States. Those cases span the entire range of individual sales practice cases and class actions for life insurers, from problems caused by rogue agents to investment/retirement plan claims, replacement cases, vanishing premium cases, variable annuity claims and race-based premium litigation. Representative sales practice cases include:

• Served as lead counsel for a life insurance company in numerous individual opt-out cases pending in federal and state courts in Alabama, Mississippi and West Virginia alleging market conduct claims. After winning dismissal of the Mississippi cases on summary judgment, the remainder of the cases settled on very favorable terms to the insurer.
• Defended a life insurer against thousands of individual opt-out cases alleging market conduct claims. After obtaining dismissal of several of these cases on motions to dismiss, the remainder of the cases settled on terms favorable to the insurer.
• Defended a life insurance company in numerous multi-plaintiff cases pending in Madison County, Illinois alleging market conduct claims. After receiving favorable pre-trial rulings in the first case to go to trial, the firm obtained a favorable settlement of all of the remaining cases.
• Served as lead counsel for a life insurer defending thousands of individual opt-out cases alleging race-based premium claims. After intense litigation of these cases pending in state and federal courts in Mississippi, Alabama, Tennessee, Georgia, Florida, and South Carolina, including the successful removal from a dangerous state court venue to federal court of the first case going to trial, the firm obtained a favorable settlement of these cases.

Maynard Cooper is a leading firm in the field of consumer and commercial financial services litigation, acting as counsel for banks, finance companies, and mortgage loan servicing companies in hundreds of cases in state and federal courts related to loan originations, loan servicing, collection practices, credit reporting, underwriting, mortgage insurance, flood insurance, forced-placed hazard insurance, foreclosures and redemptions, and virtually every other issue that arises in a financing transaction. The cases handled by Maynard Cooper commonly include claims for violations of the Real Estate Settlement Procedures Act (RESPA), Fair Credit Reporting Act (FCRA), Truth in Lending Act (TILA), Fair Debt Collection Practices Act (FDCPA), Equal Credit Opportunity Act (ECOA), and National Flood Insurance Act (NFIA), as well as various state statutory predatory lending and consumer protection laws. The Firm also has defended complex lender liability actions in which commercial borrowers allege interference with business relations, RICO violations, fraud and other allegedly tortious conduct.

The Firm has a long history of defending credit insurers in fraud, breach of contract, and bad faith claims arising from single premium insurance products including credit life and disability insurance, as well as GAP and IUI coverage. More recently, Maynard Cooper has played a prominent role in the defense of numerous statewide and nationwide class actions pending in Minnesota, Ohio, New Hampshire, and Georgia involving the alleged failure to refund unearned premiums on various single premium products. In Dube v. North Central Life Insurance Co., the Firm secured a pre-certification dismissal of the case prior to the taking of any class-related discovery. Maynard Cooper also served as lead counsel in the settlement of nationwide class actions arising from the unearned premium theory pending in the Circuit Court of Muscogee County, Georgia and Cleveland Ohio. The claims-made settlements were finally approved and administered.

Maynard Cooper has represented insurers in dozens of states around the country in all stages of claims defense including skilled analysis and opinion of policies, pre-litigation strategy, motion practice and trial. The Firm regularly handles complex coverage matters in many different lines of coverage and has litigated and tried complex coverage cases involving numerous types of insurance policies and products including: automobile, commercial general liability, employment practices liability, errors and omissions, crime and fidelity, life, health, disability, directors and officers, property and casualty, environmental insurance, excess and umbrella, and reinsurance.

The firm has extensive experience representing insurers pursuing and defending declaratory judgment actions, subrogation claims, and bad faith suits in the context of property and casualty and related lines of insurance.

• Recently represented a national insurer who issued excess insurance policies to companies now seeking defense and indemnity for alleged environmental contamination. The cases involved the litigation of the duties of an excess insurance carrier, interpretation of both “sudden and accidental“ and “absolute“ pollution exclusions found in many commercial general liability policies and other such coverage issues that frequently arise in environmental coverage litigation
• Tried an arson case to defense verdict in "tort hell" Greenville, Mississippi
• Hired to try a multi-million dollar bad faith case in Oklahoma state court over GAP coverage on behalf of national insurer, ended in favorable settlement after motions in limine rulings and one day of trial testimony
• Hired to defend national insurer against multi-million dollar Fidelity/Crime coverage claims; won summary judgment and was affirmed on appeal to United States Court of Appeals
• Recently hired to try multi-million dollar software theft/destruction case in Indiana on behalf of national insurer set for trial late 2012
• Recently hired to try multi-million dollar property and business interruption case on behalf of national insurer set for trial in summer 2012
• Routinely handles UIM/Bad-Faith claims against national insurers
• Served as counsel for adjuster corporation working in conjunction with national insurer in defense of mass tort claims involving Katrina litigation

The firm routinely provides representation to clients in all forms of insurance-related corporate and governmental affairs matters. These activities typically include:

• Assistance in the design and approval of insurance and rate filings;
• Assistance in obtaining authorizations from state departments of insurance to transact insurance;
• Assistance in drafting legislation;
• Assistance in mergers, acquisitions and reorganizations of insurers and insurance holding company systems; and
• Representation in a variety of matters pending before or involving state departments of insurance and the National Association of Insurance Commissioners ("NAIC")

The firm regularly represents insurance and financial service companies in connection with a broad range of government investigations, enforcement actions, corporate compliance matters, internal investigations, and criminal prosecutions. Our services include:

• Advice regarding the establishment, implementation and testing of corporate compliance and ethics programs;
• Assistance with investigations and enforcement proceedings brought by regulatory agencies such as the DOJ, SEC, FINRA, the Consumer Financial Protection Bureau, and numerous state insurance departments and other regulatory bodies;
• Assistance with responding to grand jury subpoenas, investigative demands, search warrants, and other investigative requests; and
• Assistance with internal investigations of potential regulatory or criminal violations perpetrated by employees, agents, competitors, or other third parties.