The defendants include the insurer State Farm Fire and

1

Casualty Company, as well as its affiliates State Farm Mutual

(continued...)

In the

United States Court of Appeals

For the Seventh Circuit

No. 09-1725

CYNTHIA KARTMAN, et al.,

Plaintiffs-Appellees,

v.

STATE FARM MUTUAL AUTOMOBILE 

INSURANCE COMPANY, et al.,

Defendants-Appellants.

Appeal from the United States District Court

for the Southern District of Indiana, Indianapolis Division.

No. 1:07-cv-00474—William T. Lawrence, Judge.

ARGUED SEPTEMBER 16, 2009—DECIDED FEBRUARY 14, 2011

Before CUDAHY, WOOD, and SYKES, Circuit Judges.

SYKES, Circuit Judge. After a severe hailstorm struck

central Indiana in April 2006, thousands of homeowners

filed claims with State Farm Fire and Casualty Company1
2 No. 09-1725

(...continued) 1

Automobile Insurance Company and State Farm General

Insurance Company. State Farm Fire and Casualty Company

issued the homeowner’s policies at issue in this case. We

use “State Farm” to refer collectively to all three defendants.

for hail damage to the roofs of their homes. State

Farm thereafter paid millions in property-damage

claims, but not all of the policyholders were satisfied

with their payments. Several brought this proposed class

action in state court alleging breach of contract, bad-faith

denial of insurance benefits, and unjust enrichment.

The lawsuit sought damages and an injunction requiring

State Farm to reinspect all class members’ roofs pursuant

to a “uniform, reasonable, and objective” standard for

evaluating hail damage. State Farm removed the case to

federal court.

The plaintiffs moved to certify a damages class under

Rule 23(b)(3) of the Federal Rules of Civil Procedure and

also—or alternatively—a class for injunctive relief under

Rule 23(b)(2). The district court issued a split decision on

the motion. The court declined to certify a Rule 23(b)(3)

damages class, holding that each plaintiff’s claim of

underpayment required an individualized factual

inquiry on the merits. But the court concluded that a

class claim for injunctive relief could proceed under

Rule 23(b)(2); the court certified a class to determine whether State Farm should be required to reinspect

policyholders’ roofs pursuant to a “uniform and objective

standard.” State Farm appealed, arguing that certification under Rule 23(b)(2) is not permissible for this action.
No. 09-1725 3

State Farm is right. This case is not appropriate for

class certification under Rule 23(b)(2). As an initial

matter, the plaintiffs’ claim for injunctive relief suffers

from some serious conceptual confusion. This is a suit

for breach of contract and bad-faith denial of insurance

benefits, the remedy for which is damages. State Farm

had a contractual obligation to pay policyholders for

their hail-damage losses and a corresponding duty in

tort not to deny claims in bad faith. But there is no

contract or tort-based duty requiring the insurer to use

a particular standard for assessing hail damage. As

such, there is no independent cognizable wrong to

support a claim for injunctive relief requiring State

Farm to conduct a class-wide roof reinspection pursuant

to a “uniform and objective” standard.

More generally, certification of a class under

Rule 23(b)(2) is permissible only when class plaintiffs

seek “final injunctive relief” that is “appropriate respecting the class as a whole.” FED. R. CIV. P. 23(b)(2).

Here, the requested injunction is neither “appropriate”

nor “final.” The relief is not appropriate for several reasons, not least of which is that the normal remedy

for wrongful denial of insurance benefits is damages,

not equitable relief. Moreover, the injunction envisioned

by the plaintiffs would in no sense be a final remedy.

A class-wide roof reinspection would only lay an evidentiary foundation for subsequent individual determinations of liability and damages.

Finally, certification of an “issues” class under

Rule 23(c)(4) is neither sought nor appropriate here. The
4 No. 09-1725

particular standard State Farm used to evaluate policyholders’ hail damage is not an element of any case presented by these plaintiffs for final injunctive relief. In

some circumstances, the applicable standard of care

might be a proper separable issue, but in this case, the

ultimate relief sought is money damages, and thus the

requirements for certification of a damages class under

Rule 23(b)(3) must be satisfied. Here, they were not.

Accordingly, we reverse the district court’s order and

remand with instructions to decertify the class.

