HERBERT I. MOELIS & others [Note 1] vs. BERKSHIRE LIFE INSURANCE COMPANY (and two companion cases [Note 2]).

COWIN, J. The plaintiffs in these consolidated actions, who are purchasers of life insurance from the defendant, Berkshire Life Insurance Company (Berkshire), moved to certify a nationwide class of Berkshire policyholders under G. L. c. 93A, § 9 (2), or, in the alternative, a Massachusetts-based class. [Note 3] The plaintiffs allege that Berkshire engaged in deceptive practices in violation of G. L. c. 93A, §§ 2 and 9. [Note 4] A judge in the Superior Court denied certification of the nationwide class on the ground that the court could not properly exercise personal jurisdiction over non-Massachusetts residents in the putative class. She also denied Statewide certification, concluding that the individual plaintiffs' potential differences with respect to Berkshire's statute of limitations defense precluded certification. The judge denied the motion for Statewide certification without prejudice. She

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then reported her decision to the Appeals Court pursuant to Mass. R. Civ. P. 64 (a), as amended, 423 Mass. 1403 (1996). We transferred the case here on our own motion, and now affirm. [Note 5]

Facts. Berkshire is a Massachusetts mutual insurance company that sells life insurance policies through its own agents as well as independent insurance brokers in offices across the country. [Note 6] In approximately 1980, Berkshire began marketing the "disappearing premium" concept, a method of paying premiums on a traditional life insurance policy by which a policyholder paid future premiums with dividends instead of receiving such dividends directly. A sufficient accumulation of dividends would allow the policyholder's obligation to pay premiums out of his or her own pocket to "disappear" after a set number of years. Customers were provided with computer-generated illustrations demonstrating when their premiums would likely "disappear."

The plaintiffs in these consolidated actions, who would be the named plaintiffs in the proposed class action, Herbert I. Moelis, Richard F. Tucker, Edward F. Coyman, and Helen F. Coyman, purchased the disappearing premium policies from Berkshire agents or from independent brokers in their respective home States in different years. After various periods of time, each of the plaintiffs learned that his or her premium would not disappear as originally illustrated. Each separately sued Berkshire, claiming that the company engaged in deceptive practices in violation of Massachusetts consumer protection law, G. L. c. 93A, §§ 2 and 9, by failing to inform policyholders adequately that dividend reductions could increase the number of years they had to pay premiums.

The plaintiffs sought to certify a nationwide class under G. L. c. 93A, § 9 (2), of 4,028 policyholders residing in forty-three different States, the District of Columbia and Puerto Rico, as

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well as fourteen policyholders residing outside the United States. The plaintiffs' proposed class included:

"All persons who own or owned a whole life policy identified as a Disappearing Premium or Premium Offset policy issued by Berkshire Life Insurance Company after January 1, 1980, excluding those policyholders whose policies went out-of-force due to death of the insured prior to the date when the obligations to make out-of-pocket payments was to cease or disappear, and further excluding those policyholders from whom Berkshire obtained a signed Statement entitled "Disappearing Premium Disclosure," a practice Berkshire adopted on or about March 15, 1993."

In the alternative, they petitioned to certify a class of Massachusetts policyholders composed of 718 Massachusetts residents.

Discussion. We review the denial of a motion for class certification for an abuse of discretion. Fletcher v. Cape Cod Gas Co., 394 Mass. 595, 606-607 (1985).

1. Nationwide class certification. The Superior Court judge properly denied the plaintiffs' motion to certify a national class. In Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 811 (1985) (Shutts), the United States Supreme Court held that the due process clause of the Fourteenth Amendment to the United States Constitution gave "some protection" to nonresident plaintiffs, as well as nonresident defendants, from the jurisdiction of a forum State seeking to adjudicate their claims. [Note 7] Nonresident defendants must have established sufficient minimum contacts in a forum State for a court of that State to assert personal jurisdiction over them. See, e.g., International Shoe Co. v. Washington, 326 U.S. 310, 319-320 (1945). However, "[b]ecause States place fewer burdens upon absent class plaintiffs than they do upon absent defendants in nonclass suits, the Due Process Clause need not and does not afford the former as much protection from [S]tate-court jurisdiction as it does the latter." Shutts, supra at 811. Thus, a State court may bind an absent

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plaintiff in an action for money damages even if he or she lacks minimum contacts with the forum, so long as basic due process protections are provided. Id. at 811-812. Those protections include notice, an opportunity to be heard and to participate in the litigation, and the opportunity for the plaintiff to remove himself or herself from the class. Id. at 812.

