A judge in the U.S. District Court in Honolulu says plaintiffs cannot bring a class-action suit against an indexed annuity manufacturer, in part, because the independent producers who sold the contracts used different sales presentations and different marketing materials.
U.S. District Judge J. Michael Seabright used that reasoning in an order rejecting a decision by a federal magistrate judge to certify a class action.
Seabright says he made the decision based solely on procedural grounds and not on the merits of the case, Yokoyama et al. vs. Midland National Life Insurance Company.
The lawyers representing the plaintiffs in the case alleged that the defendant, Midland National Life Insurance Company, Sioux Falls, S.D., a unit of Sammons Financial Group, Chicago, sold elderly Hawaiians inherently unsuitable, deceptive indexed annuity products that were designed to hide the true cost of an early contract cancellation.
Seabright gave the plaintiffs permission to present testimony from a witness who argued that the contracts caused potential class members to receive an investment value of only $70 to $80 for each $100 invested.
But Seabright writes in the order that consumers who believe they were deceived should complain to the company, file a complaint with insurance regulators, or file an individual civil suit.
The rules governing federal class-action suits require that plaintiffs’ common issues must predominate over individualized questions, Seabright writes.
In this case, each Midland National annuity sale appears to be a highly individualized transaction, Seabright writes.