UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

FAYSAL A. JAMA, on behalf of

himself and all other similarly

situated; JAMES KELLEY; ANYSA

NGETHPHARAT,

Plaintiffs-Appellants,

STATE FARM MUTUAL

AUTOMOBILE INSURANCE

COMPANY; STATE FARM FIRE

AND CASUALTY COMPANY,

Defendants-Appellees.

No. 22-35449

D.C. Nos.

2:20-cv-00454-

MJP

2:20-cv-00652-

MJP

OPINION

Appeal from the United States District Court

for the Western District of Washington

Marsha J. Pechman, District Judge, Presiding

Argued and Submitted June 13, 2023

Portland, Oregon

Filed August 19, 2024

2 JAMA V. STATE FARM MUT. AUTO. INS. CO.

Before: Johnnie B. Rawlinson and Jennifer Sung, Circuit

Judges, and Jed S. Rakoff,

District Judge.

Opinion by Judge Rakoff;

Dissent by Judge Rawlinson

SUMMARY

Washington Insurance Law

In a putative class action brought under Washington law

by drivers who alleged that their insurers failed to pay them

the actual cash value of their cars after their cars were totaled

in accidents, the panel (1) reversed the district court’s order

decertifying the negotiation class, (2) affirmed the order

decertifying the condition class, (3) vacated the district

court’s entry of summary judgment against each named

plaintiff, and (4) remanded for the district court to analyze

whether plaintiffs have introduced sufficient evidence of

injury.

Plaintiffs contended that their insurers applied two

putatively unlawful discounts in calculating their vehicles’

actual cash value: (1) a negotiation discount meant to

capture the typical amount buyers may negotiate down the

price of a replacement car, and (2) a condition discount

meant to capture the typical amount by which an insured’s

The Honorable Jed S. Rakoff, United States District Judge for the

Southern District of New York, sitting by designation.

This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

JAMA V. STATE FARM MUT. AUTO. INS. CO. 3

car’s actual condition might be worse than the condition of

cars of comparable make and age on sale at dealers. The

district court initially certified two classes: a negotiation

class and a condition class. However, following this court’s

decision in Lara v. First National Insurance Company of

America, 25 F.4th 1134 (9th Cir. 2022), the district court

decertified each class and entered summary judgment

against plaintiffs based on their putative failure to

demonstrate injury.

The panel held that the district court abused its discretion

in decertifying the negotiation class because plaintiffs

established that injury could be calculated on a class-wide

basis by adding back the putatively unlawful negotiation

adjustment to determine the value each class member should

have received.

The panel held that the district court did not abuse its

discretion in decertifying the condition class because

measuring each class member’s injury required an

individualized comparison of the putatively unlawful

condition adjustment that their insurers actually applied and

the hypothetical condition adjustment that their insurers

could have lawfully applied.

The panel reversed the district court’s summary

judgment in favor of insurers as to the named plaintiffs’

individual claims, and remanded for the district court to

evaluate anew whether the named plaintiffs have adduced

sufficient evidence of injury consistent with this opinion.

Finally, the panel rejected the insurers’ alternative

argument that Article III was a barrier to plaintiffs’ suit.

4 JAMA V. STATE FARM MUT. AUTO. INS. CO.

Dissenting, Judge Rawlinson would hold that the

majority opinion directly conflicts with Lara, and creates an

unnecessary circuit split.

COUNSEL

Scott P. Nealey (argued), Law Office of Scott P. Nealey, San

Francisco, California; Mark A. Trivett, Badgley Mullins

Turner PLLC, Shoreline, Washington; Daniel R. Whitmore,

Law Office of Daniel Whitmore, Tukwila, Washington;

Stephen M. Hansen, Law Offices of Stephen M. Hansen PS,

Tacoma, Washington; for Plaintiffs-Appellants.

Bradley J. Hamburger (argued), Daniel R. Adler, and Matt

A. Getz, Gibson Dunn & Crutcher LLP, Los Angeles,

California and Kristin A. Linsley, Gibson Dunn & Crutcher

LLP, San Francisco, California; Peter W. Herzog III,

Wheeler Trigg O'Donnell LLP, St. Louis, Missouri; Eric L.

Robertson, Wheeler Trigg O'Donnell LLP, Denver,

Colorado; Daniel N. Nightingale, Yetter Coleman LLP,

Houston, Texas; for Defendants-Appellees.

JAMA V. STATE FARM MUT. AUTO. INS. CO. 5

OPINION

Rakoff, District Judge,

Plaintiffs represent a class of drivers whose cars were

“totaled” in accidents such that repair is impracticable and

replacement necessary. Under Washington law, their

insurers, State Farm Mutual Automobile Insurance

Company and State Farm Fire and Casualty Company

(collectively, “State Farm”)

must pay them the “actual cash

value” of their cars. Plaintiffs contend that State Farm did

not do so, because in calculating their vehicles’ actual cash

value, State Farm applied two putatively unlawful discounts:

(1) a “negotiation” discount meant to capture the typical

amount buyers may negotiate down the price of a

replacement car, and (2) a “condition” discount meant to

capture the typical amount by which an insured’s car’s actual

condition might be worse than the condition of cars of

comparable make and age on sale at dealers. Plaintiffs

contend that Washington law entirely forbids the negotiation

discount and does not allow State Farm to apply the

condition discount in the manner it did.

The district court initially agreed with Plaintiffs as to

their theories of liability and certified two classes of

similarly situated insureds: a “negotiation” class and a

“condition” class. Following our decision in Lara v. First

National Insurance Company of America, 25 F.4th 1134 (9th

Cir. 2022), however, the district court decertified each class

and entered summary judgment against the named Plaintiffs

Defendant State Farm Fire and Casualty Company is a wholly owned

subsidiary of Defendant State Farm Mutual Automobile Insurance

Company.

6 JAMA V. STATE FARM MUT. AUTO. INS. CO.

based on their putative failure to demonstrate injury.

Because we conclude that the class based on the negotiation

discount can prove injury on a class-wide basis, we reverse

the district court’s decision decertifying the negotiation

class. However, because the condition class here is in all

relevant aspects identical to the one in Lara, we affirm the

district court’s decision to decertify the condition class.

BACKGROUND

This appeal concerns putative class actions against State

Farm based on how it compensates vehicle owners following

crashes where the vehicles are “totaled”—meaning they are

not reparable as a practical matter and need to be entirely

replaced. Under the State of Washington’s insurance

regulations, an insurer owes an insured the “actual cash

value” of a totaled car. Wash. Admin. Code § 284-30-391.

