In the
United States Court of Appeals
For the Seventh Circuit
No. 09-1725
C YNTHIA K ARTMAN, et al.,
Plaintiffs-Appellees,
v.
S TATE F ARM M UTUAL A UTOMOBILE
INSURANCE C OMPANY, et al.,
Defendants-Appellants.
Appeal from the United States District Court
for the Southern District of Indiana, Indianapolis Division.
No. 1:07-cv-00474—William T. Lawrence, Judge.
A RGUED S EPTEMBER 16, 2009—D ECIDED F EBRUARY 14, 2011
Before C UDAHY, W OOD , and S YKES, Circuit Judges.
S YKES, Circuit Judge. After a severe hailstorm struck
central Indiana in April 2006, thousands of homeowners
filed claims with State Farm Fire and Casualty Company 1
1
The defendants include the insurer State Farm Fire and
Casualty Company, as well as its affiliates State Farm Mutual
(continued...)
2 No. 09-1725
for hail damage to the roofs of their homes. State
Farm thereafter paid millions in property-damage
claims, but not all of the policyholders were satisfied
with their payments. Several brought this proposed class
action in state court alleging breach of contract, bad-faith
denial of insurance benefits, and unjust enrichment.
The lawsuit sought damages and an injunction requiring
State Farm to reinspect all class members’ roofs pursuant
to a “uniform, reasonable, and objective” standard for
evaluating hail damage. State Farm removed the case to
federal court.
The plaintiffs moved to certify a damages class under
Rule 23(b)(3) of the Federal Rules of Civil Procedure and
also—or alternatively—a class for injunctive relief under
Rule 23(b)(2). The district court issued a split decision on
the motion. The court declined to certify a Rule 23(b)(3)
damages class, holding that each plaintiff’s claim of
underpayment required an individualized factual
inquiry on the merits. But the court concluded that a
class claim for injunctive relief could proceed under
Rule 23(b)(2); the court certified a class to deter-
mine whether State Farm should be required to reinspect
policyholders’ roofs pursuant to a “uniform and objective
standard.” State Farm appealed, arguing that certifica-
tion under Rule 23(b)(2) is not permissible for this action.
1
(...continued)
Automobile Insurance Company and State Farm General
Insurance Company. State Farm Fire and Casualty Company
issued the homeowner’s policies at issue in this case. We
use “State Farm” to refer collectively to all three defendants.
No. 09-1725 3
State Farm is right. This case is not appropriate for
class certification under Rule 23(b)(2). As an initial
matter, the plaintiffs’ claim for injunctive relief suffers
from some serious conceptual confusion. This is a suit
for breach of contract and bad-faith denial of insurance
benefits, the remedy for which is damages. State Farm
had a contractual obligation to pay policyholders for
their hail-damage losses and a corresponding duty in
tort not to deny claims in bad faith. But there is no
contract or tort-based duty requiring the insurer to use
a particular standard for assessing hail damage. As
such, there is no independent cognizable wrong to
support a claim for injunctive relief requiring State
Farm to conduct a class-wide roof reinspection pursuant
to a “uniform and objective” standard.
More generally, certification of a class under
Rule 23(b)(2) is permissible only when class plaintiffs
seek “final injunctive relief” that is “appropriate re-
specting the class as a whole.” FED. R. C IV. P. 23(b)(2).
Here, the requested injunction is neither “appropriate”
nor “final.” The relief is not appropriate for several rea-
sons, not least of which is that the normal remedy
for wrongful denial of insurance benefits is damages,
not equitable relief. Moreover, the injunction envisioned
by the plaintiffs would in no sense be a final remedy.
A class-wide roof reinspection would only lay an evi-
dentiary foundation for subsequent individual deter-
minations of liability and damages.
Finally, certification of an “issues” class under
Rule 23(c)(4) is neither sought nor appropriate here. The
4 No. 09-1725
particular standard State Farm used to evaluate policy-
holders’ hail damage is not an element of any case pre-
sented by these plaintiffs for final injunctive relief. In
some circumstances, the applicable standard of care
might be a proper separable issue, but in this case, the
ultimate relief sought is money damages, and thus the
requirements for certification of a damages class under
Rule 23(b)(3) must be satisfied. Here, they were not.
Accordingly, we reverse the district court’s order and
remand with instructions to decertify the class.
I. Background
State Farm issues homeowner’s insurance providing
coverage for “accidental direct physical loss to property,”
including damage resulting from windstorms or hail.
