A federal judge will allow a Black and Latino queer couple to continue to press their race and gender discrimination lawsuit against insurer Liberty Mutual.
But the judge said the couple shouldn't be allowed to serve as the lead plaintiffs in a proposed class action, because they canceled their policies and aren't at any more risk of alleged discrimination from Liberty Mutual when they submit insurance claims moving forward.
U.S. District Judge Elaine Bucklo issued an opinion June 10 sustaining the ability of plaintiffs Terrie Sullivan and Veronica Rodriguez, a married Evanston couple, to continue to pursue their federal and state law discrimination lawsuit. Sullivan is a Black queer woman, while Rodriguez is a Latino American queer woman. Attorneys with the firm of Jaszczuk P.C., of Chicago, represent the women.
Daniel Schlessinger
| Jaszczuk P.C.
The couple’s conflict with Liberty Mutual began when they filed a claim on their homeowners’ policy in November 2020. They allege the company improperly denied coverage and drastically underpaid them when it finally approved the claim, said a contractor passed along to them hateful language from a claims adjuster and accused the company of failing to properly investigate their complaints.
Class allegations, according to the initial lawsuit, arise from “pervasive discrimination by claims handlers,” which the women said “leaves countless rightful claims unpaid, leads to further property damage and causes unnecessary emotional distress.”
In arguing for dismissal, Liberty Mutual said the women lack standing because they canceled their policy before filing their lawsuit, which means they can’t be subjected to legal harm going forward, with or without the injunction they requested.
Bucklo said it is too soon in the process to toss out the couple's individual discrimination claims, rejecting Liberty Mutual’s attempt to end allegations it violated the Fair Housing Act as well as state contract, discrimination and insurance law.
While the company argued the women didn’t adequately allege intentional discrimination, or that they might’ve been treated differently but for their race and orientation, Bucklo said the statements they attribute to their initial adjuster, Colby Sherbafi, “evince animus” based on those qualifiers.
In May 2021, the couple said their contractor allegedly told them the adjuster referred to Sullivan as a “nigger-carpet muncher” and said Sullivan was “ ‘too aggressive,’ a common racial stereotype leveled against Black women.” The complaint further asserted the adjuster referred to Rodriguez as a “dumb Puerto Rican bitch.”
Bucklo also noted the company initially denied the couple’s claim for damage from an overflowing toilet based on a faulty basement sump pump — when they had neither a basement nor a sump pump — “raises the specter of pretext. These allegations, taken together with the complaint’s remaining allegations and construed in the light most favorable to plaintiffs, raise a sufficient inference of both discrimination and a nexus to defendant’s alleged misconduct to entitle plaintiffs to discovery. None of the cases defendant cites compels a contrary conclusion.”
Liberty Mutual also said the couple’s Illinois Human Rights Act violations should be dismissed because they didn’t exhaust administrative remedies before filing their lawsuit. Bucklo said that position can be used as an affirmative defense, but doesn’t constitute grounds for dismissal as a jurisdictional flaw.
Bucklo noted the women content their IHRA allegations arise under an article of that law that isn’t subject to a requirement of exhausting administrative remedies. In response, Liberty Mutual said the type of claim isn’t assertable under that article. While that “argument may ultimately have merit,” Bucklo wrote, “it is not obvious from the face of plaintiffs’ complaint, and because defendant first raised the argument in its reply, I decline to resolve the issue at this stage.”
Likewise, Bucklo continued, it is too early to resolve the breach of contract and bad faith claims. Liberty Mutual said the women didn’t file their claims within their policy’s 12-month window specifically because they didn’t do so in the form the policy required, “but this argument, too, is an affirmative defense resting on facts outside of the complaint.”
The judge, however, said the couple's decision to dump their policy with Liberty Mutual dooms their attempt to serve as the lead plaintiffs in the proposed class action.
Because the women are no longer Liberty Mutual customers, the judge said, Liberty Mutual cannot harm them. So the couple has no standing to pursue any claims for an injunction against the insurer, the judge said.
And without the injunctive relief claims, there can be no class action, Bucklo wrote.
To back her finding, Bucklo quoted from Holmes v Fisher, a 1988 decision from the U.S. Seventh Circuit Court of Appeals. In that decision, the court wrote: "To permit the certification of a class headed by a 'representative' who did not have a live controversy with the defendant on the day the suit began would be to jettison the last vestiges of the case-or-controversy requirement in class actions."
"Similarly here, to the extent there is merit to plaintiffs’ claim that their injuries are the result of ongoing discriminatory conduct by defendant, an action to enjoin those practices must be pursued, if at all, by a litigant who is at risk of future injury," Bucklo wrote.
Liberty Mutual has been represented by attorneys Joseph A. Cancila, Sondra A. Hemeryck, Amy C. Andrews and Monique B. Howery, of the firm of Riley Safer Holmes & Cancila, of Chicago; and Kenneth Clark Schirle, Jonathan Kevin Barger and Joseph Anthony Steadman, of Butler Weihmuller Katz & Craig, of Chicago.
The plaintiffs are represented by attorneys Daniel I. Schlessinger, Martin W. Jaszczuk, Margaret M. Schuchardt, Seth H. Corthell and Tamra J. Miller, of the Jaszczuk firm.
Jonathan Bilyk contributed to this report.