In the 

United States Court of Appeals 

For the Seventh Circuit ____________________ 

No. 19-2898 

CARLTON GUNN, 

Plaintiff-Appellant, 

v.

CONTINENTAL CASUALTY COMPANY, 

Defendant-Appellee. 

____________________ 

Appeal from the United States District Court for the 

Northern District of Illinois, Eastern Division. 

No. 1:18-cv-03314 — Charles P. Kocoras, Judge. 

____________________ 

ARGUED APRIL 15, 2020 — DECIDED AUGUST 5, 2020 

____________________ 

Before MANION, HAMILTON, and BARRETT, Circuit Judges. 

HAMILTON, Circuit Judge. Most appellate opinions try to 

answer questions of law. This opinion is an exception. We ask 

many more questions than we can answer here. They concern 

choice-of-law principles as applied to the unique challenges 

of interstate regulation of insurance in the United States, and 

more specifically as applied to a group insurance policy issued in one jurisdiction to an employer with employees in 

every state. We realize we are leaving a good deal of work for 
2 No. 19-2898 

the capable district judge on remand. We hope he will receive 

help on choice-of-law issues from counsel for the parties and 

interested amici curiae. 

Plaintiff Carlton Gunn brought this case as a putative class 

action against defendant Continental Casualty Company, 

which issued a group long-term care insurance policy to 

Gunn’s employer, the federal judiciary, in Washington D.C. 

Gunn alleged that Continental breached its contract, committed torts, and violated consumer protection laws by raising 

his premiums dramatically. Continental persuaded the district court to dismiss the case on the pleadings based on its 

assertion of a filed-rate defense, relying on the Washington 

state Insurance Commissioner’s approval of the new, higher 

premiums for individual insureds in Washington. The parties’ 

briefs in the district court and on appeal raised the issue of 

choice of law but offered little help in resolving it. 

The appellate briefs and arguments make clear that choice 

of law is critical in this case, but they leave too many unanswered questions. Which state’s or states’ law creates Gunn’s 

causes of action? Does that jurisdiction recognize an applicable filed-rate defense, and if so, what are its contours? Which 

state or states have authority to approve premium rates under 

the group policy? If one state otherwise offers Gunn a remedy 

but another state with authority has approved Continental’s 

rates, which state’s authority controls and which must yield, 

and why? We raised these and other questions in oral argument, but without satisfactory answers. Given their importance to the larger framework of multistate insurance regulation, we conclude that the best resolution of this appeal is 

to let the adversary process take its course, with some general 

direction from us to ensure that the adversaries focus on the 
No. 19-2898 3

critical issues. We therefore reverse and remand for further 

proceedings. 

I. Plaintiff’s Claims and Procedural Background

Contracts for group insurance are in essence three-party 

contracts. Steven Plitt et al., 1A Couch on Insurance 3d § 7:1 

(1995 & supp. 2019). “A group insurance policy is the contract 

between the insurer and an employer, ... or some other central entity, for the benefit of a group of people that have some 

relationship to the central entity, such as employees.” Id. The 

central entity, not the individual insured, holds the master 

policy and has “the chief contractual relationship with the insurer.” Id. The individual insureds are considered third-party 

beneficiaries of the master policy and “typically receive certificates proving that they are insured and listing what coverage 

is provided.” Id. For this reason, “the addition of new individual members to a master group policy does not create a new 

contract of insurance.” Id. § 8:1. At the same time, individual 

insureds are usually not automatically covered by the central 

entity’s master policy. They must individually elect coverage 

and pay their own premiums. Id. § 8:2. 

For purposes of defendant’s motion to dismiss, we assume 

the truth of the following factual allegations. In 1999, 

defendant Continental Casualty Company delivered a group 

long-term care insurance policy to the federal judiciary—

specifically, to the Federal Judiciary Group Long Term Care 

Insurance Trust in Washington D.C. Long-term care 

insurance is intended to provide long-term financial security 

by covering a variety of services, not generally covered by 

Medicare or ordinary health insurance, for those unable to 

care for themselves due to age or disability. As with life 

insurance, the cost of long-term care insurance increases with 
4 No. 19-2898 

age. As Continental advertised for this policy, “the younger 

you are when your coverage begins, the lower your premiums 

will be for the duration of your participation in the plan.”

