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Defective Medical Products

Defective Medical Products

Personal Injuries

Dangerous Prescription Drugs

Class Actions

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Are Boats Required to Have Insurance in California?

  California law does not require boaters to insure their boats. Despite California’s policy on boater’s insurance, it is wise to get coverage to minimize risks to your personal assets. Boating insurance is like car or home insurance; it covers

Class Action Against CalPERS Proceeds to Trial

Kershaw, Cook, & Talley is one of the law firms appointed as Class Counsel in a class action against CalPERS on behalf of approximately 123,000 class members.  The case was filed in August 2013 in the Los Angeles County Superior Court.

The class action arises from CalPERS decision to implement an 85% premium increase on policyholders who purchased Long-Term Care (LTC) policies between 1995- 2004. Following announcement of this increase in 2013, the Plaintiffs filed a complaint asserting five causes of action against CalPERS: breach of fiduciary duty; breach of contract; breach of the implied covenant of good faith and fair dealing; rescission; and declaratory and injunctive relief.

In March 2017, CalPERS filed a Motion for Summary Judgement seeking to dismiss the case in its entirety. With respect to Plaintiffs’ breach of fiduciary duty, CalPERS argued that it had immunity.  With respect to Plaintiffs’ claim for breach of contract, CalPERS urged that it had the right to raise the policy premiums for any reason and, in any event, that the claim was barred by the statute of limitations.

Class Counsel vigorously opposed CalPERS’ motion, which was heard by the Court on June 2, 2017. During the hearing, Honorable Judge Ann Jones largely agreed with Plaintiffs and the Class.The Court rejected CalPERS’ argument that the Class’ breach of contract claims were barred by the statute of limitations.  The Court found the time period to contest the 85% rate increase did not begin to run until CalPERS actually announced the rate increase in 2013.  The Court also found that the rate increase potentially violated certain provisions in the insurance contract that prohibited rate increases that are “a result of” the increasing benefits that were being provide to policyholders who purchased inflation protection.  Since CalPERS primarily implemented the rate increase on policyholders who purchased inflation protection, the Court found that a jury could infer that the rate increases were implemented as a result of this benefit.

Although CalPERS has indicated that it will attempt to “decertify” the class, this was nevertheless a significant decision on behalf of the Class.  If the case is not decertified, the Class will likely proceed to trial in the Spring of 2018 in Department 308 of the Los Angeles Superior Court.

For more information about the class action against CalPERS, call Kershaw, Cook, & Talley at 916-779-7000.

CalPERS: Plaintiffs File Motion For Class Certification

This month the plaintiffs filed their Motion for Class Certification (click here). In this motion, the plaintiffs are asking the court to certify that the case may proceed as a class action rather than requiring each CalPERS Long Term Care policy holder to file an individual lawsuit.  In the motion, the plaintiffs summarize the evidence that has been obtained in the case to date and argue that the case should be permitted to proceed on a group basis . 

Specifically, plaintiffs motion has a lengthy discussion concerning  a “second opinion” actuarial report that was ordered by CalPERS a year after it started the program in 1996.  In the report, the actuaries were very critical of the way CalPERS had set up its program and provided several warnings that eventually came to fruition.  In the report, the actuaries warn that CalPERS decision to invest a large percentage of the Long Term Care Fund in equities was highly unusual within the insurance industry.  Unlike most insurance companies that invest almost all premiums in bonds and other low risk investments, CalPERS decided to invest 65% of the long term care fund in the stock market.  The actuaries expressly warned CalPERS that this was highly unusual and would most certainly cause rate increases down the road.  The report also noted that CalPERS was compounding the problem by failing to incorporate reserves into its pricing structure.  As such, any errors in the assumptions used to set premiums (even small errors), would lead to rate increases.  The report concluded that these two actions would likely lead to “criticism that [CalPERS] had ‘low-balled’ premiums to attract sales, with the intent—or at least willingness—to make future increases.” 

Plaintiffs further claim that CalPERS did nothing in response to these warnings. It did not change its pricing structure or divest itself from the stock market.  As predicted in the report, CalPERS ordered rate increases following stock market crashes in 2002 and 2008.  It was not until 2012 that CalPERS finally decided to “stabilize” the fund.  To do this, it reduced its stock holdings from what was originally 65% to 15%.  It also decided to incorporate a 10% reserve into its pricing structure.  These two actions were the primary basis for the 85% rate increase that was adopted by the Board in 2012.

In their motion, Plaintiffs assert that under the contract with policy holders rate increases are not permitted when they become necessary due to stock market losses, a change in investment strategy, or CalPERS’ decision to incorporate reserves into its pricing model.  Plaintiffs assert that this issue is the type that should be decided on a class basis instead of individually for each class member.

The plaintiffs also assert that CalPERS breached its fiduciary duty to class members.  The basis for this claim is CalPERS’ failure to advise class members about 1) CalPERS’ highly unorthodox investments strategy, 2) its unorthodox no reserve policy, and 3) the fact that CalPERS was told in 1996 that rates were almost certain to rise in the future.  Plaintiffs also assert that the problems with Program were likely the result of the way CalPERS structured the compensation of the outside vendors who were responsible for helping set premiums and create advertising for the program.  Specifically, the company that was hired to prepare all of the advertising for the Long Term Care Program and the actuaries who helped set premiums were both paid on a “per applicant” basis.  Hence, these vendors had a strong economic incentive to “under price” the policies and omit important negative information from the advertising for the program.  In fact, the company responsible for creating advertising for the policies now makes approximately $20 million  per year from the program.

The hearing on the motion is set for November 23, 2015 in Department 308 of the Los Angeles County Superior Court.

Defective & Dangerous Products

Chicago Medical Malpractice Lawyers

The attorneys at Kershaw, Cook & Talley successfully represent consumers in lawsuits against manufacturers and companies involving defective products and product recalls. Our experienced trial attorneys recover thousands of dollars on behalf of injured individuals in cases involving defective medical devices, dangerous drugs, car defects and more.

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At times, attorneys require further expertise and resources, legally and financially, to resolve a legal matter. We have the team, capability and dedication to handle challenging cases. If you have a case exceeding your resources with respect to workforce or experience, consider contacting our firm. We welcome referrals from firms in Sacramento and throughout the United States.

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Medical Malpractice Lawyers, Kershaw, Cook & Talley

We provide free case consultations. If you, or a loved one, suffered an injury due to another’s negligence or wrongful conduct, call our firm. We will examine your individual situation and explain your legal rights. Our attorneys have extensive experience representing injured individuals, in both jury trials and settlement negotiations.

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Kershaw, Cook & Talley is a Sacramento law firm founded on the principle of helping our clients through personalized legal services. With this philosophy, Kershaw, Cook & Talley has garnered a statewide and national reputation for providing outstanding legal representation and obtaining significant compensation for our clients.

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We understand personal injury cases are often emotionally and financially straining. Our team of top personal injury attorneys in Sacramento is committed to seeking justice for individuals injured as a result of another's negligence or intentional misconduct. At Kershaw, Cook & Talley, our experienced personal injury attorneys will hold the responsible parties accountable for their actions.


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