Abshire v. State

Full title: DONALD W. ABSHIRE AND THE OTHER PETITIONERS NAMED HEREIN v. THE STATE OF…

Court: STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT

Date published: May 16, 2018

2017 CA 0689 (La. Ct. App. May. 16, 2018)

Opinion

2017 CA 0689 C/W 2017 CA 0690

05-16-2018

DONALD W. ABSHIRE AND THE OTHER PETITIONERS NAMED HEREIN v. THE STATE OF LOUISIANA, THROUGH THE DEPARTMENT OF INSURANCE OF THE STATE OF LOUISIANA; THE DEPARTMENT OF INSURANCE OF THE STATE OF LOUISIANA; THE STATE OF LOUISIANA, THROUGH THE OFFICE OF FINANCIAL INSTITUTIONS OF THE STATE OF LOUISIANA; THE OFFICE OF FINANCIAL INSTITUTIONS OF THE STATE OF LOUISIANA; THE LOUISIANA INSURANCE GUARANTY ASSOCIATION; AND STANDARD ANALYTICAL SERVICE, INC. EDWARD J. APPLE AND THE OTHER PETITIONERS NAMED HEREIN v. THE STATE OF LOUISIANA, THROUGH THE DEPARTMENT OF INSURANCE OF THE STATE OF LOUISIANA; THE DEPARTMENT OF INSURANCE OF THE STATE OF LOUISIANA; THE STATE OF LOUISIANA, THROUGH THE OFFICE OF FINANCIAL INSTITUTIONS OF THE STATE OF LOUISIANA; THE OFFICE OF FINANCIAL INSTITUTIONS OF THE STATE OF LOUISIANA; THE LOUISIANA INSURANCE GUARANTY ASSOCIATION; AND STANDARD ANALYTICAL SERVICE, INC. AND ARTHUR A. LEWIS, LEONA LEWIS, LESTER A. SAUCIER, MARIE S. SAUCIER, FULGENCE PONTHIER, VERDIE F. PONTHIER, JOSEPH W. GOUDEAU, JR., RODIA L. GOUDEAU, NORRIS J. KIMBALL, JANET G. KIMBALL, STEWART J. AYMOND, MILDRED L. AYMOND, JOYCE GREMILLION, CRAIG P. ORTEGO, MARCELLA ORTEGO, LEWARD P. ORTEGO, ESSIE ORTEGO, HAZEL CHARRIER, ELDRED DESSELLE, SABIA DESSELLE, CRYSTAL JEANSONNE, WARREN GALLAND, LOUISE GALLAND, ELIA M. MILLIGAN, JOHN W. CHEEK, JANELL CHEEK, L.J. CHEEK, VERNA M. CHEEK, DOROTHY M. GUILLORY, GEORGE P. LEMOINE, HAZEL K. LEMOINE, DONALD L. RACHAL, DIANA DAUZAT RACHAL, SADIE C. FOGLE, GERMAINE CHATELAIN, HARDY J. LACOUR, JERALDINE D. LACOUR, NORMAN G. HAYMON, JEAN EVELYN JOHNSON, YVONNE LEWIS WELBORN, HAZEL T. FIRMIN, AND CHARLES D. LEWIS v. THE STATE OF LOUISIANA THROUGH THE DEPARTMENT OF INSURANCE OF THE STATE OF LOUISIANA; THE DEPARTMENT OF INSURANCE OF THE STATE OF LOUISIANA; THE STATE OF LOUISIANA THROUGH THE OFFICE OF FINANCIAL INSTITUTIONS OF THE STATE OF LOUISIANA; THE OFFICE OF FINANCIAL INSTITUTIONS OF THE STATE OF LOUISIANA; THE LOUISIANA INSURANCE GUARANTY ASSOCIATION; AND STANDARD ANALYTICAL SERVICE, INC.

JOHN GREGORY ODOM, STUART E. DES ROCHES, AND CHRISTOPHER T. STOW-SERGE ODOM & DES ROCHES, LLC, NEW ORLEANS, LA and DAVID P. SMITH, DAVID C. RAPHAEL, JR., AND MITTIE J. BOLTON SMITH SEGURA & RAPHAEL, LLP, ALEXANDRIA, LA and DAN B. McKAY, JR. MCKAY LAW OFFICE, BUNKIE, LOUISIANA COUNSEL FOR PLAINTIFFS/APPELLEES DONALD W. ABSHIRE, ET AL. JEFF LANDRY, ATTORNEY GENERAL LOUISIANA DEPARTMENT OF JUSTICE BATON ROUGE, LA and JOHN B. DUNLAP III, JENNIFER A. FIORE, SUSAN N. ECCLES, AND KATELIN H. VARNADO DUNLAP FIORE, LLC, BATON ROUGE, LA COUNSEL FOR DEFENDANTS/APPELLANTS LOUISIANA DEPARTMENT OF INSURANCE AND LOUISIANA OFFICE OF RISK MANAGEMENT JEFF LANDRY, ATTORNEY GENERAL LOUISIANA DEPARTMENT OF JUSTICE BATON ROUGE, LA and DAVID M. LATHAM, KEARY L. EVERITT, AND MARIE G. EVERITT EVERITT & LATHAM, L.L.C., NEW ORLEANS, LA COUNSEL FOR DEFENDANT/APPELLANT LOUISIANA OFFICE OF FINANCIAL INSTITUTIONS STUART PONDER AND MICHAEL J. VONDENSTEIN HAILEY, McNAMARA, HALL, LARMANN & PAPALE, L.L.P., METAIRIE, LA COUNSEL FOR DEFENDANT/APPELLANT ADMIRAL INSURANCE COMPANY TIMOTHY G. SCHAFER AND RACHEL S. KELLOGG SCHAFER & SCHAFER, LLP, NEW ORLEANS, LA COUNSEL FOR DEFENDANT/APPELLANT LEXINGTON INSURANCE COMPANY ROBERT I. SIEGEL AND TARA E. CLEMENT GIEGER, LABORDE & LAPEROUSE, LLC, NEW ORLEANS, LA COUNSEL FOR DEFENDANT/APPELLANT NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA PAUL D. PALERMO AND CRAIG V. SWEENEY BLUE WILLIAMS, LLP, METAIRIE, LA COUNSEL FOR DEFENDANT/APPELLANT WESTCHESTER FIRE INSURANCE COMPANY

PETTIGREW, J.

NOT DESIGNATED FOR PUBLICATION Appealed from the 19th Judicial District Court In and for the Parish of East Baton Rouge, State of Louisiana
Trial Court No. 377,713 c/w No. 412,265, Div. "B," Sec. 26
Honorable Donald R. Johnson, Judge Presiding JOHN GREGORY ODOM, STUART E. DES ROCHES,
AND CHRISTOPHER T. STOW-SERGE
ODOM & DES ROCHES, LLC, NEW ORLEANS, LA

and
DAVID P. SMITH, DAVID C. RAPHAEL, JR.,
AND MITTIE J. BOLTON
SMITH SEGURA & RAPHAEL, LLP, ALEXANDRIA, LA

and
DAN B. McKAY, JR.
MCKAY LAW OFFICE, BUNKIE, LOUISIANA COUNSEL FOR PLAINTIFFS/APPELLEES
DONALD W. ABSHIRE, ET AL. JEFF LANDRY, ATTORNEY GENERAL
LOUISIANA DEPARTMENT OF JUSTICE
BATON ROUGE, LA

and
JOHN B. DUNLAP III, JENNIFER A. FIORE,
SUSAN N. ECCLES, AND KATELIN H. VARNADO
DUNLAP FIORE, LLC, BATON ROUGE, LA COUNSEL FOR DEFENDANTS/APPELLANTS
LOUISIANA DEPARTMENT OF INSURANCE
AND LOUISIANA OFFICE OF RISK
MANAGEMENT JEFF LANDRY, ATTORNEY GENERAL
LOUISIANA DEPARTMENT OF JUSTICE
BATON ROUGE, LA

and
DAVID M. LATHAM, KEARY L. EVERITT, AND
MARIE G. EVERITT
EVERITT & LATHAM, L.L.C., NEW ORLEANS, LA COUNSEL FOR DEFENDANT/APPELLANT
LOUISIANA OFFICE OF FINANCIAL
INSTITUTIONS STUART PONDER AND MICHAEL J.
VONDENSTEIN
HAILEY, McNAMARA, HALL, LARMANN
& PAPALE, L.L.P., METAIRIE, LA COUNSEL FOR DEFENDANT/APPELLANT
ADMIRAL INSURANCE COMPANY TIMOTHY G. SCHAFER AND RACHEL S. KELLOGG
SCHAFER & SCHAFER, LLP, NEW ORLEANS, LA COUNSEL FOR DEFENDANT/APPELLANT
LEXINGTON INSURANCE COMPANY ROBERT I. SIEGEL AND TARA E. CLEMENT
GIEGER, LABORDE & LAPEROUSE, LLC,
NEW ORLEANS, LA COUNSEL FOR DEFENDANT/APPELLANT
NATIONAL UNION FIRE INSURANCE
COMPANY OF PITTSBURGH, PA PAUL D. PALERMO AND CRAIG V. SWEENEY
BLUE WILLIAMS, LLP, METAIRIE, LA COUNSEL FOR DEFENDANT/APPELLANT
WESTCHESTER FIRE INSURANCE
COMPANY BEFORE: PETTIGREW, McDONALD, AND CRAIN, JJ. PETTIGREW, J.

