Justia Government & Administrative Law Opinion Summaries

Defendant-appellant Ricardo Lara, the California Insurance Commissioner, filed a notice of noncompliance against plaintiffs-respondents Mercury Insurance Company, Mercury Casualty Company, and California Automobile Insurance Company (collectively Mercury) alleging Mercury charged rates not approved by the California Department of Insurance (CDI) and that the rates were unfairly discriminatory in violation of Insurance Code sections 1861.01 (c) and 1861.05 (b). The allegedly unapproved rates were in the form of broker fees charged by Mercury agents, which should have been disclosed as premium. After prevailing at an administrative hearing, the Commissioner imposed civil penalties against Mercury totaling $27,593,550 for almost 184,000 unlawful acts. Mercury filed a petition for writ of mandate, which the court granted, reversing the Commissioner’s decision. The court found the “broker fees” were not premium because they were charged for separate services. The court also rejected the Commissioner’s interpretation of the term premium under the Insurance Code and regulations. In addition, the court ruled Mercury did not have proper notice it was subject to penalties, in violation of due process, and the action was barred by laches because CDI had unduly delayed in bringing the action. Commissioner and intervener-appellant, Consumer Watchdog (CWD), appealed on several grounds, among them: (1) the trial court did not use the proper standard of review; (2) failed to give the Commissioner’s findings a strong presumption of correctness and failed to put the burden of proof on Mercury to show the findings were against the weight of the evidence; (3) the trial court’s finding the fees were charged for separate services was precluded by collateral estoppel; (4) Mercury received proper notice of the potential imposition of a penalty; and (5) laches did not bar the action. The Court of Appeal agreed with Commissioner and CWD the writ was issued in error and reversed the judgment. View "Mercury Insurance Co. v. Lara" on Justia Law

Tony Kourianos worked as a coal miner for more than 27 years before filing a claim for benefits under the Black Lung Benefits Act (“BLBA”). His claim was reviewed through a three-tiered administrative process. Ultimately, the Benefits Review Board (“BRB”) found that he was entitled to benefits. The BRB also found that Kourianos’s last employer, Hidden Splendor Resources, Inc., was the “responsible operator” liable for paying those benefits. Hidden Splendor’s insurer, Rockwood Casualty Insurance Company, petitioned the Tent Circuit Court of Appeal for review of the BRB’s decision: (1) challenging the administrative law judge’s (“ALJ”) decision prohibiting Hidden Splendor from withdrawing its responsible operator stipulation; and (2) contending the BRB incorrectly found that Kourianos was totally disabled and entitled to benefits. Finding no abuse of discretion in the BRB decision, the Tenth Circuit denied Rockwood's petition. View "Rockwood Casualty Insurance v. Director, OWCP" on Justia Law

Winter wheat farmers could purchase insurance to protect against below-average harvests. The policies at issue here offered yield protection. On July 1, 2014, the Federal Crop Insurance Corporation (“FCIC”) published an interim rule to implement the 2014 Farm Bill. In that interim rule, the FCIC warned that the APH yield exclusion “may not be implemented upon publication” because “[p]roduction data availability and intensive data analysis may limit FCIC’s ability to authorize exclusions of yields for all APH crops in all counties.” Therefore, the FCIC amended the Common Crop Insurance Policy (CCIP) Basic Provisions (the actual terms of the insurance policy offered for sale) “to allow the actuarial documents to specify when insureds may elect to exclude any recorded or appraised yield.” The revised CCIP Basic Provisions stated that farmers “may elect” the APH yield exclusion “[i]f provided in the actuarial documents.” The deadline for winter wheat farmers to purchase insurance for the 2015 crop year was September 30, 2014. When Plaintiffs purchased insurance, they elected to use the APH yield exclusion. But in a letter dated October 31, 2014, the USDA notified insurance providers that the APH Yield Exclusion would not be available for winter wheat for the 2015 crop year. The letter stated that insurance providers could respond to farmers’ elections by pointing them to the USDA’s “actuarial documents,” which did not yet “reflect that such an election is available.” Plaintiffs sought review of this denial through the USDA’s administrative appeals process. An administrative judge determined that she lacked jurisdiction over Plaintiffs’ challenge because the October 2014 letter to insurance providers was not an adverse agency decision. Plaintiffs then appealed to the Director of the National Appeals Division. The Director found that the October 2014 letter was an adverse agency decision, but affirmed the FCIC’s decision not to make the APH yield exclusion available to winter wheat farmers for the 2015 crop year. Plaintiffs appealed the Director’s decision to the United States District Court for the District of Colorado. The district court reversed the Director’s decision and remanded the case to the FCIC with instructions to retroactively apply the APH yield exclusion to Plaintiffs’ 2015 crop year insurance policies, reasoning the applicable statute unambiguously made the APH yield exclusion available to all farmers on the day the 2014 Farm Bill was enacted. Finding no reversible error in the district court’s judgment, the Tenth Circuit affirmed. View "Ausmus v. Perdue" on Justia Law