In 2000, plaintiff Carlton Gunn was an assistant federal 

defender in the State of Washington eligible for coverage 

under the judiciary’s policy. He purchased coverage under 

the policy, relying in part on Continental’s representation in 

its marketing materials that it would raise premiums, if at all, 

only “for everyone in your age category who has the kind of 

coverage plan that you do.” The master policy and Gunn’s 

individual coverage certificate similarly promised that 

Continental would raise premiums “only if we change the 

premiums for all insureds in the same premium class.” The 

master policy provided specifically that “Premium is 

computed as stated in the Master Application,” which 

contained tables of premium rates according to payment 

schedule, age on effective date of coverage, and amount of 

daily benefit. No mention was made of rates varying based on 

the individual insured’s state of residence. 

To protect against the long-term effects of inflation on the 

policy’s costs and benefits, Gunn also purchased what Continental called a “Lifetime Compound Automatic Benefit Increase benefit.” That feature would “automatically increase 

the daily benefit for nursing home care that you select now by 

5% annually on a compounded basis.” “This means,” Continental explained, “you will not need to worry about increasing your premium in the future.” Purchasing the automatic 

benefit increase feature more than doubled Gunn’s baseline 

premium. 

Seventeen years later, Gunn received a letter from Continental informing him that his premium rates would rise by 25 
No. 19-2898 5

percent each year for the next three years, adding up to a near 

doubling of the premium, from about $700 to about $1,400 annually. The letter also said that the effective dates of the increases would depend ultimately on the approval of “certain 

states,” which might or might not be forthcoming at the same 

time, or at all. Gunn believes this geographic disparity 

breaches Continental’s promise to raise rates only uniformly 

within a “premium class.” He also contends he should be protected from the dramatic premium increases precisely because he had already paid to protect himself against inflation 

by buying the automatic benefit increase. 

Gunn’s complaint asserted claims for breach of contract, 

breach of implied covenant, unfair and deceptive practices 

under the District of Columbia’s consumer protection statute, 

fraud, and fraudulent concealment. On behalf of himself and 

a putative class of insureds under the judiciary’s group policy, Gunn sought rescission (whether of the master policy or 

his individual certificate, he did not say) and an injunction 

against further rate increases, or alternatively compensatory, 

statutory, and punitive damages.1

Continental moved to dismiss under Federal Rule of Civil 

Procedure 12(b)(6), arguing among other grounds that the 

complaint was barred by “the filed-rate doctrine.” The federal 

version of that doctrine in general “forbids a regulated entity 

to charge rates for its services other than those properly filed 

with the appropriate federal regulatory authority.” Arkansas 

Louisiana Gas Co. v. Hall, 453 U.S. 571, 577 (1981). One way to 

put it is that the “reasonableness” of a rate is an 

1 No member of this panel is a member of the plan, so we would not 

be members of a potential plaintiff class. 
6 No. 19-2898 

administrative standard, not a justiciable legal right. MontanaDakota Utils. Co. v. Northwestern Pub. Serv. Co., 341 U.S. 246, 

251 (1951). Another is that a buyer’s consent to pay the filed 

rate is not necessary to create an obligation to pay the filed 

rate. Lowden v. Simonds-Shields-Lonsdale Grain Co., 306 U.S. 

516, 520–21 (1939). Arkansas Louisiana Gas itself held that a 

state-law action for breach of contract could not survive 

preemption based on a state court’s “speculation” that the responsible federal regulator would have approved the higher 

rate for which the parties contracted instead of the lower rate 

it had actually approved. 453 U.S. at 573, 578–79. 

States have adopted versions of this doctrine of varying 

breadth and force, some in statutes and some through case 

law. And even where different states’ doctrines differ only in 

nuance, we have said that “nuance can be important.” In re 

Rhone-Poulenc Rorer, Inc., 51 F.3d 1293, 1300 (7th Cir. 1995) (reversing certification of nationwide class whose claims were 

governed by many different states’ laws). 

Citing Arkansas Louisiana Gas and other cases, Continental 

argued that Gunn’s individual certificate had been issued to 

him in the State of Washington; that the Washington insurance commissioner had authority to approve the rates Gunn 

was charged; and that Continental had sought and obtained 

the Washington commissioner’s approval for the challenged 

rate increases. Gunn’s suit, went the argument, amounted to 

a collateral attack on rates duly approved by the commissioner, so that the filed-rate doctrine prohibited courts from 

entertaining Gunn’s claims. We confess that we were mystified when we realized that Continental’s motion did not explain whether the filed-rate doctrine it invoked stems from 

federal or state law, let alone from which state’s law. 
No. 19-2898 7

In opposition, Gunn argued that the law of the District of 

Columbia does not recognize a version of the filed-rate doctrine that would bar his claims. Neither side’s briefs to the district court engaged in a meaningful choice-of-law analysis, 

nor did they develop their competing assertions of legislative 

and regulatory jurisdiction over the rates Gunn should pay. 