INTRODUCTION

This protracted litigation involves approximately 826 to 1,326 plaintiffs who have filed suit against various agencies of the State of Louisiana and multiple insurers of the State regarding companies in which the plaintiffs had previously invested and lost significant financial assets. This case originally proceeded as a consolidated matter with several hundred plaintiffs joined in the litigation and represented by the same counsel. In order to direct the litigation, the plaintiffs formed a corporation to operate as a representative body to legally act on their behalf. As litigation progressed, numerous plaintiffs died or became incapacitated and their heirs or representatives were substituted as parties. During settlement negotiations, it became evident that the only way to obtain authority to settle the case was to convert it to a class action, based upon a Louisiana State Bar Association Ethics Advisory Service Committee opinion. At the conclusion of the class action certification hearings, the trial court denied certification on the basis that the plaintiffs failed to meet one of the statutory prerequisites for class certification, namely, La. Code Civ. P. art. 591(A)(1)'s "numerosity" requirement, which requires the plaintiffs to demonstrate that the class is so numerous that joinder of all members is impracticable. The trial court reasoned that it could not ever be said that the joinder of the members was impracticable because all of the putative plaintiffs were already parties to the litigation.

The plaintiffs appealed the denial of class certification. In that prior appeal, Abshire v. State ex rel. Dept. of Ins. of State, 2012-0104 (La. App. 1st Cir. 12/18/13), 2013 WL 6712235 (unpublished opinion), writs denied, 2014-0133, 2014-0137, 2014-0162 (La. 4/4/14), 135 So. 3d 642, 643, 643 ("Abshire II"), this court ruled that the trial court applied an incorrect legal standard when analyzing whether the plaintiffs satisfied the numerosity requirement for class certification. Utilizing de novo review of the trial court's factual findings, this court found that the plaintiffs met their burden of proving the numerosity requirement. Accordingly, this court reversed the trial court's judgment that the plaintiffs did not meet La. Code Civ. P. art. 591(A)(1)'s numerosity requirement for class certification. This court did not, however, undertake a review of the trial court's ultimate decision not to certify the class, and instead, remanded the matter to the trial court to conduct a full analysis of whether the plaintiffs met the remaining prerequisites as well as any additional requirements imposed by law for class action certification.

Following remand, the trial court signed a judgment on September 14, 2016, granting the plaintiffs' motion to certify the class action. The defendants herein — the State of Louisiana, through the Department of Insurance ("DOI"); the Louisiana Office of Financial Institutions ("OFI"); the State of Louisiana Office of Risk Management ("ORM"); Admiral Insurance Company ("Admiral"); Lexington Insurance Company ("Lexington"); National Union Fire Insurance Company of Pittsburgh, PA ("National Union"); and, Westchester Fire Insurance Company ("Westchester") — now appeal the trial court's judgment granting the plaintiffs' motion to certify the class. For the following reasons, we affirm.

FACTS AND PROCEDURAL HISTORY

History of the Litigation

A detailed factual and procedural history of this litigation is set forth in Abshire II:

Over 1,000 individual owners of annuities, life insurance policies, and corporate notes ("plaintiffs") instituted actions in 1991 and 1992 against ... the [DOI] and the [OR]. Plaintiffs purchased their instruments from three Louisiana companies -- namely, Public Investors Life Insurance Company ("PILICO"), Public Investors Incorporated ("PICO"), and Midwest Life Insurance Company ("Midwest"). In 2003, plaintiffs added additional defendants, including [ORM] and numerous insurers who provided excess insurance coverage to the State of Louisiana during the period of 1987 to 1991. OFI, DOI, ORM, [Admiral, Lexington, National Union, and Westchester] are collectively referred to herein as the [defendants].

Plaintiffs allege that during the period of 1987 through 1991, the State of Louisiana, by and through OFI and DOI, either negligently, recklessly, maliciously, flagrantly, or intentionally acquiesced in the various company owners' criminal plans to transfer funds out of the companies in which plaintiffs invested and use those funds to support affiliated, failing companies in which plaintiffs had no interest. Specifically, plaintiffs contend that OFI and DOI gave regulatory approval to these transactions in order to protect the Louisiana Insurance Guaranty Association ("LIGA") fund, which served as guarantor of the insurance companies that benefited from the

illegal transactions. PILICO, PICO, and Midwest later collapsed, and plaintiffs' losses were not protected by LIGA.

Although there was a large group of claimants, class action status was not sought at the time this case was filed. It instead proceeded as a consolidated matter with at least several hundred individually named plaintiffs who were joined in the litigation and represented by the same counsel. In order to manage so many clients' claims, shortly after this case was filed, plaintiffs' counsel sought to create a committee of plaintiffs who would direct the litigation. Thus, the plaintiffs formed a Louisiana not-for-profit corporation named PICO/Midwest Action Group ("PMAG"). PMAG was a representative body created to legally act on behalf of all plaintiffs, to simplify management, contact, and representation. PMAG's members, officers, and directors were all plaintiffs in this action, and PMAG's Board of Directors was elected by the plaintiffs. Each plaintiff was a member of PMAG, and the PMAG Board was given a power of attorney to manage each individual claim. This arrangement with PMAG was embodied in every engagement letter with counsel. For years, plaintiffs' counsel maintained contact with their clients through PMAG and proceeded by using PMAG as a vehicle to manage the litigation.

However, at the time this litigation began, many of the plaintiffs were elderly, and over the subsequent years, numerous plaintiffs have died or become incapacitated. Plaintiffs' counsel maintains that, even with PMAG, communication with and management of their clients became increasingly difficult due to the advanced age of many plaintiffs, their disabilities, relocation, and other factors that come with the passage of time. The record reflects that there have been approximately seventy ex-parte motions to substitute filed on behalf of heirs of deceased plaintiffs. Some of these substitutions have been contested; and as this litigation continues, the communication and substitution issues have only become more challenging and present obstacles to an efficient and speedy resolution of this case.

The continuing litigation over substitutions is only one issue among many that the parties have differed over. Over the years, this court has considered at least [seventeen] supervisory writs in this matter. In 2005, plaintiffs appealed an order of the trial court that dismissed hundreds of plaintiffs for their failure to submit to a deposition before a court-imposed deadline. On November 3, 2006, this court reversed the trial court's decision and remanded for proceedings consistent therewith. [Abshire v. State ex rel. Dept. of Ins., 2006-0005, 2006-0006 (La. App. 1st Cir. 11/3/06), 2006 WL 3110244 (unpublished opinion) ("Abshire I").]

Following this court's decision [in Abshire I], the parties engaged in settlement discussions. Plaintiffs' counsel's stated belief is that, up until that point, utilizing PMAG was a more effective way to manage the litigation than seeking class action status. However, the settlement discussions stalled due to questions about plaintiffs' counsel's ability to settle the case through PMAG, in light of a change in the Louisiana Rules of Professional Conduct, Rule 1.8(G). Plaintiffs' counsel then sought an ethics advisory opinion. The December 18, 2006 letter from the Ethics Advisory Service Committee advised that it was not possible to settle claims through the PMAG management committee, and that the only way to obtain authority to settle the case was to convert it to a class action.

However, instead of seeking class certification, in April 2007, plaintiffs' counsel filed a motion to withdraw as counsel for the 227 clients that counsel had lost contact with, explaining that, in preparing for trial, it developed that some of the plaintiffs could not be found or were unable or unwilling to communicate with counsel, After a hearing on August 6, 2007, the trial court orally denied the motion to withdraw. Thereafter, on September 20, 2007, plaintiffs[] sought to amend their petition, for the ninth time, in order to assert claims for class certification. In granting the motion to amend the petition to assert claims for class certification, the trial court commented: "By seeking leave to amend the petition to add allegations seeking class relief, plaintiffs' counsel are taking the only action available to prevent the summary dismissal of absent clients."

