IN TH E SUPREME COURT OF THE STATE OF WASHINGTON
CERTIFICATION FROM THE UNITED ) STATES COURT OF APPEALS, NINTH ) CIRCUIT IN )
SPEN CER ALPERT , ) ) P laintiff

- Appellant , ) No. 99377 -7 ) (certified C19

- 35867) v. ) En Banc NATIONSTAR MORTGAGE , LLC, ) a Delaware limited liability company; ) F iled HARWOOD SERVICE COMP ANY , a ) D elaware c orporation, ) ) Defendants

- Appellees , )
and )
AMERI CAN SECURITY INSURANCE ) COMPANY, a Delaware corporation; ) STANDARD GUARANTY INSURANCE ) COMPANY , a Delaware corporation ; ) ASSURANT, INC., a Delaware corporation, )
Defen dants. ) ) )

)

) )

) : September 2, 20212

Alpert v. Nationstar M

ortgage L LC, et al

. No. 99377-7
OWENS, J. ― This c ase a rrives via c ertified q uestion s from t he Ninth Ci rcuit
Court o f A ppeals and involves a

h ome owner who failed to insure his pr operty. When
the h o meowner

f aile d to insu re his property, t he m ortgage s ervicer purchased
insurance t o cover

t h e property pursuant t o the m ortgag e a greement. This t ype of policy i s k

nown a s “ force p laced

i nsurance” or

“ lender placed

i nsurance.” Order Certifying Q uestions t o t he Wash. S up. Ct

. a t 2 -3 (9 th Cir. Dec. 3 1, 2 0 20)

. The p ol icy

was underwritte n b y the i nsurers a n d p assed t hrough a b ro ker t o the m ortgage servicer. The h omeowner claims that t hese p arties participated i n a n u nlawful
kickback s cheme that artificially i nflated t he p remiums

. In Wash ington, insurers m ust generally f

ile their r ates a nd

r eceive approval
from the Of

fice of t h e Insurance C ommissioner (OIC ) before s elling insurance

. Th e

r ates c an be neither

t oo h igh nor

t oo lo w
. Once t he rates are filed and a pp roved by the
g ov erning agency , t he r ates a re “ per se r easonable ” and c laims t hat run squarely against these rates must be dismissed. This pro hibition a gainst s uit is kn own as t he
“‘“f i le d r ate ” doctrine. ’” McCa rthy F in ., Inc. v. Premera , 18 2 Wn.2d 936, 94 2, 34 7
P.3d 87 2 ( 2 015) ( q

uoting Tenore v
. A T&T Wireless S ervs. , 13 6 Wn.2d 322, 33 1

- 32,
96 2 P .2d 1 0 4 (1998)).
While t he fi led rate d octrine ha s historically applied t o shield entities t hat

f i le
rates, w e a

re a sked whether

t he fi l ed r ate d octrine also a

pplies t o bar

s uit a gainst
i ntermediaries who d o n ot f ile r ates. I n this c ase, the i ntermediaries a re the mortgageAlpert v. Nationstar Mortgage LLC, et al. No. 9 9377

- 7

3 servicer (Nationstar Mortgage LLC, or Nationstar ) and broker (Harwood Service Company , or Harwood ) who participated in the procurement of the policy from the
insurer s
. If the fi l ed rate doctrine applies to these intermediaries, we are then asked to determine whether damages would be barred under our state’s o nly cas e applying the doctrine, M cCarthy

. The filed rate doctrine exists to ensure that agencies , such as the OIC , retain primary jurisdiction in determining what rates are reasonable and to prevent rate filers
from unfair ly discriminati ng among similarly situated customers

. We recognize that

a llowing suit against intermediaries in some cases undermine s these principles in the same way that suit against a rate

- filer would

. Therefore , to ensure that the filed rate doctrine achieves its intended ef fect, w e hold today that the filed rate doctrine must also apply to bar suit against intermediaries where awarding damages or other relief would squarely attack the filed rate

. In light of this holding, w e return the second question pertaining to damages to the Ninth
Circuit Court of Appeals to first revisit and apply McCarthy to the specific allegations
of Alpert’s outstanding claims