In the instant case, the Superior Court judge correctly refused to certify a national class on the ground that the court could not properly assert personal jurisdiction over out-of-State class plaintiffs. The judge first determined that neither G. L. c. 93A, § 9 (2), nor Mass. R. Civ. P. 23, 365 Mass. 767 (1974), permits a judge to allow individual parties to remove themselves or "opt out" of a class action. See Weld v. Glaxo Wellcome Inc., 434 Mass. 81, 84 (2001); Fletcher v. Cape Cod Gas Co., supra at 602. Thus, the due process protections prescribed by Shutts as an alternative to the traditional minimum contacts test could not be satisfied.

The judge then turned to the traditional "minimum contacts" test to evaluate whether asserting jurisdiction over nonresident plaintiffs comported with due process. The plaintiffs here, relying on the statement in Shutts that the due process clause affords less protection to nonresident plaintiffs than it does to nonresident defendants, Shutts, supra at 811, argued that the judge should require less substantial contact between nonresident plaintiffs and the forum State than that required by the traditional minimum contacts of nonresident defendants. The judge rejected this argument. The plaintiffs cited no cases, and the judge found none, identifying the parameters of a lesser standard for minimum contacts applicable to nonresident plaintiffs in a class action.

There was no error here in applying the traditional defendant minimum contacts test to nonresident plaintiffs in the absence of an opt out provision. The Shutts decision did not explicitly address the personal jurisdiction standard to apply to nonresident plaintiffs when one of the Shutts alternative due process protections is absent. However, at least two United States Courts of Appeals have interpreted Shutts as holding that a court may assert personal jurisdiction over a nonresident plaintiff if basic due process protections exist, or if the minimum contacts test is satisfied. See, e.g., Carlough v. Amchem Prods., Inc., 10 F.3d

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189, 199 (3d Cir. 1993) (if member has not been given opportunity to opt out in class action, he must either have minimum contacts with forum or consent to jurisdiction). See also In re Joint E. & S. Dist. Asbestos Litig., 78 F.3d 764, 777-778 (2d Cir. 1996) (courts may assert personal jurisdiction over nonresident plaintiffs even in absence of one of Shutts due process protections if another basis for jurisdiction is available). We find their reasoning persuasive, and follow it here.

An exercise of personal jurisdiction comports with due process when the nonresident established minimum contacts in the forum. Tatro v. Manor Care, Inc., 416 Mass. 763, 772 (1994). Minimum contacts must have a basis in some act by which the nonresident purposefully avails himself of the privilege of conducting activities in Massachusetts, thus invoking the benefits and protections of its laws. Good Hope Indus., Inc. v. Ryder Scott Co., 378 Mass. 1, 7 (1979). In addition, the exercise of jurisdiction over a nonresident must not offend traditional notions of fair play and substantial justice. Id.

Here, the only contacts the nonresident policyholders have with Massachusetts is their purchase of an insurance policy from Berkshire, a Massachusetts company, through agents located in their home States, and their mailing of annual premium payments to Berkshire in Massachusetts. We conclude that these facts are not sufficient to warrant the assertion of personal jurisdiction. See New Hampshire Ins. Guar. Assoc. v. Markem Corp., 424 Mass. 344, 349 (1997) (personal jurisdiction lacking over policyholders where insurance company contracted for insurance policy in New Hampshire, activity that was insured did not occur in Massachusetts, and only relevant contacts were mailing of policy from Massachusetts to New Hampshire, policyholder's payment of premiums to insurer's offices in Massachusetts, and policyholder's submission of claims to Massachusetts). See also "Automatic" Sprinkler Corp. of Am. v. Seneca Foods Corp., 361 Mass. 441, 444-445 (1972) (no personal jurisdiction over New York company that signed purchase order to buy goods from Massachusetts seller, mailed purchase order to Massachusetts, received invoice from Massachusetts and sent check to Massachusetts). The instant case is distinguishable from situations where nonresidents more intentionally take advantage

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of favorable State policies. See, e.g., Kramersmeier v. R.G. Dickinson & Co., 440 N.W.2d 873, 877 (Iowa 1989) (Iowa court had personal jurisdiction over nonresident bondholders in proposed class action alleging misrepresentation in municipal bond offering; bondholders could reasonably expect Iowa court to adjudicate their claims where they received periodic payment of principal and interest from Iowa and availed themselves of tax-free benefits of long-term investment in Iowa municipality).

