Source: https://insuranceclaimsbadfaith.typepad.com/insurance_claims_badfaith/consumer-protection/
Timestamp: 2019-04-25 12:32:27+00:00

Document:
THE FILED RATE DOCTRINE IS NO BAR, EVEN ASSUMING THAT IT APPLIES TO INSURANCE CASES.
A 2-to-1 decision last year by a panel of the Eleventh Circuit Court of Appeals, Patel v. Specialized Loan Servicing, LLC, 904 F.3d 1314 (11th Cir. 2018), may not mean what you think it does.
The Patel panel decision has often been put into an argument that goes something like this: Courts have no business changing filed rates that have been approved by authorized regulatory agencies. The federal filed rate doctrine forbids it. Insurance claims are regulated by states, so the filed rate doctrine bars claims that involve filed insurance rates approved by state insurance commissioners authorized to approve them.
That is not what Patel stands for.
In reaching this conclusion, the Eleventh Circuit focused on “[t]he most obvious basis,” id. at 1325, namely, “the fact that the plaintiffs repeatedly state that they are challenging [the insurance company’s] premiums,” id. at 1325–26, using language targeting “artificially inflated premiums,” “unreasonably high force-placed insurance premiums,” and “amounts charged for insurance coverage,” id.at 1326, such that “[t]he plain language of the complaints therefore shows that the plaintiffs are challenging the reasonableness of [the insurance company’s] premiums; and since these premiums are based upon rates filed with state regulators, plaintiffs are directly attacking those rates as being unreasonable as well,” id. The court described these claims “directly challenging the rates ... filed with state regulators” as “textbook examples of the sort of claims that we have previously held are barred by the nonjusticiability principle.” Id.
The other circuit cases on which the defendants rely are distinguishable from the plaintiff’s claims for precisely the reason Patel is: in each case, the plaintiffs directly challenged the filed rate.
Krukas v. AARP, Inc., ___ F. Supp. 3d ___, No. 18-1124 (BAH), 2019 WL 1243864, at *12-*13 (D.D.C. March 17, 2019) (Howell, Chief Judge).
In Krukas in contrast, "the Complaint at issue does not challenge the amount of the Medigap insurance rate or the amount collected by the insurance provider [UnitedHealth] that has been approved by state insurance agencies." Krukas v. AARP, Inc., ___ F. Supp. 3d ___, No. 18-1124 (BAH), 2019 WL 1243864, at *13 (D.D.C. March 17, 2019). Other courts in other cases filed over AARP's collection of what it calls a "royalty" and plaintiffs call an unauthorized "commission" have reached different results over whether a filed rate doctrine applies, "but closer scrutiny shows this is due to differences in the claims asserted." Krukas v. AARP, Inc., ___ F. Supp. 3d ___, No. 18-1124 (BAH), 2019 WL 1243864, at *13 (D.D.C. March 17, 2019).
This reasoning is easily distinguishable since the instant suit is not filed against UnitedHealth and does not challenge the legality of the approved rates charged by UnitedHealth. Rather, the plaintiff’s claims challenge AARP’s practices and disclosures regarding the defendants' retention of a portion of the rates UnitedHealth filed.
Krukas v. AARP, Inc., ___ F. Supp. 3d ___, No. 18-1124 (BAH), 2019 WL 1243864, at *14 (D.D.C. March 17, 2019).
Parenthetically, I say "apparently approved," because as the Court itself noted in the Krukas case, it would not consider exhibits proffered by the defendants at the motion-to-dismiss stage which "would be premature." Neither the defendants nor the Court wanted to treat the defendants' motion to dismiss as a motion for summary judgment "without a full record" regarding the information filed by the carrier with the insurance regulator. Instead, at the motion-to-dismiss stage "the Court looks only to the plaintiff's Complaint" in that case. Krukas v. AARP, Inc., ___ F. Supp. 3d ___, No. 18-1124 (BAH), 2019 WL 1243864, at *11 (D.D.C. March 17, 2019).