I. Background

State Farm issues homeowner’s insurance providing

coverage for “accidental direct physical loss to property,”

including damage resulting from windstorms or hail.

In April 2006 a severe hailstorm swept through the Indianapolis metropolitan area causing widespread property

damage. Some 49,000 State Farm policyholders filed

claims for property damage as a result of the storm. Claims

under homeowner’s policies were adjusted based on

individualized assessments of the homeowner’s property damage. State Farm has guidelines to aid adjustors

in determining a homeowner’s loss but does not use a

single, uniform test for assessing hail damage.

Once an adjustor provides a property-damage estimate, the policyholder is permitted to contest that

decision in several ways. First, an insured may request

that another insurance adjustor provide an independent

evaluation. Also, specifically for losses in connection

with the April 2006 hailstorm, State Farm permitted
No. 09-1725 5

Initially, the arbitration results were binding on all parties. 2

However, in January 2007 State Farm revised this policy so

that the arbitration results were only binding on State Farm.

Throughout the course of this litigation, the number of named 3

plaintiffs has not remained constant. At the time this appeal

was filed, 17 named plaintiffs remained, including plaintiff

(continued...)

dissatisfied policyholders to challenge their damage

estimates in arbitration proceedings. Through March 18,

2

2008, State Farm used these procedures to adjust and

pay more than $263 million in property-damage claims

resulting from the hailstorm.

In March 2007 several policyholders filed this lawsuit

in state court asserting claims for breach of contract, badfaith denial of insurance benefits, and unjust enrichment arising out of State Farm’s adjustment of their

claims for hail damage to the roofs of their homes. The

suit was brought as a class action on behalf of approximately 7,000 policyholders and alleged that State Farm

engaged in pervasive undercompensation of roofdamage claims stemming from the April 2006 hailstorm.

As part of their theory that State Farm breached its contract and tort-based duties to policyholders, the plaintiffs alleged that the insurer failed to implement a

uniform “reasonable, objective” standard for assessing

hail-damaged roofs.

To highlight the problems associated with State Farm’s

ad hoc method for evaluating hail-damage claims, the

plaintiffs cited the experiences of class representatives

Karen Stergar and Hong Gao. Stergar alleged that when 3
6 No. 09-1725

(...continued) 3

Cynthia Kartman, the first listed plaintiff in the caption of

this case. 

she submitted her claim, State Farm sent several

insurance adjustors to assess her roof damage and all

provided vastly different opinions. Stergar claims that

the first adjustor did not even step out of his car, yet

determined the claim was only worth $700. Dissatisfied

with this offer, Stergar requested another opinion.

State Farm then sent a second adjustor who climbed on

the roof and suggested that Stergar needed an “entire

new roof,” but stated that he could not provide a compensation figure until a “ropes-and-ladders team” examined the damage. When the ropes-and-ladders team

arrived, it disagreed with the second adjustor’s

opinion and concluded instead that Stergar’s roof sustained $3,000 worth of damage to shingles, vents, and a

downspout.

The State Farm adjustor who examined Gao’s roof

determined that there was some damage to vents, gutters,

and the home’s left and rear elevations, and also that

some screens on the left and rear elevations needed

replacing. State Farm paid $434.08 for these repairs. Gao

was not satisfied; she believed she needed a completely

new roof. Sometime later, she discovered an interior

leak in her house and contacted State Farm. The

insurer determined that the April 2006 hailstorm

caused the leak and paid for this repair. Gao believed

the leak was evidence that her roof damage was ex-
No. 09-1725 7

tensive and that State Farm should pay to install a new

roof. She eventually replaced her roof at her own expense.

The plaintiffs sought compensatory and punitive damages and also requested injunctive relief in the form of

an order requiring State Farm to reinspect all class members’ roofs pursuant to a uniform and objective standard

for evaluating hail damage. State Farm removed the suit

to federal court pursuant to 28 U.S.C. § 1332(d). The

plaintiffs then moved for class certification under both

Rules 23(b)(2) and (b)(3).

