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Class Action Defense Cases—California Court Of Appeal Grants Defense Request For Rehearing In Ticconi v. Blue Shield Class Action

Following its Original Panel Opinion Reversing Trial Court Denial of Plaintiff’s Class Action Certification Motion, California Court of Appeal Grants Defense Petition for Rehearing in Ticconi v. Blue Shield Class Action

The Los Angeles Times reports today that the California Court of Appeal has agreed to reconsider its opinion in Ticconi v. Blue Shield of Cal. Life & Health Ins. Co., 157 Cal.App.4th 707, 68 Cal.Rptr.3d 785 (Cal.App. 2007), which reversed a trial court order denying class action status to a lawsuit against Blue Shield. Our summary of the original appellate opinion in that putative class action, as well as the opinion itself, may be found here. As Times Staff Writer Lisa Girion explains, the prior decision “opened the door to class-action lawsuits by policyholders who had been dropped after they filed claims for medical care.” The underlying class action complaint alleged that Blue Shield wrongfully rescinded insurance coverage based on fraudulent statements in insurance policy applications, and the trial court denied class action status to the lawsuit on the grounds the individual issues related to Blue Shield’s fraud and unclean hands defenses would predominate over common issues. Ticconi, at 789. The Court of Appeal, in an decision handed down on December 4, 2007, had reversed, holding that the trial court erred in denying class action treatment because “[e]quitable defenses cannot be used to defeat a UCL cause of action and Blue Shield Life may not raise the defense of fraud based on statements that insureds made in an application for insurance where the application had been neither attached to nor endorsed on the policy when issued.” Ticconi, at 789 (citations omitted). Accordingly, “the diverse facts making up Blue Shield Life’s fraud and unclean hands defenses [were] not to be factored in when determining whether the community of interest requirement is met.” Id., at 798.

Ms. Girion’s article, entitled “Insurer wins a reprieve on class actions,” may be found in the Business Section of the January 5, 2008 edition of the Los Angeles Times. The order granting rehearing was entered by the Court of Appeal on January 3, 2008.