## Facts

- Allstate issued automobile insurance policies using similar language in multiple states.
- Policyholders alleged Allstate breached its contracts by failing to include “installment fees” (charged when premiums are paid monthly) in the “total premium” disclosed to insureds.
- Allstate contended installment fees were not part of the premium, but separate charges incurred only if an insured chose installment payments rather than a lump-sum payment.
- Plaintiffs initially sought a nationwide class and later limited the proposed class to insureds in a group of states (including New Mexico) where the relevant policy language and fee practice were similar.
- A New Mexico district court certified a multi-state class and found no material conflicts of law preventing application of New Mexico law to the class contract claims.
- The New Mexico Court of Appeals reversed the certification order and decertified the class, reasoning that potential conflicts among the states’ laws made applying New Mexico law inappropriate and the class unmanageable.
- The New Mexico Supreme Court granted certiorari to review the class decertification and the conflict-of-laws approach used.

## Issues

1. What standard governs whether an “actual conflict” exists between states’ laws such that applying forum law to a multi-state class action is improper.
2. Whether speculative or merely potential differences among states’ laws, including uncertainty from limited foreign precedent, justify refusing to apply New Mexico law and decertifying a multi-state class.

## Decision

- The New Mexico Supreme Court reversed the Court of Appeals’ decertification order.
- The Court held that identifying an “actual conflict” requires more than hypothetical differences or uncertainty; proof of a real, material conflict is required before rejecting application of forum law.
- The Court remanded for further proceedings consistent with the requirement that conflicts be demonstrated and tied to material, outcome-affecting differences.

## Legal Principles

- In a multi-state class action, a conflict-of-laws objection to applying forum law must be supported by proof of an actual conflict, not speculation.
- A lack of appellate decisions in other states, or the possibility that another state might treat an issue differently, is insufficient by itself to establish a conflict defeating forum-law application.
- Manageability concerns based on conflicts of law must be grounded in identified, material differences in controlling legal rules, not generalized assumptions about multi-state variation.
- Trial courts should conduct a conflict-specific analysis to determine whether any proven differences in applicable state law are material to class certification considerations.

## Conclusion

The court held that multi-state class certification and application of New Mexico law cannot be rejected based on hypothetical or uncertain differences among states’ laws; a party must show an actual, material conflict before conflicts-of-law concerns defeat certification or forum-law application.


Ferrell v. Allstate Ins. Co., 144 N.M. 405, 188 P.3d 1156 (N.M. 2008)