The opinion of the court was delivered by: ARTHUR SPATT, District Judge
MEMORANDUM OF DECISION AND ORDER
Presently before the Court are the following two motions: (1) a
motion by the defendant Nationwide Mutual Insurance Company
("Nationwide" or the "defendant") to strike the legal arguments
from the reply affidavit of D. Brian Hufford; and (2) a motion by
the plaintiff Stephen R. Steinberg ("Steinberg" or the
"plaintiff") for class certification pursuant to Federal Rule of
Civil Procedure 23 (Fed.R. Civ. P.").
The following factual background is set forth in the Court's
Memorandum of Decision and Order dated July 27, 2002. Familiarity
with that decision is assumed; however, for the purposes of this
motion, the Court repeats the pertinent facts.
On an unspecified date, Nationwide sold Steinberg a contract
for automobile insurance for his leased 1999 BMW 740I. The
insurance contract states: "COMPREHENSIVE COVERAGE. We will pay
for loss to your auto not caused by collision of upset. We will
pay for the loss less your declared deductible." The contract
defines the word deductible as "the amount of loss to be paid by
the insured when a loss occurs." The contract also defines the
word "loss" as "direct and accidental loss or damage to your auto
including its equipment."
The insurance contract also contains a provision entitled,
"LIMITS OF PAYMENT." This section states, "ACTUAL CASH VALUE. The
limit of our coverage is the cash value of your auto or its
damaged parts at the time of loss. We will consider fair market
value, age, and condition of the property at the time of loss to
determine cash value. We may pay you directly for a loss. We may,
at our option, replace your auto."
In September 1999, the plaintiff's BMW engine was damaged by
water that entered the engine and caused an "hydraulic lock." On
behalf of Nationwide, an adjuster consented to the replacement of
the engine and agreed to pay the repairing dealer an unspecified
amount for the replacement engine and related work that was made
necessary by the loss. The dealer repaired the automobile and
Nationwide tendered a check to the plaintiff. However, the check
did not reflect the sum upon which the dealer and the adjuster
had agreed or the sum upon which the dealer and the plaintiff had
agreed. Nationwide had subtracted from that agreed-upon sum the
deductible, which is provided for in the insurance contract, and
a "betterment charge" deduction of $563.17. The term "betterment"
is not contained in the automobile insurance contract between
Nationwide and Steinberg.
Steinberg alleges that the deduction by Nationwide of the
"betterment charge" constitutes a breach of the insurance
contract between him and Nationwide because, under the contract,
the only amount of the loss an insured must pay is the
deductible. Steinberg further alleges that the term "deductible"
as defined in the insurance contract does not reflect a
"betterment charge." Steinberg also contends that Nationwide has
breached the contract by applying the "betterment charge" to the
loss of parts, such as the engine in the plaintiff's case.
The complaint further alleges that, since on or about January
1, 1993, Nationwide has entered into automobile insurance
contracts that are substantially similar to the contract
described above with "millions" of people in every state except
Hawaii, Massachusetts, and New Jersey. Steinberg seeks to
maintain a class action on behalf of all individuals who entered
into automobile insurance contracts with Nationwide and have had,
since January 1, 1993, a collision or comprehensive loss (1) for
which Nationwide paid the amount necessary for repair minus the
deductible and a "betterment charge"; or (2) that was repaired at
a Blue Ribbon Repair Shop where the insured paid a deductible and
a "betterment charge."
The plaintiff originally commenced this action against
Nationwide on October 13, 1999, in the Supreme Court of the State
of New York, Suffolk County. On November 24, 1999, Nationwide
removed the action to this Court pursuant to 28 U.S.C. §§ 1441
and 1446. In papers dated December 9, 1999, the plaintiff moved
to remand the action to state court on the ground that this Court
lacked subject matter jurisdiction. In particular, the plaintiff
argued that the amount in controversy did not exceed $75,000.
In a decision and order dated April 6, 2000, Steinberg v.
Nationwide, 91 F. Supp. 2d 540 (E.D.N.Y. 2000), this Court
denied the plaintiff's motion for remand The Court held that,
although it "[would] not aggregate the potential value of the
class in order to sustain the $75,000 jurisdictional amount," the
injunctive relief sought by the plaintiff furnishes the basis for
federal jurisdiction. Steinberg, 91 F. Supp.2d at 543-44. The
Court found that, with reasonable certainty, the imposition of an
injunction prohibiting the practice of recognizing "betterment
charges" would cause economic harm in excess of $75,000 to the
defendant. Id. at 544. Accordingly, the Court concluded that
the plaintiff's request for injunctive relief met the
jurisdictional minimum of $75,000. Id.
In papers dated September 12, 2001, Steinberg moved the Court
for permission to file a Second Amended Complaint, which, he
stated, would narrow the claims in the complaint. In particular,
Steinberg sought to withdraw a claim that the defendant's use of
used, reconditioned, or remanufactured parts when repairing a car
is also a breach of contract. In papers dated September 19, 2001,
Nationwide stated that it did not oppose the plaintiff's motion.
In an order dated September 22, 2001, the Court granted the
plaintiff's motion to file a Second Amended Complaint, and
Steinberg filed the Second Amended Class Action Complaint on
September 26, 2001.