After the motion to amend the petition was granted, the plaintiffs filed their [n]inth [a]mended and [s]upplemental [p]etition. The proposed class is defined as follows:

All persons or entities in the United States who filed suit against the State of Louisiana and/or its [DOI] or [OFI] for damages caused by the State's conduct in connection with the failure of [PILICO], and whose claim was consolidated into Civil Action No. 377,713 or No. 412,265 (captioned Donald W. Abshire, et al. vs. The State of Louisiana, et al.);

All persons or entities in the United States who filed suit against the State of Louisiana and/or its [DOI] or [OFI] for damages caused by the State's conduct in connection with the failure of [PICO], and whose claim was consolidated into Civil Action No. 377,713 or No. 412,265 (captioned Donald W. Abshire, et al. v. The State of Louisiana, et al.);

All persons or entities in the United States who filed suit against the State of Louisiana and/or its [DOI] or [OFI] for damages caused by the State's conduct in connection with the failure of [Midwest], and whose claim was consolidated into Civil Action No. 377,713 or No. 412,265 (captioned Donald W. Abshire, et al. v. The State of Louisiana, et al.);

Excluded from the Class are any persons or entities whose claims in Civil Action No. 377,713 or No. 412,265 have been resolved by a final, unappealable judgment

Plaintiffs concede that this definition does not expand the class beyond those claimants who were already plaintiffs. Plaintiffs argue that upon final judgment, all that will have to be done is to take the original list of plaintiffs stated in the petitions, take out all plaintiffs dismissed by final judgment, and the resulting group constitutes the total class.

Immediately after the [n]inth [a]mended [p]etition was filed, Admiral, OFI, and the ORM sought to remove the case to federal court, arguing that under the Class Action Fairness Act of 2005, federal subject-matter jurisdiction existed over the putative class action. The federal district court remanded the case to state court, the United States Fifth Circuit affirmed, and the United States Supreme Court denied certiorari. [Abshire v. Louisiana, No. 08-369-C, 2009 WL 50178 (M.D. La. Jan. 7, 2009), aff'd sub nom., Admiral Ins. Co. v. Abshire, 574 F.3d 267 (5th

Ctr.), cert. denied sub nom., Louisiana v. Abshire, 558 U.S. 1050, 130 S.Ct. 756, 175 LEd.2d 517 (2009).]


[...]

Upon remand, the Louisiana Supreme Court appointed a judge to sit ad hoc to assist the trial court, in June 2010. On December 20, 2010, the trial court held a hearing on the plaintiffs' motion for class certification. At the conclusion of the hearing, the court indicated that it was particularly interested in the meaning of the word "impracticable," as it is used in the Louisiana class action article, La. Code Civ. P. art. 591(A)(1), and the court invited post-hearing briefs. On February 10, 2011, the trial court heard arguments again and then orally denied the plaintiffs' motion for class certification. In its oral reasons for judgment, after discussing the subjective nature of the words found in La. Code. Civ. P. art. 591, the trial court stated:

In the one that is to me, although written in a subjective way, (A)(1), class is so numerous that joinder of all members is impracticable. In this case, it is not subjective. It is very objective, because, in fact, all of the members of the class are plaintiffs in this lawsuit. I mean, they are.

So, it is not a matter of discretion. I do not think in this case that the court has any discretion whatsoever because of the objective nature of the evidence in this case in relation to that subsection, that article subsection, that there is — under no circumstances .... In this case, it cannot in any way ever be said that it is impracticable to join the members of the class because they are already plaintiffs. They are in the lawsuit already. So, it cannot meet that criteria, and it has got to meet all five of those in order just to get to the second level.

On March 11, 2011, plaintiffs filed a motion for a suspensive appeal from the judgment denying class certification. On March 30, 2011, a judgment was signed, and the trial court granted the motion for appeal.

Abshire II, 2013 WL 6712235, at *1-4. The Abshire II Appeal

On appeal in Abshire II, the plaintiffs raised four assignments of error as to the trial court's March 30, 2011 judgment denying their motion for class certification. In the first assignment of error, the plaintiffs argued that the trial court erred in holding that the plaintiffs failed to meet the first prerequisite of La. Code Civ. P. art. 591(A)(1), the "numerosity" requirement, which states: "One or more members of a class may sue or be sued as representative parties on behalf of all, only if ... [t]he class is so numerous that joinder of all members is impracticable."¹ At the February 10, 2011 hearing, the trial court reasoned that "all of the members of the class [were] plaintiffs in this lawsuit" and that "it cannot in any way ever be said that it is impracticable to join the members of the class because they are already plaintiffs." On appeal, the plaintiffs contended that the trial court erred in ruling that the plaintiffs could never meet the numerosity requirement of Article 591(A)(1), arguing that the term "impracticability" of joinder is not synonymous with the term "impossibility" of joinder. See Abshire II, 2013 WL 6712235, at *4.

1 The other three assignments of error set forth by the plaintiffs in Abshire II were:

2) The district court erred in applying incorrect evidentiary standards at the class certification hearing, resulting in the improper exclusion of documents offered for the purpose of demonstrating the existence of the requisite elements for class certification.

3) To the extent the district court did consider any of the additional elements required for class certification outside of the impracticability issue, and there is no evidence that it did, the court erred in not finding that Plaintiffs satisfied all of those requirements.

4) The district court erred in failing to exercise its discretion as directed by the Supreme Court, and in failing to perform a rigorous analysis to determine whether this action meets class certification requirements.

This court began its analysis by noting that "[a] Vigorous analysis' must be used to determine whether a class action meets the requirements imposed by law, since this procedural device is an exception to the rule that litigation be conducted by and on behalf of the individually named parties only." Abshire II, 2013 WL 6712235, at *7. This court continued its analysis of whether the plaintiffs met Article 591(A)(1)'s numerosity requirement, stating that "[n]umerosity is determined based upon the facts and circumstances of each individual case, and there is no set number above which a class is automatically considered so numerous as to make joinder impractical as a matter of law," specifically noting that this court has declined to adopt a rule or presumption that a minimum number of plaintiffs would make joinder impracticable under Article 591(A)(1).² Abshire II, 2013 WL 6712235, at *7-8.

2 The exact number of plaintiffs in this case is unclear and disputed, but there are, at a minimum, several hundred plaintiffs. At the hearings on the plaintiffs' motion for class certification, plaintiffs' counsel represented to the trial court that the number of plaintiffs was somewhere between 826 and 1,346. Abshire II, 2013 WL 6712235, at *8.

After examining the relevant jurisprudence, this court concluded that "impracticability is not synonymous with impossibility" and that the plaintiffs were not required to allege or prove that joinder of all parties is impossible:

Accordingly, the trial court erred to the extent that it equated "impracticability" with "impossibility" of joinder. By dismissing the plaintiffs' numerosity argument based upon a finding that joinder had already occurred, the trial court failed to consider the jurisprudence explaining what impracticable means, as well as the cases that set forth factors for a complete numerosity analysis. Although it is obviously possible to join all the plaintiffs in this litigation, that fact alone does not adequately answer the question of whether joinder is impracticable. Because we find that the trial court applied an incorrect legal standard when considering whether the plaintiffs met the requirement for numerosity, we review the trial court's decision on this issue de novo. [Emphasis in original.]

Abshire II, 2013 WL 6712235, at *10.

This court continued:

[T]he history of this litigation and the current state of the case demonstrates that the number of plaintiffs is so numerous that joinder is impracticable, and we find that plaintiffs meet the numerosity requirement of La. Code Civ. P. art. 591. The class action was devised to solve problems associated with adjudicating lawsuits such as this one involving an unwieldy number of plaintiffs who should be joined and whose membership is constantly changing, where the courts would be unduly burdened by joinder, and where class action would clearly be more useful and judicially expedient than continuing as a cumulated mass joinder.

Moreover, in a recent case, Doe v. Southern Gyms, LLC [2012-1566 (La. 3/19/13), 112 So. 3d 822], the Louisiana Supreme Court identified factors that, although not as well-developed or relied upon, have developed in the jurisprudence for determining practicality of joinder of a large number of potential class members. An analysis of those factors also leads to the conclusion that joinder in this case is impracticable. We recognize that Doe v. Southern Gyms, LLC was decided after the trial court's denial of the motion for class certification in February 2011, but the parties have presented arguments regarding these factors; and we consider them here. Those factors are: (1) the geographic dispersion of the class; (2) the ease with which class members may be identified; (3) the nature of the action; (4) the size of the individual claims; (5) judicial economy in

avoiding a multiplicity of lawsuits; and (6) financial resources of class members. These factors may also inform a district court's determination whether the proposed class has a sufficient number of members so that joinder is impracticable.

Abshire II, 2013 WL 6712235, at *12.

After applying the Doe v. Southern Gyms, LLC factors for determining practicality of joinder of a large number of potential class members to the specific facts of this case, this court concluded:

[B]ased upon our review of the evidence in the record and the law interpreting impracticability of joinder, we find that the plaintiffs have established that the proposed class is so numerous as to make it impracticable for all of them to be joined. Accordingly, we reverse the trial court's judgment that plaintiffs did not meet the numerosity requirement for class certification. [...] We do not undertake a de novo review of the trial court's ultimate decision not to certify the class, but instead remand this case for proceedings in conformity with our rulings herein.