In April 2006 a severe hailstorm swept through the India-
napolis metropolitan area causing widespread property
damage. Some 49,000 State Farm policyholders filed
claims for property damage as a result of the storm. Claims
under homeowner’s policies were adjusted based on
individualized assessments of the homeowner’s prop-
erty damage. State Farm has guidelines to aid adjustors
in determining a homeowner’s loss but does not use a
single, uniform test for assessing hail damage.
Once an adjustor provides a property-damage esti-
mate, the policyholder is permitted to contest that
decision in several ways. First, an insured may request
that another insurance adjustor provide an independent
evaluation. Also, specifically for losses in connection
with the April 2006 hailstorm, State Farm permitted
No. 09-1725 5
dissatisfied policyholders to challenge their damage
estimates in arbitration proceedings.2 Through March 18,
2008, State Farm used these procedures to adjust and
pay more than $263 million in property-damage claims
resulting from the hailstorm.
In March 2007 several policyholders filed this lawsuit
in state court asserting claims for breach of contract, bad-
faith denial of insurance benefits, and unjust enrich-
ment arising out of State Farm’s adjustment of their
claims for hail damage to the roofs of their homes. The
suit was brought as a class action on behalf of approxi-
mately 7,000 policyholders and alleged that State Farm
engaged in pervasive undercompensation of roof-
damage claims stemming from the April 2006 hailstorm.
As part of their theory that State Farm breached its con-
tract and tort-based duties to policyholders, the plain-
tiffs alleged that the insurer failed to implement a
uniform “reasonable, objective” standard for assessing
hail-damaged roofs.
To highlight the problems associated with State Farm’s
ad hoc method for evaluating hail-damage claims, the
plaintiffs cited the experiences of class representatives
Karen Stergar and Hong Gao.3 Stergar alleged that when
2
Initially, the arbitration results were binding on all parties.
However, in January 2007 State Farm revised this policy so
that the arbitration results were only binding on State Farm.
3
Throughout the course of this litigation, the number of named
plaintiffs has not remained constant. At the time this appeal
was filed, 17 named plaintiffs remained, including plaintiff
(continued...)
6 No. 09-1725
she submitted her claim, State Farm sent several
insurance adjustors to assess her roof damage and all
provided vastly different opinions. Stergar claims that
the first adjustor did not even step out of his car, yet
determined the claim was only worth $700. Dissatisfied
with this offer, Stergar requested another opinion.
State Farm then sent a second adjustor who climbed on
the roof and suggested that Stergar needed an “entire
new roof,” but stated that he could not provide a com-
pensation figure until a “ropes-and-ladders team” exam-
ined the damage. When the ropes-and-ladders team
arrived, it disagreed with the second adjustor’s
opinion and concluded instead that Stergar’s roof sus-
tained $3,000 worth of damage to shingles, vents, and a
downspout.
The State Farm adjustor who examined Gao’s roof
determined that there was some damage to vents, gutters,
and the home’s left and rear elevations, and also that
some screens on the left and rear elevations needed
replacing. State Farm paid $434.08 for these repairs. Gao
was not satisfied; she believed she needed a completely
new roof. Sometime later, she discovered an interior
leak in her house and contacted State Farm. The
insurer determined that the April 2006 hailstorm
caused the leak and paid for this repair. Gao believed
the leak was evidence that her roof damage was ex-
3
(...continued)
Cynthia Kartman, the first listed plaintiff in the caption of
this case.
No. 09-1725 7
tensive and that State Farm should pay to install a new
roof. She eventually replaced her roof at her own expense.
The plaintiffs sought compensatory and punitive dam-
ages and also requested injunctive relief in the form of
an order requiring State Farm to reinspect all class mem-
bers’ roofs pursuant to a uniform and objective standard
for evaluating hail damage. State Farm removed the suit
to federal court pursuant to 28 U.S.C. § 1332(d). The
plaintiffs then moved for class certification under both
Rules 23(b)(2) and (b)(3).