2. Statewide class certification. The Superior Court judge did not abuse her discretion in denying, without prejudice to renew, the plaintiffs' motion to certify a Statewide class under G. L. c. 93A, § 9 (2). Section 9 (2) requires satisfaction of the same elements of numerosity, commonality, typicality, and adequacy of representation as are required by Mass. R. Civ. P. 23 (a). [Note 8] Fletcher v. Cape Cod Gas Co., 394 Mass. 595, 605 (1985). Unlike

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rule 23, however, § 9 (2) does not require that common issues predominate over individual ones, or that a class action be superior to other methods of litigation. Aspinall v. Philip Morris Cos., 442 Mass. 381, 407 n.8 (2004). Nonetheless, in determining whether members of the proposed class are "similarly situated" and have suffered a "similar injury" under § 9 (2), the court has discretion to consider issues of predominance and superiority. Fletcher v. Cape Cod Gas Co., supra at 605-606.

The judge concluded that the proposed class satisfied the numerosity, commonality, typicality, and adequacy of representation elements. She also determined that class members were "similarly situated" under § 9 (2) with respect to the question whether Berkshire engaged in deceptive sales practices. However, the judge concluded that Berkshire had raised a substantial statute of limitations defense to the plaintiffs' claims. Berkshire contended in this regard that the inquiry relative to when the statute of limitations had begun to run with respect to each of the putative class members was highly fact specific. As such, the judge determined that the members were not "similarly situated," and a class action was inappropriate.

The judge acted within her discretion in deciding that, at the present juncture, individual differences with respect to the statute of limitations appeared to be significant and appeared not to lend themselves to adjudication on a representative basis. Affirmative defenses should be considered in making class certification decisions. Waste Mgt. Holdings, Inc. v. Mowbray, 208 F.3d 288, 295 (1st Cir. 2000). Where factual and legal issues with respect to a statute of limitations defense are amenable to resolution on a class-wide, representative basis, certification of a class is proper. Id. at 296-297 (court properly certified class in breach of warranty claim against company that used its stock to purchase businesses where statute of limitations defense was unlikely to affect most class members, and fact that company had exclusive

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control over collection and release of its financial data established common factual predicate for tolling statute). However, where individualized inquiry is necessary to resolve a statute of limitations defense, a variety of jurisdictions have found class certification to be inappropriate. See, e.g., Barnes v. American Tobacco Co., 161 F.3d 127, 149 (3d Cir. 1998), cert. denied, 526 U.S. 1114 (1999) (declining to certify class of smokers because, among other reasons, need to conduct individualized inquiry into statute of limitations defense for each plaintiff "augurs that a class action will devolve into a lengthy series of individual trials").

In Massachusetts, a statute of limitations begins to run when the plaintiff learned or should reasonably have learned that he has been harmed. See Szymanski v. Boston Mut. Life Ins. Co., 56 Mass. App. Ct. 367, 371 (2002), citing Williams v. Ely, 423 Mass. 467, 475 (1996). In the instant case, the inquiry regarding the statute of limitations could require determining when each plaintiff knew or reasonably should have known that the policy would not perform as expected because the illustrations provided by Berkshire were misleading. The judge acted within her discretion in concluding that, given the potentially different information available to each of the plaintiffs, this appeared to be a highly fact-specific inquiry. For instance, the judge noted that while Berkshire failed directly to inform or notify policyholders that even a small change in the interest rate could have a significant impact on the elimination of out-of-pocket premiums, it did emphasize, in materials distributed to its sales agents, that dividends could be reduced given changes in interest rates, and it suggested the provision of updated illustrations for certain policies that were in force. Thus, some members of the class might have received updated illustrations, which might have reasonably alerted them that their policies would not perform as expected. The resolution of the statute of limitations issue for a particular plaintiff might depend on when, and whether, these updated illustrations were received.

As the judge also noted, however, if one or more of the named plaintiffs were to proceed to trial on their claims, the statute of limitations issue would be tried as part of the case, and those plaintiffs might petition again to certify a Statewide class. If that were to happen, the judge would be in a better position to

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assess whether and to what extent the statute of limitations defense might be subject to resolution on a class-wide basis.

We affirm the denial of certification of the nationwide class and the denial without prejudice of the plaintiffs' motion for Statewide class certification.

So ordered.