15-2665-cv, 15-3504-cv, 15-3553-cv, 15-4189-cv
Ross, et al. v. AXA Equitable Life Ins. Co.

                              UNITED STATES COURT OF APPEALS
                                  FOR THE SECOND CIRCUIT

                                       SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED
BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY
OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.



        At a stated Term of the United States Court of Appeals for the Second Circuit, held at the
Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York on the
23rd day of February, two thousand seventeen.

Present:         JOHN M. WALKER, JR.,
                 ROSEMARY S. POOLER,
                 BARRINGTON D. PARKER,
                           Circuit Judges.

_____________________________________________________

JONATHAN ROSS, DAVID LEVIN,

                                Plaintiffs-Appellants,

                         v.                                                  15-2665-cv

AXA EQUITABLE LIFE INSURANCE COMPANY,

                                Defendant-Appellee.1




1
    The Clerk of Court is respectfully directed to amend the caption as above.
MARIA DEL CARMEN ROBAINAS, GIOVANNI
VALLADARES, JOSE A. CAPABLANCA,
MODESTO MARTIN, JACQUELINE J. RUSS,
ALLEN PEREZ, GREGORY TRUITT, EDUARDO J.
PRIETO, JAMES T. FAVRE, INTERNATIONAL
ASSOCIATION OF MACHINISTS AND
AEROSPACE WORKERS, DISTRICT LODGE 15,

                                 Plaintiffs-Appellants,

                         v.                                                   15-3504-cv

METROPOLITAN LIFE INSURANCE COMPANY,

                                 Defendant-Appellee.2

CALVIN W. YARBROUGH, ON BEHALF OF
HIMSELF AND ALL OTHERS SIMILARLY
SITUATED,

                                 Plaintiffs-Appellants,

                         v.                                                   15-3553-cv

AXA EQUITABLE LIFE INSURANCE COMPANY,

                                 Defendant-Appellee.

MARK ANDREW INTOCCIA, SR., ON BEHALF OF
HIMSELF AND ALL OTHERS SIMILARLY
SITUATED, RONALD F. WEILERT,
INDIVIDUALLY AND ON BEHALF OF ALL
OTHERS SIMILARLY SITUATED, ANN M.
WEILERT, INDIVIDUALLY AND ON BEHALF OF
ALL OTHERS SIMILARLY SITUATED,

                                 Plaintiffs-Appellants,

                         v.                                                   15-4189-cv

METROPOLITAN LIFE INSURANCE COMPANY,

                                 Defendant-Appellee.

_____________________________________________________
2
    The Clerk of Court is respectfully directed to amend the official caption as above.

                                                   2
Appearing for Appellants:    Timothy W. Burns, Perkins Coie LLP (David J. Harth, Jeff J.
                             Bowen, Freya K. Bowen, Eric D. Miller, on the brief), Madison,
                             WI, for all Appellants.

                             Edward W. Ciolko, Kessler Topaz Meltzer & Check LLP, Radnor,
                             PA, for Appellants Andrew Intoccia, Sr., on behalf of himself and
                             all others similarly situated, Ronald F. Weilert, individually and on
                             behalf of all others similarly situated, and Ann M. Weilert,
                             individually and on behalf of all others similarly situated.

                             Glen L. Abramson, Berger & Montague, P.C., Philadelphia PA, for
                             Appellant International Association of Machinists and Aerospace
                             Workers, District Lodge 15.

Appearing for Appellee AXA Equitable Life Insurance Company:
                          Elizabeth M. Sacksteder, Paul, Weiss, Rifkind, Wharton &
                          Garrison LLP (Brad S. Karp, Bruce Birenboim, Justin D. Lerer, on
                          the brief), New York, NY.

Appearing for Appellee Metropolitan Life Insurance Company:
                            Sandra D. Hauser, Dentons US LLP (Patrick J. Gennardo, on the
                            brief), New York, NY.

      Appeal from the United States District Court for the Southern District of New York
(Furman, Cote, Sullivan, Js.).

     ON CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the judgments of said District Courts be and hereby are AFFIRMED.