The Affordable Care Act’s three premium‐stabilization programs were designed to redistribute money among insurance companies and mitigate each company’s exposure to market risks, 42 U.S.C. 18061–18063. The Department of Health and Human Service (HHS) intended to implement these programs in a budget‐neutral way paying out only the funds that each program had taken in from other insurance companies. Land of Lincoln participated in these premium‐stabilization programs and incurred a debt of roughly $32 million but HHS owed Land of Lincoln over $70 million. HHS was not able to pay what it owed because it was taking in far less money than expected, and it refused to dip into its discretionary funds. Like other insurance companies, Land of Lincoln sought the overdue payments in an unsuccessful suit. Land of Lincoln became insolvent and began liquidation. Despite an Illinois court order, HHS began to offset its overdue payments against Land of Lincoln’s debt, as its own regulations permitted. The Director of the Illinois Department of Insurance, Land of Lincoln’s appointed liquidator, asked the state court for a declaration that HHS violated the order, but HHS removed the motion to federal district court arguing that the federal government was not subject to state court jurisdiction. The district court remanded the case back to state court relying on a narrow reading of 28 U.S.C. 1442, and principles of abstention. The Seventh Circuit reversed on both grounds and remanded to the district court. View "Hammer v. United States Department of Health and Human Services" on Justia Law

A taxi driver injured in an accident while working filed a report with the Alaska Workers' Compensation Board. The nature of the relationship between the taxi company and the driver was disputed. The driver retained an attorney for a lawsuit against the other driver, and settled that claim with the other driver's insurance company without his taxi company's approval. Because the taxi company did not have workers' compensation insurance, the Alaska Workers' Compensation Benefits Guaranty Fund assumed responsibility for adjusting the workers' compensation claim. The Fund asked the Board to dismiss the taxi driver's claim because of the unapproved settlement. The Board dismissed the claim, and the Workers' Compensation Appeals Commission ultimately affirmed the Board's decision. The taxi driver appealed, but finding no reversible error, the Alaska Supreme Court affirmed the Commission's decision. View "Atkins v. Inlet Transportation & Taxi Service, Inc." on Justia Law

Dave Jones, in his capacity as Insurance Commissioner of the State of California (the Commissioner), appealed an order enjoining him from enforcing three regulations, adopted in 1992, to implement the unfair claims settlement practices provision of the Unfair Insurance Practices Act (UIPA). The injunction was issued at the conclusion of the first phase of a trial in which PacifiCare Life and Health Insurance Company challenged the Commissioner’s finding that it had committed over 900,000 acts and practices in violation of the Insurance Code. The Court of Appeal reversed the order imposing the injunction in its entirety. The trial court determined the first regulation was inconsistent with the language of section 790.03(h), which it concluded had been interpreted by the California Supreme Court in Moradi-Shalal v. Fireman’s Fund Ins. Companies 46 Cal.3d 287 (1988), and in Zhang v. Superior Court, 57 Cal.4th 364 (2013), to apply only to insurers engaged in a pattern of misconduct. The appellate court determined the Supreme Court’s only binding interpretation of that statutory language was found in Royal Globe Ins. Co. v. Superior Court, 23 Cal.3d. 880 (1979), which held that section 790.03(h) could be violated by an insurer’s single knowing act. Consequently, the Court was bound by that precedent. View "PacifiCare Life & Health Ins. Co. v. Jones" on Justia Law