Abshire II, 2013 WL 6712235, at *14. Thus, we held that the plaintiffs met the class action threshold prerequisite for numerosity. However, because the trial court did not undergo a "rigorous analysis" to determine whether the plaintiffs met the remaining prerequisites for class action certification, as well as the additional criteria found in La. Code Civ. P. art. 591 for class action certification, this court did not review the trial court's ultimate decision not to certify the class. Instead, we remanded the matter to the trial court so that it could perform a "rigorous analysis" to determine whether the plaintiffs met the remaining requirements for class action certification. Abshire II, 2013 WL 6712235, at *7, *14. Action of the Trial Court upon Remand

Upon remand, the judge ad hoc appointed by the Louisiana Supreme Court in June 2010 to preside over this matter recused himself from the case. Thereafter, the trial judge who presided over the case's allotted division assumed control of the litigation and set the plaintiffs' motion for class action certification for hearing on August 31, 2016.³ Later, however, the trial court elected to issue a written ruling based on the record alone without entertaining arguments. On September 14, 2016, the trial court signed a judgment granting the plaintiffs' motion for class action certification, finding that the plaintiffs met all of the requirements set forth in La. Code Civ. P. art. 591. On September 21, 2016, the trial court issued written reasons for its judgment.

3 This case was originally allotted to Division "M" of the 19th Judicial District Court, Parish of East Baton Rouge, Louisiana, and has been pending before a number of judges in that division over the past twenty-six years, most recently before Judge Kay Bates. On June 22, 2010, the Louisiana Supreme Court appointed Judge Doug Moreau to serve as judge ad hoc of Division "M" for the limited purpose of hearing and disposing of this case. In May 2016, Judge Moreau recused himself from the case, stating in his notice of recusal that "[a]n earlier ruling of mine on the class certification motion has been the subject of an appeal resulting in a reversal and remand" and that "circumstances have developed which lead me to conclude that I should recuse myself from further judicial proceedings in this case." Thereafter, Judge Donald R. Johnson (Division "B") assumed the handling of this case due to the retirement of Judge Bates in 2014. Upon her retirement, Judge Johnson, who previously presided over a criminal docket, rotated to a civil docket and assumed control of all pending Division "M" civil cases, including this case.

The defendants now suspensively appeal the trial court's September 14, 2016 judgment, requesting that this court reverse the trial court's decision to certify the plaintiffs' class action.⁴ Trial in this matter is currently set for November 2018.

4 The parties have designated portions of the record on appeal.

ASSIGNMENTS OF ERROR

On appeal, OFI, DOI, and ORM ("State Defendants") raise the following assignments of error for consideration by this court:

1. The district court erred in finding that Plaintiffs met their burden of proof and established, by a preponderance of the evidence, that all five prerequisites of Louisiana Code of Civil Procedure article 591(A) [were] met.

2. The district court further erred in finding that Plaintiffs established the requirements of Louisiana Code of Civil Procedure 591(B) have been met.

Admiral, Lexington, National Union, and Westchester ("Insurer Defendants") have also appealed, assigning the following errors to the trial court's judgment:

1. The trial court erred in finding sufficient "commonality" among the plaintiffs to justify class action status in light of the fact that individual liability issues predominate over common questions of law or fact, particularly as to the fact that the plaintiffs have alleged multiple theories of liability with multiple actions or inactions over a five (5) year period.

2. The trial court erred in failing to consider that the fraud allegations alleged by plaintiffs require examination of each individual plaintiff.

3. The trial court erred in finding sufficient "typicality" to justify class status as plaintiffs' claims arise out of multiple actions or inactions, some of which are applicable to some plaintiffs and not applicable to other plaintiffs and, moreover, some of which are applicable to one or more insurers and not the other insurers.

4. The trial court erred in finding the proposed class representatives will adequately represent the proposed class as the representatives demonstrated a general lack of knowledge of individual sub-class member's investments, motives for investing, reliance, and damages sustained.

STANDARD OF REVIEW

The standard of review for class action certification is bifurcated. Abshire II, 2013 WL 6712235, at *4. The trial court's factual findings are reviewed under the manifest error-clearly wrong standard,⁵ but the trial court's judgment on whether or not to certify the class is reviewed under an abuse of discretion standard.⁶ Whether the trial court applied the correct legal standard in determining whether to certify the class is reviewed de novo. Lillie v. Stanford Trust Company, 2013-1995 (La. App. 1st Cir. 11/1/17), 235 So. 3d 1139, 1147, writ denied sub nom., Lillie v. Stand Ford Tr. Co., 2017-2010 (La. 2/2/18), 233 So. 3d 613.

5 Under the manifest error-clearly wrong standard, this court employs a two-part test for the reversal of a fact finder's determinations. First, this court must find from the record that a reasonable factual basis does not exist for the finding of the trial court. Second, this court must determine that the record establishes that the finding is clearly wrong (manifestly erroneous). This test requires this court to review the record in its entirety to determine manifest error. This court's determination is not whether the fact finder was correct, but whether the fact finder's conclusion was reasonable. Even though an appellate court may feel its own evaluations and inferences are more reasonable than the fact finder's, reasonable evaluations of credibility and reasonable inferences of fact should not be disturbed upon review where conflict exists in the testimony. Bova v. Butler, 2014-0765 (La. App. 1st Cir. 12/23/14), 168 So. 3d 551, 554, writ denied, 2015-0172 (La. 4/17/15), 168 So. 3d 398.

6 The abuse of discretion standard is highly deferential to the trial court's determination under consideration. A decision is considered an abuse of the trial court's great discretion if the trial judge reaches a conclusion in an arbitrary or capricious manner. See Schwarzenberger v. Louisiana State Univ. Health Scis. Ctr. New Orleans, 2017-0024 (La. App. 4th Cir. 8/24/17), 226 So. 3d 1200, 1205-06. A trial court's discretionary action will not be disturbed on review if reasonable people could differ as to the propriety of the trial court's action. J. Caldarera & Co., Inc. v. City of Baton Rouge, 2003-0759 (La. App. 1st Cir. 2/23/04), 873 So. 2d 728, 730.

A trial court has wide discretion in deciding whether or not to certify a class. Abshire II, 2013 WL 6712235, at *5. Any errors to be made in deciding class action issues should be in favor of and not against maintenance of the class action, because a class certification order is subject to modification or decertification if later developments during the course of the trial so require. Price v. Martin, 2011-0853 (La. 12/6/11), 79 So. 3d 960, 967.

When reviewing the trial court's ruling regarding class certification, we do not consider whether the plaintiffs' claims state a cause of action, or whether the plaintiffs will ultimately prevail on the merits. Rather, our task is to examine the plaintiffs' legal claims and to determine only whether a class action is the appropriate procedural device in light of established Louisiana criteria. See Baker v. PHC-Minden, L.P., 2014-2243 (La. 5/5/15), 167 So. 3d 528, 537.

LAW

A class action is a nontraditional litigation procedure that permits a representative with typical claims to sue or defend on behalf of, and stand in judgment for, a class of similarly situated persons when the question is one of common interest to persons so numerous as to make it impracticable to bring them all before the court. Baker v. PHC-Minden, L.P., 167 So. 3d at 537. The procedure for class certification is provided in Title II, Chapter 5, Section 1, of the Louisiana Code of Civil Procedure, articles 591-597. In 1997, the Louisiana State Legislature amended those articles to closely track the language of the 1966 amendments to Federal Rule of Civil Procedure 23. See 1997 La. Acts No. 839, § 1 (eff. July 1, 1997). As the underlying suits were filed in 1991 and 1992, the pre-1997 class action articles apply to this case. However, as noted by this court in Abshire II, the 1997 amendments to La. Code Civ. P. arts. 591-597 did not result in a substantive change to Louisiana class action law because those changes had already been incorporated into our state's class action jurisprudence. See Abshire II, 2013 WL 6712235, at *5-6. Therefore, as the original 1960 requirements for class action certification are virtually identical to the criteria currently required by La. Code Civ. P. arts. 591-597, we analyze this matter using the post-1997 version of the class action articles.

Under Louisiana law, the requirements for class certification are set forth in La. Code Civ. P. art. 591. The five threshold prerequisites — often referred to as numerosity, commonality, typicality, adequate representation, and an objectively definable class — are found in Article 591(A), which provides:

One or more members of a class may sue or be sued as representative parties on behalf of all, only if:

(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.

(4) The representative parties will fairly and adequately protect the interests of the class.

(5) The class is or may be defined objectively in terms of ascertainable criteria, such that the court may determine the constituency of the class for purposes of the conclusiveness of any judgment that may be rendered in the case. This prerequisite shall not be satisfied if it is necessary for the court to inquire into the merits of each potential class member's cause of action to determine whether an individual falls within the defined class.