The district judge declined to certify a Rule 23(b)(3)

damages class based on a lack of common issues of

fact; each plaintiff’s claim of underpayment required

individualized determination on the merits. But the

judge certified a class under Rule 23(b)(2) to adjudicate

the request for an injunction requiring State Farm to

conduct a class-wide roof reinspection pursuant to a

“uniform and objective standard for evaluating hail

damage claims.” The judge added that he would use the

Rule 23(b)(2) injunction proceeding to assess State Farm’s

liability for damages, and that if State Farm was

found liable, he would reconsider whether to certify a

Rule 23(b)(3) damages class or a subclass. The judge

defined the Rule 23(b)(2) injunction class as including

all policyholders who submitted insurance claims

resulting from the April 2006 hailstorms and did not

receive sufficient compensation for an “entirely new

roof at State Farm’s expense, minus any applicable deduction or depreciation.” Excluded from the class were

those individuals who had resolved their claims with
8 No. 09-1725

State Farm via binding arbitration, settlement agreement,

or a judgment in state or federal court. State Farm sought

interlocutory review of the district court’s certification

order pursuant to Rule 23(f), and we granted the petition.

II. Discussion

We review the district court’s decision to certify a

injunction class under Rule 23(b)(2) for abuse of discretion. Andrews v. Chevy Chase Bank, 545 F.3d 570, 573

(7th Cir. 2008). Ordinarily, the district court has substantial latitude in the management of complex classaction litigation. See Carnegie v. Household Int’l, Inc., 376

F.3d 656, 661 (7th Cir. 2004) (district courts may devise

“imaginative solutions” to resolve problems created by

class actions). Here, however, the class-certification

decision rests on a legal error. The judge declined to

certify a damages class under Rule 23(b)(3) but thought

the claim for injunctive relief was appropriate for class

treatment under Rule 23(b)(2). Underlying this split

determination is a legal misunderstanding about the

nature of the plaintiffs’ claims; “ ‘purely legal’ determinations made in support of [a class certification] decision

are reviewed de novo.” Andrews, 545 F.3d at 573.

A. Clarifying the Claims

A central problem with the court’s order is that it

misconceptualizes the claims in this case. Although the

complaint invokes several legal theories, the plaintiffs

have only one cognizable injury—underpayment of their
No. 09-1725 9

With extremely limited exceptions, putative class members in 4

suits for monetary damages are entitled to notice of the pending

action and an opportunity to opt out. Jefferson v. Ingersoll Int’l

Inc., 195 F.3d 894 897 (7th Cir. 1999) (citing Ortiz v. Fibreboard

Corp., 527 U.S. 815 (1999)). The opt-out mechanism allows

plaintiffs who have suffered greater-than-average damages to

sue on their own and pursue a larger-than-average monetary

award. In re Allstate Ins. Co., 400 F.3d 505, 507 (7th Cir. 2005).

Because the notice and opt-out procedural safeguards automatically attach to all classes certified under Rule 23(b)(3),

damages actions are generally certified under this subdivision. FED. R. CIV. P. 23(c)(2)(B). In contrast when an injunctive remedy is sought, members of the putative class are

typically not entitled to opt out because the injunction

will usually have the same effect on all members of the

class as individual suits would. FED. R. CIV. P. 23(c)(2)(A);

In re Allstate, 400 F.3d at 506.

insurance claims for hail damage to their roofs—and

prospective injunctive relief is not a proper remedy for

that kind of injury. Instead, this is simply an action for

damages—not the dual remedies of an injunction plus

damages—and if suitable for class adjudication at all,

may be certified only under Rule 23(b)(3). See Jefferson

v. Ingersoll Int’l Inc., 195 F.3d 894, 897 (7th Cir. 1999).4

Because the district court correctly denied Rule 23(b)(3)

certification based on the particularized facts of each

plaintiff’s claim, this class action should have ended there.

Nonetheless, in an apparent effort to make their case

more amenable to class certification, the plaintiffs
10 No. 09-1725

Even if State Farm had a cognizable legal obligation to use a 5

uniform and objective standard for evaluating hail-damage

claims, an equitable remedy would not necessarily follow. A

remedy in equity is awarded in exceptional circumstances,

and as we explain, infra, the claims in this case do not satisfy

the traditional test for injunctive relief.

included a separate request for injunctive relief in their

complaint. For factual support they alleged that State

Farm failed to implement a “reasonable, objective” standard to assess the hail damage to their roofs. This allegation, and the accompanying request for injunctive relief,

created the illusion that State Farm had two distinct

legal obligations arising under the express or implied

terms of the insurance contract: an obligation to compensate insured homeowners for the hail damage to

their roofs and an independently actionable duty to examine all hail-damaged roofs pursuant to a uniform

and objective standard.