The district court also did not engage with the choice-oflaw problem, but it agreed with Continental that Gunn’s suit 

was the type of attack on duly approved rates generally 

barred by filed-rate rules and dismissed the complaint with 

prejudice. We have jurisdiction of the appeal under 28 U.S.C. 

§ 1291. 

II. Analysis

A. The Choice-of-Law Problem

We review de novo a grant of a motion to dismiss for failure to state a claim. Warciak v. Subway Restaurants, Inc., 

949 F.3d 354, 356 (7th Cir. 2020). A Rule 12(b)(6) motion tests 

“the legal sufficiency of a complaint,” as measured against the 

standards of Rule 8(a). E.g., Runnion v. Girl Scouts of Greater 

Chicago and Northwest Indiana, 786 F.3d 510, 526 (7th Cir. 2015). 

It is the defendant’s burden to establish the complaint’s insufficiency. Yeksigian v. Nappi, 900 F.2d 101, 104 (7th Cir. 1990). 

There is procedural problem in this case, however, that 

made defendant’s use of Rule 12(b)(6) inappropriate. Continental did not actually challenge the complaint’s sufficiency, 

at least by invoking the filed-rate doctrine. Continental instead advanced an affirmative defense, which it had the burden of pleading and proving. Fed. R. Civ. P. 8(c)(1) (burden of 

pleading); Benson v. Fannie May Confections Brands, Inc., 

944 F.3d 639, 645 (7th Cir. 2019) (burden of proving); see E. & 
8 No. 19-2898 

J. Gallo Winery v. EnCana Corp., 503 F.3d 1027, 1039 n.11 (9th 

Cir. 2007) (filed-rate doctrine as affirmative defense). With a 

narrow and pragmatic exception for a plaintiff who has 

pleaded herself out of court, the appropriate vehicle for resolving an affirmative defense is a motion for judgment on the 

pleadings under Rule 12(c), not a Rule 12(b)(6) motion. Benson, 944 F.3d at 645; see also Burton v. Ghosh, 961 F.3d 960, 964–

65 (7th Cir. 2020) (collecting cases); cf. Brooks v. Ross, 578 F.3d 

574, 579 (7th Cir. 2009) (example of pragmatic exception 

where complaint unambiguously set forth dates establishing 

statute-of-limitations defense). “Observing the distinction is 

necessary to allocate correctly the burdens of pleading and 

proof,” H.A.L. N.Y. Holdings, LLC v. Guinan, 958 F.3d 627, 632 

(7th Cir. 2020), and serves an important notice function. Burton, 961 F.3d at 965, citing Blonder-Tongue Labs., Inc. v. Univ. of 

Illinois Found., 402 U.S. 313, 350 (1971), among others. 

In this case, Continental’s filed-rate defense certainly drew 

on materials outside the complaint and was not appropriate 

for a Rule 12(b)(6) motion. Gunn did not plead himself out of 

court with one stray reference to the Washington state insurance commissioner, so an answer and motion under Rule 

12(c), not a Rule 12(b)(6) motion, would have been the appropriate path to raise a filed-rate defense. We construe Continental’s motion as one under Rule 12(c), and Continental bore 

the burden of showing that the allegations of the complaint 

and an answer showed that an affirmative defense conclusively defeated all of Gunn’s claims as a matter of law. See 

Alexander v. City of Chicago, 994 F.2d 333, 336 (7th Cir. 1993). 

Regardless of the procedural bobble, Continental had to 

address an indispensable threshold question: under the law 

of what sovereign was it entitled to judgment? Law “does not 
No. 19-2898 9

exist without some definite authority behind it.” Black & White 

Taxicab & Transfer Co. v. Brown & Yellow Taxicab & Transfer Co., 

276 U.S. 518, 533 (1928) (Holmes, J., dissenting). Claims and 

defenses have to come from somewhere. “Proof of [them] in 

the air, so to speak, will not do.” Palsgraf v. Long Island R.R. 

Co., 162 N.E. 99, 99 (N.Y. 1928). Yet that has basically been 

Continental’s approach. 

In support of its motion to dismiss, Continental assumed 

without argument that the applicable law was Washington’s, 

though Gunn pleaded at least one cause of action arising under a statute of the District of Columbia. On appeal, Continental asserts, again without argument, that Washington law creates Gunn’s causes of action and, astonishingly, claims that 

“federal common law” creates its filed-rate defense. But Continental does not argue for federal preemption.2 Nor does the 

2 Chief Judge Howell denied dismissal in a recent case similar to 

Gunn’s, noting that a filed-rate defense “typically” has a basis in federal 

statute and in that context “supports the supremacy of federal regulation 

over certain federal as well as state and common law claims.” Krukas v. 