The district judge declined to certify a Rule 23(b)(3)
damages class based on a lack of common issues of
fact; each plaintiff’s claim of underpayment required
individualized determination on the merits. But the
judge certified a class under Rule 23(b)(2) to adjudicate
the request for an injunction requiring State Farm to
conduct a class-wide roof reinspection pursuant to a
“uniform and objective standard for evaluating hail
damage claims.” The judge added that he would use the
Rule 23(b)(2) injunction proceeding to assess State Farm’s
liability for damages, and that if State Farm was
found liable, he would reconsider whether to certify a
Rule 23(b)(3) damages class or a subclass. The judge
defined the Rule 23(b)(2) injunction class as including
all policyholders who submitted insurance claims
resulting from the April 2006 hailstorms and did not
receive sufficient compensation for an “entirely new
roof at State Farm’s expense, minus any applicable de-
duction or depreciation.” Excluded from the class were
those individuals who had resolved their claims with
8 No. 09-1725
State Farm via binding arbitration, settlement agreement,
or a judgment in state or federal court. State Farm sought
interlocutory review of the district court’s certification
order pursuant to Rule 23(f), and we granted the petition.
II. Discussion
We review the district court’s decision to certify a
injunction class under Rule 23(b)(2) for abuse of discre-
tion. Andrews v. Chevy Chase Bank, 545 F.3d 570, 573
(7th Cir. 2008). Ordinarily, the district court has sub-
stantial latitude in the management of complex class-
action litigation. See Carnegie v. Household Int’l, Inc., 376
F.3d 656, 661 (7th Cir. 2004) (district courts may devise
“imaginative solutions” to resolve problems created by
class actions). Here, however, the class-certification
decision rests on a legal error. The judge declined to
certify a damages class under Rule 23(b)(3) but thought
the claim for injunctive relief was appropriate for class
treatment under Rule 23(b)(2). Underlying this split
determination is a legal misunderstanding about the
nature of the plaintiffs’ claims; “ ‘purely legal’ determina-
tions made in support of [a class certification] decision
are reviewed de novo.” Andrews, 545 F.3d at 573.
A. Clarifying the Claims
A central problem with the court’s order is that it
misconceptualizes the claims in this case. Although the
complaint invokes several legal theories, the plaintiffs
have only one cognizable injury—underpayment of their
No. 09-1725 9
insurance claims for hail damage to their roofs—and
prospective injunctive relief is not a proper remedy for
that kind of injury. Instead, this is simply an action for
damages—not the dual remedies of an injunction plus
damages—and if suitable for class adjudication at all,
may be certified only under Rule 23(b)(3). See Jefferson
v. Ingersoll Int’l Inc., 195 F.3d 894, 897 (7th Cir. 1999).4
Because the district court correctly denied Rule 23(b)(3)
certification based on the particularized facts of each
plaintiff’s claim, this class action should have ended there.
Nonetheless, in an apparent effort to make their case
more amenable to class certification, the plaintiffs
4
With extremely limited exceptions, putative class members in
suits for monetary damages are entitled to notice of the pending
action and an opportunity to opt out. Jefferson v. Ingersoll Int’l
Inc., 195 F.3d 894 897 (7th Cir. 1999) (citing Ortiz v. Fibreboard
Corp., 527 U.S. 815 (1999)). The opt-out mechanism allows
plaintiffs who have suffered greater-than-average damages to
sue on their own and pursue a larger-than-average monetary
award. In re Allstate Ins. Co., 400 F.3d 505, 507 (7th Cir. 2005).
Because the notice and opt-out procedural safeguards auto-
matically attach to all classes certified under Rule 23(b)(3),
damages actions are generally certified under this subdivi-
sion. F ED . R. C IV . P. 23(c)(2)(B). In contrast when an injunc-
tive remedy is sought, members of the putative class are
typically not entitled to opt out because the injunction
will usually have the same effect on all members of the
class as individual suits would. F ED . R. C IV . P. 23(c)(2)(A);
In re Allstate, 400 F.3d at 506.
10 No. 09-1725
included a separate request for injunctive relief in their
complaint. For factual support they alleged that State
Farm failed to implement a “reasonable, objective” stan-
dard to assess the hail damage to their roofs. This allega-
tion, and the accompanying request for injunctive relief,
created the illusion that State Farm had two distinct
legal obligations arising under the express or implied
terms of the insurance contract: an obligation to com-
pensate insured homeowners for the hail damage to
their roofs and an independently actionable duty to ex-
amine all hail-damaged roofs pursuant to a uniform
and objective standard.
