Class Action Frequently Asked Questions
1. What is a class action lawsuit?
Class actions are lawsuits in which the legal claims and rights of similarly situated groups of people are decided in a single court proceeding. This avoids the need for a large number of people to file similar individual lawsuits.
2. Who represents the interests of the Class?
The court appoints “class representatives” and “class counsel” to pursue the legal claims on behalf of the class. Ultimately, however, the court is there to protect the interests of the class and to make sure that the representation by class counsel is fair and adequate.
3. Who is the Judge in this case?
The judge assigned to handle this case is the Honorable Ann I. Jones, Judge of the Los Angeles County Superior Court.
4. What is this case about?
The lawsuit generally alleges that it was improper for CalPERS to impose an 85% rate increase on individuals who purchased LTC1 and LTC2 policies issued through CalPERS’ Long Term Care insurance program. Specifically, the lawsuit alleges that in October 2012, CalPERS adopted an 85% rate increase for certain policy holders that was allegedly necessitated by investment losses in the LTC Program and CalPERS’ decision to change its investment strategy. The plaintiffs assert that under the contracts between CalPERS and Class Members, CalPERS is not permitted to increase premiums for these reasons. The lawsuit also alleges that the 85% premium increase breaches the fiduciary duty CalPERS owes to Class Members. Plaintiffs also allege that the Towers Watson Defendants negligently performed actuarial services in and before 2004 relating to the LTC Program and that this also caused the 85% increase adopted by CalPERS in October 2012. This lawsuit seeks a recovery only with respect to the 85% rate increase implemented in 2015 and 2016 and does not seek a recovery relating to earlier premium increases that occurred in 2003, 2007, 2010, 2011, 2012, 2013 and 2014. Both CalPERS and the Towers Watson Defendants deny that they have done anything improper and deny that anything they may have done caused the injuries claimed by the Class.
5. If I changed my coverage after the announcement of the 85% rate increase, am I included in the Class?
The lawsuit seeks relief for all harm allegedly caused by CalPERS’ decision to implement the 2015-2016 rate increase. This includes seeking relief for policy holders who either elected to pay the 85% increase or chose to reduce coverage in order to avoid the increase. However, you are not eligible to be part of the Class if your policy went into claim and your premium payments were suspended prior to the increase and has remained in claim ever since.
6.What legal claims are part of this lawsuit?
The Court certified the following legal claims to be included in this class action:
7. What time period is covered by this case?
This class action relates to CalPERS’ long-term care policies sold between 1995 and 2004 that were subject to the 85% increase implemented in 2015 and 2016. This includes LTC1 policies sold from 1995-2002 and LTC2 policies sold from 2003-2004.
8. How do defendants answer plaintiffs’ allegations?
CalPERS and the Towers Watson Defendants contend that the plaintiffs’ allegations are without merit, they deny all alleged wrongdoing, and they intend to defend against this case on that basis. Specifically, CalPERS believes that the 85% premium increase was permitted by its contracts with Class Members and that it did not breach any fiduciary duties towards Class Members. CalPERS and the Towers Watson Defendants also assert that plaintiffs’ claims are barred by the applicable statutes of limitation, which they claim began running when premiums were first increased in 2003. CalPERS also believes plaintiffs’ claim for breach of fiduciary duty is barred by governmental immunity. The Towers Watson Defendants deny that they were professionally negligent and deny that any Class Members have any right to recover from the Towers Watson Defendants since the Towers Watson Defendants had no duty to or relationship with CalPERS’ policy holders. The Towers Watson Defendants also deny that the actuarial assistance they provided to CalPERS in the early years of the LTC Program was causally connected to the 85% premium increase CalPERS adopted in 2012.
9. How do I know if I am a Class Member?
You are a Class Member if (1) you are a California citizen, (2) you purchased a long-term care policy from CalPERS between 1995 and 2004, and (3) you were subject to the 85% premium increase announced to policyholders in or around February 2013, and implemented beginning in 2015. You are not eligible to be part of the Class if your policy went into claim and your premium payments were suspended prior to the increase and has remained in claim ever since.
10. How did you get my name and address?
Class Counsel obtained your name and contact information from CalPERS in accordance with the orders of the Court.
11. What are “representative” plaintiffs?
Representative plaintiffs are the named plaintiffs who bring suit on behalf of all the members of a similarly situated group, without the necessity of each individual Class Member filing his or her own lawsuit.
12. Who are the representative plaintiffs in this case?
There are three representative plaintiffs in this case, Holly Wedding, Richard Lodyga and Eileen Lodyga. All have agreed to represent the interests of the Class to the best of their ability and have been approved by the Court to serve as the representatives of the Class.