AARP, Inc., 376 F. Supp. 3d 1, 18 (D.D.C. 2019). In Krukas, the court assumed for purposes of argument that some version of a filed-rate doctrine 

could apply to insurance regulation and denied dismissal because the 

plaintiff did not directly challenge any regulated rates. Id. at 20−26. Federal law leaves insurance regulation and pricing to the States. 15 U.S.C. 

§ 1011. In this context, it is “neither prudent nor appropriate for a federal 

court to impose the filed-rate doctrine on a state which has not adopted it, 

nor should a court stretch or bend a state doctrine to more comfortably fit 

the contours of the federal rule.” Bhasker v. Kemper Cas. Ins. Co., 284 F. 

Supp. 3d 1191, 1233 (D.N.M. 2018) (denying dismissal of insurance claims 

based on filed-rate doctrine), quoting Clark v. Prudential Ins. Co. of Am., No. 

CIV. 08-6197, 2011 WL 940729, at *10 (D.N.J. Mar. 15, 2011) (denying motion to strike insurance class claims based on filed-rate doctrine). 
10 No. 19-2898 

doctrine affect federal jurisdiction.3 Continental has not explained why, in Gunn’s case arising under state law, federal 

law (let alone the narrow niches of federal common law that 

have survived Erie Railroad) could be relevant at all. See Erie 

R.R. Co. v. Tompkins, 304 U.S. 64 (1938); Williams v. Jader Fuel 

Co., Inc., 944 F.2d 1388, 1400 (7th Cir. 1991) (“the legal and factual sufficiency of an affirmative defense is examined with reference to state law”). 

Because Continental did not identify the source of governing law, we have little trouble concluding that it did not show 

properly that it was entitled to judgment based on this freefloating defense. 

The more difficult question is what to do about it. “The 

matter of what questions may be taken up and resolved for 

the first time on appeal is one left primarily to the discretion 

of the courts of appeals.” Singleton v. Wulff, 428 U.S. 106, 121 

(1976). But the record here offers little guidance. Gunn also 

did not engage on the choice-of-law issue. 

We must say frankly that the parties let the district court 

down. The parties each asserted their choice-of-law positions, 

and they clearly signaled that the choice of law could be decisive. But the parties went no farther than those assertions; neither side supported its position. The district court did not make 

3 There is no suggestion here or reason to think that any version of the 

filed-rate doctrine affects a federal court’s subject-matter jurisdiction. See 

Wilson v. EverBank, N.A., 77 F. Supp. 3d 1202, 1233 n.6 (S.D. Fla. 2015) (collecting cases holding filed rates go to merits, not jurisdiction); see also 

Krukas, 376 F. Supp. 3d at 14 n.5 (distinguishing “nonjusticiability” rationale for filed-rate doctrine from Article III justiciability). 
No. 19-2898 11

its own choice of law but cited filed-rate cases from many 

state and federal courts. 

We recognize that an appeal is too late to raise a choice-oflaw issue for the first time and we are under no obligation to 

do so on our own initiative. “We are busy enough without 

creating issues that are unlikely to affect the outcome of the 

case (if they were likely to affect the outcome the parties 

would be likely to contest them).” Wood v. Mid-Valley Inc., 

942 F.2d 425, 427 (7th Cir. 1991). In this case, however, both 

sides raised the choice-of-law issue but then offered the district court (and us) little help. 

Choice of law may well be decisive here. The relevant issues are doubtful enough, and the stakes high enough for our 

state-based systems of decentralized insurance regulation, 

that they are better addressed by the district court in the first 

instance, perhaps with help from interested friends of the 

court who can provide insight into those systems and their 

relationship to one another. See, e.g., Harris v. KBR Servs., Inc., 

724 F.3d 458, 462 (3d Cir. 2013) (remanding for initial choiceof-law determination where necessary to review dismissal for 

non-justiciability). 

B. Considerations on Remand 

1. Illinois Choice-of-Law Rules Control

We begin with the fundamentals. A federal court exercising its diversity jurisdiction over state-law claims applies the 

choice-of-law rules of the state in which it sits. Klaxon Co. v. 