In essence, then, the plaintiffs claimed that they
suffered two separate injuries—underpayment of their
hail-damage claims and a violation of a distinct right
to have their hail-damaged roofs evaluated under a
uniform and objective standard. To the extent that
the first injury proved inappropriate for class-wide ad-
judication (because each policyholder’s claim was
unique), the second injury (so the argument goes) was
common to the class and could be redressed by an in-
junction ordering a class-wide reinspection. 5 This
parsing of remedies gave the plaintiffs a fallback posi-
tion on the class-certification question. If they failed to
5
Even if State Farm had a cognizable legal obligation to use a
uniform and objective standard for evaluating hail-damage
claims, an equitable remedy would not necessarily follow. A
remedy in equity is awarded in exceptional circumstances,
and as we explain, infra, the claims in this case do not satisfy
the traditional test for injunctive relief.
No. 09-1725 11
win certification of a damages class under Rule 23(b)(3)
based on lack of commonality, they could still argue for
an injunction class under Rule 23(b)(2) to adjudicate
whether State Farm breached an obligation to use
a uniform and objective standard to evaluate hail-
damaged roofs.
This technique of recasting a straightforward claim for
damages as a claim for damages and injunctive relief runs
into trouble on some basic principles of common
law—most fundamentally that a claim of injury is not
cognizable unless it results from the breach of a
recognized legal duty owed to the plaintiff. See, e.g., Doe
v. Welborn, 110 F.3d 520, 523 (7th Cir. 1997); Babcock v.
White, 102 F.3d 267, 271 (7th Cir. 1996). A noncognizable
claim can support neither a judgment nor a remedy.
See Jones v. Reagan, 696 F.2d 551, 554 (7th Cir. 1983).
Simply put, State Farm had no independent duty—
whether sounding in contract or tort—to use a
particular method to evaluate hail-damage claims.
State Farm’s alleged underpayment of the plaintiffs’ hail-
damage claims is a cognizable wrong in both contract
and tort, but the method it uses to adjust claims is not
independently actionable.6
6
Review of the class-certification decision in this case requires
a preliminary look at the merits. See Szabo v. Bridgeport Machs.,
Inc., 249 F.3d 672, 676 (7th Cir. 2001) (when questions con-
cerning class certification overlap with the merits, the court
may examine the merits as necessary to resolve the threshold
questions).
12 No. 09-1725
The essence of an insurance policy is a promise by the
insurer to compensate the insured for the loss of
something of value that is covered under the policy,
thereby shifting the risk of loss from the insured to the
insurer. See, e.g., Group Life & Health Ins. Co. v. Royal
Drug Co., 440 U.S. 205, 228 (1979); 1 L EE R. R USS & T HOMAS
F. S EGALLA , C OUCH ON INSURANCE § 1:6 (3d ed. 2009)
[hereinafter C OUCH] (defining insurance); 43 A M . JUR. 2D
Insurance § 2 (2010). Insurance entails a promise to pay
covered losses, not a covenant to use a particular
standard for evaluating property damage. If a given
policyholder was fully compensated for the damage
attributable to the hailstorm, then State Farm will
have satisfied its contractual obligation regardless of
whether it used a “uniform and objective” or an ad hoc
standard to assess the damage. State Farm’s allegedly
inconsistent standard for evaluating hail damage might
be evidence tending to show that some policyholders
received inadequate compensation for their losses, but
does not by itself establish liability for breach or supply
a basis for injunctive relief. See Ind. Bureau of Motor
Vehicles v. Ash, Inc., 895 N.E.2d 359, 365 (Ind. App. Ct.
2008); see also U.S. Valves, Inc. v. Dray, 190 F.3d 811, 814
(7th Cir. 1999) (Indiana law); Parke State Bank v. Akers,
659 N.E.2d 1031, 1034-35 (Ind. 1995) (it is the plaintiff’s
burden to prove injury or loss resulting from defendant’s
breach of contract).
The same analysis applies to the plaintiffs’ claim for
bad-faith denial of insurance benefits. An insurer has
an obligation of “good faith and fair dealing with respect
to the discharge of [its] contractual obligation” to the
No. 09-1725 13
insured. Erie Ins. Co. v. Hickman, 622 N.E.2d 515, 519 (Ind.
1993). Under Indiana law this obligation arises in tort
and includes the “obligation to refrain from (1) making
an unfounded refusal to pay policy proceeds; (2) causing
an unfounded delay in making payment; (3) deceiving
the insured; and (4) exercising any unfair advantage to
pressure an insured into a settlement of his claim.” Id.