Once these prerequisites are met, there are four types of class actions potentially available pursuant to Article 591(B), which lists additional criteria depending on the type of class action sought by the parties. The additional criteria applicable to this case are found in Article 591(B)(3), known as the "predominance" and "superiority" requirements: "The court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy."

The party seeking to maintain the class action has the burden of establishing that the statutory criteria have been met. Baker v. PHC-Minden, L.P., 167 So. 3d at 539. Thus here, the plaintiffs were required to prove the five prerequisites of Article 591(A), as well as prove that questions of law or fact common to the members of the class predominate over individual issues and that the class action is superior to any other method for resolving the controversy fairly and efficiently under Article 591(B).

DISCUSSION

Our task in this case is not to make findings of fact; rather, we are called upon to decide whether the trial court's determination that a factual basis existed for certifying the matter as a class action was manifestly erroneous or clearly wrong, i.e., whether the trial court's conclusions were reasonable. If a factual basis exists for certifying the matter as a class action, we must then determine whether the trial court abused its vast discretion in ultimately deciding to certify the class. See Abshire II, 2013 WL 6712235, at *4-5. Given the trial judge's wide discretion in certifying a class, and mindful of La. Code Civ. P. art. 592(A)(3)(d), which allows a trial judge to decertify a class at any time before a decision on the merits of the common issues, we affirm the trial court's September 14, 2016 judgment for the reasons that follow. Louisiana Code of Civil Procedure Article 591(A)(1) - Numerosity

The "numerosity" requirement found in La. Code Civ. P. art. 591(A)(1) requires the plaintiffs to demonstrate that "[t]he class is so numerous that joinder of all members is impracticable." The "numerosity" requirement is not met by simply alleging a large number of potential claimants. Doe v. Southern Gyms, LLC, 112 So. 3d at 831. To establish numerosity, a determination must be made on the facts and circumstances of each individual case. Id. at 830. Although the identification of all potential class members is unnecessary, the party seeking certification should be able to establish a definable group of aggrieved persons. Id. at 831.

The State Defendants allege the plaintiffs failed to satisfy Article 591(A)(1)'s numerosity requirement.⁷ First, the State Defendants contend that this court in Abshire II incorrectly found that the trial court misapplied the legal standard when considering whether the plaintiffs satisfied the numerosity requirement. Specifically, the State Defendants argue that this court misinterpreted the trial court's statement, "it cannot in any way ever be said that it is impracticable to join the members of the class because they are already plaintiffs," to mean that the trial court found that impracticability was synonymous with impossibility. The State Defendants complain that our alleged misinterpretation of that statement caused this court to mistakenly conclude that the trial court failed to consider the relevant jurisprudence on impracticability. The State Defendants argue that following the conclusion of the class certification hearings in 2010, in its oral reasons for judgment, the trial court stated that it had reviewed Louisiana cases on class action certification, specifically mentioning Dupree v. Lafayette Ins. Co., 2009-2602 (La. 11/30/10), 51 So. 3d 673. Additionally, the State Defendants argue that the parties briefed the trial court on the definition of "impracticability" in post-trial memoranda. Thus, the State Defendants allege this court mistakenly concluded in Abshire II that the trial court failed to consider the jurisprudence on impracticability and, therefore, should not have undertaken a de novo review of the trial court's factual determination as to whether the plaintiffs satisfied the numerosity requirement. They also argue that upon reversal and remand of the case by this court in Abshire II, the trial court "simply regurgitated" this court's analysis of the numerosity requirement and made no determinations of its own on remand, which the State Defendants contend perpetuated the alleged "flawed basis for the ruling on numerosity" by this court in Abshire II.

7 The Insurer Defendants do not challenge the trial court's factual determination that the plaintiffs satisfied Article 591(A)(1)'s numerosity requirement.

In the prior appeal of this matter, this court utilized a de novo review after we determined that the trial court applied an incorrect legal standard in determining whether the plaintiffs satisfied Article 591(A)(1)'s numerosity requirement for class action certification. See Abshire II, 2013 WL 6712235, at *10. Based on that de novo review, this court in Abshire II found the plaintiffs met the numerosity requirement. The State Defendants and the Insurer Defendants (namely, Admiral and Westchester) appealed our prior decision; the Louisiana Supreme Court denied their applications for certiorari. Abshire v. State ex rel. Dept. of Ins. of State, 2014-0133, 2014-0137, 2014-0162 (La. 4/4/14), 135 So. 3d 642, 643, 643. Upon the supreme court's denial, the judgment of this court in Abshire II became final and definitive. See La. Code Civ. P. art. 2166(E). Therefore, that judgment is now the law of the case, and we will not revisit our own ruling of law on the numerosity issue. See Quality Envtl. Processes, Inc. v. IP Petroleum Co., Inc., 2016-0230 (La. App. 1st Cir. 4/12/17), 219 So. 3d 349, 366, writ denied, 2017-00915 (La. 10/9/17), 227 So. 3d 833,⁸ The State Defendants' contention that the plaintiffs failed to satisfy the numerosity prerequisite for class certification is without merit.⁹ Louisiana Code of Civil Procedure Article 591(A)(2) - Commonality

8 The law-of-the-case doctrine is a discretionary guide which relates to: (a) the binding force of a trial judge's ruling during the later stages of trial; (b) the conclusive effects of appellate rulings at trial on remand; and (c) the rule that an appellate court ordinarily will not reconsider its own rulings of law on a subsequent appeal in the same case. Jones v. McDonald's Corp., 97-2287 (La. App. 1st Cir. 11/6/98), 723 So. 2d 492, 494, writ not considered, 98-3057 (La. 2/5/99), 737 So. 2d 738. It applies to all prior rulings or decisions of an appellate court or the supreme court in the same case, not merely those arising from the full appeal process. The reasoning behind the law-of-the-case doctrine is to avoid relitigation of the same issue, to promote consistency of result in the same litigation, and to promote efficiency and fairness to both parties by affording a single opportunity for the argument and decision of the matter at issue. Id. Re-argument in the same case of a previously decided point will be barred where there is simply a doubt as to the correctness of the earlier ruling. The law-of-the-case doctrine is not an inflexible law, thus appellate courts are not absolutely bound thereby and may exercise discretion in application of the doctrine. Id. at 495. The doctrine is not applied in cases of palpable error or where, if the law of the case were applied, manifest injustice would occur. Id. at 494. The doctrine applies only against those who were parties to the case when the earlier decision was rendered, and who thus have had their day in court. Day v. Campbell-Grosjean Roofing & Sheet Metal Corp., 260 La. 325, 256 So. 2d 105, 107 (1971).

9 The State Defendants' Assignment of Error No. 1.

Louisiana Code of Civil Procedure article 591(A)(2) requires that "[t]here are questions of law or fact common to the class." While Article 591(A)(2) requires that there be questions of law or fact common to the class, Article 591(B)(3) further requires that these common questions predominate over any questions affecting only individual members, which will be discussed more fully below. Thibodeaux v. Louisiana Citizens Prop. Ins. Corp., 2009-1304 (La. App. 1st Cir. 2/12/10), 2010 WL 502797, at *3 (unpublished opinion), writ denied, 2010-0541 (La. 5/7/10), 34 So. 3d 863. The test of commonality is not a demanding one, and requires only that there be at least one issue, the resolution of which will affect all or a significant number of the putative class members. Display South, Inc. v. Graphics House Sports Promotions, Inc., 2007-0925 (La. App. 1st Cir. 6/6/08), 992 So. 2d 510, 518, writ not considered, 2008-1562 (La. 10/10/08), 993 So. 2d 1274. The mere existence of common questions, however, will not satisfy the "commonality" requirement. Commonality requires a party seeking certification to demonstrate the class members' claims depend on a common contention, and that common contention must be one capable of class-wide resolution — one where the "determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke." Price v. Martin, 79 So. 3d at 969.

The State Defendants allege that to prove commonality, the plaintiffs rely solely on allegations that the State Defendants engaged in a "common scheme" to defraud the plaintiffs. The State Defendants complain that the plaintiffs' allegations are conclusory and that the plaintiffs are unable to prove that the same set of operative facts would be offered for every member of the putative class. Specifically, the State Defendants cite to testimony given by an expert at the class certification hearing on December 20, 2010, wherein the expert allegedly proved that there were two distinct classifications of plaintiffs: those who would have viable claims against the State Defendants, and those who would not.¹⁰

10 An expert for the State Defendants, in the field of statutory accounting practices, testified regarding plaintiffs who made premium payments between October 31, 1989 and May 15, 1991. The plaintiffs alleged that it was during this period that the Commissioner of Insurance should have closed the failing insurance companies when he learned the companies were insolvent, but instead, allowed individuals to purchase policies and make premium payments during this time. The State's expert testified that the plaintiffs could be divided into two groups: those who made payments after October 31, 1989, and those that did not. The State Defendants argue that the plaintiffs who did not make any sort of premium payments after October 1989 do not have any viable claims against the State Defendants because those payments would have occurred outside of the period during which the plaintiffs alleged the Commissioner of Insurance was aware that the companies were insolvent.

