USAA has scored a significant legal win after Florida’s Third District Court of Appeal overturned a class action certification against the insurer on January 28. The case involved USAA Casualty Insurance Company and USAA General Indemnity Company and centered on their responsibilities under Florida’s no-fault auto insurance law related to Medicare coordination.
The lawsuit was filed by MSP Recovery Claims and related groups, who claimed that USAA failed to properly identify when its insured customers were eligible for Medicare benefits. MSP argued that USAA had a duty to coordinate benefits with Medicare and notify Medicare payers accordingly. They sought a court declaration that these duties applied across all class members.
Back in May 2024, MSP’s attorneys pointed to a similar case involving IDS Property Casualty Insurance, where a class had been certified by the same trial judge. Using that as precedent, the court approved class certification for the USAA case in June 2024.
However, the appeals court took a different view. It ruled that common questions don’t outweigh individual issues among class members. The court said these cases require a close look at each insured person’s situation, including payment details and Medicare coordination. Because of this, the court found the case unsuitable for class action status.
The court also noted that despite MSP’s attempt to frame the case as seeking only a declaration on USAA’s duties, it still effectively involved claims for money damages to fix past harms. This means each claim would need its own separate review to determine if USAA failed to meet its legal obligations.
This decision follows earlier rulings by the same court that rejected similar class certifications against auto insurers over Medicare-related claims. For insurers operating in Florida’s no-fault insurance space, the ruling is a major safeguard against broad class actions on Medicare coordination issues.
The appeals court sent the case back to the trial court to undo the class certification. While USAA raised other potential defenses, the court focused solely on the issue of class certification.
Now, MSP and similar entities will likely have to pursue individual lawsuits rather than class actions, making litigation more costly and time-consuming. For insurers, this ruling highlights a strong defense strategy: emphasize the need for individualized examination of claims on personal injury protection benefits and Medicare coordination to avoid class action exposure.
For the time being, USAA can claim a victory in what has become an ongoing legal struggle for Florida insurers caught between state no-fault rules and federal Medicare regulations.