In essence, then, the plaintiffs claimed that they

suffered two separate injuries—underpayment of their

hail-damage claims and a violation of a distinct right

to have their hail-damaged roofs evaluated under a

uniform and objective standard. To the extent that

the first injury proved inappropriate for class-wide adjudication (because each policyholder’s claim was

unique), the second injury (so the argument goes) was

common to the class and could be redressed by an injunction ordering a class-wide reinspection. This 5

parsing of remedies gave the plaintiffs a fallback position on the class-certification question. If they failed to
No. 09-1725 11

Review of the class-certification decision in this case requires 6

a preliminary look at the merits. See Szabo v. Bridgeport Machs.,

Inc., 249 F.3d 672, 676 (7th Cir. 2001) (when questions concerning class certification overlap with the merits, the court

may examine the merits as necessary to resolve the threshold

questions).

win certification of a damages class under Rule 23(b)(3)

based on lack of commonality, they could still argue for

an injunction class under Rule 23(b)(2) to adjudicate

whether State Farm breached an obligation to use

a uniform and objective standard to evaluate haildamaged roofs.

This technique of recasting a straightforward claim for

damages as a claim for damages and injunctive relief runs

into trouble on some basic principles of common

law—most fundamentally that a claim of injury is not

cognizable unless it results from the breach of a

recognized legal duty owed to the plaintiff. See, e.g., Doe

v. Welborn, 110 F.3d 520, 523 (7th Cir. 1997); Babcock v.

White, 102 F.3d 267, 271 (7th Cir. 1996). A noncognizable

claim can support neither a judgment nor a remedy.

See Jones v. Reagan, 696 F.2d 551, 554 (7th Cir. 1983).

Simply put, State Farm had no independent duty—

whether sounding in contract or tort—to use a

particular method to evaluate hail-damage claims.

State Farm’s alleged underpayment of the plaintiffs’ haildamage claims is a cognizable wrong in both contract

and tort, but the method it uses to adjust claims is not

independently actionable.6
12 No. 09-1725

The essence of an insurance policy is a promise by the

insurer to compensate the insured for the loss of

something of value that is covered under the policy,

thereby shifting the risk of loss from the insured to the

insurer. See, e.g., Group Life & Health Ins. Co. v. Royal

Drug Co., 440 U.S. 205, 228 (1979); 1 LEE R. RUSS & THOMAS

F. SEGALLA, COUCH ON INSURANCE § 1:6 (3d ed. 2009)

[hereinafter COUCH] (defining insurance); 43 AM. JUR. 2D

Insurance § 2 (2010). Insurance entails a promise to pay

covered losses, not a covenant to use a particular

standard for evaluating property damage. If a given

policyholder was fully compensated for the damage

attributable to the hailstorm, then State Farm will

have satisfied its contractual obligation regardless of

whether it used a “uniform and objective” or an ad hoc

standard to assess the damage. State Farm’s allegedly

inconsistent standard for evaluating hail damage might

be evidence tending to show that some policyholders

received inadequate compensation for their losses, but

does not by itself establish liability for breach or supply

a basis for injunctive relief. See Ind. Bureau of Motor

Vehicles v. Ash, Inc., 895 N.E.2d 359, 365 (Ind. App. Ct.

2008); see also U.S. Valves, Inc. v. Dray, 190 F.3d 811, 814

(7th Cir. 1999) (Indiana law); Parke State Bank v. Akers,

659 N.E.2d 1031, 1034-35 (Ind. 1995) (it is the plaintiff’s

burden to prove injury or loss resulting from defendant’s

breach of contract).

The same analysis applies to the plaintiffs’ claim for

bad-faith denial of insurance benefits. An insurer has

an obligation of “good faith and fair dealing with respect

to the discharge of [its] contractual obligation” to the
No. 09-1725 13

insured. Erie Ins. Co. v. Hickman, 622 N.E.2d 515, 519 (Ind.

1993). Under Indiana law this obligation arises in tort

and includes the “obligation to refrain from (1) making

an unfounded refusal to pay policy proceeds; (2) causing

an unfounded delay in making payment; (3) deceiving

the insured; and (4) exercising any unfair advantage to

pressure an insured into a settlement of his claim.” Id.

