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Click here for the full text of this decision FACTS:Stonebridge Life Insurance Co. provides accidental death and dismemberment insurance nationwide through a uniform telemarketing effort. The company purchases personal information about potential customers, including their credit-card and bank-account numbers, from other businesses and credit-card issuers. Telemarketers then call those customers and, using a standardized script, describe the insurance and the enrollment process. The insurance is offered on a 60- or 90-day trial basis free of charge, during which time the customer can decide whether to keep or cancel the coverage. The customer is informed that the premium will be automatically charged to the customer’s credit card or bank account when the “bonus” period ends, unless the customer calls to cancel coverage. Customers who indicate they want the insurance are transferred to a licensed agent who enrolls them in the program. The agent confirms the customer’s understanding that the coverage is provided at no cost during the introductory period and explains that unless the coverage is cancelled before the “bonus” period expires the premium will be charged to the customer’s account every month. Although the customer is told which account Stonebridge will charge, the agent does not disclose that Stonebridge already has the specific account information or explain that there will be no further contact from the company before the account is charged. Gayle G. Pitts and Mary Vanderford brought this suit against Stonebridge on behalf of a class of insurance customers who enrolled through the telemarketing program. The class representatives claim they were never informed that the company already had their credit card or bank account information, nor were they told there would be no further contact before their accounts were charged for premiums when the trial period ended. The class sought restitution of insurance premiums based on a single liability theory “money had and received.” The trial court certified a statewide class, identifying the common liability issue as: “[D]id the Defendants obtain money from the Plaintiffs by charging their credit cards or debiting their bank accounts for accidental death and dismemberment insurance premiums which in equity belongs to the Plaintiffs?” The 13th Court of Appeals affirmed the trial court’s certification order. HOLDING:Reversed and remanded. The class members claimed they were each subjected to essentially the same telemarketing effort and initially consented to the trial program, and they contended that the only issue in the case was whether Stonebridge charged their credit cards or debited their bank accounts for premiums which “in equity and good conscience” belong to the class members. Because Stonebridge’s liability turned exclusively on the answer to that question, the class argued that common issues predominated over individual issues in the case. Stonebridge, on the other hand, contended that class certification was inappropriate, because the equitable claim required resolution of individual issues that would predominate at trial. The court agreed with Stonebridge. Predominance, the court stated, is one of the most stringent prerequisites to class-action certification. The predominance requirement prevents class certification when complex and diverse individual issues would overwhelm or confuse a jury or severely compromise a party’s ability to present otherwise viable claims or defenses. In this case, the only cause of action that the class asserted was for “money had and received.” Because the plaintiffs’ claim was equitable in nature, the defendant could present any facts and raise any defenses that would deny the claimant’s right or show that in equity and good conscience the claimant should not recover. Equitable defenses, the court stated, raise important substantive issues that may have a significant effect on class-action litigation. Evidence, the court stated, that individual class members understood they would be charged without further notice, that individual members consented to the charges after they were made or that a policy holder wanted the coverage irrespective of how premiums were charged would be relevant to an assessment of potential equitable defenses. With an estimated class size of some 1.5 million, the court stated that the vast majority of the litigation could be spent trying to determine which individuals should recover their premiums under the equities presented and which should not. Thus, the court concluded that the class representatives failed to prove at the outset that individual issues could be considered in a fair, manageable and time-efficient manner on a class-wide basis. Accordingly, the plaintiffs did not satisfy Texas Rule of Procedure 42(b)(3)’s predominance requirement, and the trial court erred in certifying the class. OPINION:Per curiam.

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