Publications

(Article from Insurance Law Alert, July/August 2015)

For more information, please visit the Insurance Law Alert Resource Center.

The New Jersey Supreme Court ruled that a defendant facing a private civil suit brought under the Insurance Fraud Prevention Act is entitled to a jury trial.  Allstate N.J. Ins. Co. v. Lajara, 2015 WL 4276162 (N.J. July 16, 2015).

Allstate sued numerous doctors, billing companies and other entities, alleging fraud under New Jersey’s Insurance Fraud Prevention Act (“IFPA”), N.J.S.A. 17:33A-1-30.  A trial court denied the defendants’ request for a jury trial, and an intermediate appellate court affirmed on the bases that IFPA does not explicitly confer a right to a jury trial and that private IFPA claims seek only equitable relief.  Under New Jersey law, the right to a jury trial attaches only to claims that are legal in nature.  The New Jersey Supreme Court reversed.

First, the court reasoned that the remedies in a private IFPA action – which include compensatory and treble damages and attorneys’ fees – are “typical form[s] of legal [as opposed to equitable] relief” and therefore give rise to a jury trial right.  Second, the court explained that in determining whether a cause of action is legal in nature, New Jersey courts consider whether a statutory action is similar to a common law action.  The court concluded that an IFPA cause of action is comparable to common law fraud, and that the right to a jury trial is thus implied in IFPA.

Notably, the decision is limited to IFPA claims brought by private plaintiffs and does not address whether jury trial right exists when an IFPA action is brought by the Commissioner of Banking and Insurance.