         Plaintiffs-Appellants Jonathan Ross, David Levin, Calvin W. Yarbrough, on behalf of
himself and all others similarly situated, Maria Del Carmen Robainas, Giovanni Valladares, Jose
A. Capablanca, Modesto Martin, Jacqueline J. Russ, Allen Perez, Gregory Truitt, Eduardo J.
Prieto, James T. Favre, International Association of Machinists and Aerospace Workers, District
Lodge 15, Mark Andrew Intoccia, Sr., on behalf of himself and all others similarly situated,
Ronald F. Weilert, individually and on behalf of all others similarly situated, and Ann M.
Weilert, individually and on behalf of all others similarly situated, (collectively “Appellants”)
appeal from four judgments of the United States District Court for the Southern District of New
York (Furman, Cote, Sullivan, Js.), dismissing for lack of Article III standing Appellants’ four
putative class action suits on behalf of: (1) all those who purchased, renewed, or paid premiums
for life insurance issued by Defendant-Appellee AXA Equitable Life Insurance Co. (“AXA”)
between 2011 and March 11, 2014; (2) all those who purchased, renewed, or paid premiums for
life insurance or group life insurance issued by Defendant-Appellee Metropolitan Life Insurance
Co. (“MLIC”) between February 1, 2008 and December 16, 2014; (3) all those who purchased,
renewed, or paid premiums for Guaranteed Benefits Insurance Riders attached to variable
annuity contracts issued by AXA between January 1, 2011 and March 11, 2014; and (4) all those
who purchased, renewed, or paid premiums for Guaranteed Benefits Insurance Riders attached to


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variable annuity contracts issued by MLIC between April 20, 2009 and April 20, 2015. See
Yarbough v. AXA Equitable Life Ins. Co., No. 15-cv-2582, 2015 WL 6792225 (S.D.N.Y. Oct. 22,
2015) (Sullivan, J.); Robainas v. Metro. Life Ins. Co., No. 14cv9926, 2015 WL 5918200
(S.D.N.Y. Oct. 9, 2015) (Cote, J.); Ross v. AXA Equitable Life Ins. Co., 115 F. Supp. 3d 424
(S.D.N.Y. 2015) (Furman, J.); App’x at 471.We assume the parties’ familiarity with the
underlying facts, procedural history, and specification of the issue for review.

        On appeal from a dismissal under Federal Rule of Civil Procedure 12(b)(1), “we review
the [district] court’s factual findings for clear error and its legal conclusions de novo.” Cortlandt
St. Recovery Corp. v. Hellas Telecomms., S.à.r.l., 790 F.3d 411, 417 (2d Cir. 2015) (citation
omitted). This court must “accept as true all material allegations in the complaint” and “construe
the complaint in favor of the complaining party.” Id. (internal quotation marks and citations
omitted).

        “To satisfy the irreducible constitutional minimum of Article III standing, a plaintiff must
demonstrate (1) injury in fact, (2) a causal connection between that injury and the complained-of
conduct, and (3) a likelihood that the injury will be redressed by a favorable decision.” Strubel v.
Comenity Bank, 842 F.3d 181, 187-88 (2d Cir. 2016) (internal quotation marks and citation
omitted). Here, we focus on the first element—injury in fact. “To demonstrate injury in fact, a
plaintiff must show the invasion of a legally protected interest that is concrete and particularized
and actual or imminent, not conjectural or hypothetical.” Id. at 188 (internal quotation marks and
citation omitted). “The plaintiff, as the party invoking federal jurisdiction, bears the burden of
establishing these elements.” Spokeo, Inc. v. Robbins, 136 S. Ct. 1540, 1547 (2016) (citation
omitted). “Where, as here, a case is at the pleading stage, the plaintiff must clearly allege facts
demonstrating each element.” Id. (internal ellipses, quotation marks, and citation omitted).

        Appellants first argue they have Article III standing because they have alleged a violation
of New York Insurance Law Section 4226 and the injury inherent in the statutory violation is
sufficient, by itself, to constitute injury in fact. We disagree.

        In Spokeo, the Supreme Court stopped short of conferring Article III standing to any
person by virtue of that person having been granted a statutory right to sue, holding “Article III
standing requires a concrete injury even in the context of a statutory violation.” Id. at 1549. The
Supreme Court instead suggested that “the risk of real harm [might] satisfy the requirement of
concreteness” in some circumstances, such as where “the common law permitted suit in such
instances[.]” Id. The Court stated that where a violation of a statute “may result in no harm” or
not “present any material risk of harm[,]” a plaintiff will not be able to “satisfy the demands of
Article III by alleging a bare [statutory] violation.” Id. at 1550.

        In Strubel v. Comenity Bank, this Court considered whether four alleged violations of the
Truth in Lending Act (“TILA”) were sufficient to convey Article III standing absent a separate
injury allegation under Spokeo. 842 F.3d at 185-86, 190-94. This Court held that a violation of
two of TILA’s requirements, namely (1) the requirement of notice to the consumer of consumer
rights pertaining to disputed credit card purchases and (2) the requirement that a dissatisfied
consumer must notify the creditor in writing, gave rise to Article III standing absent a separate
injury. Id. at 190. As this Court explained, “[a] consumer who is not given notice of his


                                                  4
obligations is likely not to satisfy them and, thereby, unwittingly lose the very credit rights that
the law affords him. For that reason, a creditor’s alleged violation of each notice requirement, by
itself, gives rise to a risk of real harm to the consumer’s concrete interest in the informed use of
credit.” Id. at 190-91 (internal quotation marks and citation omitted). In contrast, this Court held
that the “alleged defect in 30-day notice of correction[] does not, by itself, present any material
risk of harm” and therefore was insufficient for Article III standing without a separate alleged
injury. Id. at 193 (internal quotation marks and citation omitted).

