The U.S. District Court for the Western District of Washington recently denied a motion to certify a nationwide class of immediate annuity purchasers who were 85 years old or older at the time of purchase. In the Estate of Felts v. Genworth Life Ins. Co., the estate claimed that Genworth misrepresented the inherent risks in the purchase of its life-only single premium immediate annuities (LOSPIAs), misrepresented or failed to disclose material facts regarding the annuities, and failed to properly access the LOSPIA as suitable for Mr. Felts.

The district court held that the estate satisfied neither the predominance nor the superiority requirements under Rule 23(b) (3). Despite the estate’s laundry list of “deceptive sales and marketing practices,” ranging from failure to disclose the actuarial tables used by Genworth to misrepresenting the non-refund nature of the LOSPIAs, the court found that individualized issues predominated, noting that “hundreds of large financial institutions, insurance brokerages, and independent agents … market Genworth LOSPIAs in hundreds of different ways.” In addition, the laws of as many as 50 different states could apply since the estate alleged no federal claims, but instead sought relief under contract-based claims, a negligence claim and state consumer protection and criminal profiteering acts. The district court also decided that individual claims were superior to class treatment because hundreds of purchasers across the nation purchased LOSPIAs from different sales people using different practices. The court stated that each individual should be able to challenge the specific practices that induced him or her to purchase the annuity and the purportedly deceptive written or oral representations made to the individual.