The plaintiffs contend that even if State Farm lacked

a contractual duty to inspect their roofs pursuant to

a “uniform and objective” standard, the insurer’s duty

of good faith required it to do so.

This argument reflects a fundamental misunderstanding of the tort of bad faith. As relevant here, an

insurer breaches its duty of good faith when it offers

“no legitimate basis for denying liability.” Freidline v.

Shelby Ins. Co., 774 N.E.2d 37, 40 (Ind. 2002); accord

Hickman, 622 N.E.2d at 520. The bad-faith claim in this

case is premised upon allegations that State Farm

undercompensated the plaintiffs for the hail damage

to their roofs. For purposes of the tort, this amounts to

a claim that the insurer engaged in an unfounded

refusal to fully pay the plaintiffs’ claims. There are no

allegations suggesting deceit or unfair advantage as the

basis for the bad-faith claim. It is true that the Indiana

Supreme Court noted in Hickman that the types of bad

faith it had identified—bad-faith delay or denial of payment, deceit, or taking unfair advantage—were not exhaustive. See Hickman, 622 N.E.2d at 519. But the plaintiffs have cited no authority for the proposition that an

insurer’s use of an ad hoc loss-assessment standard,

standing alone, qualifies as an independent basis for bad-
14 No. 09-1725

Moreover, even if plaintiffs are able to prove their bad-faith 7

claims, the remedy for State Farm’s violation of the Hickman

(continued...)

faith liability. See Hickman, 622 N.E.2d at 520 (“[T]he lack

of diligent investigation alone is not sufficient to support an award.”).

Instead, the bad-faith claim asserted here is a gardenvariety one: Bad faith arises when an insurance claim

is wrongfully denied and the insurer knows there is “no

rational, principled basis” for denying the claim. Id.; see

also Mahan v. Am. Standard Ins. Co., 862 N.E.2d 669, 677

(Ind. Ct. App. 2007) (“[A] finding of bad faith requires

evidence of a state of mind reflecting dishonest purpose,

moral obliquity, furtive design, or ill will.” (quotation

marks omitted)). Thus, to prove State Farm committed

the tort of bad faith, the plaintiffs must establish that

their claims were underpaid—or wrongfully denied—

in the first place. See HemoCleanse, Inc. v. Philadelphia Indem.

Ins. Co., 831 N.E.2d 259, 264 (Ind. App. Ct. 2005) (“[T]o

determine whether [the insurer] breached the covenant of

good faith and fair dealing necessarily requires that

the factfinder determine whether it wrongly denied

coverage . . . .”). This requirement alone bars class certification because it cannot be established on a class-wide

basis. Again, State Farm’s inconsistent approach to haildamage estimating (if it was inconsistent) might be evidence tending to show that the insurer underpaid some

hail-damage claims. But it does not independently establish liability or support a separate injunctive remedy.7
No. 09-1725 15

(...continued) 7

duty of good faith would be damages, not equitable relief.

See Hickman, 622 N.E.2d at 519-20.

Stated differently, the plaintiffs cannot prove that their

hail-damage claims were denied in bad faith without

first showing that they received inadequate coverage

for their loss. See id.; see also 1 COUCH § 1:6. This requires

proof that a compensable loss occurred and was

underpaid or not paid at all—a claim-specific inquiry

that turns on the nature of the damage to each plaintiff’s

roof and the amount State Farm paid to repair it. And

as the district court properly held in declining to certify

a Rule 23(b)(3) damages class, the class-action device

is not appropriate for resolving such highly individualized questions of fact. See Mejdrech v. Met-Coil Sys.

Corp., 319 F.3d 910, 911 (7th Cir. 2003) (only genuinely

common issues, identical across all claimants, are

suitable for class resolution).

Finally, we need not spend much time on the claim

for unjust enrichment. In Indiana, as elsewhere, “the

existence of an express contract precludes recovery under

the theory of unjust enrichment.” T-3 Martinsville, LLC

v. U.S. Holding, LLC, 911 N.E.2d 100, 123 (Ind. Ct. App.

2009). Because the class plaintiffs had written insurance policies with State Farm, their unjust-enrichment

claim is not actionable and cannot form the basis for

the remedy of an injunction.