In sum, the filed rate doctrine is not in our stars, so to speak, it is in the claims that are alleged. The filed rate doctrine does not apply to conduct and practices that "are independent of any approved rates." The FRD does not exist when "resolution of these claims ... does not necessitate any determination about the reasonableness of the rate." Krukas v. AARP, Inc., ___ F. Supp. 3d ___, No. 18-1124 (BAH), 2019 WL 1243864, at *15 (D.D.C. March 17, 2019). So take a look at what is alleged and what is proffered before a Court rules on the filed rate doctrine.
THE VOLKSWAGEN "DEFEAT DEVICES" ENORMOUS MDL CLAIMS.
This is the beginning of a triolgy of articles that will end our continuing series taking a look at the recent Multi-District Litigation lawsuits (MDLs) involving General Motors and Volkswagen. In this installment and in the next two articles after this one, we will bring the series to a close by taking a look at the Volkswagen "pollution defeat device" MDL. Our special focus will be trained on the secrecy involved in this huge lawsuit, secrecy that is built into multi-district litigation and similar huge lawsuits. To a great extent secrecy is a major reason such lawsuits exist in the first place.
Demands from the Federal Trade Commission in the first months of 2017 for the "policies, practices and procedures" used by a finance company regarding "technologies to track the location of borrowers' vehicles in case they need to repossess them," including "installing devices that enable them to remotely disable a car's ignition after a borrower misses a payment."
It is worth mentioning here that in a multidistrict litigation lawsuit against Hyundai and Kia, consisting apparently of plaintiffs who did not settle their claims with Hyundai and Kia the first time around, there are some 566 entries for pleadings and orders on the docket, and that many of the materials filed in the case concern sealing the evidence. I reviewed all 566 entries and although I may have missed one or more, it appeared that the trial judge granted every motion to seal that was ever filed in that case.
TOMORROW: THE VW MDL: ANOTHER STIPULATED PROTECTIVE ORDER.
 Fiat Chrysler Defeat Device claims: The United States and the State of California sued Fiat Chrysler over defeat devices that basically mimicked VW's defeat devices. The suits were settled in January 2019 with the Federal Government and the State of California for a combined total of some $330 Million in lieu of civil penalties alone (figures mine), on top of an additional maximum estimate of $185 Million in recall costs. See Neal E. Boudette, How Fiat Chrysler Overtook the Pack, New York Times, p. B3, January 15, 2019; Neal E. Boudette, Fiat Chrysler's Penalties Reflect Limits of Diesel, New York Times, p. B5, January 11, 2019.
"Illegal engine-control software" claims alleged by the United States against Fiat Chrysler Automobiles: See Neal E. Boudette, "Business Day Section / U.S. Sues Fiat Chrysler, Accusing It of Using Software to Pass Emissions Tests" (New York Times Online, May 23, 2017), available at https://nyti.ms/2qSYYuH.
Hyundai, Kia inflated mileage claims: After settling regulators' claims for $100 million, Hyundai Motor America and its related corporation Kia Motors America settled for an additional $400 million most of a lawsuit that was brought based on allegations of inflated fuel economy claims for their cars. See, e.g., Jerry Hirsch, "Hyundai, Kia Reach $400-Million Settlement Over Inflated MPG Claims" (Los Angeles Times Online, December 23, 2013), available at http://articles.latimes.com/print/2013/dec/23/autos/la-fi-hy-hyundai-kia-settle-mpg-lawsuit-20131223. It was reported four days after the lawsuit settlement was announced, or on December 27, 2013, that the president and CEO of Hyundai Motors America was stepping down and would be replaced when his contract ended on December 31, 2013. Ronald D. White, "Hyundai Motor America Chief John Krafcik to Step Down" (Los Angeles Times Online, December 27, 2013), available at http://articles.latimes.com/print/2013/dec/27/business/la-fi-hyundai-chief-resigning-20131228.