13. Who are the lawyers approved by the Court as Class Counsel?
Michael J. Bidart Stuart C. Talley
Shernoff Bidart Echeverria LLP Kershaw, Cook & Talley, PC 401 Watt Avenue
600 S. Indian Hill Blvd. Sacramento, California 95864
Claremont, California 91711
Gretchen M. Nelson Gregory Bentley
Nelson & Fraenkel LLP Bentley & More, LLP
707 Wilshire Blvd., Suite 3600 4 Park Plaza, Ste. 500
Los Angeles, California 90017 Irvine, CA 92614
14. Will I have to pay any part of Class Counsel’s legal fees and costs?
At no time will you be obligated to pay any litigation expenses or costs of Class Counsel.
15. How does Class Counsel get paid?
At the conclusion of the litigation, Class Counsel may ask the Court for their fees and litigation costs to be paid out of the recovery, if any, obtained for the Class. Alternatively, Class Counsel’s fees could be paid separately by the defendants if plaintiffs’ suit is successful. Class Counsel will not be paid unless they obtain a monetary award and/or other benefit for the Class. Any legal fees paid to Class Counsel must be reviewed, approved and awarded by the Court.
16. Do I have to do anything to be a Class Member?
No. If you decide to remain in the Class, the lawsuit will continue to be prosecuted on your behalf, and you will be notified with regard to any settlement, trial result, or judgment that affects your interests as a Class Member.
17. What does it mean to stay in the Class?
If you remain in the Class, you will be bound by the results of this lawsuit as to the issues identified in this Notice, whether the results are favorable or unfavorable.
18. Will Class Members receive a monetary award?
If you remain in the Class, you will have the right to share in any monetary recovery, if any, obtained for the Class.
19. Will I have to actively participate in the case to receive an award?
Generally, no. However, it is possible that some Class Members may be interviewed, deposed, or may testify at trial. Class Members may also be asked to complete a “claim form” when the case is concluded.
20. What if I don’t want to be a Class Member?
You have a choice of staying in the Class or deciding to “opt out” of the Class. The Court will exclude from the Class any person who requests to be excluded. If you decide to opt out of the Class, you will not be bound by the results of this lawsuit, whether favorable or unfavorable, and you will not share in any recovery that may be obtained for the Class. By opting out you will retain any claims you may have against CalPERS, the Board Defendants, and the Towers Watson Defendants, subject to limitations periods and other defenses that may apply.
21. How do I “opt out” of the Class?
You must send a letter with your name, present address and a simple statement that you wish to be excluded from this lawsuit. Opt-out letters must be postmarked by October 14, 2016 and sent to:
Sanchez v. CalPERS Class Action
c/o Heffler Claims Group
PO Box 58460
Philadelphia, PA 19102
22. What is the last day to “opt out” of the Class?
The last day to opt out of the Class is October 14, 2016. If your letter is not postmarked on or before that date, you will be included in the Class. Opt-out letters postmarked after October 14, 2016 will not be effective.
23. Can I appear in this case or file my own lawsuit?
Yes, you can do either. If you choose, you may have your own attorney represent you in this case by filing an appearance on your behalf but you will be responsible for paying that lawyer. If you choose to opt out, you may file your own separate lawsuit. However, if you decide to bring an individual lawsuit, there is a risk that certain defenses will bar that suit.
24. When will the case be over?
It is difficult to know how long it will take for this case to conclude. There is a possibility that the case will be resolved without a trial. Otherwise, Class Counsel will have to prove plaintiffs’ claims at trial. During the trial, evidence will be presented to help a jury or the judge decide whether plaintiffs or defendants are right about the claims alleged in this lawsuit. There is no guarantee that plaintiffs will win or that they will recover any money for the Class.
25. Will I be notified if something important happens?
Yes. If you remain in the Class, you will receive notice from Class Counsel of any decertification of the Class, significant changes to the Class, settlement, dismissal, compromise, or final judgment if it affects you as a Class Member. You can also check the website established for this matter, which includes court documents reflecting significant case developments. The website address is: WWW.CALPERSLTCCLASSACTION.COM.
26. Are there more details about the case?
The complete record of all the non-confidential pleadings and papers filed in this case are available for your inspection during regular business hours at the Los Angeles County Superior Court. Certain pleadings and court orders in the case will also be available on the case website, WWW.CALPERSLTCCLASSACTION.COM. However, please do not write or call the Court or the Clerk of the Court for information.