Stentor Elec. Mfg. Co., 313 U.S. 487 (1941). Here, that state is 

Illinois, which applies forum law unless an actual conflict 

with another state’s law is shown, Bridgeview Health Care Ctr. 

v. State Farm Fire & Cas. Co., 10 N.E.3d 902, 905 (Ill. 2014), or 
12 No. 19-2898 

the parties agree that forum law does not apply. See Belleville 

Toyota, Inc. v. Toyota Motor Sales, U.S.A., Inc., 770 N.E.2d 177, 

194 (Ill. 2002). Neither Gunn nor Continental seeks application of Illinois law, and the laws of the District of Columbia 

and Washington appear likely, at a minimum, to give different effect to the acts of the Washington state insurance commissioner. The analysis then turns to which state’s law applies. Bridgeview, 10 N.E.3d at 905. 

In general, Illinois follows the Restatement (Second) of 

Conflict of Laws (Am. Law Inst. 1971). Barbara’s Sales, Inc. v. 

Intel Corp., 879 N.E.2d 910, 919 (Ill. 2007). For claims on a contract, the Second Restatement usually enforces the parties’ 

contractual choice of law, see § 187, which may extend to tort 

claims “dependent” on the contract. Facility Wizard Software, 

Inc. v. Southeastern Technical Servs, LLC, 647 F. Supp. 2d 938, 

943 (N.D. Ill. 2009). In this case, however, the parties’ contract 

contains no choice-of-law provision. 

Absent effective party choice, to govern issues in contract 

the Second Restatement chooses the “local” law (that is, the 

substantive law excluding choice-of-law rules) of the state 

which, “with respect to that issue, has the most significant relationship to the transaction and the parties.” § 188(1). To govern issues in tort, the Second Restatement similarly chooses 

the law of the state which, “with respect to that issue, has the 

most significant relationship to the occurrence and the parties.” § 145(1). These general standards offer little direct guidance in resolving particular cases. See Barbara’s Sales, 

879 N.E.2d at 920. But the Second Restatement also supplies 

“a secondary statement in black letter setting forth the choice 

of law rules in a given situation.” Id. (quotation marks omitted). These “specific presumptive rules” provide more 
No. 19-2898 13

concrete points of departure. Townsend v. Sears, Roebuck & Co., 

879 N.E.2d 893, 902 (Ill. 2007). 

For claims regarding a group life insurance contract, the 

Second Restatement’s presumptive rule is that “rights against 

the insurer are usually governed by the law which governs 

the master policy.” § 192 cmt. h. That is usually the law of the 

employer’s principal place of business, where the master policy was delivered. Id. The Illinois Supreme Court has cited this 

rule with approval in the context of group health insurance. 

Hofeld v. Nationwide Life Ins. Co., 322 N.E.2d 454, 458 (Ill. 1975). 

The Couch treatise is in accord as to group insurance generally, 1A Couch on Insurance § 8:7, and we have reached the 

same conclusion as to group accident insurance under Indiana’s version of the “most significant relationship” test. Horn 

v. Transcon Lines, Inc., 7 F.3d 1305, 1307–08 (7th Cir. 1993). Applied to this case, comment h to section 192 of the Second Restatement seems to suggest that Illinois would choose District 

of Columbia law to govern Gunn’s claim for breach of contract. 

As for Gunn’s tort claims (unfair and deceptive consumer 

practices, fraud, and fraudulent concealment), the Second Restatement’s presumptive rule for torts of deception provides 

that if the place of defendant’s deception and the place of 

plaintiff’s reliance on it were the same, the law of that place 

applies. § 148(1). If deception and reliance took place in different states, a list of relevant contacts guides the court’s determination of what jurisdiction has “the most significant relationship” to the case. § 148(2). Illinois has applied section 

148 to consumer fraud claims. Barbara’s Sales, 879 N.E.2d at 

922. Applied to this case, section 148 suggests Illinois may 

choose either District of Columbia or Washington law to 
14 No. 19-2898 

govern Gunn’s tort claims, depending on whether it would 

legally characterize Continental’s alleged misrepresentations 

as having been made to Gunn in Washington or to his employer in the District of Columbia.4

2. The Filed-Rate Doctrine in the District of Columbia

“In the District of Columbia, the filed rate doctrine is statutorily mandated.” District of Columbia v. D.C. Pub. Serv. 