A class-action lawsuit against General Motors over alleged programming designed to cheat diesel emissions tests: See Neal E. Boudette, "G.M. Accused in Lawsuit of Deceit on Diesel Truck Emissions" (New York Times Online, May 25, 2017).
Demands from the Federal Trade Commission in the first months of 2017 for the "policies, practices and procedures" used by a finance company: See Michael Corkery and Jessica Silver-Greenberg, "DealBook / Federal Agency Begins Inquiry Into Auto Lenders' Use of GPS Tracking" (New York Times Online, February 19, 2017), available at https://nyti.ms/2lwZFaA.
 See Jerry Hirsch, "Hyundai, Kia Sued Again Over Inflated Mileage Claims" (Los Angeles Times Online, November 8, 2012), available at http://articles.latimes.com/print/2012/nov/08/business/la-fi-mo-autos-hyundai-fuel-economy-lawsuit-20121108.
Since an appellate court decision on January 23, 2018, that MDL continues still. The appellate court reversed the trial judge's approval of settlement in that case and sent it back for further proceedings. In re Hyundai and Kia Fuel Economy Litigation, 881 F.3d 679 (9th Cir. 2018), rehearing en banc granted (vacated as precedent in the Ninth Circuit pending rehearing en banc), 897 F.3d 1003 (9th Cir. 2018).
FILED RATE DOCTRINE DID NOT BAR STATUTORY UNFAIR PRACTICE CLAIMS.
In Washington State as elsewhere, the filed rate doctrine is a defense under certain circumstances. In basic and general terms as laid out by a federal court in the case of Harvey v. Centene Mgt. Co. LLC, No. 2:18-CV-00012-SMJ, 2018 WL 6112407, at *5 n.1 (E.D. Wash. Nov. 21, 2018), it is Washington State law that the "filed rate doctrine" was made by courts to cover cases involving regulated utilities. The effect is to shelter the appropriately filed rate from attack, whether directly or indirectly. In other words, the reasonableness of a rate filed with a governing regulatory administrative agency and approved by that agency is a settled issue, not subject to dispute.
The Harvey case is an insurance case. Specifically, that case involves health insurance policies.
In the Harvey case, the plaintiff alleged that the defendants breached contracts and violated Washington's Unfair Business Practices and Consumer Protection Statutes by failing to deliver the benefits of their "Ambetter health insurance policy" which they allegedly promised and represented that they would deliver. The plaintiff alleged these claims on behalf of a putative class of Ambetter policyholders. Harvey v. Centene Mgt. Co. LLC, No. 2:18-CV-00012-SMJ, 2018 WL 6112407, at *1 (E.D. Wash. Nov. 21, 2018).
In part here pertinent, the federal judge in Washington held in accordance with the concisely phrased headings of his rulings that "1. The filed rate doctrine does not apply to claims that are merely incidental to and do not directly attack Insurance Commissioner-approved health insurance premiums," Harvey v. Centene Mgt. Co. LLC, No. 2:18-CV-00012-SMJ, 2018 WL 6112407, at *5 (E.D. Wash. Nov. 21, 2018), and "2. Harvey's claims are merely incidental to and do not directly attack Insurance Commissioner-approved health insurance premiums." Harvey v. Centene Mgt. Co. LLC, No. 2:18-CV-00012-SMJ, 2018 WL 6112407, at *6 (E.D. Wash. Nov. 21, 2018). In short, claims based on allegations that the defendants did not deliver the insurance benefits they sold were not barred by the filed rate doctrine.
Even if the Court had not been completely convinced of this ruling, the Court went further in Harvey and stated that this decision was based on a motion to dismiss and "'the better practice'" in any case is to address the filed rate doctrine either on a motion or motions for summary judgment, or at trial. Harvey v. Centene Mgt. Co. LLC, No. 2:18-CV-00012-SMJ, 2018 WL 6112407, at *7 (E.D. Wash. Nov. 21, 2018).
"THE INFLICTION OF STIPULATIONS ON LITIGATION OF FACTS AND ON SETTLEMENTS"
PART TWO OF TWO PARTS COMPLETED WITH ALL FOOTNOTES REPRINTED HERE ON THURSDAY, NOVEMBER 29, 2018.