        Appellants cannot rely solely on a violation of New York Insurance Law Sections
4226(a)(4) and (d) in order to satisfy Article III’s injury-in-fact requirement. Section 4226(a)(4)
provides that an insurer shall not “make any misleading representation, or any misrepresentation
of the financial condition of any such insurer or of the legal reserve system upon which it
operates[.]” N.Y. Ins. Law § 4226(a)(4). As in Strubel, a violation of Section 4226(a)(4) alone
does not inherently present any material risk of harm. 842 F.3d at 193; see also Spokeo, 136 S.
Ct. at 1550 (“[N]ot all inaccuracies cause harm or present any material risk of harm.”). The mere
fact that an insurer may make a misleading representation does not require or even lead to the
necessary conclusion that the misleading representation is material or even likely to cause harm.
Further, Appellants here, like the plaintiff in Strubel, fail to allege that they would not have
purchased the life insurance and annuity riders provided by AXA and MLIC had they known of
AXA’s and MLIC’s alleged shadow insurance practices. Appellants also fail to allege, or even
suggest, that consumers generally would not have purchased AXA’s and MLIC’s life insurance
and annuity riders had they known about the alleged shadow insurance practices. Under Strubel,
Appellants’ allegations are insufficient to support a conclusion that a plain violation of Section
4226 creates an injury in fact sufficient for Article III standing. See 842 F.3d at 193.

        In order to suffice for Article III standing, an injury in fact must not only be concrete and
particularized, it must also be “actual or imminent, not conjectural or hypothetical.” Spokeo, 136
S. Ct. at 1548 (internal quotation marks and citation omitted). “Although imminence is
concededly a somewhat elastic concept, it cannot be stretched beyond its purpose, which is to
ensure that the alleged injury is not too speculative for Article III purposes—that the injury is
certainly impending.” Clapper v. Amnesty Int’l USA, 133 S. Ct. 1138, 1147 (2013) (internal
quotation marks and citation omitted; emphasis in original). The Supreme Court has therefore
“repeatedly reiterated that threatened injury must be clearly impending to constitute injury in
fact, and that allegations of possible future injury are not sufficient.” Id. (internal quotation
marks and citations omitted; emphasis in original). A “speculative chain of possibilities does not
establish that [the] injury [alleged] is certainly impending[.]” Id. at 1150.

        Appellants argue that they have suffered an injury in fact because there is an increased
risk that AXA and MLIC will be unable to pay Appellants’ claims in the event of an economic
downturn. This allegation travels too far down the speculative chain of possibilities to be “clearly
impending.” Clapper, 133 S. Ct. at 1150. An economic downturn would have negative effects on
all financial contracts, even those that do not contain the hidden risks that Appellants allege here.
Such an economic downturn is not only speculative itself, but also simply the first of many
necessary conditions that must be fulfilled (including a bank lender of a letter of credit (“LOC”)
refusing to renew its outstanding LOCs to the reinsurer or, alternatively, the parent company or
the New York Department of Financial Services pressuring AXA or MLIC not to draw down the


                                                  5
available LOC) in order for the risk Appellants posit to cause them harm. Accordingly,
Appellants have failed to allege injury in fact on the basis of an increased risk of nonpayment
because the “speculative chain of possibilities [alleged by Appellants] does not establish that
[the] injury [alleged] is certainly impending[.]” Id.

        Appellants also argue they have suffered an injury because they purchased life insurance
policies and annuity riders that were inferior, due to the shadow insurance transactions, to life
insurance policies and annuity riders that Appellants would have been able to buy for the same
price that do not have such shadow transactions. Appellants, however, do not allege that the
amount to be paid out by the life insurance policies or by the annuity riders they bought has
decreased. The value of a life insurance policy or an annuity rider is the amount that will be paid
by the policy in the future. See, e.g., Foster Hose Supporter Co. v. Taylor, 184 F. 71, 73 (2d Cir.
1911) (noting the substance of a life insurance policy is the “promise to pay the insurance” in
exchange for the holder’s “punctual payment of the premiums”). Appellants therefore cannot
allege a current injury, as the value of the life insurance policies and annuity riders has not
changed. Instead, Appellants only allege that the amount that will be paid out, i.e. the value of
the insurance policy and annuity rider, might decrease in the future. Like Appellants’ “increased
risk” claim, any injury for a possible inability of AXA and MLIC to fully pay out the life
insurance and annuity rider claims in the future is speculative and hypothetical.

        We have considered the remainder of Appellants’ arguments and find them to be without
merit. Accordingly, the judgments of the district courts hereby are AFFIRMED.


                                                     FOR THE COURT:
                                                     Catherine O’Hagan Wolfe, Clerk




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