The case was assigned to Senior U.S. District Judge Alvin K. Hellerstein. President Clinton nominated him in May 1998. The Senate confirmed him in October 1998. He took senior status in January 2011.
Thrust of the Case
The "Nature of the Action" section of the first amended complaint consists of 20 paragraphs, and includes a few redactions. Here are some lightly edited excerpts from that section:
1. Plaintiffs seek to represent a class of policyholders who have been subjected to unlawful and excessive COI increases in violation of their insurance policies.
2. The policies at issue are Performance Universal Life policies issued between 2003 and 2010.
3. In February 2018, John Hancock's parent company, Manulife Financial Corporation, which reports on behalf of John Hancock in consolidated statements, announced that it had suffered a $1.6 billion net loss in the fourth quarter of 2017.
4. In May 2018, John Hancock sent cryptic letters to policyholders informing them of a massive increase in COI rates and charges on certain Performance Universal Life policies.
6. John Hancock did not disclose that, when reviewing the proposed COI increase, the New York Department of Financial Services concluded that the assumptions John Hancock had originally used when pricing the policies were not reasonable.
8. Internally, John Hancock had long recognized that its original assumptions were no longer valid.
10. The COI increase is massive. For example, one plaintiff took out a policy on her life in 2008. After paying ten years of premiums at John Hancock's "projected" rates, John Hancock suddenly increased her COI rates by about 70% per year, causing her to have to pay about $225,000 more in premiums per year to keep her coverage. She is now aged 87.
11. Other policyholders have seen increases ranging from 17% to 75%. John Hancock did not provide policyholders with any reason for the wildly disparate COI increases.
12. The COI increase violated terms of the policies in numerous respects.
17. John Hancock did not implement the COI increase on other products it issued between 2003 and 2010.
19. In violation of the policy provision promising illustrations "upon request," John Hancock refused to provide illustrations for subject policies from January 2017 through May 2018.
20. The COI rate hike and John Hancock's actions preceding it breached the policies in at least five respects.
The "Factual Background" section of the first amended complaint consists of 53 paragraphs. Also, the first amended complaint contains the following seven claims for relief: (1) breach of contract, (2) violation of certain New York laws, (3) violation of certain other New York laws, (4) violation of certain California laws, (5) violation of certain other California laws, (6) violation of certain Texas laws, and (7) violation of certain New Jersey laws. The first amended complaint is in the complimentary package offered at the end of this post.
On July 27, 2020, Judge Hellerstein issued a scheduling order listing several pretrial deadlines. For example, the fact discovery deadline is February 22, 2021, the expert discovery deadline is June 28, 2021, and the briefing for class certification is to be completed by September 27, 2021. The scheduling order does not mention settlement, but includes a deadline for "dispositive motions." The scheduling order is in the complimentary package offered at the end of this post.
It appears that the case has a long way to go. I plan to report on significant future developments, such as class certification and the terms of any proposed settlement.
I am offering a complimentary 58-page PDF consisting of the plaintiffs' first amended complaint (56 pages) and the judge's recent scheduling order (2 pages). Email email@example.com and ask for the November 2020 package about the case of Leonard v. John Hancock.