The following reprint from the book, Catastrophe Claims: Insurance Coverage for Natural and Man-Made Disasters, is with the permission of Thomson Reuters West, the publisher, and Dennis J. Wall, the author of the reprinted selection. This selection, Section 2:19 (2018, Thomson Reuters), is reprinted here with permission of Thomson Reuters. Any further reproduction without the consent of the publisher is expressly prohibited.
Note: Access to hyperlinked citations are restricted by Thomson Reuters West in this publication; subscription may be required by Thomson Reuters West to access the hyperlinked citations that appear below.
Beyond the three cases which have just been discussed, each decision coming from a different Federal Court and a different jurisdiction, Ursomano from California, Ali from Oklahoma, and Keller from Washington State, there are many other lender force-placed insurance class action cases and many other types of cases which are pending and others which are likely to be filed in the future. Some of those class actions will involve the same defendants as in cases which have settled and in which a “class” has been “certified for settlement purposes,” as in the Fladell case. Orders in those cases will be used in defense in other cases, whether or not they contain expressions of res judicata, preclusive effect as does the stipulated settlement order in Fladell.
Although the Fladell case was ultimately settled by a stipulated agreement which the Court approved in that case, it is interesting to note the several objections which the Fladell defendants raised to class certification when they were against it and before they were for it.
In the Fladell case, the defendants pointed out in their opposition that the plaintiffs were seeking limited certification. According to the Fladell defendants, the plaintiffs requested certification of a national class on three Federal claims but not of their Florida law claims, for which the plaintiffs requested certification “of a Florida-only class.”20 That statement obviously contradicts the position taken afterward by the same defendants in other legal proceedings, that the Fladell class settlement bars all lender force-placed insurance claims in all other cases in the nation.
In approving the Fladell parties' settlement agreement, the parties and the Federal Judge said that the Florida class action settlement complied with Federal Rules 23(a) and 23(b). Rule 23 requires among other things that the proposed class action procedure be a superior means of adjudicating the alleged claims and that the current named plaintiffs are adequate to represent the alleged classes in pursuing those claims.
It is noteworthy but perhaps not entirely surprising that District Judges often make their secrecy decisions in unreported Orders. Being unreported, they are much harder to find than reported decisions. In one such secrecy Order, captioned “ORDER RE: ADMINISTRATIVE MOTIONS TO SEAL,”25 a District Court treated a motion for class certification as a nondispositive motion even though disposition of the motion for class certification was at the heart of the plaintiffs' collective claims. The parties once again stipulated to secrecy, in this instance, to request that exhibits filed in connection with the motion for class certification should be kept secret. Applying an explicitly lesser standard for sealing documents and parts of documents when they are exhibits concerning “nondispositive” motions as opposed to dispositive motions, the District Court entered its Order granting the parties' stipulation to “file all documents sought to be sealed in redacted form consistent with their joint submission.”26 In other words, the holding that a motion to certify a class in a case in which the reason for the lawsuit's existence lies in class certification -- and few if any putative class action lawsuits fit into any other category -- drove the decision to keep documents secret which probably and almost certainly would support the plaintiffs' substantive claims in the case.
© 2018 Thomson Reuters. No Claim to Orig. U.S. Govt. Works.
Houston Cas. Co. v. Charter Oak Fire Ins. Co., No. 1:16-cv-535-LJO-EPG, 2017 WL 35500 at *1 (E.D. Cal. January 3, 2017).
Cabrera v. Government Emp's Ins. Co., 2014 WL 2999206 (S.D. Fla. July 3, 2014) (Seltzer, Chief U.S.M.J.).
Cabrera v. Government Emp's Ins. Co., 2014 WL 2999206 *9 (S.D. Fla. July 3, 2014) (Seltzer, Chief U.S.M.J.).
See Cabrera v. Government Emp's Ins. Co., 2014 WL 2999206 *9 (S.D. Fla. July 3, 2014) (Seltzer, Chief U.S.M.J.).
