Third Circuit Denies Aetna’s Petition Challenging Certification of ERISA Class Action as Untimely under FRCP 23(f)

In Wolff v. Aetna Life Ins. Co., No. 22-8056, __F.4th__, 2023 WL 5082238 (3d Cir. Aug. 9, 2023), the Third Circuit Court of Appeals denied Defendant-Petitioner Aetna Life Insurance Company’s petition challenging a district court’s order certifying a nationwide class of long-term disability claimants. Plaintiff Joanne Wolff was a participant in Bank of America’s long-term disability plan, which was administered by Aetna. Wolff became disabled and entitled to benefits under the plan following a serious car accident. She received a personal injury settlement from the driver responsible for the accident. Aetna sought to collect some of the settlement funds to recoup the disability benefits it paid to Wolff, but Wolff argued that the long-term disability plan did not give Aetna the right to recoup disability payments from the third-party settlement paid to her for her personal injuries. Nonetheless, Wolff did repay a portion of the disability payments that Aetna demanded and then filed a putative class action against Aetna in 2019 alleging violations of ERISA. Wolff sought to certify a nationwide class composed of all employees who had enrolled in an Aetna standard form disability plan, not just Bank of America employees, who Aetna demanded repay a portion of their disability payments from personal injury recoveries.

On May 25, 2022, the district court granted Wolff’s motion for class certification and certified the following class:

• All persons who were injured and received long-term disability benefits from the defendants as a result of an injury causing event and as against whom defendant sought or recovered reimbursement of long-term disability benefits it had paid to insured from the insureds’ tort recoveries and who suffered harm and damages which include, by way of exemplification and not in limitation, the loss of use of money, the loss of interest on money, the loss of possession of their funds, the loss of enjoyment of their funds, their losses in having to free their funds from defendants’ encumbrances and payment of money from their tort recoveries to the defendant as a result of defendants’ wrongful reimbursement demands and actions based on a violation of the policy.

Aetna did not challenge the Class Certification Order within Federal Rule of Civil Procedure 23(f)’s fourteen-day period. Instead, nearly three months after the district court certified the class, Aetna filed a motion to reconsider the Order. The district court granted the motion in part and reworded the class definition to address a potential fail-safe issue. (A fail-safe class is one that is defined so that whether a person qualifies as a member depends on whether the person has a valid claim.) The new class definition read as follows:

• All persons who, between August 8, 2013 and November 30, 2017, were members of a long-term disability benefits plan insured and administered by Defendant Aetna Life Insurance Company, were insured under a long-term disability policy that did not identify personal injury recoveries as “Other Income Benefits,” were injured and received long-term disability benefits from Aetna Life Insurance Company as a result of an injury causing event, and as against whom Aetna Life Insurance Company sought or recovered reimbursement of such long-term disability benefits from funds received from the person’s personal injury recovery.

Aetna filed a Rule 23(f) petition of the district court’s Reconsideration Order within fourteen days. Wolff challenged the petition on the basis that it was untimely filed.

The Third Circuit Court of Appeals found that Aetna’s Rule 23(f) petition is untimely because the Reconsideration Order did not materially alter the Class Certification Order. The court explained that, “[t]oday we make clear what we suggested in [Gutierrez v. Johnson & Johnson, 523 F.3d 187 (3d Cir. 2008)]: a revision to a class certification order establishes a new fourteen-day time limit for a 23(f) petition only when the revision materially changes the original order granting or denying class certification.”

The court further explained that the Reconsideration Order changed the class definition in three ways: (1) narrowed the class period by limiting it to claims arising between August 8, 2013 and November 30, 2017; (2) changed the reference from individuals who “received long-term disability benefits from the defendants” to individuals who enrolled in “disability benefit plan[s] insured and administered by Defendant Aetna;” and (3) stating that the class only includes individuals covered by disability plans that “did not identify personal injury recoveries” as a potential source of recoupment for Aetna’s disability payments. The court found that these changes were more akin to “minor clarifications” than material alterations. The district court did not alter its analysis to conform with any intervening authority. Because Aetna did not file its Rule 23(f) petition within fourteen days of May 25, 2022, the court denied it as untimely.