“Actual cash value” is defined as “the fair market value of

the loss vehicle immediately prior to the loss.” Id. § 284-30-

320(1). Washington’s insurance regulations set forth various

ways in which an insurer may go about ascertaining actual

cash value, including by basing it on data for comparable

vehicles in the local area, obtaining quotes from licensed

dealers, analyzing data of advertised comparable vehicles,

and so on. Id. § 284-30-391(2). While these regulations do

not themselves create a direct cause of action, Plaintiffs

contend they are incorporated into their insurance contracts

and that a violation of the insurance regulations also

constitutes a violation of the Washington Consumer

Protection Act (“WCPA”), pursuant to which they are

authorized to sue. See Lara, 25 F.4th at 1136.

As relevant here, after an insured’s vehicle is totaled, the

claims process ordinarily begins with an inspection of the car

by a State Farm estimator. Following this inspection,

JAMA V. STATE FARM MUT. AUTO. INS. CO. 7

something called an “Autosource” report is prepared by a

third-party vendor called Autodex. Such reports are used in

over 99% of cases to prepare an initial valuation of the

totaled car. The Autosource reports survey databases of the

advertised price of comparable makes and models, and then

make various “adjustments.” The relevant adjustments

include: (1) a “condition” adjustment, and (2) a

“negotiation” adjustment. The condition adjustment

assumes that the typical car in use is in worse condition and

would sell for less than comparable cars advertised by

dealers and reduces the advertised price by that difference.

The negotiation adjustment assumes that the typical

customer negotiates with the dealer and buys a car for less

than the advertised price and is designed to capture that price

difference.

Following preparation of the Autosource report, a State

Farm claims handler reviews it to verify, among other things,

the car’s mileage, equipment, and condition. The handler

then contacts the insured to discuss the preliminary

valuation; if the insured can provide new information

regarding the car’s value, that may feed back into the

valuation. If anything other than the Autosource report is

used for valuation, that is documented and management

approval is sought. If the parties cannot reach agreement as

to the valuation, they instead pursue a process involving

independent appraisers.

In both of the cases consolidated and under review here,

Plaintiffs challenge the negotiation adjustment. They argue

that Washington law specifies which price components

insurers may consider when determining “actual cash

value,” and that negotiation discounts are not among them.

State Farm moved to dismiss, but the district court agreed

with Plaintiffs that Washington law does not allow insurers

8 JAMA V. STATE FARM MUT. AUTO. INS. CO.

to make negotiation adjustments and that Plaintiffs had

therefore stated claims for both breach-of-contract and

unfair trade practices under the WCPA.

In one of the cases, plaintiff Faysal A. Jama also

challenges the condition adjustment. Unlike negotiation

adjustments, Washington law expressly allows insurers to

make “appropriate” condition adjustments. See Wash.

Admin. Code § 284-30-391(4)(b), but Jama claims that State

Farm’s condition adjustments are inappropriate because they

lack sufficient empirical foundation. The district court

denied State Farm’s motion to dismiss the condition

adjustment claim, concluding that Jama’s allegations that

State Farm had “provided no basis on which to verify

whether the perceived condition deduction was

‘appropriate’” were sufficient to show a violation of Section

391(4)(b) and state a breach of contract claim.

The district court then certified two classes. For both

cases, it certified a “negotiation class,” consisting of:

(1) Washington-based, State Farm insured car-owners

whose vehicles were totaled, (2) “where [their] claims for

total loss were evaluated by State Farm using the Autosource

valuation system which took a deduction/adjustment for

‘typical negotiation,’” (3) “where such claims were settled

and paid using the amount determined in the Autosource

valuation which took a deduction/adjustment for ‘typical

negotiation,’” and (4) “where such claims were paid . . .

without the parties . . . using[] an alternative appraisal

process.” And, in Jama, the court certified a “condition”

class consisting of: (1) Washington-based, State Farm

insured car-owners whose vehicles were totaled, (2) where

loss claims were evaluated “using the Autosource valuation

system which took deductions for the condition of the loss

vehicle,” (3) where such claims were later paid using an

JAMA V. STATE FARM MUT. AUTO. INS. CO. 9

amount determined by Autosource that “took deductions for

the condition of the loss vehicle,” and (4) “where such

claims were paid . . . without the parties . . . using[] an

alternative appraisal process.”

Although the Plaintiffs proposed broader classes that

would have included anyone who simply received an

Autosource report containing one or both of the disputed

adjustments, the district court reasoned that such classes

would include persons not actually injured by such

adjustments. (This might happen if, for instance, the parties

negotiated a different payment from that laid out in the

Autosource report, or if they pursued the appraisal route.) It

therefore narrowed the proposed classes to “include only

those paid the value determined in an Autosource Report

with the [relevant] discount applied.” This ensured that the

value of any unlawful adjustment could be determined on a

class-wide basis.

Subsequently, this Court decided Lara v. First National

Insurance Company of America, 25 F.4th 1134 (9th Cir.

2022) where we held that a district court faced with what was

in some respects a similar putative class action—but which

focused only on disputed “condition” adjustments—did not

abuse its discretion in declining to certify a class. Id. at

1138–40. In Lara, the valuation process of insurer Liberty

Mutual (“Liberty”) involved, as here, obtain[ing] a “report

about the value of ‘comparable vehicles,’” following an

inspection. Id. at 1136. Liberty worked with CCC Intelligent

Solutions (“CCC”) to develop these valuation reports. Id.

And as in this case, that report “us[ed] a database of cars at

dealerships all around the country,” “start[ing] with the

value of comparable cars—other cars that are a similar make

and model, are in similar condition, and have similar

features,” before applying various adjustments. Id. Again, as

10 JAMA V. STATE FARM MUT. AUTO. INS. CO.

in this case, one such adjustment—applied uniformly across

totaled cars—was a “condition adjustment” that reduced the

estimated value of a totaled car relative to comparable cars

sold at dealerships on the theory that comparable cars sold at

dealerships “are usually in pretty good condition,” and

therefore likely worth more than an insured’s totaled vehicle

even if in most respects comparable. Id. at 1136–37. In Lara,

“[p]laintiffs’ theory of the case [wa]s that Liberty violate[d]

Washington’s insurance regulations by not itemizing or

explaining this downward ‘condition adjustment,’ which

makes it impossible to verify.” Id. at 1137.

The Lara plaintiffs defined their proposed class to

include any Washington-based driver whose car was totaled

and who received at some point during Liberty’s claims

evaluation process a valuation report including the

putatively unlawful (because it was un-itemized) condition

adjustment. Id. at 1137, 1139. The proposed class included

plaintiffs whose cars were valued using the CCC report with

no further adjustments, plaintiffs for whom the CCC report

provided a starting point for a higher negotiated offer, and

plaintiffs who availed themselves of an alternative appraisal

process. Id. Given this lack of uniformity, the district court

declined to certify a proposed damages class “because it held

both that individual questions predominated over common

questions and that individualized trials were superior to a

class action.” Id. at 1136. On appeal, we concluded that

“[n]either holding was an abuse of discretion” and affirmed.

Id.

In Lara we recognized that “[w]hether Liberty and

CCC’s condition adjustment violates the Washington state

regulations” was a question common to the class. Id. at 1138.

