7th Circuit Reverses Class Action Status in Progressive ACV Undervaluation Case

The U.S. Court of Appeals for the Seventh Circuit reversed the class action status in an undervalued actual cash value (ACV) lawsuit against Progressive and remanded the case to the District Court. The case involves Indiana policyholders who allege Progressive calculated total loss vehicle ACVs using "Projected Sold Adjustments," which they argue is an unacceptable methodology.

The Seventh Circuit judges found that the District Court erred in its legal conclusion about Progressive's duties under its standard insurance policy, particularly regarding the calculation method for actual cash value payments. The appellate panel highlighted that Progressive's contractual obligation is to pay the actual cash value of totaled vehicles, factoring factors like vehicle age and condition, rather than adhering to a specific valuation formula. The court emphasized that damages would result from underpayment but disputed the plaintiffs' claim of a methodological breach based on how the ACV was calculated. This ruling contrasts with recent decisions in Ohio and Pennsylvania, where courts differed on class certification for similar lawsuits against Progressive alleging systemic underpayment through the application of Projected Sold Adjustments.

 The case underscores complexities in insurance claims adjudication related to ACV calculations, impacting class certification viability in fraud and breach of contract suits. It also illuminates the nuanced judicial interpretations of insurer obligations and evidentiary requirements for damage claims under total loss vehicle insurance contracts.