At bottom, the actionable claims in this case are for

State Farms’s alleged underpayment of the plaintiffs’ hail-
16 No. 09-1725

damage claims—nothing more, nothing less. The insurer’s use of an ad hoc loss-assessment standard may be

evidence that it underpaid in some cases but is not an

independently actionable wrong. With this conceptual

clarification of the plaintiffs’ claims, we now proceed to

the issue of class certification under Rule 23(b)(2).

B. Certification of an Injunction Class Under Rule

23(b)(2)

A case may be certified as a class action under

Rule 23(b)(2) where the “party opposing the class has

acted or refused to act on grounds that apply generally

to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting

the class as a whole.” FED. R. CIV. P. 23(b)(2). Subsumed

in this rule are at least two independent requirements:

The contemplated equitable relief must be (1) “appropriate respecting the class as a whole” and (2) “final.”

Here, the contemplated injunction will provide neither

“appropriate” nor “final” relief for the alleged underpayment of the plaintiffs’ hail-damage claims.

The proposed injunction would not be an appropriate

remedy for any single plaintiff, let alone for the class as

a whole. To begin with, the plaintiffs cannot satisfy the

test for a remedy in equity. An injunction requires a

showing that: (1) the plaintiffs have suffered irreparable

harm; (2) monetary damages are inadequate to remedy

the injury; (3) an equitable remedy is warranted based on

the balance of hardships between the plaintiffs and defendant; and (4) the public interest would be well served by
No. 09-1725 17

the injunction. eBay Inc. v. MercExchange, L.L.C., 547 U.S.

388, 391 (2006) (outlining traditional test for permanent

injunctive relief); see also 1 DAN B. DOBBS, DOBBS LAW OF

REMEDIES § 2.9 (2d ed. 1993). The third part of this test—the

balance of hardships—takes on heightened importance

when the plaintiff requests a “mandatory injunction,” that

is, an injunction requiring the defendant to perform

an affirmative act. See DOBBS, supra § 2.9. A mandatory

injunction imposes significant burdens on the defendant

and requires careful consideration of the intrusiveness

of the ordered act, as well as the difficulties that may

be encountered in supervising the enjoined party’s compliance with the court’s order. Id.

This case cannot satisfy the basic requirements for an

injunction. First, the plaintiffs have not suffered

irreparable harm. Their injury—the underpayment of

their insurance claims—is easily remedied by an award

of money damages, a fully adequate remedy. It follows

that class certification under Rule 23(b)(2) is necessarily

improper. The Advisory Committee Notes to Rule 23

underscore this basic point, noting that certification

under Rule 23(b)(2) “does not extend to cases in which

the appropriate final relief relates exclusively or predominantly to money damages.” FED. R. CIV. P. 23 advisory

committee’s note (1966).

Injunctive relief is also not “appropriate” because

the hardships of the contemplated injunction would

fall disproportionately on State Farm. (This point also

demonstrates the “finality” problem.) As proposed, the

injunction would require State Farm to carry out a class-
18 No. 09-1725

wide roof reinspection. The district court defined the

class to include all State Farm policyholders who filed

insurance claims for damage resulting from the

April 2006 hailstorm and did not receive “an entirely

new roof.” It is quite possible that some—perhaps

many—of the policyholders who did not receive an

“entirely new roof” were nonetheless fully compensated

for their hail-damage losses. Yet these policyholders

would be entitled to a reinspection at State Farm’s expense. Because the April 2006 hailstorm generated

some 7,000 roof-damage claims, the cost of complying

with such an injunction would be immense.

Supervising compliance with the envisioned injunction

would be administratively challenging. Federal Rule of

Civil Procedure 65(d) mandates that every injunction

“state its terms specifically” and “describe in reasonable

detail” the “act or acts restrained or required” so that the

enjoined party is fairly apprised of his responsibilities

and the court can objectively assess compliance. FED. R.

CIV. P. 65(d)(1); see also Shook v. Bd. of County Comm’rs,

543 F.3d 597, 604 (10th Cir. 2008) (injunction may not be

so vague to operate at a “stratospheric level of abstraction”). As currently envisioned, the injunction would

require State Farm to reinspect the class members’ roofs

pursuant to a “reasonable, uniform, and objective standard.” This is far too general to satisfy Rule 65(d), yet to

be more specific would essentially require the court to

write an insurance-adjustment code.

