Kaufman v. Allstate New Jersey Ins. Co.., 2012 WL 3870323 (App. Div. Sept. 7, 2012). As discussed here, New Jersey has more liberal rules for standing to sue than do the federal courts. But there are some extreme cases where even those generous standing principles do not allow a plaintiff to sue. This per curiam opinion, by a panel consisting of Judges Axelrad and Sapp-Peterson, is one of those cases.
Plaintiffs originally brought a putative class action against their various auto insurers, asserting that the insurers were required to pay not only to repair their vehicles that had been damaged in accidents, but also to pay for “diminution in value” that allegedly attaches even to vehicles that are fully repaired. The applicable insurance policies did not provide for, or explicitly excluded, such “diminution in value” coverage.
In Kieffer v. High Point Ins. Co., 422 N.J. Super. 38 (App. Div. 2011), discussed here, the same counsel for the Kaufman plaintiffs filed three putative class actions against other auto insurers. Those cases projected essentially the same theory as plaintiffs offered in Kaufman. The Law Division dismissed those cases for failure to state a claim and the Appellate Division affirmed in a published opinion by Judge Sapp-Peterson. [Disclosure: I was co-counsel for one of the insurer defendants in Kieffer].
Given the dispositive precedent of Kieffer, plaintiffs in Kaufman changed their theory. Instead of a first-party claim under their collision policies for damages for non-payment of diminution in value, plaintiffs now sought prospective declaratory and injunctive relief that would bar the defendant insurers from denying coverage for diminution in value claims under plaintiffs’ uninsurer motorist or underinsured motorist coverages “should their vehicles be involved in an accident with an uninsured or underinsured motorist that causes diminshed value to their automobile.”
The Law Division found that new claim insufficient to support standing. The Appellate Division affirmed, even after applying the de novo standard of review that is applicable to decisions regarding standing. Several plaintiffs no longer had their insurance policies with defendants. For that reason, those plaintiffs lacked standing since they had no stake in the litigation, no real adverseness, and no likelihood of harm from an unfavorable decision. As to the other plaintiffs, their claims were purely speculative and based on a “hypothetical situation which does not establish the requisite adverseness needed to seek the declaratory relief and injunctive relief they seek.” Plaintiffs might never get into an accident with an uninsured or underinsured motorist. The cases cited by plaintiffs in support of standing involved situations where claims were actually pending, unlike plaintiffs here, who were seeking a determination based on some speculative cause of action or issue.”
Standing under New Jersey law is very broad, and there are very few cases in which standing is properly denied, especially in comparison to federal standing rules. This case is one of those few.