The plaintiffs contend that even if State Farm lacked
a contractual duty to inspect their roofs pursuant to
a “uniform and objective” standard, the insurer’s duty
of good faith required it to do so.
This argument reflects a fundamental misunder-
standing of the tort of bad faith. As relevant here, an
insurer breaches its duty of good faith when it offers
“no legitimate basis for denying liability.” Freidline v.
Shelby Ins. Co., 774 N.E.2d 37, 40 (Ind. 2002); accord
Hickman, 622 N.E.2d at 520. The bad-faith claim in this
case is premised upon allegations that State Farm
undercompensated the plaintiffs for the hail damage
to their roofs. For purposes of the tort, this amounts to
a claim that the insurer engaged in an unfounded
refusal to fully pay the plaintiffs’ claims. There are no
allegations suggesting deceit or unfair advantage as the
basis for the bad-faith claim. It is true that the Indiana
Supreme Court noted in Hickman that the types of bad
faith it had identified—bad-faith delay or denial of pay-
ment, deceit, or taking unfair advantage—were not ex-
haustive. See Hickman, 622 N.E.2d at 519. But the plain-
tiffs have cited no authority for the proposition that an
insurer’s use of an ad hoc loss-assessment standard,
standing alone, qualifies as an independent basis for bad-
14 No. 09-1725
faith liability. See Hickman, 622 N.E.2d at 520 (“[T]he lack
of diligent investigation alone is not sufficient to sup-
port an award.”).
Instead, the bad-faith claim asserted here is a garden-
variety one: Bad faith arises when an insurance claim
is wrongfully denied and the insurer knows there is “no
rational, principled basis” for denying the claim. Id.; see
also Mahan v. Am. Standard Ins. Co., 862 N.E.2d 669, 677
(Ind. Ct. App. 2007) (“[A] finding of bad faith requires
evidence of a state of mind reflecting dishonest purpose,
moral obliquity, furtive design, or ill will.” (quotation
marks omitted)). Thus, to prove State Farm committed
the tort of bad faith, the plaintiffs must establish that
their claims were underpaid—or wrongfully denied—
in the first place. See HemoCleanse, Inc. v. Philadelphia Indem.
Ins. Co., 831 N.E.2d 259, 264 (Ind. App. Ct. 2005) (“[T]o
determine whether [the insurer] breached the covenant of
good faith and fair dealing necessarily requires that
the factfinder determine whether it wrongly denied
coverage . . . .”). This requirement alone bars class cer-
tification because it cannot be established on a class-wide
basis. Again, State Farm’s inconsistent approach to hail-
damage estimating (if it was inconsistent) might be evi-
dence tending to show that the insurer underpaid some
hail-damage claims. But it does not independently estab-
lish liability or support a separate injunctive remedy.7
7
Moreover, even if plaintiffs are able to prove their bad-faith
claims, the remedy for State Farm’s violation of the Hickman
(continued...)
No. 09-1725 15
Stated differently, the plaintiffs cannot prove that their
hail-damage claims were denied in bad faith without
first showing that they received inadequate coverage
for their loss. See id.; see also 1 C OUCH § 1:6. This requires
proof that a compensable loss occurred and was
underpaid or not paid at all—a claim-specific inquiry
that turns on the nature of the damage to each plaintiff’s
roof and the amount State Farm paid to repair it. And
as the district court properly held in declining to certify
a Rule 23(b)(3) damages class, the class-action device
is not appropriate for resolving such highly indi-
vidualized questions of fact. See Mejdrech v. Met-Coil Sys.
Corp., 319 F.3d 910, 911 (7th Cir. 2003) (only genuinely
common issues, identical across all claimants, are
suitable for class resolution).
Finally, we need not spend much time on the claim
for unjust enrichment. In Indiana, as elsewhere, “the
existence of an express contract precludes recovery under
the theory of unjust enrichment.” T-3 Martinsville, LLC
v. U.S. Holding, LLC, 911 N.E.2d 100, 123 (Ind. Ct. App.
2009). Because the class plaintiffs had written in-
surance policies with State Farm, their unjust-enrichment
claim is not actionable and cannot form the basis for
the remedy of an injunction.
At bottom, the actionable claims in this case are for
State Farms’s alleged underpayment of the plaintiffs’ hail-
7
(...continued)
duty of good faith would be damages, not equitable relief.
See Hickman, 622 N.E.2d at 519-20.
