Two Million Consumers Affected By Judge Kenneth M. Karas’ Landmark Ruling
United States District Judge Kenneth M. Karas has granted national class action certification in the lawsuit against Gerber Life Insurance Company, allowing plaintiffs who purchased Gerber’s Grow-Up Plan and College Plan to proceed collectively with their claims. Judge Karas’ landmark ruling was delivered by phone on September 27, 2024, and represents a significant victory for consumers who allege they were intentionally misled by deceptive marketing practices.
Filed by class representatives Emilie Norman and Josephine Loguidice, the lawsuit cites fraudulent advertising and misrepresentation by Gerber Life, and seeks damages for all individuals who purchased the Grow-Up Plan or College Plan between April 25, 2014 and October 21, 2021.
In total, Judge Karas granted nationwide certification for a class of over 2 million people who paid premiums exceeding $700 million.
“This is a true win for the millions of consumers who were duped by Gerber Life into purchasing these products based on false, grossly deceptive messaging, and who otherwise might not have their day in court,” said Natalie Lyons, plaintiffs’ attorney and partner at Cohen & Malad, LLP.
Gerber Life’s Grow-Up Plan and College Plan were marketed as providing long-term financial benefits for children, sold as a type of savings account that could be utilized for education and other circumstances when the child was older. However, the policies were, in fact, simply life insurance plans that only paid out if the child died.
During the statutory period, over 1.9 million consumers purchased Grow-Up Plan policies, and an additional 37,000 College Plan policies were sold nationwide.
In the ruling, Judge Karas explained the court’s decision to apply New York consumer protection laws to all class members, as plaintiffs argued, saying “The wrong here, from plaintiffs’ perspective – and they’ve got evidence that substantiates their theory of the wrong – originated in New York. All of the ads, all of the marketing scheme, the marketing planning all was done in New York. So the fact that the processing of the plans may have been in Michigan; the fact that the purchases of these plans were made throughout the country, in the Court’s view doesn’t change the interest analysis….”
Judge Karas also found the compensatory damages models presented by plaintiffs’ expert reliable and accepted three of four proposed counts.
- Full Refund of Premiums Paid: Refund of all premiums paid less any payments made
to policyholders, such as death benefits or policy loans. - Refund Minus Mortality Protection: Refund of premiums less the cost of mortality protection.
- Refund Minus Additional Costs: Refund of premiums less Gerber Life’s acquisition and maintenance costs related to the policy, in addition to the cost of mortality protection.
“Today is one of the best days of my career,” said Lynn Toops, partner at Cohen & Malad, LLP. “I am delighted with the Court’s ruling, and I am proud to have worked alongside Ms. Lyons, who has championed this case since the day she joined Cohen & Malad.”
“Gerber Life deliberately preyed upon new mothers and grandmothers of modest means and education,” Toops continued. “They intentionally tricked these women into purchasing worthless life insurance policies under the guise that they were a savings plan for their children, when they were not.”
Consumers who purchased either the Gerber Life Grow-Up Plan policy or Gerber Life College Plan policy between April 25, 2014 and October 21, 2021 are encouraged to contact the class action department of Cohen & Malad, LLP: cohenandmalad.com/contact-us.
Lead attorneys Lynn Toops and Natalie Lyons are available for further media comment. Please call 317.472.6744 or contact us online.
Loguidice v. Gerber Life Insurance Company | Case Number: 7:20-cv-03254
New York Southern Court, Judge Kenneth M. Karas
