Moore v. PaineWebber, Inc.

Robert Moore and another individual (collectively, Moore) (plaintiffs) brought Racketeer Influenced and Corrupt Organizations Act (RICO) and fraud claims against PaineWebber, Inc. (defendant) for misrepresenting a universal-life-insurance policy called the Provider as an IRA or IRA substitute. The RICO claims were dismissed. The Second Circuit reversed, and Moore moved for class certification on remand. Moore presented evidence that brokers used marketing materials prepared by PaineWebber promoting the Provider as an IRA alternative, PaineWebber held training sessions in which brokers were told to emphasize the Provider’s investment aspects, and divisional vice-presidents were instructed to memorize a script before a marketing meeting. The brokers used at least three different telephone scripts to market the Provider to customers: one referred to the Provider as a retirement program without mentioning life insurance; the other two indicated that the Provider was related to insurance. Customer complaint letters indicated that some brokers did not mention life insurance; others told customers that insurance was a part of the product for tax purposes but no administrative fees would be charged; and others told customers that they would still get an 8 percent rate of return after insurance fees. The district court denied Moore’s class-certification motion. Moore appealed.