Insurance company obtains full victory in nationwide putative class action
Client(s) Insurance company
Jones Day secured a full victory for a large national insurance company and several affiliated entities in a nationwide putative class action asserting RICO fraud claims and wage and hour claims in connection with the client’s design and operation of several independent contractor agent programs. Three former agents alleged that the company created a fraudulent enterprise designed to induce individuals to become agents, including by misrepresenting the nature of the programs and by encouraging many participants to take out large loans and invest in building independent agencies that the agents ultimately did not own. The plaintiffs also asserted wage claims under California law, alleging that the company misclassified participants in these programs as independent contractors.
The insurance company successfully transferred the putative class action from the Central District of California to the Southern District of Ohio, where it subsequently filed motions to dismiss and for summary judgement. The district court ruled in favor of the company on summary judgment, dismissing with prejudice two of the three named plaintiffs’ federal RICO claims, and declining to exercise supplemental jurisdiction over their remaining state claims. With respect to the third plaintiff, the court ruled in the insurance company’s favor on the motion to dismiss, dismissing his claims and holding that he had agreed to arbitrate any disputes as part of his independent contractor agreement. In so doing, the court rejected the plaintiff’s challenges to the arbitration agreement, holding the agreement was fully enforceable. The plaintiff appealed that order to the Sixth Circuit Court of Appeals, which sided with the insurance company on all fronts and affirmed the district court’s order, upholding the enforceability of the arbitration agreement as a matter of state contract law.