The Insurer Defendants argue that there is no common nucleus of facts in this matter, and that each plaintiff would have to put on evidence regarding whether certain actions of the Insurer Defendants constituted fraud or negligence; when such actions occurred; demonstrate what knowledge each had at the time the financial instruments were purchased; and show what information each relied upon in purchasing the financial instruments. Additionally, the Insurer Defendants contend that the number of insurers involved, issues regarding the potential trigger of coverage, and the multitude of policies at issue in this case require that the trial court conduct an individualized inquiry into the claims of each plaintiff, such that the commonality requirement for class certification is not met.

The defendants are united in their contention that allegations of fraud, i.e., individual issues of reliance on the defendants' conduct and representations, defeat commonality. The defendants complain that the plaintiffs' claims — allegations of fraudulent, willful, reckless, and intentional conduct, and negligent misrepresentations made by the various defendants in this matter — make the case not suitable for treatment as a class action because those types of allegations require an examination of each individual plaintiff's claim. The defendants argue that class action certification is not proper in cases in which an intensive review of facts surrounding each class member is required. The defendants cite several cases in support of this proposition and rely primarily on Banks v. New York Life Ins. Co., 98-0551 (La. 7/2/99), 737 So. 2d 1275 (on rehearing), cert. denied, 528 U.S. 1158, 120 S.Ct. 1168, 145 L.Ed.2d 1078 (2000), in support of their argument that the plaintiffs failed to satisfy the commonality requirement for class certification.

In Banks v. New York Life Ins. Co., the plaintiffs filed suit on behalf of those who had purchased life insurance from New York Life Insurance Company. The plaintiffs alleged various acts of fraud and negligent misrepresentations against New York Life Insurance Company and its agents. Illustrations such as charts and explanatory brochures were used by agents in their life insurance sales presentations. The misrepresentations in that case were allegedly written in the illustrations and based upon oral statements by the individual insurance agents to the plaintiffs. The Banks court found that the trial court would be required to scrutinize each plaintiff's case individually to determine whether the oral representations were at odds with the written disclosures and analyze whether the plaintiffs relied upon oral statements, written materials, or both. The Banks court concluded that there were too many individual issues affecting the liability of New York Life Insurance Company and its agents in that case to find that common issues predominated over individual liability issues. See Id. at 1278, 1281-83.

Banks v. New York Life Ins. Co. is distinguishable from the instant case, however. That case involved approximately 1,000 insurance agents who sold 101,109 policies to Louisiana residents, 1,850 of whom comprised the class. Id. at 1278. The present case does not involve such a large number of subjective inquiries. Additionally, we note that this case does not involve fraudulent misrepresentations or any oral representations made by agents of the defendants selling insurance or other investment instruments to the individual insureds, i.e., the putative class members. See Thibodeaux v. Louisiana Citizens Prop. Ins. Corp., 2010 WL 502797, at *4. Furthermore, the plaintiffs' allegations in this matter are not limited to individualized allegations of fraud. The plaintiffs have alleged that the defendants initiated a fraudulent scheme to manipulate the plaintiffs' assets. The plaintiffs have also alleged that the State Defendants had a duty to not knowingly violate their own statutes and regulations.

Recently, this court upheld a trial court's class certification upon a finding that the plaintiffs shared the common issue of the loss of financial assets due to a fraudulent investment scheme perpetrated by an entity that had allegedly not been properly regulated by a state agency, OFI. In Lillie v. Stanford Trust Company, 235 So. 3d at 1142-43, the putative class members claimed that investment advisors working for Stanford Trust Company induced the plaintiffs to invest either directly in certificates of deposit ("CDs") or to designate Stanford Trust as the custodian of their income retirement accounts ("IRAs"), whereby Stanford Trust converted the funds in the IRAs into CDs held by another company, Stanford International Bank Ltd. ("SIB"). Following the 2008 financial crisis, Stanford Trust collapsed and SIB was dissolved, causing the plaintiffs to suffer significant financial losses. The plaintiffs alleged OFI allowed the CDs to be marketed and sold without proper examination of the risk profile of the CDs or assurances that such information was being disclosed to investors. Id. at 1143.

Following the trial court's class certification in Lillie v. Stanford Trust Company, OFI appealed and contended that the trial court erred in certifying the plaintiffs' class because they could not prove the commonality requirement, among other prerequisites. OFI argued that there was an alleged lack of commonality as to the representations made to each plaintiff and that the plaintiffs had a multitude of reasons for either investing directly in the CDs or placing their IRAs with Stanford Trust, whereby the funds were converted to CDs. Id. at 1145-46. This court affirmed the trial court's factual determination that the plaintiffs satisfied the commonality requirement, stating that "[w]hile the testimony of the plaintiffs who testified at the certification hearing varied as to how they came to invest in the [CDs] ..., they all testified that they had no knowledge of the true value of the CDs or the riskiness of the investment." Id. at 1150. This court continued:

Thus, although the evidence shows that there were differences in the manner in which the various plaintiffs came to invest in the [CDs], we fail to see how these differences change the fact common to all the plaintiffs — that they invested in the CDs under a false understanding of the value and safety of the investment. And while the OFI did not directly make any representations to the plaintiffs as to the value or risk of the [CDs], the question that remains and that is yet to be determined is whether any communication by the OFI of its concerns regarding the risk and value of the CDs, pursuant to its regulatory authority, would have come to the knowledge of the plaintiffs or otherwise impacted the representations made to the plaintiffs. As such, we find no error in the trial court's finding that the answer to the question of whether the OFI had a duty to disclose the riskiness of the CDs or to prohibit the sale of the CDs is equally common to all the proposed plaintiffs, such that in one stroke, it could determine the liability of the OFI as to all of the plaintiffs.

Id.

The same can be said in this case. Like in Lillie v. Stanford Trust Company, all of the plaintiffs in this case purchased annuities, life insurance policies, and corporate notes from companies who then allegedly criminally transferred funds out of those companies to invest in failing companies that later collapsed and caused the plaintiffs tremendous financial loss. Similarly, the State Defendants here allegedly acquiesced in, or failed to regulate, the actions of those companies. So, although the plaintiffs may have had different reasons for investing, invested in various financial instruments, and suffered varying types and degrees of damages, the common issue is that all suffered loss as a result of the alleged actions or inactions of the defendants in perpetration of the fraudulent scheme.

In its written reasons for ruling, the trial court discussed the commonality requirement:

Display South, Inc. [992 So. 2d 510, 518], dictates that "the test of commonality is not a demanding one, and requires only that there be at least one issue of law or fact, the resolution of which will affect all or a significant number of putative class members." Martello v. City of Ferriday 2001-1248 (La. App. 3 Cir. 3/6/02), 813 So.2d 467, 477[,] acknowledges "some [class members] may have only claims for lost personal expenses, whereas some may only have claims for lost business expenses.... These individual differences in the exact type or amount of damages do not preclude or defeat class certification." Therefore, in the instant case, in this [c]ourt's judgment, it is of little matter that there were different insurance policies and instruments in place and that the amount of damages [among] plaintiffs differs. What matters is that these instrument owners each lost money as a result of the alleged actions of the state criminally transferring funds out of companies plaintiffs invested in and putting those funds into failing companies that plaintiffs had no interest in, which, upon their failure, lost plaintiffs a great deal of money. Thus, the Display requirement that at least one issue of fact affects a significant number of class members seems to this [c]ourt to be clearly met.

As stated, the test of commonality is not demanding and merely requires that there be one issue, the resolution of which affects all or a significant number of the putative class members. See Display South, Inc. v. Graphics House Sports Promotions, Inc., 992 So. 2d at 518. The trial court found that the one issue common to the putative class members — the individual instrument owners — is that each lost money as a result of the alleged acquiesce of the State Defendants (namely, the DOI and OFI) in the actions of PILICO, PICO, and Midwest in criminally transferring funds out of their companies, in which the plaintiffs had invested, investing and using those funds to support affiliated, but legally distinct and failing companies that the plaintiffs had no interest in, and upon the collapse of those failing companies, causing the plaintiffs to lose a significant amount of money. We note the possibility that while some plaintiffs might fail to prevail on their individual claims, that possibility does not defeat class membership. See Duhé v. Texaco, Inc., 99-2002 (La. App. 3rd Cir. 2/7/01), 779 So. 2d 1070, 1080, writ denied, Duhé v. Texaco, Inc., 2001-0637 (La. 4/27/01), 791 So. 2d 637. Therefore, we find no manifest error in the trial court's factual determination that there are questions of law or fact common to the class. Based on our review of the record, a reasonable factual basis exists for the trial court's finding that the plaintiffs satisfied Article 591(A)(2)'s commonality requirement. The defendants' arguments that the plaintiffs failed to satisfy the commonality prerequisite for class certification are without merit.¹¹ Louisiana Code of Civil Procedure Article 591(A)(3) - Typicality

11 The State Defendants' Assignment of Error No. 1; the Insurer Defendants' Assignment of Error Nos. 1 and 2.

Louisiana Code of Civil Procedure article 591(A)(3) requires that the claims of the class representatives be a cross-section, or typical of, the claims of all class members. The test for typicality, like commonality, is not demanding. Typicality is satisfied if the representative plaintiffs' claims arise out of the same event or course of conduct as the other class members' claims and are based on the same legal theory. Display South, Inc. v. Graphics House Sports Promotions, Inc., 992 So. 2d at 518-19.

