White and Nadeau v. Symetra – Part 1

Several class action lawsuits, almost always settled without admission of liability, have nonetheless helped shape, and arguably have helped to improve, structured settlement business practices in the United States. Examples include: the Weil lawsuit ; Macomber v. Travelers; Spencer v. Hartford; and Griffiths v. Aviva.

On Tuesday October 17, 2023, in Phoenix, a three-judge panel of U.S. Ninth Circuit Court of Appeals is scheduled to hear oral arguments in a class action lawsuit brought by Plaintiff-Appellees Renaldo White and Randolf Nadeau against Defendants-Appellants Symetra Assigned Benefits Service Company (SABSCO) and Symetra Life Insurance Company (Symetra Life) – herein sometimes referred to jointly as “Symetra.” Here is the livestream link – time to be posted.

Case Background

Symetra Life and SABSCO are separate legal entities but both are subsidiaries of Symetra Financial Corporation. In 2004, Symetra Financial Corporation acquired a group of life insurance and investment companies (including Safeco Life Insurance Company) from Safeco Corporation. Beginning in 1984, Safeco Life Insurance Company (Safeco Life) had written structured settlement annuities (SSAs). In the early 2000s, Safeco Life funded a study analyzing the future profitability of SSAs. The study concluded that SSAs could become unprofitable for insurance companies, but it would take many years to determine.  Defendant Symetra Life continued writing structured settlement annuities until 2005 with Defendant SABSCO operating as its assignment company.

In 2005, Symetra stopped writing structured settlements and started engaging in factoring transactions. Symetra, however, was unique among factoring companies. For the most part, Symetra, as a factoring company, was soliciting and purchasing payment rights from the same structured settlements Symetra Life and Safeco Life had previously sold to structured settlement recipients. Symetra’s new factoring business utilized SABSCO as the assignment company providing the monthly payments to annuitants to solicit “funding (i.e. factoring) services” to structured settlement recipients.

Plaintiffs White and Nadeau each were recipients of SSAs purchased and owned by SABSCO, and issued by SAFECO (n/k/a Symetra). Each of their settlement agreements included language explicitly stating they lacked the power to transfer their future SSA payments. Plaintiffs later sold their rights to future payments to SABSCO in exchange for immediate lump sum payments at a significant discount.  Each of White’s and Nadeau’s subsequent transfers of their payment rights was approved by a state court as being in their “best interest.”

Note: Defendants’ arguments against class certification highlight these state court “best interest” determinations. For example, in Plaintiff Nadeau’s case, a New York Judge found “the transaction, including the discount rate used to determine the gross advance amount and the fees and expenses used to determine the net advance amount, are fair and reasonable.”

The Plaintiffs’ Lawsuit – Overview

On December 30, 2020, Plaintiffs White and Nadeau filed a class action lawsuit, individually and on behalf of approximately 2000 other structured settlement recipients who similarly sold their payment rights to Defendants, in the United States District Court Western District of Washington at Seattle seeking to certify the following class and subclass:

  • Nationwide Class – “All persons who are or were, at any time, annuitants of [a structured settlement annuity] (SSA) that contemplated life contingent payments issued by Symetra and who subsequently sold to a Symetra affiliate the right to receive payments from that SSA in a factoring transaction.”
  • Void Ad Initio Subclass – “All members of the Class whose contract defining the annuity at issue included language explicitly stating that the annuitants lack the power to transfer their future SSA payments.”

Plaintiffs’ general allegations:

  • Defendants utilized the information they already had on structured settlement recipients to target their factoring solicitations.
  • Defendants preyed upon structured settlement recipients’ trust in Defendants as the issuer of their annuities, without disclosing their profit-motive and conflict of interest.
  • Defendants’ solicitation of their rights to the future structured settlement payments under the SSAs was predatory and the result of an illegal business scheme.
  • This illegal business scheme was designed to induce them and other structured settlement recipients into selling their future payments at a steep discount resulting in damages of an estimated $75 million.

The Plaintiffs more specific legal claims against the Defendants: 1) Violations of the Racketeer Influenced and Corrupt Organizations Act (RICO); 2) Violations of the Washington Consumer Protection Act (CPA); 3) Violation of the duty of good faith and fair dealing; 4) Breach of fiduciary duty against Symetra; 5) Breach of fiduciary duty against SABSCO; 6) Breach of contract; 7) Tortious interference with contract; 8) Civil conspiracy; and 9) Unjust enrichment.

The District Court Decision

On August 3, 2022, United States Senior District Judge Marsha J. Pechman issued an order:

  • Determining Plaintiffs had provided sufficient evidence to establish by a preponderance of the evidence that class certification was appropriate and proper for each of their legal claims – with the exception of their breach of fiduciary duty claims which Judge Pechman denied.
  • Certifying each of the two classes Plaintiffs proposed as set forth above.

The Defendants’ Appeal

Defendants SABSCO and Symetra Life have filed an appeal with the U.S. Ninth Circuit arguing

Judge Pechman abused her discretion in granting certification and reversal is required. Defendants maintain Plaintiffs cannot “actually prove” any of their claims are “capable of class-wide resolution” and  Judge Pechman’s decision was based on errors of law and a selective analysis of the factual record.

