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Class Action Allegations Can Be Properly Stricken on a Motion to Dismiss in New Jersey

Posted: 06/03/2015


Summary

The New Jersey Appellate Division recently affirmed the dismissal of plaintiffs’ class allegations in Myska, et al. v. New Jersey Manufacturers Ins. Co., et al., Docket Nos. A-4398-13T4 and A-0275-14T4 (App. Div. May 8, 2015). Plaintiffs’ putative class claims arose out of the alleged denials in diminution in value damages by the respective insurance carrier defendants. Defendant New Jersey Manufacturers Insurance Company ("NJM") moved to dismiss Plaintiffs’ individual causes of action, along with their class claims and demands for class certification. The trial court dismissed plaintiffs’ class
allegations against NJM.

Plaintiffs appealed the trial court’s dismissal of their putative class claims and argued that the trial court erred in dismissing their class claims prior to discovery. The Appellate Division affirmed the trial court’s dismissal of plaintiffs’ putative class claims and "flatly reject[ed]…impos[ing] a bright-line rule prohibiting examination of the propriety of class certification until discovery is undertaken." After accepting as true all of the allegations in a complaint, the Court held that central inquiry on class certification remains whether the putative class raises "questions of law or fact common to the members of the class [that] predominate over any questions affecting individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy." The Appellate Division affirmed the trial court’s order holding that underlying contracts "may be as varied as the number of insurers that issue policies and the vehicles those policies cover" and the facts and circumstances surrounding the insurance claims and an insured’s compliance with the policy will be "unique." The Appellate Division further rejected plaintiffs’ contention that the individual plaintiffs’ demands are too small to warrant recourse in litigation as two of the plaintiffs’ claims totaled $14,399.00 and $17,524 respectively.

In light of this decision, companies faced with putative class allegations in New Jersey should consider proactively moving to dismiss or strike the class claims where the class allegations appear impossible on the face of the complaint. This is particularly true for those putative class actions which require individual factual inquiries for each class member and the individual amount at issue is more than nominal.

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