16 No. 09-1725
damage claims—nothing more, nothing less. The in-
surer’s use of an ad hoc loss-assessment standard may be
evidence that it underpaid in some cases but is not an
independently actionable wrong. With this conceptual
clarification of the plaintiffs’ claims, we now proceed to
the issue of class certification under Rule 23(b)(2).
B. Certification of an Injunction Class Under Rule
23(b)(2)
A case may be certified as a class action under
Rule 23(b)(2) where the “party opposing the class has
acted or refused to act on grounds that apply generally
to the class, so that final injunctive relief or cor-
responding declaratory relief is appropriate respecting
the class as a whole.” F ED. R. C IV. P. 23(b)(2). Subsumed
in this rule are at least two independent requirements:
The contemplated equitable relief must be (1) “appro-
priate respecting the class as a whole” and (2) “final.”
Here, the contemplated injunction will provide neither
“appropriate” nor “final” relief for the alleged underpay-
ment of the plaintiffs’ hail-damage claims.
The proposed injunction would not be an appropriate
remedy for any single plaintiff, let alone for the class as
a whole. To begin with, the plaintiffs cannot satisfy the
test for a remedy in equity. An injunction requires a
showing that: (1) the plaintiffs have suffered irreparable
harm; (2) monetary damages are inadequate to remedy
the injury; (3) an equitable remedy is warranted based on
the balance of hardships between the plaintiffs and defen-
dant; and (4) the public interest would be well served by
No. 09-1725 17
the injunction. eBay Inc. v. MercExchange, L.L.C., 547 U.S.
388, 391 (2006) (outlining traditional test for permanent
injunctive relief); see also 1 D AN B. D OBBS, D OBBS L AW OF
R EMEDIES § 2.9 (2d ed. 1993). The third part of this test—the
balance of hardships—takes on heightened importance
when the plaintiff requests a “mandatory injunction,” that
is, an injunction requiring the defendant to perform
an affirmative act. See D OBBS, supra § 2.9. A mandatory
injunction imposes significant burdens on the defendant
and requires careful consideration of the intrusiveness
of the ordered act, as well as the difficulties that may
be encountered in supervising the enjoined party’s com-
pliance with the court’s order. Id.
This case cannot satisfy the basic requirements for an
injunction. First, the plaintiffs have not suffered
irreparable harm. Their injury—the underpayment of
their insurance claims—is easily remedied by an award
of money damages, a fully adequate remedy. It follows
that class certification under Rule 23(b)(2) is necessarily
improper. The Advisory Committee Notes to Rule 23
underscore this basic point, noting that certification
under Rule 23(b)(2) “does not extend to cases in which
the appropriate final relief relates exclusively or predomi-
nantly to money damages.” F ED. R. C IV. P. 23 advisory
committee’s note (1966).
Injunctive relief is also not “appropriate” because
the hardships of the contemplated injunction would
fall disproportionately on State Farm. (This point also
demonstrates the “finality” problem.) As proposed, the
injunction would require State Farm to carry out a class-
18 No. 09-1725
wide roof reinspection. The district court defined the
class to include all State Farm policyholders who filed
insurance claims for damage resulting from the
April 2006 hailstorm and did not receive “an entirely
new roof.” It is quite possible that some—perhaps
many—of the policyholders who did not receive an
“entirely new roof” were nonetheless fully compensated
for their hail-damage losses. Yet these policyholders
would be entitled to a reinspection at State Farm’s ex-
pense. Because the April 2006 hailstorm generated
some 7,000 roof-damage claims, the cost of complying
with such an injunction would be immense.
Supervising compliance with the envisioned injunction
would be administratively challenging. Federal Rule of
Civil Procedure 65(d) mandates that every injunction
“state its terms specifically” and “describe in reasonable
detail” the “act or acts restrained or required” so that the
enjoined party is fairly apprised of his responsibilities
and the court can objectively assess compliance. F ED. R.
C IV. P. 65(d)(1); see also Shook v. Bd. of County Comm’rs,
543 F.3d 597, 604 (10th Cir. 2008) (injunction may not be
so vague to operate at a “stratospheric level of abstrac-
tion”). As currently envisioned, the injunction would
require State Farm to reinspect the class members’ roofs
pursuant to a “reasonable, uniform, and objective stan-
dard.” This is far too general to satisfy Rule 65(d), yet to
be more specific would essentially require the court to
write an insurance-adjustment code.