Comm’n, 905 A.2d 249, 256 (D.C. 2006), citing D.C. Code § 34-

603. The statutory scheme within which the mandate is embedded provides that every public utility in the District must 

file proposed rate changes with the D.C. Public Service Commission for the Commission’s approval. § 34-901(c)–(d). The 

statutory filed-rate rule provides that rates approved by the 

Commission “shall be prima facie reasonable until finally 

found otherwise in an action brought for that purpose.” § 34-

603; see also § 34-1129 (“It shall be unlawful for any public 

utility to ... receive a greater or less compensation for any service performed by it within the District of Columbia ... than 

4 We note one wrinkle in Illinois conflicts law that may or may not 

bear on this case. Illinois recognizes the doctrine of dépeçage, or “cutting 

into pieces” a single claim and subjecting different issues to different jurisdictions’ laws. Spinozzi v. ITT Sheraton Corp., 174 F.3d 842, 848 (7th Cir. 

1999). Even if Illinois would choose District of Columbia law to govern 

one or more of Gunn’s claims, perhaps Illinois might choose Washington 

law to govern Continental’s defenses if it determined that Washington 

had the most significant relationship to the case with respect to a specific 

issue, such as the filed-rate defense. See Doctor’s Data, Inc. v. Barrett, 170 F. 

Supp. 3d 1087, 1107 (N.D. Ill. 2016) (recognizing possibility of splitting 

claims from defenses under principle of dépeçage); see generally Restatement (Second) § 6 (factors relevant to “most significant relationship” analysis). 
No. 19-2898 15

is specified in such printed schedules ... as may at the time be 

in force.”). 

The problem for Continental’s defense, however, is that 

this statutory language says nothing about insurers, which 

are not included in the definition of “public utilities.” See § 34-

214. Nor does the statute address the District’s insurance regulator or insurance premiums. We have found no District of 

Columbia case or statute applying filed-rate principles in the 

insurance context. We also have found no District of Columbia case recognizing a filed-rate defense to a suit for breach of 

a promise as to how premiums would be computed, still less 

to a suit for fraud. Dicta suggest the District of Columbia may 

recognize a common law filed-rate doctrine not anchored in a 

specific statute, see Watergate East, Inc. v. D.C. Pub. Serv. 

Comm’n, 662 A.2d 881, 889 (D.C. 1995) (statute “amounts to a 

codification of the filed rate doctrine”), but if such a doctrine 

exists, its contours are yet to be revealed. After all, a legislative 

decision to adopt the doctrine in one context (public utilities) 

could be understood as a legislative choice not to adopt it in 

others (like insurance). And at any rate, the District would still 

have to balance the policies underlying filed-rate rules against 

its own consumer protection policies. See, e.g., McCarthy Finance, Inc. v. Premera, 347 P.3d 872, 875 (Wash. 2015) (“But 

while a court must be cautious not to substitute its judgment 

on proper rate setting for that of the relevant agency, the legislature has directed that the [consumer protection statute] be 

liberally construed.”). 

Even if the District of Columbia otherwise recognizes a 

common law filed-rate doctrine broad enough to bar Gunn’s 

claims, it also is not clear whether such a doctrine would apply to enforce the decision of a different jurisdiction’s 
16 No. 19-2898 

regulator. Continental’s brief assumes that the public law of 

Washington must in all events, and in all courts, trump the 

private law of the District of Columbia. Traditionally, however, courts have been reluctant to enforce the public law of 

other states. See Restatement (First) of Conflict of Laws § 610 

(Am. Law Inst. 1934) (“No action can be maintained on a right 

created by the law of a foreign state as a method of furthering 

its own governmental interests.”); id., cmt. c (“No action can 

be maintained by a foreign state to enforce its license ... 

laws”); Moore v. Mitchell, 30 F.2d 600, 604 (2d Cir. 1929) (L. 

Hand, J., concurring) (“To pass upon the provisions for the 

public order of another state is, or at any rate should be, beyond the powers of a court”). 

Why would District of Columbia law privilege Washington state’s interest in the authority of its insurance commissioner above the District’s own interest in affording a remedy 

to injured plaintiffs whom it would otherwise protect? See 

Emory v. Grenough, 3 U.S. (3 Dall.) 369, 370 n. (1797), translating 2 Ulrich Huber, Praelectiones Juris Romani et Hodierni, ch. 

“De Conflictu Legum” (1689) (“By the courtesy of nations, 

whatever laws are carried into execution, within the limits of 

any government, are considered as having the same effect 

every where, so far as they do not occasion a prejudice to the 

rights of the other governments, or their citizens.”); Joseph 

Story, Commentaries on the Conflict of Laws 33 (1834) (“It is difficult to conceive, upon what ground a claim can be rested, to 

give to any municipal laws an extra-territorial effect, when 

those laws are prejudicial to the rights of other nations, or 

their subjects.”), approving Huber, supra. The District of Columbia has an interest in protecting those subject to its laws 

from unfair and deceptive business practices. See Shaw v. Marriott Int’l, Inc., 605 F.3d 1039, 1045 (D.C. Cir. 2010). Perhaps 
No. 19-2898 17

more to the point, the District of Columbia has an interest in 

enforcing contracts negotiated and performed there, Wright v. 

