In Gunnells v. Fidelity Group, Inc., No. 01-2419 (4th Cir. Oct. 30, 2003), the Court, in an interlocutory appeal, affirmed the trial court's partial certification of a class action in a suit brought by purchasers and beneficiaries of a multi-employer health care plan for claims growing out of the plan's collapse.
The complaint alleged causes of action for negligent undertaking, fraud, negligent misrepresentation, breach of contract, civil conspiracy, and violations of the South Carolina Unfair Trade Practices Act.
The trial court refused to certify any class action claims under the S.C. Unfair Trade Practices Act. However, the court conditionally granted plaintiffs' motion for class certification with respect to their management claim against the third party claims administrator, allowing the class to pursue a single claim: that it violated its duties, both contractual and at law, as third party administrator of the plan and such such conduct was a cause of the plan's failure.
In a lengthy dissent, Judge Niemeyer blasted the majority's approach, stating among other things that:
As a result of the majority’s limited focus on the facts related to a single issue in this case, it has left a difficult and complex procedural structure created by the need to try numerous individual claims
for each class member that will result in an unnecessary, and ultimately unhelpful, procedural nightmare. And on a broad judgment level, one has to question the utility of enduring this procedural
morass for the purpose of answering the single question certified for class treatment: whether TPCM’s mismanagement was a cause of the Plan’s failure. Answering this question resolves no class member’s
claim and only invites the difficult questions of how to proceed once the question is answered. Little, if any, time or effort can be saved by answering this question in the abstract because full individual trials
on liability will still have to be conducted for each individual class member.