Finally, as a practical matter, it’s hard to see what

purpose would be served by a class-wide roof reinspec-
No. 09-1725 19

This may constitute another barrier to class certification. 8

Where a class is not cohesive such that a uniform remedy will

not redress the injuries of all plaintiffs, class certification

is typically not appropriate. See Shook v. Bd. of County Comm’rs,

543 F.3d 597, 604 (10th Cir. 2008); Lemon v. Int’l Union of Operating Eng’rs, 216 F.3d 577, 580 (7th Cir. 2000) (class cohesion

destroyed when case depends on adjudication of facts particular to any subset of class or the necessary remedy differentiates materially among the class members); but see In re Monumental Life Ins. Co., 365 F.3d 408, 416 (5th Cir. 2004) (permitting

class certification even though a portion of the class would

receive no benefit from the contemplated injunction).

tion. For example, at least four of the named class plaintiffs, including Gao, have replaced their roofs. A reinspection would serve absolutely no purpose for this subclass

of plaintiffs. It is very likely that many others have

8

already had their roofs repaired using the proceeds of

their insurance payments. In short, the proposed injunction is not merely inappropriate, it is broadly impractical.

There is a second fundamental reason why this case is

unsuitable for class certification: An injunction would

not provide “final” relief as required by Rule 23(b)(2). An

injunction is not a final remedy if it would merely lay

an evidentiary foundation for subsequent determinations

of liability. See Andrews v. Chevy Chase Bank, 545 F.3d 570,

573 (7th Cir. 2008); Bolin v. Sears, Roebuck & Co., 231 F.3d

970, 978 (5th Cir. 2000) (class certification not permitted

where class members “have nothing to gain from an

injunction, and the declaratory relief they seek serves

only to facilitate the award of damages”). As we have
20 No. 09-1725

explained, the plaintiffs have no independently actionable

claim based on State Farm’s failure to use a uniform and

objective standard for evaluating hail damage. Properly

understood, the contract and tort causes of action

here are straightforward claims for underpayment of

insurance benefits. As such, State Farm’s liability cannot

be determined on a class-wide basis, but instead

requires individualized factual inquiries into the merits

of each policyholder’s claim. Far from being final relief,

a class-wide roof reinspection would only initiate thousands of individualized proceedings to determine

breach and damages. See Andrews, 545 F.3d at 577.

Seen in this light, the contemplated injunction would

essentially have the effect of shifting the burden to State

Farm to prove elements of the plaintiffs’ claims. It goes

without saying that no plaintiff is entitled to recover

except on proof of breach and damage. See, e.g., Berkel &

Co. Contractors, Inc. v. Palm & Assocs., Inc., 814 N.E.2d 649,

655 (Ind. Ct. App. 2004) (to prevail on contract claim,

plaintiff must prove “the existence of a contract, the

defendant’s breach thereof, and damages”); Fogel v. Zell,

221 F.3d 955, 960 (7th Cir. 2000) (as fundamental

principle, tort liability requires proof of harm). Ordering

State Farm to reinspect roofs on a class-wide basis

amounts to an order requiring the insurer to establish

whether it underpaid any of its policyholders, and if so,

by how much.

The plaintiffs argue that disallowing an injunction class

under Rule 23(b)(2) would be inconsistent with Allen v.

International Truck & Engine Corp., 358 F.3d 469 (7th Cir.
No. 09-1725 21

2004). There, a group of employees sued their employer

for racial discrimination and sought both injunctive

relief and damages. We held that certification of a

Rule 23(b)(2) class for injunctive relief was appropriate

even if the related damage claims required subsequent

individual adjudication. 358 F.3d at 470. Unlike this

case, however, the remedies sought by the Allen plaintiffs were designed to cure two distinct injuries: past

and future discrimination. Monetary damages, if

awarded, would compensate the employees for the discrimination they had already suffered; damages would

provide a final retrospective remedy for that injury. An

injunction, on the other hand, would require the

employer to cease its discriminatory conduct, providing

a final prospective remedy for ongoing and future discrimination. Here, in contrast, the plaintiffs have suffered only one cognizable injury—State Farm’s alleged

underpayment of their hail-damage claims—and a retrospective damages remedy would provide final, adequate

relief for this singular harm.