Summary of the District Judge’s Analysis

Judge Pechman began her analysis by confirming her responsibility to undertake a “rigorous analysis” of all Federal Rules of Civil Procedure (FRCP) Class Action Rule 23 factors necessary to determine whether to certify any class. These factors require the Plaintiffs to meet all four requirements in Rule 23(a): numerosity, commonality, typicality, and adequacy of representation.

In addition, as Judge Pechman explained, the Plaintiffs must also satisfy one of FRCP Rule 23(b)’s factors. Of those factors, Plaintiffs Wood and Nadeau seek certification under the “predominance” standard of Rule 23(b)(3). To obtain certification of a class action for money damages under Rule 23(b)(3), Plaintiffs must establish that “the questions of law or fact common to class members predominate over any questions affecting only individual members.”

Plaintiffs must demonstrate predominance and superiority under Rule 23(b)(3) by a preponderance of the evidence. Citing case authority, Judge Pechman wrote: “[e]stablishing predominance, therefore, goes beyond determining whether the evidence would be admissible in an individual action” and “[i]nstead, a ‘rigorous analysis’ of predominance requires ‘judging the persuasiveness of the evidence presented’ for and against certification.’”

Note: this “predominance” standard of Rule 23(b)(3), as applied to Plaintiffs’ case and Judge Pechman’s analysis, represents a key challenge raised by Defendants – both in the District Court and in their appeal. Defendants argue that Plaintiffs’ claims present numerous individualized inquiries that overwhelm any purportedly common questions thereby rendering the case unfit for class certification under Rule 23.

Judge Pechman next analyzed each Rule 23(a) requirement and the Rule 23(b)(3) “predominance” standard. Judge Pechman determined the Plaintiffs had met all four of the Rule 23(a) requirements identified above.

Judge Pechman’s “Predominance” Standard Analysis

Rule 23(b)(3) requires not just that some common questions exist, but that they predominate over individual ones. Citing case law, Judge Pechman explained: “[a]n individual question is one where members of a proposed class will need to present evidence that varies from member to member, while a common question is one where the same evidence will suffice for each member to make a prima facie showing [or] the issue is susceptible to generalized, class-wide proof.”

Because commonality and predominance overlap, Judge Pechman considered both elements together and did so in the context of each of the legal claims Plaintiffs are pursuing – because, in ruling on the motion for class certification, “[c]ourts must resolve all factual and legal disputes relevant to class certification, even if doing so overlaps with the merits.”

Judge Pechman then determined Plaintiffs had satisfied the Rule 23(b)(3) “predominance” standard for all of their legal claims with the exception of their breach of fiduciary duty claims. The general issue for each claim is whether Plaintiffs have put forth sufficient evidence to demonstrate that common proof will apply to the class as a whole.

Within Judge Pechman’s comprehensive Rule 23(b)(3) “predominance” analysis, here are three examples of individual issues she addressed:

  • Causation/Reliance – Judge Pechman discussed “causation” and “reliance” as part of her analysis of both Plaintiffs’ RICO claim and Consumer Protection Act claim. She agreed with the Plaintiffs that a valid justification for their commonality argument focused on Defendants’ conduct, as opposed to the class members or Defendants’ relationship with the class members.
  • Defendants’ Unfair and Deceptive Business Practices – Judge Pechman’s analysis of Plaintiffs’ Consumer Protection Act claim details Defendants’ alleged unfair and deceptive business practices. Plaintiffs’ purported evidence for establishing commonality includes Defendants’ marketing plans, Defendants’ internal research, and internal communications and training materials.
  • AntiAssignment “Power Language – Judge Pechman’s discussion of “power language” in Plaintiffs’ structured settlement agreements appears in her analysis of Plaintiffs’ Contract claims. Readers should note: “power language” not only defines the putative subclass in this case. “Power language” also represented a critical issue in the Cordero case and has ongoing importance for settlement planners.

Having determined that Plaintiffs’ satisfied the Rule 23(b)(3) “predominance” standard for all of their legal claims (with the exception of their breach of fiduciary duty claims), Judge Pechman considered a final requirement for class certification: whether class treatment is superior and manageable compared with individual trials. The four factors to be considered under Rule 23(b)(3) are:

  • The class members’ interests in individually controlling the prosecution or defense of separate actions;
  • The extent and nature of any litigation concerning the controversy already begun by or against class members;
  • The desirability or undesirability of concentrating the litigation of the claims in the particular forum; and
  • The likely difficulties in managing a class action.

Judge Pechman found Plaintiffs had demonstrated sufficient superiority for each factor.


This summary of Judge Marsha Pechman’s District Court Order concludes Part 1 of the Independent Expert’s Review of the White and Nadeau v. Symetra case. Part 2 will summarize the Defendants’ and Plaintiffs’ Appellate Arguments providing a deeper dive into some of the significant issues – including lessons for primary market settlement planners.