. I

. S TATEMENT OF F ACTS This case involves a homeowner who claims that he was overcharged for “force placed” home insu rance (also known as lender placed insurance)

. “ Force placed
insurance ” is insurance that a lender or mortgage servicer procures on behalf of theAlpert v. Nationstar Mortgage LLC, et al. No. 9 9377

- 7

4 homeowner, pursuant to a mortgage agreement, if the homeowner fail s to insure the property. For three years the home owner , Mr. Spencer Alpert , did not maintain
homeowner’s insurance as required by his mortg age agreement. As a result, his loan servicer, Nat ionstar, obtained insurance and charged Alpert. 1 The insurers were Assurant, American Security Insurance Comp any (ASIC) and Standard Guaranty Insurance Company (collectively Assurant Defendants). Harwood acted as an intermediary broker between the insurers and Nationstar. Harwood is a wholly owned subsidiary of Nationstar. Only the claims against Nationstar an d Harwood are the subject of this appeal , and the claims against Assurant Defendants were dismissed by agreement of the parties

. The heart of Alpert’s claims is that Assurant Defendants, Harwood, and Nationstar operated an unlawful kickback scheme that inflated Alpert’s premiums. Alpert alleges that Nationstar and ASIC misname d payments to Nationstar as

“ ‘ commissions, ’ ‘ expense reimbursements, ’ or premiums for riskless reinsurance , ”
and he asserts that these payments were actually “ gratuitous payme nts constituting an effective rebate on the cost of coverage to Nationstar.” Br. of Appellant at 14 (9th
Cir. No. 19

- 35867 (2020))

. Nonetheless, defendants claim that “Nationstar paid to

1 Alpert asserts that Nationstar, and not Alpert, is the “insured ” under this force placed insurance agreement. H owever, w e need not resolve this question whether Alpert , Nationstar , or both we re the “insured” to reach our decision today.Alpert v. Nationstar Mortgage LLC, et al. No. 9 9377

- 7

5 ASIC the approved rate which was then passed to Mr. Alpert without adding a single
cent.” Opposing Br. of Defs.

- Appellees’ Nationstar and Harwood at 11. Alpert brought a total of 13 claims against defendants. Among these , Alpert
asserted federal claims arising under the Truth in Lending Act of 1968, 15 U.S.C.
ch. 41, and Racketeering Influenced and Corrupt Organizations Act (RICO) , 18
U.S.C. ch. 96, as well as sta te law claims based in contract, tort , and the Consumer
Protection Act , ch. 19.86 RCW

. The federal district court dismissed c ounts 1

- 5 and 7

- 10 based on the filed rate
doctrine and counts 6, 12, and 13 on other grounds

. Alpert settled all claims against
Assurant Defendants , and accordingly, counts 4 and 7 against these parties are no longer at issue

. Because only c ount 11 remained, the federal district court dismissed
the case due to lack of subject matter jurisdiction and remanded to the King County Superior Court . Alpert then a ppealed to the Ninth Circuit Court of Appeals. Accordingly, of Alpert’s numerous claims, counts 1, 2, 3, 5, 8, 9, and 10 are the only remaining counts that are the subject of his appeal. 2 Alpert broadly pleaded damages that included general damages, actual damages, treble damages, statutory damages, injunctive relief, and attorney fees.

2 These claims are as follows: c ount 1 (breach of contract) , c ount 2 (breach of im plied covenant of good faith and fair dealing) , c ount 3 (unjust enrichment) , c ount 5 ( violation of Washington Consumer Protection Act) , c ount 8 (breach of fiduciary duty) , c ount 9 ( violation of RICO , 18 U.S.C. § 1962(c) ) , c ount 10 ( violation of RICO , 18 U.S.C. § 1962(d) ).Alpert v. Nationstar Mortgage LLC, et al. No. 9 9377