The plaintiffs also contend that their claim for injunctive relief is analogous to “medical monitoring”

injunctions in class actions brought by smokers against

tobacco companies. In this context, other circuits have

indicated that Rule 23(b)(2) certification may be appropriate where the action seeks an injunction requiring

the defendant to fund a medical-monitoring program

for detecting the onset of latent disease in the plaintiff

class. See Barnes v. Am. Tobacco Co., 161 F.3d 127, 142-43 (3d

Cir. 1998) (implicitly suggesting that a court-ordered

medical-monitoring program could be characterized as
22 No. 09-1725

Not all forms of medical monitoring are equitable in nature, 9

and courts have warned that certification under Rule 23(b)(2)

is inappropriate if the injunction is a “disguised request for

compensatory damages.” Barnes v. Am. Tobacco Co., 161 F.3d 127,

131 (3d Cir. 1998); see also Day v. NLO, Inc., 144 F.R.D. 330, 335-36

(S.D. Ohio 1992), rev’d on other grounds, 5 F.3d 154 (6th Cir.

1993). For example, a court order requiring a defendant to

pay a plaintiff a sum of money for the purpose of medical

monitoring is essentially an award of damages and therefore

cannot be awarded in a Rule 23(b)(2) proceeding. The same

(continued...)

final injunctive relief, but ultimately denying certification

under Rule 23(b)(2) on other grounds); Boughton v. Cotter

Corp., 65 F.3d 823, 827 (10th Cir. 1995) (indicating

Rule 23(b)(2) certification for a medical-monitoring claim

may be legally permissible). The plaintiffs maintain

that these medical-monitoring cases demonstrate that a

Rule 23(b)(2) class may be certified even if the requested injunction will not provide truly final relief.

Because the injunction they seek would only assess, not

compensate, their hail damage, the plaintiffs compare

it to a medical-monitoring injunction and insist it is likewise sufficiently final to satisfy the requirements of

Rule 23(b)(2).

This argument misses the mark. A medical-monitoring

injunction is designed to relieve class plaintiffs of the

prospective costs associated with medical supervision.

Barnes, 161 F.3d at 139. In this sense, it is a final remedy

because it permanently defrays future costs of medical

supervision. In contrast, the injunction the plaintiffs

9
No. 09-1725 23

(...continued) 9

can be said for a court order requiring the defendant to pay

the plaintiffs’ medical expenses directly. However, if the

court establishes its own medical-monitoring program managed by court-appointed trustees, the remedy could then be

characterized as injunctive even if the defendants are required to pay for the program. See Barnes, 161 F.3d at 131-32.

request here would not perform any prospective function at all; it is designed to assess past property damage

for purposes of determining liability for individual retrospective compensatory monetary remedies. In short,

the plaintiffs are not really interested in final prospective equitable relief at all; they are singularly focused

on recovering a retrospective damages remedy, and

Rule 23(b)(3), not (b)(2), governs certification of a

damages class.

Before concluding, we offer an observation about an

anomaly in the district court’s class-certification order. The judge said he would use the Rule 23(b)(2) proceeding to assess State Farm’s “liability” on the damages

claims. Perhaps by this the judge meant that he intended

to use the Rule 23(b)(2) class proceeding to adjudicate

only those common issues pertaining to State Farm’s

liability for breach of contract and bad faith, while reserving the more claimant-specific issues—such as the

calculation of damages—for subsequent individual adjudication. However, as we have explained, Rule 23(b)(2)

governs class claims for final injunctive or declaratory

relief and is not appropriately invoked for adjudicating

common issues in an action for damages. A damages
24 No. 09-1725

class may be certified under Rule 23(b)(3) and particular

issues identified for resolution on a class-wide basis

pursuant to Rule 23(c)(4). FED. R. CIV. P. 23(c)(4) (“When

appropriate, an action may be brought or maintained as

a class action with respect to particular issues.”). Or, in

an appropriate case, a Rule 23(b)(2) class and a

Rule 23(b)(3) class may be certified where there is a

real basis for both damages and an equitable remedy.

See Pella Corp. v. Saltzman, 606 F.3d 391, 392-93 (7th Cir.

2010). As we have explained, that is not the case here;

neither Rule 23(b)(3) nor Rule 23(c)(4) is implicated.

For the foregoing reasons, we REVERSE and REMAND

with instructions to decertify the Rule 23(b)(2) class.

2-14-11