Three cases—one not yet decided—are expected to significantly impact California consumer class actions involving insurers and others in the financial services industry.

In one decision generally favorable to the industry, the California Supreme Court decided that life insurance is not a “service” subject to the California Consumer Legal Remedies Act’s remedial provisions. Although the parties had framed the issue in Fairbanks v. Superior Court as whether insurance in general is a “service,” the court narrowed the issue to focus on life insurance. Observing that the Act applies only to consumer “goods” and “services,” the court found that the statute’s plain language compelled the conclusion that an “insurer’s contractual obligation to pay money under a life insurance policy is not work or labor, nor is it related to the sale or repair of any tangible chattel.”

More recently, however, in a 4-3 opinion, the California Supreme Court decided In re Tobacco II Cases, addressing two questions. First, the court considered in a class action under the California Unfair Competition Law, who must comply with the requirements that a “person” has “suffered injury in fact” and “lost money or property as a result of” alleged unfair competition. The court held that these requirements apply only to class representatives, not unnamed class members. The court also addressed what is required to show causation (“as a result of”) for purposes of establishing UCL standing, and concluded that UCL plaintiffs are not required to allege that misrepresentations were the sole, or even decisive, cause of an injury, and that plaintiffs need not plead with specificity that they relied on misrepresentations. These conclusions provoked a strong dissent that the majority had esssentially determined “that normal class action rules do not apply to UCL private representative actions.”

The Ninth Circuit Court of Appeals, too, is expected to deliver its en banc decision in Dukes v. Wal-Mart, Inc., which may fundamentally alter that court’s treatment of federal class actions certified for declaratory and injunctive relief. The case involves the largest civil rights class action ever certified in the United States.