But, answering that common question “require[d] an

individualized determination for each plaintiff” because

JAMA V. STATE FARM MUT. AUTO. INS. CO. 11

Washington’s insurance regulations did “not provide a

private cause of action,” such as would allow plaintiffs to

prevail on any element of their claim merely by showing the

illegality of Liberty’s non-itemized conditions adjustment.

Id. at 1138–40. Plaintiffs’ actual causes of action for breach

of contract and unfair business practices under the WCPA

each included an element of injury. Id. at 1139. This meant

each plaintiff had to show that they received less money than

they were owed; in other words, that they received less than

the vehicle’s pre-crash “actual cash value,” which in turn

was defined as its “fair market value.” Id. at 1136 (quoting

Wash. Admin. Code § 284-30-320(1)).

First, we held that the class proposed in that case might

easily include class members who were not actually injured

by the un-itemized adjustments to vehicle value in CCC

reports.

Id. at 1139. For example, we observed such a class

might include: (1) persons for whom the condition

adjustment was ultimately revised upward, (2) persons with

whom Liberty negotiated a different amount, and (3) persons

who challenged Liberty’s valuation and ultimately received

an appraisal to determine value. None of these persons

would have been obviously injured by the inclusion of the

disputed adjustment. Id. Second, we noted that even those

individuals whose claims were paid based on CCC reports

containing the disputed condition adjustments might not

have been injured if the adjustment accurately approximated

or overestimated the condition of their vehicles. Id. That

As explained supra at 9, the district court in this case avoided this

problem by narrowing the class to include only those who were paid the

value assessed in the Autosource report, less the negotiation discount.

Individuals who negotiated a higher payment than the Autosource

valuation and individuals who used an alternative appraisal process were

excluded from the modified class.

12 JAMA V. STATE FARM MUT. AUTO. INS. CO.

might happen, for instance, if an individual’s car was in

worse condition than comparable cars considered by CCC,

such that Liberty, consistent with Washington law, could

have applied an even greater adjustment if it had been

appropriately itemized. Because such questions would need

to be resolved individually, this Court held that the district

court did not err in declining to certify a class. Id.

Following Lara, the district court in this case decertified

both the negotiation and condition classes and granted

summary judgment to State Farm on the individual

Plaintiffs’ claims. It reasoned that, under Lara, the mere fact

of an illegal adjustment under Washington’s insurance

regulations did not suffice to establish injury. Because an

insured might ultimately be paid their vehicle’s actual cash

value or more notwithstanding an unlawful adjustment, the

district court found that the Plaintiffs could not prove injury

on a class-wide basis by relying on class members’ car value

as calculated in the Autosource reports less the amount of

the challenged negotiation or condition adjustments. And the

Court went further, reasoning that “[t]he Ninth Circuit’s

decision in Lara makes clear that Plaintiffs have not

provided sufficient evidence of injury to sustain their claims

and that they lack standing,” and that accordingly “Lara

compels summary judgment in State Farm’s favor.”

This appeal followed.

II.

ANALYSIS

We have jurisdiction under 28 U.S.C. §§ 1291 and 1294.

The district court’s decision to decertify a class is reviewed

for abuse of discretion. Lara, 25 F.4th at 1138. However,

because courts lack “discretion to get the law wrong,” any

order granting or denying certification based on a legal error

necessarily involves an abuse of discretion. Id. (citing

JAMA V. STATE FARM MUT. AUTO. INS. CO. 13

Hawkins v. Comparet-Cassani, 251 F.3d 1230, 1237 (9th

Cir. 2001)). We review the district court’s entry of summary

judgment de novo. Campidoglio LLC v. Wells Fargo & Co.,

870 F.3d 963, 973 (9th Cir. 2017).

Regarding the class decertifications, we conclude that

the district court abused its discretion in decertifying the

negotiation class. For this class, Plaintiffs established that

injury could be calculated on a class-wide basis by adding

back the putatively unlawful negotiation adjustment to

determine the value each class member should have

received. However, we affirm the district court’s

decertification of the condition class, since no one disputes

that State Farm could have applied a lawful condition

adjustment to each member of that class. Accordingly, it was

not an abuse of discretion to conclude that measuring each

class member’s injury requires an individualized

comparison of the putatively unlawful condition adjustment

that State Farm actually applied and the hypothetical

condition adjustment that State Farm could have lawfully

applied.

We also reverse the district court’s grant of summary

judgment in State Farm’s favor as to all of the named

Plaintiffs’ individual claims. We hold that nothing in Lara

prevents Plaintiffs from relying on the Autosource reports as

evidence of injury. We do not decide whether Plaintiffs have

presented sufficient evidence of injury to survive summary

judgment. Instead, we remand that question to the district

court.

We discuss each conclusion below.

14 JAMA V. STATE FARM MUT. AUTO. INS. CO.

A. The district court’s decertification orders

1. The Negotiation Class

The district court made an error of law by assuming Lara

required decertification of the negotiation class despite

(1) material differences between the negotiation class

definition presented here and the condition class definition

presented in Lara, and (2) material differences between the

negotiation claim presented here and the condition claim

presented in Lara.

In Lara, we held that common proof that an insurer

unlawfully applied a standardized adjustment for the

condition of a totaled vehicle in violation of Washington

regulations would not suffice to establish class-wide injury.

This was so for two reasons. First, the proposed class in Lara

included any insured for whom such an adjustment was used

in the insurer’s initial valuation report, even if that

adjustment was not ultimately reflected in the insurer’s final

payout. For instance, while the disputed condition

adjustment in Lara involved a uniform downward

adjustment to Liberty’s estimate of value, that adjustment

merely provided a starting place. Liberty and its contractee

responsible for preparing the reports, CCC, “also look[ed] at

the actual pre-accident condition of the totaled car,” such

that, “[i]f [the car] was in great condition, then CCC

reverse[d] the negative adjustment and sometimes even

applie[d] a positive adjustment.” Id. at 1137. Because of this

process, the proposed class of all drivers whose valuation

process began with a report including the disputed condition

adjustment would “include [] plaintiff[s] for whom Liberty

used the CCC report with the disputed condition adjustment

but ultimately gave a higher offer, either because of an

upward adjustment or just as part of negotiations.” Id. at

JAMA V. STATE FARM MUT. AUTO. INS. CO. 15

1139. Further, since insureds who challenged Liberty’s

valuation could opt instead into a process for having their car

appraised, the proposed class would “also include []

plaintiff[s] who at first received the CCC report [with the

challenged adjustment] but whose car was valued with an

appraisal.” Id. In other words, the class proposed in Lara

would have included an unknown number of class members

whose actual payout was untethered from the putatively

unlawful adjustment, precluding common proof that all class

members were injured by that adjustment.