The State Defendants contend that the plaintiffs failed to satisfy the "typicality" requirement for class certification because the plaintiffs did not prove that the damages sustained by the class representatives were typical of the damages suffered by the class members. While all of the plaintiffs allegedly sustained financial losses, the plaintiffs alleged a wide array of property and personal injury damage including losses of homes, farms, businesses, income, profits, insurability, and emotional distress. The State Defendants complain that the uniqueness of damages claimed by the plaintiffs renders it impossible for the putative class representatives to adequately represent the other class members.

The Insurer Defendants allege the plaintiffs failed to satisfy the typicality requirement for class certification because the plaintiffs' claims arise out of multiple actions or inactions by different defendants and involve three distinct legal theories. Furthermore, the Insurer Defendants contend that there are multiple insurance policies issued by at least five separate insurers at issue in this lawsuit; therefore, the timing of each alleged action or inaction by the Insurer Defendants is relevant in determining which, if any, policy provides coverage for any of the plaintiffs' claims.

The trial court found that the typicality requirement was satisfied. While aware of the possibility of factual variations, the trial court concluded in its written reasons:

Display [South, Inc., 992 So. 2d 510,] holds that "the typicality element is satisfied if the claims of the representative party arise out of the same event, practice, or course of conduct that gives rise to the claims of the other class members and those claims are based on the same legal theory." 992 So.2d 510 at 518-19. In this case, plaintiffs' counsel argues that claims for loss of insurability, financial impairment, loss of creditworthiness, loss of a home, farm, or business, emotional distress or mental anguish represent differences in the degree and amount of damages all flow from the same source — the loss of plaintiffs' investments because of the State's actionable conduct, and that it is the loss in value of the instruments that is the predominant and common loss in this case. [...] Thus, this [c]ourt maintains that the jurisprudence supports a finding that the typicality prong is satisfied in this case because the losses are typical of the class all around and plaintiffs are suing defendants in tort because all experienced damages when defendants allegedly drained all of the assets out of the companies that plaintiffs had invested in, which resulted in those companies crumbling.

Again, the test for typicality is not demanding and merely requires that the claims of the class representatives arise out of the same event, practice, or course of conduct giving rise to the claims of other class members and are based on a legal theory. See Display South, Inc. v. Graphics House Sports Promotions, Inc., 992 So. 2d at 518-19; see also Stewart v. Rhodia Inc., 2011-0434 (La. App. 1st Cir. 3/14/12), 96 So. 3d 482, 495. The alleged event out of which the putative class representatives' and plaintiffs' claims arise is the State Defendants' acquiescence in various company owners' criminal plans to transfer funds out of the companies in which the plaintiffs had invested, investing and using those funds to support failing companies, which ultimately collapsed and caused the plaintiffs to lose money. The fact that the damages of each plaintiff may differ does not defeat typicality. In Lillie v. Stanford Trust Company, 235 So. 3d at 1152, this court emphatically stated that "varying degrees of damages or the fact that class members must individually prove their right to recover are not grounds for denying class certification."

Furthermore, the Insurer Defendants' arguments regarding potential policy coverage is ancillary to the class certification motion. The issue of if, and when, coverage under any applicable insurance policy was triggered would be more appropriately resolved in a third-party demand by the Insurer Defendants against the State Defendants for a subrogation claim, should the plaintiffs prevail on their underlying claims and the Insurer Defendants be ordered to pay for losses caused by the State Defendants.

Therefore, we find no manifest error in the trial court's factual determination that the class representatives' claims are typical of the claims of all class members. Based on our review of the record, a reasonable factual basis exists for the trial court's finding that the plaintiffs satisfied Article 591(A)(3)'s typicality requirement. The defendants' claims that the plaintiffs failed to satisfy the typicality prerequisite for class certification are without merit.¹² Louisiana Code of Civil Procedure Article 591(A)(4) - Adequate Representation

12 State Defendants' Assignment of Error No. 1; Insurer Defendants' Assignment of Error No. 3.

The "adequate representation" requirement found in La. Code Civ. P. art. 591(A)(4) requires the parties seeking to maintain a class action to demonstrate that the representative parties will fairly and adequately protect the interests of the class. The test often used for determining adequate representation consists of three elements: (1) the chosen class representatives cannot have antagonistic or conflicting claims with other members of the class; (2) the named representatives must have a sufficient interest in the outcome to insure vigorous advocacy; and (3) counsel for the named plaintiffs must be competent, experienced, qualified, and generally able to conduct the proposed litigation vigorously. Singleton v. Northfield Ins. Co., 2001-0447 (La. App. 1st Cir. 5/15/02), 826 So. 2d 55, 64, writ denied, 2002-1660 (La. 9/30/02), 825 So. 2d 1200.

The defendants contend that the putative class representatives' testimony demonstrates a general lack of knowledge of the individual members' investments, motives for investing, reliance, and damages sustained. The Insurer Defendants argue that the proposed class consists solely of the plaintiffs from prior individual cumulated and consolidated actions, all of whom are already joined as litigants in this matter. Thus, the Insurer Defendants allege that class representatives are unnecessary. Instead, the Insurer Defendants argue that the plaintiffs attempted to certify a class and prove their claims utilizing proposed sub-class representatives who lack knowledge of the claims of the individuals the representatives purport to represent. The Insurer Defendants argue that the testimony of the class representatives demonstrates that the putative class representatives will be unable to adequately represent the sub-classes and class as a whole because the putative class representatives did not sustain all of the individualized losses alleged by the putative class members and were unable to identify in their testimonies individual class members that did sustain any particular losses.

Applying the adequate representation factors to the facts of this case, the trial court found in its written reasons:

In regard to element one, plaintiffs do not have conflicting claims because the events which unfolded arise out of the same common nucleus of operative [facts] in that each plaintiff suffered a patrimonial loss because of the alleged conduct of the defendants. In regard to element two, we find persuasive both the length of the litigation itself and the fact that approximately seventy plaintiffs who have died have, through their estates, filed motions to substitute, thus continuing the litigation. Finally, regarding element three, to this [c]ourt's knowledge, there have been no allegations of lawyers being incompetent to represent the parties. As there have been over ten attorneys working together on the plaintiffs' side, and five or six currently working on this case, pooled together there should be little doubt of competency, experience, and qualifications.

We find no manifest error in the trial court's factual determination that the class representatives will fairly and adequately protect the interests of the class. We can find no statutory or jurisprudential rule that requires a class member to have personal or detailed knowledge of other class members' claims. Representation is rendered inadequate only when differences between class members and their representatives create conflicts among the members' interests and the representatives' interests. See Singleton v. Northfield Ins. Co., 826 So. 2d at 64. There is no indication from the record that different types of investments or damages suffered by class members and their representatives create a conflict of interest between the class and the representatives. Based on our review of the record, a reasonable factual basis exists for the trial court's finding that the plaintiffs satisfied Article 591(A)(4)'s adequate representation requirement. The defendants' arguments that the plaintiffs failed to satisfy the adequate representation prerequisite for class certification are without merit.¹³ Louisiana Code of Civil Procedure Article 591(A)(5) - Objectively Definable Class

13 State Defendants' Assignment of Error No. 1; Insurer Defendants' Assignment of Error No. 4.

The "objectively definable class" requirement found in La. Code Civ. P. art. 591(A)(5) requires that the plaintiffs demonstrate that the class may be defined objectively in terms of ascertainable criteria, such that the court may determine the constituency of the class for purposes of the conclusiveness of any judgment that may be rendered in the case. A class definition provides the framework against which the court can apply the statutory requirements in order to determine whether a class action may be maintained. The parties seeking certification must be able to establish a definable group of aggrieved persons based on objective criteria derived from the operative facts of the case. The requirement that there be a class capable of definition ensures that the proposed class is not amorphous, vague, or indeterminate. Any subdivisions may be based upon geographical subgroupings, subgroupings by type of injury alleged, exposure, and other factors as may become apparent as a case management order is formulated, and the litigation progresses. Stewart v. Rhodia Inc., 96 So. 3d at 488.