Sony Pictures Entm’t, Inc., 394 F. Supp. 2d 27, 32 (D.D.C. 2005), 

and the nature of group insurance suggests the master policy 

in this case fits that description. It is not clear the District of 

Columbia could or would subordinate those interests to the 

regulatory interests of the State of Washington. 

3. The Filed-Rate Doctrine in Washington State

The State of Washington recognizes a “common law filed 

rate doctrine” not grounded in any statute. McCarthy Finance, 

Inc. v. Premera, 347 P.3d 872, 875 (Wash. 2015). The doctrine 

has been applied to bar state consumer protection claims challenging health insurance premiums that had been approved 

by the state insurance commissioner. Id. at 876. But claims under the state consumer protection law or for breach of contract 

that are “merely incidental” to rates approved by the commissioner are not barred. Harvey v. Centene Mgmt. Co., 357 F. 

Supp. 3d 1073, 1083 (E.D. Wash. 2018) (denying motion to dismiss in part), quoting McCarthy, 347 P.3d at 875. 

“[W]hile a court must be cautious not to substitute its 

judgment on proper rate setting for that of the relevant 

agency, the legislature has directed that the [consumer protection statute] be liberally construed ... . In most cases, courts 

must consider [such] claims even when the requested damages are related to agency-approved rates.” McCarthy, 

347 P.3d at 875. Accordingly, to the extent Washington state 

law applies, Gunn’s claims may or may not be barred depending on whether they are deemed “merely incidental” to or 

“would necessarily require courts to reevaluate” the commissioner’s approval of Continental’s rates, as the Washington 

Supreme Court—and no other court—would apply that 
18 No. 19-2898 

distinction. Harvey, 357 F. Supp. 3d at 1083, quoting McCarthy, 

347 P.3d at 875. 

4. Multistate Regulation of Group Insurance 

In the McCarran–Ferguson Act of 1945, Congress 

essentially insulated state regulation of “the business of 

insurance” from the dormant Commerce Clause and from 

implied federal preemption. 15 U.S.C. §§ 1011–1012; see 

American Ins. Ass’n v. Garamendi, 539 U.S. 396, 427–28 (2003) 

(“state regulation ... will be good against preemption by 

federal legislation unless that legislation specifically relates to 

the business of insurance” (quotation marks omitted)); Group 

Life & Health Ins. Co. v. Royal Drug Co., 440 U.S. 205, 218 n.18 

(1979) (“States are free to regulate insurance companies 

without fear of Commerce Clause attack.”). Given the 

national reach of so many insurance companies and of group 

insurance policies issued to national employers, regulation of 

such group policies poses important choice-of-law questions. 

Continental’s understanding of those challenges leads it to 

assert that its promise of interstate uniformity in a group insurance policy was illusory. “[L]ike all long-term care insurers,” Continental says, it “must seek approval of rate increases 

on a state-by-state basis.” Continental says that the necessity 

is so obvious that a reasonable customer should have known 

that any promises of uniform rates among similarly situated 

insureds should not have been believed. Continental’s position is startling, but we have been given no support—as a matter of law, custom, or reason—for its central assumption that 

the proper regulatory subject is the individual certificate of a 

customer like Gunn rather than the employer’s master policy 

under which the individual certificates are issued. 
No. 19-2898 19

A necessary foundation for a filed-rate defense is the regulator’s “jurisdiction to determine the reasonableness of 

rates.” McCarthy, 347 P.3d at 875. Washington asserts, as it can 

assert, legislative and regulatory jurisdiction over only instate activity. See Midwest Title Loans, Inc. v. Mills, 593 F.3d 

660, 666 (7th Cir. 2010), quoting Healy v. Beer Inst., 491 U.S. 

324, 337 (1989); Dean Foods Co. v. Brancel, 187 F.3d 609, 614–15 

(7th Cir. 1999), quoting Bonaparte v. Tax Court, 104 U.S. 592, 

594 (1881); Wash. Rev. Code § 48.01.020. As to ratemaking, 

Washington requires that every company “engaged in the 

business of making contracts of insurance” file its proposed 

rates with the insurance commissioner for approval or disapproval. Wash. Rev. Code § 48.01.050; see §§ 48.19.040, 

48.19.060. The question then is how to describe the legal geography of a group insurance policy with an employer and 

master policy in one location and individual insureds all over 

the nation. More than one state has at least arguable interests 

in such national policies and the individual certificates issued 

under them.