See generally Dennis J. Wall, “Conditional and Other ‘Nonspecific’ Objections to Discovery Are No Objections at All in an Insurance (or in Any Other Case),” 33 Ins. Lit. Rptr. 437 (2011).
Floyd Norris, “High & Low Finance / Failed Bank's Broken Vows Mean Little” p. B1, col. 1 (New York Times Nat'l ed., “Business Day” Section, Friday, September 19, 2014). The order of the Federal Court in North Carolina can be found in FDIC v. Rippy, Order of September 10, 2014 granting defendants' summary judgment motion, Dkt. No. 124 (E.D.N.C. Case No. 7-11-cv-00165-BO).
FDIC v. Rippy, Dkt. No. 124, Order of September 10, 2014 granting defendants’ summary judgment motion, at p. 3 (E.D.N.C. Case No. 7-11-cv-00165-BO).
FDIC v. Rippy, Dkt. No. 71, May 21, 2013 Amended Stipulated Protected Order and Non-Waiver Agreement, at p. 2 (E.D.N.C. Case No. 7-11-cv-00165-BO).
Fed. R. Civ. P. 26.
The new reference to trade secrets and other confidential commercial information reflects existing law. The courts have not given trade secrets automatic and complete immunity against disclosure, but have in each case weighed their claim to privacy against the need for disclosure.
An alternative to secrecy stipulations pursued in the cases, is to settle the class action case and provide for secrecy in the settlement agreement which the Court is then requested to approve. This method of obtaining secrecy is at work in the class action lawsuit filed against the high-profile corporations of Silicon Valley who allegedly conspired to limit their workers' “mobility and incomes.” David Streitfeld, “New Accord is Expected in Hiring Ban,” p. B1, col. 5 (New York Times Nat'l ed., “Business Day” Section, Thursday, January 15, 2015). As explained in this Times report, a second settlement agreement was reached in the case and presented to the Court for approval “[t]o head off a trial and the exposure of reams of incriminating emails.” The Federal District Judge already rejected one settlement because the amount was too low to be “‘within the range of reasonableness,'” i.e., the original settlement amount presented for the Court's approval was unreasonably low. Although the second attempt at a settlement agreement contains more money, “[t]he settlement money is pocket change to the companies, which include some of the world's wealthiest. If they let the case go to trial, however, it might corrode their image as forward-thinking, worker-friendly benevolent empires.” David Streitfeld, “New Accord is Expected in Hiring Ban,” p. B1, col. 5 (New York Times Nat'l ed., “Business Day” Section, Thursday, January 15, 2015).
Fladell, et al., Plaintiffs v. Wells Fargo Bank, N.A., et al., Defendants (S.D. Fla. Case No. 13-cv-60721), app. dismissed (unreported) (11th Cir. August 4, 2015).
Ursomano v. Wells Fargo Bank, N.A., No. C-13-4381, 2014 WL 644340 *1-*2 (N.D. Cal. February 19, 2014).
Ursomano v. Wells Fargo Bank, N.A., No. C-13-4381, 2014 WL 644340 *2 (N.D. Cal. February 19, 2014).
Ursomano v. Wells Fargo Bank, N.A., No. C-13-4381, Dkt. No. 74 filed on Nov. 12, 2014 (N.D. Cal. Case No. C-13-4381).
See, e.g., Keller v. Wells Fargo Bank, N.A., No. C14-422, 2014 WL 6684895 *2-*3 (W.D. Wash. November 25, 2014) (“limited injunction” ultimately granted against defendants foreclosing on plaintiffs' home so as to allow the plaintiffs to prove that their case is not included in the Fladell settlement).
Fladell v. Wells Fargo Bank, N.A., No. 13-cv-60721-FAM, Dkt. No. 108 [hereinafter “DE 108”], filed December, 2013 (S.D. Fla. Case No. 13-cv-60721-FAM), app. dismissed (unreported) (11th Cir. August 4, 2015).