In papers dated October 5, 2001, Nationwide moved to dismiss
the Second Amended Complaint on the ground that the Court lacked
subject matter jurisdiction. Nationwide stated that Steinberg's
Second Amended Complaint did not request the injunctive relief
that this Court previously held satisfied the amount in
controversy element of diversity jurisdiction. As such,
Nationwide argued that the amount in controversy did not exceed
$75,000 and that the Court must dismiss the complaint for lack of
subject matter jurisdiction. Steinberg conceded that the request
for injunctive relief was missing from his Second Amended
Complaint and explained that he had inadvertently deleted the
request. On October 24, 2001, Steinberg requested permission to
supplement the pleading pursuant to Fed.R. Civ. P. 15(a) so as
to include the request for injunctive relief.
In an order dated July 27, 2002, the Court granted Nationwide's
motion to dismiss the Second Amended Complaint. The Court also
granted Steinberg's motion to file an amended complaint that
differed from the Second Amended Complaint only in that it
contained a request for injunctive relief. On August 7, 2002,
Steinberg filed the Third Amended Class Action Complaint.
A. The Defendant's Motion to Strike Legal Argument from Reply
Affidavit of D. Brian Hufford
The defendant moves to strike the legal arguments from the
reply affidavit of D. Brian Hufford in support of the plaintiff's
motion for class certification. In response, the plaintiff moves
to strike the legal arguments from the declaration of Adam S.
Levy. A review of the reply affidavit shows that, unlike the Levy
declaration, it raises a multitude of legal arguments and
citations. Local Civil Rule 7.1 provides:
Except as otherwise permitted by the court, all
motions and all oppositions thereto shall be
supported by a memorandum of law, setting forth the
points and authorities relied upon in support of or
in opposition to the motion, and divided, under
appropriate headings, into as many parts as there are
points to be determined. Willful failure to comply
with this rule may be deemed sufficient cause for the
denial of a motion or for the granting of a motion by
Although the plaintiff did forth his legal arguments in his reply
memorandum of law, his attorney's affidavit also contains a
number of legal arguments. The legal arguments set forth in the
affidavit are improper and have the effect of circumventing the
Court's page limits on memoranda which is 10 pages for a reply
memorandum. Accordingly, the Court grants the defendant's motion
to strike the legal arguments set forth in the reply affidavit by
the plaintiff's counsel.
B. Standards for Class Certification
In determining whether a putative class qualifies for
certification, the only question is whether the requirements of
Fed.R. Civ. P. 23 have been met. See Eisen v. Carlisle &
Jacquelin, 417 U.S. 156, 177-78, 40 L. Ed. 2d 732,
94 S. Ct. 2140 (1974). The Court assumes the allegations in the complaint
to be true, and the burden is on the plaintiff to prove that the
putative class meets the four threshold requirements of Rule
23(a) and satisfies the requirements of at least one of the
categories enumerated in Rule 23(b). See In re: Visa
Check/Mastermoney Antitrust Litig., 280 F.3d 124, 133 (2d Cir.
2001); Caridad v. Metro-North Commuter RR, 191 F.3d 283, 291
(2d Cir. 1999); Vengurlekar v. Silverline Technologies, Ltd.,
220 F.R.D. 222, 226 (S.D.N.Y. Nov. 2003).
In deciding certification, courts must take a liberal rather
than a restrictive approach in determining whether the plaintiff
satisfies these requirements and may exercise broad discretion in
weighing the propriety of a putative class. See In re NASDAQ
Market Makers Antitrust Litig., 169 F.R.D. 493, 504 (S.D.N.Y.
1996) (citing Korn v. Franchard Corp., 456 F.2d 1206, 1208-09
(2d Cir. 1972)); See also Pecere v. Empire Blue Cross and Blue
Shield, 194 F.R.D. 66, 69 (E.D.N.Y May 2000). Whether the
plaintiffs have stated a cause of action or will prevail on the
merits is not a consideration for resolution of a motion for
class certification. See Vengurlekar, 220 F.R.D. at 226.
While the district court must engage in a "rigorous analysis" to
establish whether the plaintiff has met its burden of proof as to
certification, Caridad, 191 F.3d at 291, such a determination
must not evolve into a "preliminary inquiry into the merits."
Eisen., 417 U.S. at 177.
1. Rule 23(a) Requirements
To qualify for class certification, the plaintiff must first
prove that the putative class meets the four threshold
requirements of Rule 23(a):
(1) the class is so numerous that joinder of all
members is impracticable, (2) there are questions of
law or fact common to the class, (3) the claims or
defenses of the representative parties are typical of
the claims or defenses of the class, and (4) the
representative parties will fairly and adequately
protect the interests of the class.
Fed.R. Civ. P. 23(a); See also In re Visa Check/Mastermoney
Antitrust Litigation, 280 F.3d 124
, 132-33 (2nd Cir. 2001).
Rule 23(a)(1), generally referred to as the numerosity
requirement, requires that the class be "so numerous that joinder
of all members is impracticable." Fed.R. Civ. P. 23(a)(1).
`Impracticable,' in this context, is not to be confused with
impossible. Rule 23(a)(1) only requires that, in the absence of a
class action, joinder would be "difficult" or "inconvenient."
Vengurlekar, 220 F.R.D. at 227 (internal quotations and
The commonality requirement set forth in Rule 23(a)(2) requires
a showing that common issues of fact or law exist and affect all
class members. However, the individual circumstances of the class
members can differ without precluding class certification. See
Vengurlekar, 220 F.R.D. at 227. "The critical inquiry is
whether the common questions are at ...