- 7

6 I I. C ERTIFIED Q UESTIONS P RESENTED
1. Should the filed rate doctrine apply to claims by a Washington homeowner against a loan servicer arising from the placement of lender placed insurance on the Washington homeowner’s property where the servicer purchased the insurance from a separate insura nce company who filed the insurance product with the Washington State Office of the Insurance Commissioner?
2. In the event the filed rate doctrine does apply to this type of transaction, do the damages requested by Plaintiff fall outside the scope of the filed rate doctrine or , rather , do they “directly attack agency

- approved rates,” such that they are barred under McCarthy Finance, Inc. v. Premera , 347 P.3d 872, 875 (2015)?
I II

. A NALYSIS
A. Background of the Filed Rate Doctrine Historically, many state and federal laws have required certain utilities to submit their rates for approval before offering those rates to the public. See , e.g. , Keogh v. Chi

. & N w . Ry. Co. , 260 U.S. 156, 43 S. Ct. 47, 67 L. Ed. 183 (1922); RCW 48.19.040 (1) (requiring insurers to file and maintain rates). In Washington , for example, once an
insurer files a rate with the OIC and the rate is approved, the insurer can sell insurance only according to the parameters of that rate. RCW 48.19.040(6). Keogh , a federal case, first established almost a century ago that once a filed rate is approved, filers are immune from at tacks on the approved rates. “ The rights as defined by the tariff cannot be varied or enlarged by either contract or tort of the carrier.
A nd they are not affected by the tort of a third party. ” Keogh , 260 U.S. at 163 (citations omitted) . This prohibition against suit is known as the “filed rate” or “filed tariff”
doctrine. Tenore , 136 Wn.2d at 331

- 32

.Alpert v. Nationstar Mortgage LLC, et al. No. 9 9377

- 7

7 “The purposes of the ‘filed rate’ doctrine are twofold: (1) to preserve the agency's primary jurisdiction to determine the reasonableness of rates, and (2) to insure that regulated entities charge only those rates approved by the agency.” Id. (citing Ark

. L a. Gas Co. v. Hall , 453 U.S. 57 1, 577

- 78, 101 S. Ct. 2925, 69 L. Ed. 2d 856 (1981)). Despite the frequent application of the filed rate doctrine in federal courts, this court has only once applied the filed rate to bar suit in McCarthy , 182 Wn.2d 936. In McCarthy , we held that claims asserting damages under the C onsumer P rotection A ct were barred by the filed rate doctrine

. Id

. at 943

- 44. We reasoned that the filed rate doctrine would apply only if the claims and damages directly attacked a gency rates and “would necessarily require courts to reevaluate agency

- approved rates.” Id. at 942

- 43. Damages were not barred , even if they were “related to agency

- approved rates” so long

as they were “merely incidental” to the claims or were claims for general damages

. Id.

at 942 (citing Tenore , 136 Wn.2d at 344). With this background in mind , we turn to address the two certified questions.
B. The Filed Rate Doctrine Applies to Intermediaries Where Awarding Damages Runs Squarely a gainst t he Filed Rate “Certifie d questions are matters of law we r eview de novo.” Frias v. Asset Foreclosure Servs., Inc ., 181 Wn.2d 412, 420 , 334 P.3d 529 (2014).Alpert v. Nationstar Mortgage LLC, et al. No. 9 9377

- 7

8 Alpert asserts that the filed rate doctrine is inapplicable to Nationstar and Harwood because they are “intermediaries” 3 who never filed a rate with the OIC . Alpert points to Tenore where we stated that the filed rate doctrine “provides, in essence, that any ‘filed rate’

— a rate filed with and approved by the governing regulatory agency

— is
per se reaso nable and cannot be the subject of legal action against the private entity that
filed it.” 136 Wn.2d at 331

- 32 (emphasis added). Alpert emphasizes that neither
Nationstar nor Harwood were the private entity that filed the rate and , therefore , do not
fall within the doctrine’s reach. Federal courts recently presented with similar scenarios have generally concluded that the filed rate doctrine applies to transactions where the doctrine’s underlying
purposes , preserving agencies’ primary jurisdiction and pre venting unfair discrimination, are undermined. According to these courts, a pplicability of the doctrine
does not depend strictly on the identities of the plaintiff and defendant as ratepayers and

rate

- filers

. See Rothstein v. Balboa Ins. Co. , 794 F.3d 256, 263

- 65 (2d Cir. 2015); Leo v. Nationstar Mortg

. LLC , 964 F.3d 213, 217 n.4 (3d Cir. 2020); Patel v. Specialized Loan Servicing, LLC , 904 F.3d 1314, 1321