Here, however, the district court, well before Lara,

anticipated and solved this problem through its definition of

the negotiation class. The district court rejected Plaintiffs’

proposed class

precisely because such class would

“include[] insureds who were not necessarily paid the

amount determined in an Autosource Report with the typical

negotiation discount applied” and who would therefore “not

have injuries directly traceable to the negotiation discount

and resolution of the legality of the deduction would not

necessarily resolve their claims.” But “[r]ather than deny

class certification” on this basis, the district court “revise[d]

the class definition to include only those [who were] paid the

value determined in an Autosource report with the

negotiation discount applied.” On this basis, the district court

declined to appoint one of the named plaintiffs, Ngethpharat,

as a class representative because her payout was in fact not

based on her initial Autosource report including the disputed

adjustment. This narrowing of the proposed class sufficed by

itself to prevent many of the situations we discussed at length

Like the class proposed in Lara, Plaintiffs’ proposed class would have

included any insured whose initial valuation report included one of the

disputed adjustments.

16 JAMA V. STATE FARM MUT. AUTO. INS. CO.

in Lara where class members might not have been injured

by the putatively unlawful adjustment.

Second, Lara anticipated that even as to “a plaintiff

whose car was valued using the CCC report with the

disputed condition adjustment, and for whom Liberty used

CCC’s estimate without making any further adjustments . . .

the district court would have to look into the actual value of

the car, to see if there was an injury.” Id. In Lara, class

members for whom the disputed condition adjustment was

too big (because their car’s condition was better than CCC

reported) were injured, but class members for whom the

disputed condition adjustment was correct or too small

(because their car’s condition was as bad or worse than CCC

reported) were not injured, and there was no way to

determine whether a class member was injured on a class-

wide basis.

Here, the district court took the Lara court’s language

regarding the condition adjustment and, assuming it applied

equally to the negotiation adjustment, concluded that its

narrowing of Plaintiffs’ class definitions was insufficient to

ensure that injury could be proved on a class-wide basis for

the negotiation class. The district court reasoned that Lara

required some additional individualized assessment of injury

beyond the showing that an insured’s payout was based on

an unlawful adjustment. In so holding, the district court

ignored the nature of the putatively unlawful condition

adjustment at issue in Lara and how it differs critically from

the negotiation adjustment at issue here: in essence, the

parties agree that Washington law allows a condition

adjustment; the parties dispute only whether State Farm

calculates the condition adjustment lawfully. But Plaintiffs

contend that Washington law flatly prohibits any negotiation

adjustment; and if Plaintiffs are correct about that legal issue,

JAMA V. STATE FARM MUT. AUTO. INS. CO. 17

then each Plaintiff suffered damages equal to the amount of

the negotiation adjustment that State Farm made. As

explained further below, that difference between the

condition and negotiation claims dictates a different

outcome for the negotiation class.

As described above, Washington law requires insurers to

pay the owners of totaled vehicles their vehicles’ “actual

cash value,” defined as “the fair market value of the loss

vehicle immediately prior to the loss.” Wash. Admin. Code

§ 284-30-320(1). But Washington law does not leave it at

that. It also tells insurers in some detail how to estimate

vehicles’ “actual cash” or “fair market value.” For example,

insurers may do so by: (1) obtaining quotes for a similar

vehicle from multiple local licensed dealers, (2) averaging

locally advertised prices of comparable vehicles, or

(3) relying on “a computerized source to establish a

statistically valid actual cash value” based on data sources

meeting certain criteria. Id. § 284-30-391(2). Washington

law further requires insurers to “[b]ase all offers on itemized

and verifiable dollar amounts for vehicles that are currently

available, or were available within ninety days of the date of

loss, using appropriate deductions or additions for options,

mileage or condition when determining comparability.” Id.

§ 284-30-391(4)(b).

There is, therefore, no dispute that insurers may adjust

an estimate based on comparable vehicles’ value to take into

account the totaled vehicle’s pre-crash value. In fact, as just

described, Washington’s regulations affirmatively

contemplate that insurers will do precisely this. Id. (allowing

“appropriate deductions or additions,” where “itemized and

verifiable,” based on, among other things, the loss vehicle’s

“condition” (emphasis added)). Plaintiffs’ theory in Lara

was that Liberty’s standardized downward condition

18 JAMA V. STATE FARM MUT. AUTO. INS. CO.

adjustment “violate[d] Washington’s insurance regulations

[because it was] not itemiz[ed] or explain[ed] . . . which

ma[de] it impossible to verify.” 25 F.4th at 1137. No one in

Lara disputed that Liberty could lawfully have applied a

properly itemized and verifiable condition adjustment to

calculate putative class members’ actual cash value. Thus,

there was no way to know whether any individual putative

class member was injured by the standardized and un-

itemized adjustment without individually inquiring into

whether the adjustment exceeded whatever condition

adjustment Liberty could lawfully have applied. Even for

those class members “whose car[s] w[ere] valued using the

CCC report with the disputed condition adjustment, and for

whom Liberty used CCC’s estimate without making any

further adjustments . . . the district court would have [had] to

look into the actual value of the car, to see if there was an

injury.” Id. at 1139.

Here, however, Plaintiffs have advanced an entirely

different theory with respect to the negotiation class. As to

that class, their theory is not that State Farm failed to follow

the correct procedure for making permissible adjustments,

but rather that Washington law does not permit State Farm

to apply a discount for typical negotiation at all. See Wash.

Admin. Code § 284-30-391(4)(b). The district court

accepted this argument, holding that Washington law

permits insurers to apply only those deductions explicitly

laid out in Section 391(4)(b) and no others. State Farm has

not challenged that holding here. Accordingly, Plaintiffs’

challenge to the negotiation class here is materially

distinguishable from the challenge in Lara: A class member

in Lara might have been subject to the challenged condition

deduction but been uninjured by it because a greater or equal

condition addition could also have been lawfully applied.

JAMA V. STATE FARM MUT. AUTO. INS. CO. 19

This would lead a class member to receive the actual cash

value of their vehicle or more. All members of the

negotiation class

in this case, however, received less than

they were owed in the exact amount of the impermissible

negotiation deduction. As to the proposed negotiation class

in this case, we therefore conclude that class members could

measure their injuries on a class-wide basis by adding back

to the value of their vehicles as calculated in the Autosource

reports the amount of the unlawful negotiation discount.

As explained ante at 9, the district court narrowed the class here to

include only those who were paid the value in the Autosource report with

the unlawful negotiation deduction.

The dissent incorrectly claims our decision today creates a circuit split.

See Dissenting Opinion, at pp. 33-35. The Fifth Circuit decision that the

dissent cites, Sampson v. United Services Automobile Association., 83

F.4th 414 (5th Cir. 2023), is easily distinguishable. That case involved a

Louisiana statute that permitted actual cash value of a totaled vehicle to

be calculated using “a generally recognized motor vehicle industry

source.” Id. at 417 (quotation omitted). Plaintiffs there argued that the

method used by the defendant-insurer was unlawful because it was not a

“generally recognized motor vehicle industry source” and proposed

calculating damages by “arbitrarily choosing” another method that

plaintiffs claimed was “generally recognized,” called NADA. Id. at 417,

420. The problem with the class in that case was that there existed

innumerable other “legally permissible method[s] of determining” actual

cash value and those other methods could “produce lower damages than

NADA (or no damages at all),” depending on the individual case. Id. at

420. This created an “an explosion of predominance issues” because

there was just as strong of an argument that any of those other

permissible methods should be used, and so, as to each class member,

there would be a dispute over which alternative method to select and over

whether that method showed each class member was injured at all. Id.

Here, by contrast, the unlawful conduct challenged by the negotiation

class is applying one specific deduction, not using a categorically

unlawful method, and so there is no need to pick among alternative

20 JAMA V. STATE FARM MUT. AUTO. INS. CO.

In holding otherwise, the district court reasoned that

Plaintiffs “ask[] the Court and fact finder to assume that one

portion of an Autosource report got the [adjusted cash value]

right, without any evidence as to why this is true.” But what

Plaintiffs in the negotiation class actually asked the

factfinder to credit was the whole Autosource report

, minus

one specific uniformly applied downward adjustment that

Plaintiffs contended and the district court agreed State Farm

could not lawfully make.

In resisting this conclusion, State Farm protests that

measuring injury this way would allow Plaintiffs to rely

solely on the fact of illegality to establish injury, a “shortcut”

Lara supposedly rejected. And it is true that Lara held that

merely “[c]alling Defendants’ adjustments ‘illegal’” does

not suffice to prove injury. 25 F.4th at 1140. But State Farm

ignores why that was. Class members in Lara might have

received a report containing an unlawful adjustment while

nonetheless receiving actual cash value. This would have

been the case, for instance, where class members’ payout

calculation methods. In the absence of defendants’ allegedly unlawful

conduct, each class member indisputably would have been paid the

amount they actually received, plus the amount of the putatively

unlawful negotiation deduction.

State Farm itself used these reports to calculate adjusted cash value,

and submitted extensive record evidence demonstrating why they

constituted appropriate measures of cash value.

While a declaration submitted by State Farm suggests that condition

adjustments in the initial Autosource report are often subsequently

refined for individual insureds based both on the State Farm claim

handler’s investigation of the condition of the totaled vehicle and

negotiation with the insured, there is no comparable suggestion that any

negotiation adjustment that is applied is subject to further individualized

adjustment.

JAMA V. STATE FARM MUT. AUTO. INS. CO. 21

was based on an alternative appraisal. Id. at 1139. This also

would have been the case where payout was based on a

valuation report, but the condition adjustment accurately

reflected the actual condition of the car—notwithstanding

the fact that it was un-itemized. Id. None of these factors is

relevant to the negotiated adjustment as applied to the class

here, where members of the narrowed class were simply paid

what the Autosource report determined, including the

putatively unlawful negotiation discount. While an un-

itemized condition adjustment could nevertheless have

accurately reflected the condition of the car for some class

members in Lara, there is no negotiation adjustment that

could accurately price the negotiation discount here if

Plaintiffs are correct that the adjustment is always unlawful,

regardless of the amount.

State Farm also avers that, in Lara, plaintiffs argued

“that the only possible definition of ‘actual cash value’ in the

regulations is the value given by the prescribed process, and

thus that the injury for each plaintiff is the amount of the

condition adjustment.” Id. at 1140. And since Lara rejected

this argument, State Farm contends that determining “actual

cash value” in litigation requires some assessment

independent from Washington’s regulatorily prescribed

process.

But, once again, State Farm ignores why Lara found

plaintiffs’ argument unconvincing. As we explained in Lara,

[i]f the condition adjustment was applied for

a plaintiff but then that plaintiff still got an

amount equal to what he or she would have

gotten if the adjustment was not applied (or

more than that), then there was no breach of

contract [or WCPA claim] because there was

22 JAMA V. STATE FARM MUT. AUTO. INS. CO.

no injury . . . [which] could easily have

happened [if] CCC or Liberty . . . adjusted the

value back up, Liberty . . . made a higher

offer, or the parties [did] appraisals.

Id. In other words, Lara rejected measuring injury based on

a failure to “follow the prescribed process” because a

procedural violation does not necessarily lead to an incorrect

result; if the improper process happened to produce a correct

result (or a result that favored plaintiffs), then plaintiffs were

not actually paid less than they were owed. The Lara class,

unlike the narrowed negotiation class in this case, included

members who may not have been injured by the allegedly

unlawful process. Here, by contrast, the narrowing of the

class leaves only those class members who (1) were paid

based on the Autosource report, excluding those who

negotiated or pursued an appraisal, and (2) were paid a

negotiation adjustment that, according to the Plaintiffs, can

never measure a lawful deduction. By narrowing the class,

the district court thus avoided the injury irregularity problem

we identified in Lara.

Lara did not hold, as State Farm claims, that Washington

law either does not or cannot define the substantive inputs

that constitute actual cash value. And here, Plaintiffs’

argument is that State Farm accurately estimated the actual

cash value of their vehicles based on several permissible

inputs and then applied one further subtraction that

Washington law entirely forbids. Nothing in Lara precludes

common proof of injury as the amount of State Farm’s

estimates less the impermissible deduction as to the class of

JAMA V. STATE FARM MUT. AUTO. INS. CO. 23

owners who were paid the Autosource valuation.

Accordingly, we conclude the district court abused its

discretion in decertifying the negotiation class.

2. The Condition Class

Our analysis above does not hold true for the condition

class. As discussed above, the district court’s narrowed class

definition avoided many of the problems of common proof

discussed in Lara. Specifically, the condition class certified

here excluded those Plaintiffs whose ultimate payout was not

directly based on a valuation report containing the

challenged deduction. See Lara, 25 F.4th at 1139–40. But

the narrowed class definition alone does not exclude the

“plaintiff whose car was valued using the [Autosource]

report with the disputed condition adjustment, and for whom

[State Farm] used [Autodex’s] estimate without making any

further adjustments,” whose payout nonetheless equaled or

exceeded their pre-crash car’s actual cash value because the

adjustment accurately reflected the condition of the car. Id.

at 1139.

Plaintiffs in Jama raise various distinctions between the

condition class presented here and that in Lara. They argue,

for instance, that the plaintiffs in Lara merely challenged

Liberty’s refusal to itemize, whereas here the Jama Plaintiffs

challenge the substance of State Farm’s condition

adjustment because they were not made “when determining

comparability.” Wash. Admin. Code § 284-30-391(4)(b).

We note that the district court characterized the condition

class here as materially identical to that in Lara: as based on

State Farm’s failure “to verify whether the perceived

We address (and reject) State Farm’s argument that measuring injury

this way violates Article III below. See II.B.2, infra.

24 JAMA V. STATE FARM MUT. AUTO. INS. CO.

condition deduction was ‘appropriate.’” In any event, as

Plaintiffs’ counsel confirmed at oral argument, the condition

class in Jama does not differ from that in Lara in the way

most relevant. As to the condition class, Plaintiffs do not

dispute that some condition adjustment could lawfully have

been taken. Accordingly, just as in Lara, there is no way to

know as to any individual class member in the condition

class whether their actual payout was more, less, or equal to

what State Farm could lawfully have paid if it had calculated

a condition adjustment appropriately. Lara, 25 F.4th at 1139.

There is therefore no way to know without individualized

inquiry whether such a class member received less than their

car’s actual cash value and therefore suffered any injury. For

this reason, the district court did not abuse its discretion in

decertifying the condition class.

B. The district court’s entry of summary judgment

1. Proof of injury under Washington law

Because we conclude that the district court misread Lara

as to the negotiation discount, it follows that the district

court’s entry of summary judgment against the named

Plaintiffs based on their claims for the negotiation discount

was in error. We further hold that—even as to the challenged

condition adjustment—the district court also erred in

holding that Plaintiffs could not rely on the Autosource

reports, and the amount of a challenged adjustment, as

relevant evidence of value and injury.

The district court based its entry of summary judgment

largely on its reading of Lara. But Lara did not purport to

address the actual evidence any individual Plaintiff must

adduce to give rise to a genuine dispute of material fact. The

question at issue in Lara was whether the district court

abused its discretion in declining to certify a class where

JAMA V. STATE FARM MUT. AUTO. INS. CO. 25

common issues did not predominate over individual ones,

therefore requiring an individualized injury inquiry. Lara, 25

F.4th at 1138–40.

To be sure, in analyzing whether individualized issues

relating to injury predominated over common ones, Lara

necessarily discussed how plaintiffs alleging breach of

contract or violations of the WCPA could go about

demonstrating injury. As to that question, Lara held that

merely adding back to the insurer’s valuation report the full

amount of a putatively unlawful applied condition

adjustment might, in many cases, not embody the proper

measure of a class member’s injury. 25 F.4th at 1139. This

would be the case, for example, where payouts were not

actually based on the challenged adjustment, or where, even

if payouts were based on the challenged adjustment, they

still exceeded actual cash value. Id.

But the fact that an insurer’s own valuation of an

insured’s pre-crash vehicle minus one putatively unlawful

adjustment may not correctly measure injury for all plaintiffs

does not mean that it cannot provide a starting place. In fact,

in language entirely ignored by the district court, Lara

explicitly agreed that “the amount of the [putatively

unlawful] deduction would still be . . . [s]ome relevant

evidence” of injury. 25 F.4th at 1140. Nothing in Lara

required (as the district court appeared to believe)

Indeed, the same district court whose order denying class certification

we affirmed in Lara issued just three weeks before that order an order

denying the motion of one of the defendants for summary judgment.

There, that district court rejected that defendant’s argument that

plaintiffs who received payment after their cars were initially valued by

reports with a challenged condition adjustment could not demonstrate

injury based on that adjustment. Order at 10–13, Lundquist v. First Nat’l

Ins. Co., No. 18-cv-5301 (W.D. Wash. Oct. 1, 2020), ECF No. 14.

26 JAMA V. STATE FARM MUT. AUTO. INS. CO.

“[p]laintiffs [to] undertake[] a[] separate valuation process

or retain[] an expert to opine on the value of the loss

vehicles.” Indeed, State Farm itself used the Autosource

reports as one proper measure of actual cash value. And

ample evidence provided by State Farm itself demonstrated

how the Autosource reports were prepared and why they

provided an accurate measure of the pre-crash actual cash

value of drivers’ cars. We see no reason why a plaintiff

seeking to prove injury cannot rely on the Autosource

reports themselves to establish value, minus the unlawful

negotiation adjustment. And here, as noted, the class is

limited to those who were paid the Autosource valuation.

Accordingly, the district court’s conclusion that Lara

requires individual plaintiffs to introduce evidence of value

independent of the valuation reports was error. We therefore

vacate its entry of summary judgment in favor of State Farm.

On remand, the district court should evaluate anew whether

the named Plaintiffs have adduced sufficient evidence of

injury consistent with this opinion.

As to specific named plaintiffs, it may be clear from the records that

the Autosource reports less a challenged adjustment do not provide

sufficient evidence of injury to get past summary judgment. For instance,

named plaintiff Ngethpharat’s payout was not directly based on an

Autosource report containing a challenged deduction since she

challenged State Farm’s initial valuation and subsequently obtained a

second valuation excluding the challenged deduction, which is why the

district court excluded her from the class it certified. We do not today

decide whether Ngethpharat or any other named plaintiff in fact adduced

sufficient evidence of injury to survive summary judgment. Rather, we

merely hold that nothing about Lara precludes plaintiffs from relying on

the difference between an insurer’s calculation of value and the amount

of a challenged adjustment as relevant evidence of injury. The district

court should apply this standard to the claims before it in the first

instance.

JAMA V. STATE FARM MUT. AUTO. INS. CO. 27

2. Standing

With a drumbeat of citations to TransUnion LLC v.

Ramirez, 594 U.S. 413 (2021), State Farm argues in the

alternative that Article III precludes relying on an unlawfully

applied adjustment as evidence of injury, because allowing

Plaintiffs to recover the amount of an unlawful adjustment

would somehow result in their recovering for an “injury in

law” without any actual reference to the lost value of the car.

But assessing the actual value of the car is unnecessary to

determine there is standing here. Plaintiffs’ claim is that they

were paid less than they were owed under their insurance

policies with State Farm. Had the challenged negotiation

adjustment not been applied, the valuation in the Autosource

reports of Plaintiffs’ vehicles would have been higher and

they would have been paid more by State Farm. That is “a

classic pocketbook injury sufficient to give [a plaintiff]

standing.” Tyler v. Hennepin Cty., 598 U.S. 631, 636 (2023)

(holding that plaintiff had Article III standing where

defendant “illegally appropriated” a “surplus” of a debt

plaintiff owed to defendant).

TransUnion is inapposite. There, the purported “injury”

that the Supreme Court held did not confer standing was “the

mere existence of inaccurate information in a database.”

TransUnion, 594 U.S. at 434. By contrast, the injury here—

a lighter wallet—has long been “traditionally recognized as

providing a basis for a lawsuit in American courts.”

TransUnion, 594 U.S. at 432. Article III is thus no barrier to

Plaintiffs’ suit.

III. CONCLUSION

For the foregoing reasons, we reverse the district court’s

order decertifying the narrowed negotiation class, but affirm

28 JAMA V. STATE FARM MUT. AUTO. INS. CO.

its order decertifying the condition class.

We also vacate

the district court’s entry of summary judgment against each

named Plaintiff and remand for the district court to analyze

whether Plaintiffs have introduced sufficient evidence of

injury consistent with this opinion.

Each party shall bear their own costs.

REVERSED IN PART AND REMANDED.

Rawlinson, Circuit Judge, dissenting:

I respectfully dissent from the majority opinion because,

in my view, it directly conflicts with our recent precedent as

set forth in Lara v. First National Insurance Co., 25 F.4th

1134 (9th Cir. 2022), and creates an unnecessary circuit split.

In Lara, a case with facts similar to those presented in

this appeal, we concluded that the district court did not abuse

its discretion when it denied class certification. See id. at

1136. The plaintiffs sought certification of a damages class

comprised of individuals whose automobiles were totaled in

a motor vehicle accident. See id. In assessing the “actual

cash value” of the totaled vehicle, the insurance company

relied upon a report that set forth the “value of comparable

We deny plaintiffs’ motion to certify to the Washington Supreme

Court the question of whether the district court’s application of Lara to

require individualized proof of injury outside the Autosource reports is

contrary to Washington law. We read Lara as relating to how plaintiffs

may demonstrate the predominance of common inquiries under Rule 23,

and not, as the district court held, as imposing substantive new barriers

on plaintiffs seeking to prove injury under Washington law. Therefore,

we do not believe this case involves any substantial unresolved question

of state law. See Murray v. BEJ Mins., LLC, 924 F.3d 1070, 1072 (9th

Cir. 2019).

JAMA V. STATE FARM MUT. AUTO. INS. CO. 29

vehicles.” Id. (internal quotation marks omitted). From that

report, the insurance company adjusted the valuation based

on “a condition adjustment,” derived from the difference

between the condition of the vehicle being valued and the

condition of “[u]sed cars for sale at dealerships.” Id. at 1136-

37.

After the insurance company valued the plaintiffs’

vehicles using the “downward condition adjustment,” they

sued their insurer and the company that prepared the

valuation report. Id. at 1137 (internal quotation marks

omitted). Plaintiffs asserted that the insurer violated the

state’s “insurance regulations by not itemizing or explaining

[the] downward condition adjustment.” Id. (citation and

internal quotation marks omitted).

Following the district court’s denial of class

certification, the plaintiffs filed an appeal with this court.

We concluded that a common question existed as to whether

the conditions adjustment violated the state regulations. See

id. at 1138. However, we added that “to show liability for

breach of contract or unfair trade practices, Plaintiffs must

also show an injury. And to show an injury will require an

individualized determination for each plaintiff.” Id.

The applicable regulation required insurers “to itemize the deductions

or additions that they make, and that these adjustments be appropriate.”

Id. (citing Wash. Admin. Code § 284-30-320(3)). “Because these

regulations are enforced by the Washington insurance commissioner,

and do not create a private cause of action, Plaintiffs couldn’t sue [the

insurer and the company that prepared the report] directly for violating

[the regulations], so they sued [the insurer] for breach of contract and

both companies for unfair trade practices and civil conspiracy.” Id.

(citations omitted).

30 JAMA V. STATE FARM MUT. AUTO. INS. CO.

We explained that the insurer “only owed each punitive

class member the actual cash value of his or her car.” Id. at

1139. If a class member received the actual cash value or

more, that class member has not been injured. See id.

Consequently,

figuring out whether each individual putative

class member was harmed would involve an

inquiry specific to that person. More

particularly, it would involve looking into the

actual pre-accident value of the car and then

comparing that with what each person was

offered, to see if the offer was less than the

actual value. Because this would be an

involved inquiry for each person, common

questions do not predominate.

Id.

We clarified that even for a plaintiff whose car was

valued using the disputed report, the court would still “have

to look into the actual value of the car, to see if there was an

injury.” Id.

We further clarified that “[a] violation of the regulation

isn’t a breach. Breach of contract requires not just a

violation of the terms of the contract but also an injury.” Id.

(citation and footnote reference omitted). The same was true

for Plaintiffs’ unfair trade practices claim. See id.

We rejected the plaintiffs’ argument that their injuries

could be established simply by referring to “the amount of

JAMA V. STATE FARM MUT. AUTO. INS. CO. 31

the condition adjustment” for each plaintiff. Id. at 1140. We

responded:

But that’s still not right. If the condition

adjustment was applied for a plaintiff but

then that plaintiff still got an amount equal to

what he or she would have gotten if the

adjustment was not applied (or more than

that), then there was no breach of contract

because there was no injury.

Id.

We observed that the situation of a plaintiff receiving

equal to or in excess of “what he or she would have gotten if

the adjustment was not applied” “could easily have

happened.” Id. By way of example, we noted that the

company preparing the report or the insurer “could have

adjusted the value back up, [the insurer] could have made a

higher offer, or the parties could have done appraisals.” Id.

We agreed that the insurer was “correct to say that on this

point, Plaintiffs essentially ask for a strict liability remedy

which is not provided by their causes of action.” Id. We

concluded that “because figuring out whether each plaintiff

was injured would be an individualized process, the district

court did not abuse its discretion in finding that individual

questions predominated.” Id. Stated differently, the

existence of the condition adjustment is not the end of the

story or the analysis.

The facts in the case before us are virtually identical to

those in Lara. The only difference is that in addition to a

condition adjustment, the insurer in this case also applied a

negotiation discount reflecting the average amount a buyer

could negotiate from the price of a replacement vehicle.

32 JAMA V. STATE FARM MUT. AUTO. INS. CO.

My colleagues in the majority followed the Lara

decision and do not challenge the denial of certification for

the condition adjustment claims. See Majority Opinion, pp.

23-24. However, their attempt to distinguish Lara as applied

to the negotiation adjustment claims, in my view, is

singularly unpersuasive.

The majority offers the following reasoning for

excepting the negotiation condition from the Lara analysis.

First, the majority reasons that “Plaintiffs contend that

Washington law flatly prohibits any negotiation adjustment;

and if Plaintiffs are correct about that legal issue, then each

Plaintiff suffered damages equal to the amount of the

negotiation adjustment that [the insurer] made.” Majority

Opinion, pp. 16-17 (emphasis in the original). However,

Lara squarely forecloses this reasoning. See 25 F.4th at

1139 (“A violation of the regulation isn’t a breach of the

contract between the insurer and the insured.”) (footnote

reference omitted). In any event, “even if a violation of the

regulations [were] a breach of the contract, Plaintiffs still

have to show harm.” Id. at 1139 n.4. And Plaintiffs may not

use the report to establish harm. See id. at 1140 (describing

this argument as “essentially ask[ing] for a strict liability

remedy which is not provided by their causes of action.”);

see also id. (“Plaintiffs finally resort to calling Defendants’

adjustments ‘illegal.’ But that’s an argument for the

Washington insurance commissioner, the official who could

prosecute this kind of alleged violation. . . .”).

