A federal judge won’t let GEICO customers continue their class action alleging the insurer overcharged customers for auto insurance during the early months of the Covid pandemic when traffic numbers on the roads dropped dramatically.
In late July 2020, attorneys filed class action lawsuits in Cook County Circuit Court and Chicago federal court, targeting insurers American Family, GEICO, Allstate and Progressive. The complaints commonly centered on the insurers’ premium relief in the wake of social and economic activity restrictions Gov. JB Pritzker imposed earlier that year.
The lawsuits targeting GEICO centered on GEICO's offer of a 15% credit on auto policies renewed between April 8, 2020, and April 7, 2021.
One of those lawsuits was filed by attorneys with the firm of Romanucci & Blandin on behalf of named plaintiffs Roxanne and James Thomas, who became GEICO customers in 2013. They said GEICO failed to offer retroactive relief for premiums paid when vehicle risk was calculated under the entirely different context of pre-pandemic traffic and alleged the giveback program didn’t keep the company from realizing “a windfall of revenue.”
The plaintiffs had sought permission to move forward with the case on behalf of GEICO customers throughout Illinois. They were now joined in the action by additional plaintiffs, represented by attorneys with the firms of Stephan Zouras, of Chicago, and Nicholas Kaster, of Minneapolis. Lawyers from all three firms sought to be named class counsel, meaning they would all represent plaintiffs and all be in line for potential fees from a judgment or settlement.
The plaintiffs’ expert, Bernard Birnbaum, offered what he called a “reasonable rate” calculation to determine what he claimed GEICO should have charged for policies in effect on or after March 21, 2020. GEICO didn’t challenge Birnbaum’s qualifications, but said his methodology is unreliable because, as Coleman wrote, “insurers usually issue premiums by assessing future risks based on information they know at that given time.”
In support of Birnbaum’s testimony, the Thomases argued he used the same methodology GEICO deployed for the giveback program and positioned his calculations, not as retroactive application of premium math, but as a prospective reconsideration of how much money GEICO decided to return to policyholders.
“Avoiding semantics,” Coleman wrote, “(private passenger automobile) rates determine future costs, while Birnbaum’s methodology seeks to calculate returns. The two are hardly one in the same. The court does not disagree with the accuracy of the methodology or its conclusion, but the court cannot rule that Birnbaum’s methodology is sound when the plaintiffs only attempt to support half of his methodology.”
Coleman further said the Thomases failed, through filings and during oral arguments, to show how Birnbaum’s report cited any recognized approach for the concept of “reasonable premium relief.” She said the plaintiffs have the obligation to prove an assertion Birnbaum’s work is supported by or rooted in insurance industry standards, and refused to accept as binding a 2022 lawsuit GEICO faced in California federal court.
Regarding class certification, Coleman noted the Thomases proposed an “unfairness” class of 300,000 GEICO customers and a “deception” class of about 6,000. While she agreed there are common questions applying to the “unfairness” group, she said that wasn’t true of the “deception” class, which would constitute people who allege they relied on GEICO’s website explaining the giveback terms.
The questions for the smaller class, Coleman said, merely recite elements of state consumer fraud law claims and fall short of demonstrating the extent of legal injury common to every prospective member.
GEICO also challenged the ability of James Thomas to serve as a class representative based on his testimony, but Coleman said the question of whether his remarks change the nature of his claims isn’t suitable until the case advances to the merits stage.
However, because she struck Birnbaum’s calculations, Coleman also determined the plaintiffs lack a damages model and therefore cannot meet predominance requirements for class certification. She granted the Thomases 30 days to amend their complaint.
GEICO did not respond to a request for comment on the ruling.