The Ghost Of Systems Past: "Big Data" Suits Loom, But Old Data Issues Remain Unresolved

2017 could be big for litigation over "Big Data" applications in insurance. This past year saw the filing of several "price optimization" class actions, and claims against a fraud detection tool, similar to the ones used by insurers, survived an initial round of motions. Zynda v. Arwood, 175 F.Supp.3d 791 (E.D. Mich. 2016). But even as the industry braces for a wave of suits over cutting edge models and analytics, battles over less exotic systems are still being fought. Last month, in Johnson v. GEICO Cas. Co., No. 16-1132 (3rd Cir. Nov. 29, 2016), the U.S. Court of Appeals for the Third Circuit addressed several key theories and arguments that have been used against some early applications of machine learning—tools that identify excessive medical charges or unnecessary procedures. While ruling in favor of the insurer, the court left the status of those theories and arguments essentially unresolved. Because the same contentions are sure to re-surface when plaintiffs go