The Eighth Circuit affirmed the district court's grant of summary judgment deferring to an insurance policy interpretation made by the FCIC and a determination regarding the FCIC's authority made by the RMA. The court held that the clear language of the Federal Crop Insurance Act indicated that Congress intended the Corporation to have extensive and broad authority; given the FCIA's broad grant of authority to the Corporation, and the specific authority over the provisions of insurance and insurance contracts found in 5 U.S.C. 1505 and 1506, substantial deference was given to the FCIC's interpretation of the special provision; and, considering the plain language of the insurance contract and the deference given to the RMA in its role of supervisor of the FCIC, the RMA's determination that the FCIC was required to provide an interpretation of the special provision to the arbitrating parties was not clearly erroneous. View "Bottoms Farm Partnership v. Perdue" on Justia Law

The Supreme Court reversed the district court’s deemed denial of Scottsdale Insurance Company’s motion to set aside the default judgment entered against it, holding that Scottsdale satisfied its burden of establishing that doubt existed concerning whether service was properly effectuated.National Parks Reservations (NPR) filed a complaint and demand for jury trial, naming Scottsdale. Because Scottsdale was a foreign insurer, NPR was statutorily required to serve Scottsdale through the Office of the Montana State Auditor, Commissioner of Securities and Insurance (the Commissioner). The Commissioner, in turn, was statutorily required to forward the complaint and summons to Scottsdale. After Scottsdale failed to appear the district court entered a partial default judgment against Scottsdale. Scottsdale moved to set aside the default judgment, arguing that both NPR and the Commissioner had failed strictly to comply with foreign insurer service requirements under Mont. Code Ann. 33-1-603(1), and, thus, the default judgment was void. Scottsdale’s motion was deemed denied. The Supreme Court reversed, holding that Scottsdale established that doubt existed regarding whether service was properly completed by the Commissioner. View "Reservation Operations Center LLC v. Scottsdale Insurance Co." on Justia Law

Migliaro purchased a Standard Flood Insurance Policy (SFIP) under the National Flood Insurance Program, 42 U.S.C. 4011(a), from Fidelity for his property, which sustained flood damage in October 2012's Hurricane Sandy. Fidelity’s adjuster recommended a payment of $90,499.11, which Fidelity paid. Five months later, Migliaro submitted a proof of loss, claiming an additional $236,702.57. On July 15, 2013, Fidelity sent Migliaro a letter titled “Rejection of Proof of Loss,” stating: This is not a denial of your claim. Your field adjuster provided you with an estimate and Proof of Loss regarding covered damages. If there are additional covered damages identified, please forward documentation and they will be considered. Migliaro did not provide additional documentation or submit a second proof of loss but filed suit. Migliaro's July 2015 complaint was dismissed as untimely. Because SFIP claims are ultimately paid by the government, SFIPs are identical and state: You may not sue ... unless you have complied with all the requirements of the policy. If you do sue, you must start the suit within one year after the date of the written denial of all or part of the claim. The Third Circuit affirmed. Although the rejection of a proof of loss is not per se a denial of the claim, it does constitute a denial if the policyholder treats it as such by filing suit against the carrier. View "Migliaro v. Fidelity National Indemnity Insurance Co." on Justia Law

Migliaro purchased a Standard Flood Insurance Policy (SFIP) under the National Flood Insurance Program, 42 U.S.C. 4011(a), from Fidelity for his property, which sustained flood damage in October 2012's Hurricane Sandy. Fidelity’s adjuster recommended a payment of $90,499.11, which Fidelity paid. Five months later, Migliaro submitted a proof of loss, claiming an additional $236,702.57. On July 15, 2013, Fidelity sent Migliaro a letter titled “Rejection of Proof of Loss,” stating: This is not a denial of your claim. Your field adjuster provided you with an estimate and Proof of Loss regarding covered damages. If there are additional covered damages identified, please forward documentation and they will be considered. Migliaro did not provide additional documentation or submit a second proof of loss but filed suit. Migliaro's July 2015 complaint was dismissed as untimely. Because SFIP claims are ultimately paid by the government, SFIPs are identical and state: You may not sue ... unless you have complied with all the requirements of the policy. If you do sue, you must start the suit within one year after the date of the written denial of all or part of the claim. The Third Circuit affirmed. Although the rejection of a proof of loss is not per se a denial of the claim, it does constitute a denial if the policyholder treats it as such by filing suit against the carrier. View "Migliaro v. Fidelity National Indemnity Insurance Co." on Justia Law