The trial court in its written reasons found the plaintiffs satisfied the objectively definable class requirement for class certification, reasoning:

Display [South, Inc., 992 So. 2d at 520] holds that "the requirement that there be a class capable of [definition] ensures that the proposed class is not amorphous, vague, or indeterminate. A person should be able to determine readily if he or she is a member of the class.["] This is probably the easiest requirement to meet. ... This [c]ourt believes that the proposed class description gives enough [detail] that one could determine quickly whether or not one is a member of that class. The proposed class seems very straightforward: one either knows that they were involved in this suit or they were not involved in this suit. Thus, this [c]ourt finds that this element is satisfied.

Based on our review of the record, a reasonable factual basis exists for the trial court's finding that the plaintiffs satisfied Article 591(A)(5)'s objectively definable class requirement. Accordingly, we find no manifest error in the trial court's factual determination that the plaintiffs have demonstrated that the proposed class may be defined objectively in terms of ascertainable criteria. The State Defendants' contention that the plaintiffs failed to satisfy the objectively definable class prerequisite for class certification is without merit.¹⁴ Louisiana Code of Civil Procedure Article 591(B)(3) - Predominance and Superiority

14 The State Defendants' Assignment of Error No. 1. The Insurer Defendants do not challenge the trial court's factual determination that the plaintiffs satisfied Article 591(A)(5)'s "objectively definable class" requirement.

According to the additional "predominance" and "superiority" requirements found in La. Code Civ. P. art. 591(B)(3), the plaintiffs must prove that "the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy." See Thibodeaux v. Louisiana Citizens Prop. Ins. Corp., 2010 WL 502797, at *3.

Article 591(B)(3) lists six factors that are "pertinent to" a finding of "predominance" and "superiority":

(a) The interest of the members of the class in individually controlling the prosecution or defense of separate actions;

(b) The extent and nature of any litigation concerning the controversy already commenced by or against members of the class;

(c) The desirability or undesirability of concentrating the litigation in the particular forum;

(d) The difficulties likely to be encountered in the management of a class action;

(e) The practical ability of individual class members to pursue their claims without class certification;

(f) The extent to which the relief plausibly demanded on behalf of or against the class, including the vindication of such public policies or legal

rights as may be implicated, justifies the costs and burdens of class litigation[.]

The defendants ultimately argue that class action certification is not the superior method for adjudicating this case and will not serve to promote judicial efficiency and fairness, contending that the plaintiffs' motive in seeking class action certification — fifteen years after the institution of this action and nine supplemental and amending petitions later — is that plaintiffs' counsel have had difficulty in communicating with a large number of their clients and have been unable to settle this litigation since they need specific authority from each client to do so.¹⁵

15 The State Defendants' Assignment of Error No. 2. The Insurer Defendants do not assign error to the trial court's factual determination that the plaintiffs satisfied Article 591(B)(3)'s additional requirements of "predominance and superiority." The Insurer Defendants did, however, present arguments relating to these requirements, which this court considered in its analysis. --------

The trial court underwent a complete analysis of the six factors set forth in Article 591(B)(3)(a)-(f). As to factor (a), the trial court reasoned: "the fact that plaintiffs gave written permission to the attorneys to convert the case to a class action illustrates that the class [members] do not have an interest in individually adjudicating." We can find no manifest error in the trial court's factual determination as to this element.

With regards to factor (b), the trial court concluded: "[t]he First Circuit in the present case previously stated that there is no danger of a multiplicity of lawsuits from these events, which satisfies this prong." As noted by the trial court, we stated in our prior opinion: "[T]here is no risk of a multiplicity of lawsuits in this situation, because all of the proposed class members are already plaintiffs in this litigation and the prescriptive period on other claimants has run ...." Abshire II, 2013 WL 6712235, at *14. We can find no manifest error in the trial court's factual determination as to this element.

Considering factor (c), the trial court stated: "[i]n the instant case, there is no indication of requests for change of venue aside from a failed attempt at removal, thus leaning in favor of this prong." We can find no manifest error in the trial court's factual determination as to this element.

As to factor (d), the trial court reasoned:

Realistically, every case has its own set of management problems. This case [has] been under the management control of PMAG for years, but because it would be unethical to continue representation in this manner due to a change in the Louisiana Rules of Professional Conduct, the claims must be managed individually. Though this makes management more difficult, there is no argument that the management creates irreconcilable difficulties. Since the Louisiana Supreme Court held in [McCastle v. Rollins Envtl. Servs. of Louisiana, Inc., 456 So. 2d 612, 620 (La. 1984)] that errors of certification should be "made in favor of, and not against the maintenance of the class[,]" and acknowledged that in every case there will be management problems, the instant case seems to pass this factor.

We can find no manifest error in the trial court's factual determination as to this element.

With regards to factor (e), the trial court concluded:

[T]his [c]ourt previously said that a class action is the only thing that could preserve this case for absent parties. Moreover, due to the change in the ethics rule, the attorneys, in order to obtain authority to settle the case on behalf of their clients, must convert the case into a class action. This [c]ourt finds that [f]actor (e) is satisfied due to [the] constraints that make a class action the most viable procedural device for this situation.

We can find no manifest error in the trial court's factual determination as to this element.

Finally, considering factor (f), the trial court stated: "aiding in the resolution of allegations of state corruption would qualify as a vindication of public policy." We can find no manifest error in the trial court's factual determination as to this element.

When a common character of rights exists, a class action is superior to other available adjudicatory methods for the purpose of promoting the basic goals of a procedural device: 1) implementing the substantive law at issue in the case; 2) providing judicial efficiency in carrying out the substantive law; and 3) insuring individual fairness to all parties involved. If the superiority of a class action is disputed, the trial court must inquire into the aspects of the case and decide whether some other procedural device would better serve these goals. McCastle v. Rollins Envtl. Servs. of Louisiana, Inc., 456 So. 2d at 616-17; Mire v. EatelCorp Inc., 2002-0737, 2002-1705 (La. App. 1st Cir. 5/9/03), 849 So. 2d 608, 614, writ denied, 2003-1590 (La. 10/3/03), 855 So. 2d 317. Considering the trial court's well-reasoned conclusions in light of the record before us, we cannot say the trial court manifestly erred in its factual determination that a class action is the superior procedural device to achieve the goals of individual fairness, judicial efficiency, and proper application of the law in this matter. This assignment of error is without merit.

CONCLUSION

The plaintiffs were required to prove the five prerequisites for class action certification as set forth in La. Code Civ. P. art. 591(A), as well as prove that questions of law or fact common to the members of the class predominate over individual issues and that the class action is superior to any other procedural method for resolving the controversy fairly and efficiently, as set forth in La. Code Civ. P. art. 591(B)(3). Based on our review of the record, we cannot say that the trial court erred in its factual determination that the plaintiffs satisfied the statutory requirements for class action certification found in La. Code Civ. P. art. 591. Furthermore, based on the trial court's well-reasoned analysis regarding the implementation of substantive law, the effectuation of judicial efficiency, and the promotion of individual fairness, we conclude that the trial court did not abuse its discretion in ultimately deciding to certify the class. Therefore, the trial court's September 14, 2016 judgment certifying the plaintiffs' class action is hereby affirmed. We note, however, that the trial court can revisit or modify its decision regarding class certification if later developments so require. See La. Code Civ. P. art. 592(A)(3)(d).

The trial court's September 14, 2016 judgment certifying the plaintiffs' class action is hereby affirmed. All costs of this appeal, in the amount of $3,514.50, are cast to the defendants-appellants: the State of Louisiana, through the Department of Insurance; the State of Louisiana, through the Division of Administration, Office of Risk Management; the State of Louisiana, through the Office of Financial Institutions; Admiral Insurance Company; Lexington Insurance Company; National Union Fire Insurance Company of Pittsburgh, PA; and, Westchester Fire Insurance Company.

AFFIRMED.

Abshire II, 2013 WL 6712235, at *4.

This court considered the plaintiffs' second assignment of error, whether the trial court applied incorrect evidentiary standards at the class certification hearings, resulting in the improper exclusion of certain documents offered for the purpose of demonstrating the existence of the requisite elements for class certification; specifically, the trial court's exclusion of two documents: a report by the Office of State Inspector General and a deposition of the former Inspector General. This court held that the trial court erred in excluding the two documents, reasoning that to the extent the documents allowed the trial court to make a meaningful determination as to whether there were questions of law or fact common to the class and that those questions predominated over questions affecting only individual members, the documents were admissible for the limited purpose of the class certification hearing. Abshire II, 2013 WL 6712235, at *16-17.

This court pretermitted discussion of the plaintiffs' third and fourth assignments of error since the trial court did not undergo a full analysis of whether the plaintiffs met all of the prerequisites and additional requirements imposed by law for class action certification. Abshire II, 2013 WL 6712235, at *14.