Finally, as a practical matter, it’s hard to see what
purpose would be served by a class-wide roof reinspec-
No. 09-1725 19
tion. For example, at least four of the named class plain-
tiffs, including Gao, have replaced their roofs. A reinspec-
tion would serve absolutely no purpose for this subclass
of plaintiffs.8 It is very likely that many others have
already had their roofs repaired using the proceeds of
their insurance payments. In short, the proposed injunc-
tion is not merely inappropriate, it is broadly impractical.
There is a second fundamental reason why this case is
unsuitable for class certification: An injunction would
not provide “final” relief as required by Rule 23(b)(2). An
injunction is not a final remedy if it would merely lay
an evidentiary foundation for subsequent determinations
of liability. See Andrews v. Chevy Chase Bank, 545 F.3d 570,
573 (7th Cir. 2008); Bolin v. Sears, Roebuck & Co., 231 F.3d
970, 978 (5th Cir. 2000) (class certification not permitted
where class members “have nothing to gain from an
injunction, and the declaratory relief they seek serves
only to facilitate the award of damages”). As we have
8
This may constitute another barrier to class certification.
Where a class is not cohesive such that a uniform remedy will
not redress the injuries of all plaintiffs, class certification
is typically not appropriate. See Shook v. Bd. of County Comm’rs,
543 F.3d 597, 604 (10th Cir. 2008); Lemon v. Int’l Union of Oper-
ating Eng’rs, 216 F.3d 577, 580 (7th Cir. 2000) (class cohesion
destroyed when case depends on adjudication of facts par-
ticular to any subset of class or the necessary remedy differenti-
ates materially among the class members); but see In re Monu-
mental Life Ins. Co., 365 F.3d 408, 416 (5th Cir. 2004) (permitting
class certification even though a portion of the class would
receive no benefit from the contemplated injunction).
20 No. 09-1725
explained, the plaintiffs have no independently actionable
claim based on State Farm’s failure to use a uniform and
objective standard for evaluating hail damage. Properly
understood, the contract and tort causes of action
here are straightforward claims for underpayment of
insurance benefits. As such, State Farm’s liability cannot
be determined on a class-wide basis, but instead
requires individualized factual inquiries into the merits
of each policyholder’s claim. Far from being final relief,
a class-wide roof reinspection would only initiate thou-
sands of individualized proceedings to determine
breach and damages. See Andrews, 545 F.3d at 577.
Seen in this light, the contemplated injunction would
essentially have the effect of shifting the burden to State
Farm to prove elements of the plaintiffs’ claims. It goes
without saying that no plaintiff is entitled to recover
except on proof of breach and damage. See, e.g., Berkel &
Co. Contractors, Inc. v. Palm & Assocs., Inc., 814 N.E.2d 649,
655 (Ind. Ct. App. 2004) (to prevail on contract claim,
plaintiff must prove “the existence of a contract, the
defendant’s breach thereof, and damages”); Fogel v. Zell,
221 F.3d 955, 960 (7th Cir. 2000) (as fundamental
principle, tort liability requires proof of harm). Ordering
State Farm to reinspect roofs on a class-wide basis
amounts to an order requiring the insurer to establish
whether it underpaid any of its policyholders, and if so,
by how much.
The plaintiffs argue that disallowing an injunction class
under Rule 23(b)(2) would be inconsistent with Allen v.
International Truck & Engine Corp., 358 F.3d 469 (7th Cir.
No. 09-1725 21
2004). There, a group of employees sued their employer
for racial discrimination and sought both injunctive
relief and damages. We held that certification of a
Rule 23(b)(2) class for injunctive relief was appropriate
even if the related damage claims required subsequent
individual adjudication. 358 F.3d at 470. Unlike this
case, however, the remedies sought by the Allen plain-
tiffs were designed to cure two distinct injuries: past
and future discrimination. Monetary damages, if
awarded, would compensate the employees for the dis-
crimination they had already suffered; damages would
provide a final retrospective remedy for that injury. An
injunction, on the other hand, would require the
employer to cease its discriminatory conduct, providing
a final prospective remedy for ongoing and future dis-
crimination. Here, in contrast, the plaintiffs have suf-
fered only one cognizable injury—State Farm’s alleged
underpayment of their hail-damage claims—and a retro-
spective damages remedy would provide final, adequate
relief for this singular harm.