As noted above, the key contractual event in group insurance transactions is generally held to be delivery of the master 

policy, not the individual certificates issued under it. See 

1A Couch on Insurance § 8:1 (“the addition of new individual 

members to a master group policy does not create a new contract of insurance.”). Apparently on the same understanding, 

Washington’s current statutory regulation of group long-term 

care insurance applies to “a long-term care insurance policy 

or contract that is delivered or issued for delivery in this state” 

and “any certificate issued under a group long-term care insurance policy that has been delivered or issued for delivery 

in this state.” Wash. Rev. Code § 48.83.020. (The long-term 

care insurance statute in force in 2000, when Gunn first 
20 No. 19-2898 

obtained coverage, did not address group insurance specifically. See Wash. Rev. Code § 48.84.020; Wash. Admin. Code 

§ 284-54-010.) So we might expect the Washington state insurance commissioner to care about master policies delivered in 

Washington and about certificates issued, no matter where or 

to whom, under master policies delivered in Washington. 

That would make good multistate sense. If universalized, 

it would mean that every group policy has one and only one 

regulator, steering clear of the regulatory Scylla avoided in 

the private-law context by the usual choice-of-law rule. See 

Horn v. Transcon Lines, Inc., 7 F.3d 1305, 1307 (7th Cir. 1993) 

(“There is only one policy and one form of certificate evidencing coverage. We cannot imagine why Liberty Mutual would 

prefer a choice-of-law approach under which 50 different 

rules govern the same policy of insurance”); Restatement 

(Second) § 192 cmt. h (“it is desirable that each individual insured should enjoy the same privileges and protection”); 1A 

Couch on Insurance § 8:7 (“This rule prevents the same policy 

from being interpreted according to the law of potentially 50 

states thus creating uniformity in the coverage and protection 

of every individual insured under the group policy.”). 

But Continental proceeded on nearly the opposite assumption in 2015, when it sought the challenged rate increases. Continental wrote the Washington insurance commissioner: 

The new premium rates will be applied to all insureds under group policies that were sitused in 

your state except insureds under the group policies sitused in your state that were issued certificates in another state that is an extraterritorial (ET) jurisdiction. These insureds are 
No. 19-2898 21

governed by the other ET state’s laws and regulations and will be included in that state for rate 

increase purposes. The new premium rates will 

also be applied to insureds issued in your state 

under groups sitused outside of your state. 

As we read this letter, Continental submitted rates to the commissioner for every individual certificate issued in Washington, even if the master policy had not been delivered there, 

but not for every master policy delivered in Washington, if the 

certificate was issued in an “extraterritorial jurisdiction” 

(which appears to describe Washington as well). 

The briefs do not explain what is an “extraterritorial jurisdiction,” what makes it one, or whether the District of Columbia is one, nor did counsel at oral argument. We assume that 

interstate regulation of insurance transactions involves a 

good deal of comity and agreement among regulators of different states, without each regulator always pushing for maximum power. Any state’s claim to extraterritorial power merits further inquiry, at least. Continental’s letter to the Washington insurance commissioner suggests if nothing else that 

its basic position is overstated: at least some states, those that 

are not “extraterritorial jurisdictions,” are content to leave 

ratemaking authority in the hands of the regulator where the 

master policy was delivered, even if certificates under that 

policy are issued to insureds within their own borders. 

Untying this knot is not possible on the record now before 

us. But it is essential to even a threshold determination of the 

validity of any filed-rate defense that would give decisive effect to the decisions of the Washington state insurance commissioner. We must remand this task to the capable district 

judge, who may find it useful to enlist the help of interested 
22 No. 19-2898 

amici, including the National Association of Insurance Commissioners, associations of insurance companies, and perhaps 

others who can educate generalist federal courts about the 

broader implications of choice-of-law rules as applied to 

group insurance policies. 

We acknowledge the questions we have posed are more 

easily asked than answered. And we have not framed or discussed those questions with any intention to prejudge the correct outcome(s) in this case. The district court may find that a 

motion under Rule 12(c), a motion for summary judgment on 

a more complete record, or perhaps a motion for class certification could bring the issues into sharper relief. See In re 

Bridgestone/Firestone, Inc., 288 F.3d 1012, 1015 (7th Cir. 2002). 

Those are case management issues best left to the district 

court’s discretion. The judgment of the district court is 

REVERSED and the case is REMANDED for further proceedings consistent with this opinion.