Next, the majority reasons that proposed negotiation

class members “could measure their injuries on a class-wide

basis by adding back to the value of their vehicles as

calculated in the . . . reports the amount of the unlawful

negotiation discount.” Majority Opinion, p. 19. However,

this approach is also specifically foreclosed by the analysis

JAMA V. STATE FARM MUT. AUTO. INS. CO. 33

in Lara. See 25 F.4th at 1139 (“[F]iguring out whether each

individual putative class member was harmed would involve

an inquiry specific to that person. More particularly, it

would likely involve looking into the actual pre-accident

value of the car and then comparing that with what each

person was offered . . .”) (emphasis added). The quoted

language nullifies the majority’s implied argument that the

actual value is the value of the vehicles “as calculated in the

. . . reports” plus “the amount of the unlawful negotiation

discount.” Majority Opinion, p. 19. But, as we observed in

Lara, “that’s still not right.” 25 F.4th at 1140. “While the

condition adjustment here is applied across the board, other

compensating adjustments and the ultimate valuation are

made individually. And it’s those other things that would

require more individualized inquires here.” Id.; see also id.

at 1136 (discussing the baseline evaluation for each car

based on “comparable vehicles”).

The majority’s approach is not only contrary to our

precedent, but it would also create a circuit split, a

circumstance we strive to avoid. See Global Linguist

Solutions, LLC v. Abdelmeged, 913 F.3d 921, 923 (9th Cir.

2019). In Sampson v. United Servs. Auto. Ass’n., 83 F.4th

414, 422 (5th Cir. 2023), the Fifth Circuit found our decision

in Lara “particularly instructive” to its analysis in a case that,

as in Lara, involved a valuation report utilized by the insurer

to calculate the actual cash value (ACV) of a totaled car. See

id. at 417.

Under Louisiana statutes, the actual cash value of the

vehicle “shall be derived by using a method that falls into

one of three broadly defined categories, one of which is use

of a generally recognized motor vehicle industry source.”

Id. (citation and internal quotation marks omitted). As in

Lara, the plaintiffs in Sampson argued that the valuation

34 JAMA V. STATE FARM MUT. AUTO. INS. CO.

method used by the insurer was “not a legal method” under

the statute, including because the method “negatively

adjust[ed] vehicles’ ACV based on such things as damage to

the vehicle.” Id.

In rejecting this argument, the Fifth Circuit drew a

distinction between the selection of a damages model and the

determination of liability for injuries incurred. See id. at

421-22. The Fifth Circuit reasoned that in the class

certification context, “although ample authority suggests”

that district courts

have great discretion in choosing among

damages models, especially estimative

damages models at the certification stage,

those authorities do not say that courts have

similar discretion in choosing among models

of injury and liability. See e.g., Terrebonne

Fuel & Lube, Inc. v. Placid Refin. Co., 681

So.2d 1292, 1300 (La. App. 4 Cir. 1996)

(There must be “proof that there has been

some damages” i.e., “that damage has

actually occurred, before there is discretion to

assess the amount of damages”).

Id. at 422 (emphasis in the original).

The Fifth Circuit emphasized the accepted premise “that

common questions may predominate under Rule 23(b)(3)

even though other important matters will have to be tried

separately, such as damages. But while damages are

specifically described among these other important matters,

liability and injury are not.” Id. (citations and internal

quotation marks omitted).

JAMA V. STATE FARM MUT. AUTO. INS. CO. 35

The Fifth Circuit concluded that “a district court’s wide

discretion to choose an imperfect estimative-damages model

at the certification stage does not carry over from the context

of damages to the context of liability.” Id. at 422-23, see

also Bourque v. State Farm Mutual Auto Ins. Co., 89 F.4th

525, 528-29 (5th Cir. 2023) (following the analysis

articulated in Sampson).

The Fifth Circuit’s rulings are consistent with our

analysis in Lara. The majority opinion is not. Like the

plaintiffs in Sampson, the majority opinion conflates a

damages model with the required demonstration of injury.

See Lara, 25 F.4th at 1140 (noting the existence of

adjustments other than the condition adjustment that were

“made individually”).

The same is true for the negotiation adjustment. Under

the facts of this case, we know that in addition to the

negotiation adjustment, a condition adjustment was also

applied on an individualized basis. See Majority Opinion,

pp. 23-24. The Majority Opinion acknowledges that “the

district court did not abuse its discretion in decertifying the

condition class.” Majority Opinion, p. 24. However, the

Majority Opinion nevertheless seeks to rationalize reliance

on the condition adjustment and the negotiation adjustment

to establish injury. See Majority Opinion, p. 25 (“Lara

explicitly agreed that the amount of the putatively unlawful

deduction would still be some relevant evidence of

injury. . . .”) (citation, alterations, and internal quotation

marks omitted). But the Majority Opinion deletes the rest of

the discussion. Immediately following the language quoted

by the majority, the Lara decision explained that even if the

amount of the deduction would be “relevant evidence,” that

fact is “beside the point” because “[s]ome relevant evidence

could be in common, but much of it wouldn’t be, and that’s

36 JAMA V. STATE FARM MUT. AUTO. INS. CO.

why the district court didn’t abuse its discretion in finding

that individual questions predominate.” 25 F.4th at 1140.

See also Sampson, 83 F.4th at 422 (interpreting Lara as

“finding that predominance was not satisfied where plaintiff

class members could show that an insurer’s use of [a

valuation report] was unlawful but could not prove an actual

underpayment by class-wide proof”). Indeed, Lara

characterized this very argument as “essentially ask[ing] for

a strict liability remedy.” 25 F.4th at 1140.

The same analysis forecloses the majority’s contention

that “a plaintiff seeking to prove injury [can] rely on the

[valuation] reports themselves to establish value, minus the

unlawful negotiation adjustment.” Majority Opinion, p. 26.

But there are two problems with this argument. The first

problem is that equating value with a demonstration of injury

impermissibly conflates the injury issue with the damages

issue. See Sampson, 83 F.4th at 422-23; see also Lara, 25

F.4th at 1140 (describing this argument as “essentially

ask[ing] for a strict liability remedy”). The second problem

is that the “unlawful” nature of the adjustment cannot

establish an injury. See Lara, 25 F.4th at 1140.

The majority concedes that “Lara held that merely

calling Defendants’ adjustments illegal does not suffice to

prove injury.” Majority Opinion, p. 20 (citation and internal

quotation marks omitted). The majority seeks to avoid this

ruling by giving its explanation of “why” the Lara court

reached the conclusion that alleged illegality is insufficient

to establish an injury. Id. (emphasis in the original). But no

“explanation” can change the unqualified language used by

the Lara court. Regardless of why the ruling was made, it is

clear: the alleged illegality of the condition does not

establish injury. See Lara, 25 F.4th at 1140. At bottom, the

majority cannot articulate a principled basis upon which to

JAMA V. STATE FARM MUT. AUTO. INS. CO. 37

distinguish this case from our holding in Lara. In addition,

the majority opinion creates an unwarranted circuit split. For

these reasons, I respectfully dissent.