- 23 (11th Cir. 2018). We agree that labels do not necessarily govern the doctrine ’s applicability

. W here a rate filer and other intermediaries jointly act to artificially inflate the rate,

3 While Alpert asserts that the filed rate doctrine should not apply because the i nsurance c ode does not apply to intermediaries, the i nsurance c ode generally extends to “all persons having to do [with all insurance and insurance transac tions].” RCW 48.01.020.Alpert v. Nationstar Mortgage LLC, et al. No. 9 9377

- 7

9 allowing suit against any of these parties may still have the s ame effect of directly attacking the rate and causing courts to “ reevaluate agency

- approved rates.” McCarthy , at 942

- 43. 4 If the suit does in fact run squarely against the rate , suit must logically be
barred , regardless of the party’s status as a rate

- filer, so that the doctrine may serve its
intended purposes
. 5 Accordingly, we decline to recognize a categorical exemption from the filed rate doctrine for intermediaries who do not file rates. Rather, the doctrine’s applicability to nonfiling intermediaries turns on whether awarding damages squarely attack s the fil ed

rate

. As the conduct at issue involves joint conduct between the rate

- filer and
intermediaries , we hold that the filed rate doctrine may also apply where the allegations run squarely against the filed rate. We therefore answer the first certifi ed question in the
affirmative.

4 Alpert further asserts that barring suit against intermediaries would undermine the Department of Financial Institution’s primary jurisdiction as well as other statutory schemes . However, the filed rate doctrine will bar suit only if damages run squarely against the rate, and it would generally not undermine agencies of their ability to enforce their regulat ions or provide redress where they have express statut ory authori ty to do so.

5 Alpert further relies on Smith v. SBC Communications Inc. , 178 N.J. 265 , 839 A.2d 850 (2004) ; however, we find Smith unpersuasive. In Smith , the filed rate was applicable only to the first transaction under the regulatory scheme and inapplicable to subsequent resales

. Id. at 277

- 78

. Here, there was a singular sale for insurance as evidenced by the mortgage agreement that was made “ at Lender’s option and Borrower’s expense .” Opening Br

. of Appe l lant at 12 (9th Cir. No. 19

- 35867 (2020))

.Alpert v. Nationstar Mortgage LLC, et al. No. 9 9377

- 7

10 C

. We Decline to Addres s t he Second Certified Question a nd Ask t he Court T o First Revisit a nd Apply McCarthy The second question the Ninth Circuit asks is what damages are barred by the
filed rate doctrine. Alpert brings a variety of claims, some which have been settled, dismissed, or are seemingly no longer at issue

. This task requires analyzing the allegations to determine whether the relief requested comport s with McCarthy

. As we do not wish to unnecessarily expand our reasoning in McCarthy to analyze
claims that m ay fall squarely within its parameters, we respectfully ask the Ninth Circuit
C ourt of Appeals to first revisit and apply McCarthy in light of today’s opinion and s o decline to answer the second certified question at this time

. “Whether to actually answer a certified question that has been accepted for review is within the discretion of this
court.” U nited S tates v. Hoffman , 154 Wn.2d 730, 73 6 , 116 P.3d 999 (2005) (citing Hoffman v. Regence Blue Shield , 140 Wn.2d 121 , 128, 991 P.2d 77 (2000)).
I V. C ONCLUSION In certain circumstances, awarding damages against intermediaries such as mortgage brokers and servicers may directly attack the filed rate. When it does, the doctrine must apply to bar suit, just as it would against the rate

- filer. Accordingly, we answer the first question in the affirmative. W e respectfully decline to answer the second question and ask the court to r evisit and apply McCarthy

.Alpert v. Nationstar Mortgage, LLC, et al. No. 99377-7

11 WE CONCUR: