Nos. 20-2103 20-2135

JESSE ARONSTEIN, individually and on behalf of all others similarly situated,

Plaintiff, Appellant/Cross-Appellee,

v.

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY,

Defendant, Appellee/Cross-Appellant,

C.M. LIFE INSURANCE COMPANY,

Defendant.

APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Mark G. Mastroianni, U.S. District Judge]

Before

Howard, Chief Judge, Selya and Lynch, Circuit Judges.

Kevin B. Love, with whom Ian McLoughlin, Adam Stewart, Criden & Love, P.A., and Shapiro Haber & Urmy LLP were on brief, for appellant/cross-appellee. Eric S. Mattson, with whom Robert N. Hochman, Heather Benzmiller Sultanian, John P. Pucci, Jodi K. Miller, Sidley Austin LLP, and Bulkley, Richardson and Gelinas, LLP were on brief, for appellee/cross-appellant. October 6, 2021 LYNCH, Circuit Judge. When a life insurance company cuts the interest rate of an annuity in half, it must make that change clear to its consumers. In choosing to change an interest rate by an endorsement its own staff warned would sow consumer confusion, defendant Massachusetts Mutual Life Insurance Company ("MassMutual") introduced ambiguity into its annuity certificate. Because of that lack of clarity, plaintiff Jesse Aronstein believed that he had bought an annuity that guaranteed him 3.0% annual interest. MassMutual has taken the position that it clearly promised only 1.5%. After a bench trial, the district court ruled against MassMutual; it also ruled against Aronstein's class action claims.1

Finding no error, we affirm the district court's denial of class certification, entry of judgment for Aronstein, and award of prejudgment interest.

I.

In 2003, MassMutual decided to cut the minimum guaranteed interest rates -- the lowest rates annuities can earn -- paid to purchasers of some of its annuities. For the New York version of its "Odyssey" annuity, MassMutual reduced the rate from

1 No reporter has published and no electronic database contains the relevant district court decisions. They can be found, however, on the district court's docket. Aronstein v. Mass. Mut. Life Ins. Co., No. 3:15-cv-12864-MGM (D. Mass. judgment entered Nov. 12, 2020), ECF Nos. 169, 212, 223, 229, 230.

- 3 - 3.0% to 1.5%. To effect that change, MassMutual considered two options: updating the entire certificate or attaching an amendment to the certificate, called an endorsement or rider, to override the certificate's terms. MassMutual chose the latter option, despite internal documents stating that creating such a conflict between the endorsement and the certificate would be "[c]onfusing to the client." MassMutual entitled this rider the "GUARANTEED INTEREST RATE ENDORSEMENT." It also changed references in its internal documents from "guaranteed interest rate" to "guaranteed minimum interest rate." (Emphasis added.) But MassMutual did not make a similar clarification in the endorsement to educate all of its consumers.

We briefly describe the Odyssey annuity certificate, as purportedly amended by the endorsement. The body of the certificate explains that interest will accrue at a minimum rate of 3.0% per year. On the first substantive page of the certificate, the minimum guaranteed interest rate is listed as 3.0%, and the policy promises that "[t]he interest rate credited to this Certificate shall never be less than the Minimum Guaranteed Interest Rate shown above" (i.e., 3.0%).