The plaintiffs also contend that their claim for in-
junctive relief is analogous to “medical monitoring”
injunctions in class actions brought by smokers against
tobacco companies. In this context, other circuits have
indicated that Rule 23(b)(2) certification may be appro-
priate where the action seeks an injunction requiring
the defendant to fund a medical-monitoring program
for detecting the onset of latent disease in the plaintiff
class. See Barnes v. Am. Tobacco Co., 161 F.3d 127, 142-43 (3d
Cir. 1998) (implicitly suggesting that a court-ordered
medical-monitoring program could be characterized as
22 No. 09-1725
final injunctive relief, but ultimately denying certification
under Rule 23(b)(2) on other grounds); Boughton v. Cotter
Corp., 65 F.3d 823, 827 (10th Cir. 1995) (indicating
Rule 23(b)(2) certification for a medical-monitoring claim
may be legally permissible). The plaintiffs maintain
that these medical-monitoring cases demonstrate that a
Rule 23(b)(2) class may be certified even if the re-
quested injunction will not provide truly final relief.
Because the injunction they seek would only assess, not
compensate, their hail damage, the plaintiffs compare
it to a medical-monitoring injunction and insist it is like-
wise sufficiently final to satisfy the requirements of
Rule 23(b)(2).
This argument misses the mark. A medical-monitoring
injunction is designed to relieve class plaintiffs of the
prospective costs associated with medical supervision.
Barnes, 161 F.3d at 139. In this sense, it is a final remedy
because it permanently defrays future costs of medical
supervision.9 In contrast, the injunction the plaintiffs
9
Not all forms of medical monitoring are equitable in nature,
and courts have warned that certification under Rule 23(b)(2)
is inappropriate if the injunction is a “disguised request for
compensatory damages.” Barnes v. Am. Tobacco Co., 161 F.3d 127,
131 (3d Cir. 1998); see also Day v. NLO, Inc., 144 F.R.D. 330, 335-36
(S.D. Ohio 1992), rev’d on other grounds, 5 F.3d 154 (6th Cir.
1993). For example, a court order requiring a defendant to
pay a plaintiff a sum of money for the purpose of medical
monitoring is essentially an award of damages and therefore
cannot be awarded in a Rule 23(b)(2) proceeding. The same
(continued...)
No. 09-1725 23
request here would not perform any prospective func-
tion at all; it is designed to assess past property damage
for purposes of determining liability for individual retro-
spective compensatory monetary remedies. In short,
the plaintiffs are not really interested in final prospec-
tive equitable relief at all; they are singularly focused
on recovering a retrospective damages remedy, and
Rule 23(b)(3), not (b)(2), governs certification of a
damages class.
Before concluding, we offer an observation about an
anomaly in the district court’s class-certification or-
der. The judge said he would use the Rule 23(b)(2) pro-
ceeding to assess State Farm’s “liability” on the damages
claims. Perhaps by this the judge meant that he intended
to use the Rule 23(b)(2) class proceeding to adjudicate
only those common issues pertaining to State Farm’s
liability for breach of contract and bad faith, while re-
serving the more claimant-specific issues—such as the
calculation of damages—for subsequent individual ad-
judication. However, as we have explained, Rule 23(b)(2)
governs class claims for final injunctive or declaratory
relief and is not appropriately invoked for adjudicating
common issues in an action for damages. A damages
9
(...continued)
can be said for a court order requiring the defendant to pay
the plaintiffs’ medical expenses directly. However, if the
court establishes its own medical-monitoring program man-
aged by court-appointed trustees, the remedy could then be
characterized as injunctive even if the defendants are re-
quired to pay for the program. See Barnes, 161 F.3d at 131-32.
24 No. 09-1725
class may be certified under Rule 23(b)(3) and particular
issues identified for resolution on a class-wide basis
pursuant to Rule 23(c)(4). FED. R. C IV. P. 23(c)(4) (“When
appropriate, an action may be brought or maintained as
a class action with respect to particular issues.”). Or, in
an appropriate case, a Rule 23(b)(2) class and a
Rule 23(b)(3) class may be certified where there is a
real basis for both damages and an equitable remedy.
See Pella Corp. v. Saltzman, 606 F.3d 391, 392-93 (7th Cir.
2010). As we have explained, that is not the case here;
neither Rule 23(b)(3) nor Rule 23(c)(4) is implicated.
For the foregoing reasons, we R EVERSE and R EMAND
with instructions to decertify the Rule 23(b)(2) class.
2-14-11