DE 108 at page 1.
DE 108 at page 19.
Fladell v. Wells Fargo Bank, N.A., 2014 WL 5488167 *7 (S.D. Fla. Oct. 29, 2014), app. dismissed (unreported)(11th Cir. August 4, 2015).
Stitt v. Citibank, N.A., ORDER RE: ADMINISTRATIVE MOTIONS TO SEAL, Dkt. No. 152 Filed December 17, 2015 (N.D. Cal. No. 4:12-cv-032892-YGR).
Stitt v. Citibank, N.A., ORDER RE: ADMINISTRATIVE MOTIONS TO SEAL, Dkt. No. 152, at p.2, Filed December 17, 2015 (N.D. Cal. No. 4:12-cv-032892-YGR).
See, e.g., 1 Dennis J. Wall, Litigation and Prevention of Insurer Bad Faith § 3:107, “Settlement of third-party bad faith claims: Confidentiality (protected) or concealment (void)” (3d Edition and 2017 Supplement, Thomson Reuters West); 2 Dennis J. Wall, Litigation and Prevention of Insurer Bad Faith § 9:28, “Settlement of first party bad faith claims: Confidentiality (protected) or concealment (void)” (3d Edition and 2017 Supplement, Thomson Reuters West), examining among other things, Florida Statute Section 69.081.
The above reprint from the book, Catastrophe Claims: Insurance Coverage for Natural and Man-Made Disasters, is with the permission of Thomson Reuters West, the publisher, and Dennis J. Wall, the author. This selection, Section 2:19 (2018, Thomson Reuters), is reprinted here in its entirety with permission of Thomson Reuters. Any further reproduction without the consent of the publisher is expressly prohibited.
NEW: "INJURY IN FACT": WHAT HAPPENS TO INSURER BAD FAITH STATUTES?
A pdf of this new section can be accessed here or on my website at www.dennisjwall.com.
9:14.50. “Injury in Fact”: What happens to bad faith statutes?
Claims handling and penalties statutes regulating the business of insurance may not any longer provide causes of action to many policyholders and claimants.
In 2016, the Roberts Court grafted a requirement onto the U.S. Constitution which is not found in it—standing — but which is instead found in the Court's cases. Cases decided in lower courts since the Roberts Court raised standing to a constitutional prerogative are divided over whether Congress and State Legislatures can provide standing by providing remedies for statutory violations.
One of the elements of standing is “injury in fact,” which the Spokeo Court raised to “a constitutional requirement” which bars legislatures from conferring standing on people and organizations in most cases. To establish injury in fact, a person invoking a statutory remedy now must meet a newly-found constitutional requirement that she or he had a legally protected interest that is concrete and individualized to her or him, and that the harm is “actual” or “imminent,” not “conjectural” or “hypothetical.”3The Spokeo case itself was presented when Mr. Thomas Robins filed a lawsuit claiming an alleged violation of the Fair Credit Reporting Act by an internet search engine service which incorrectly provided information to the world about him. The Roberts Court remanded for a determination of whether Robins adequately alleged an injury in fact in his complaint.
As it has done by replacing “ultimate facts” pleading with “plausibility” pleading, in which allegations of fact in a complaint must be weighed by each individual judge who must dismiss the complaints that he or she does not think are “plausible,” the Roberts Court has laid down another obstacle to filing lawsuits in Federal Courts.4 It is fundamental to its process to note how many times the Court would have people believe that its work has consisted for several years now of finding procedural and constitutional limitations which other Courts somehow must have overlooked.
However, this decision is by no means alone.8 In Spokeo itself, the Court deciding that case remanded for a determination of “plausibility,” in effect, of whether Thomas Robins and persons like him had alleged injury in fact as the U.S. Constitution now apparently requires.
If the idea of “injury in fact” has been elevated surreptitiously from standing to the U.S. Constitution, it can certainly have an effect on claims based on State statutes providing remedies to ‘private attorneys general’ that the States rely on to enforce the laws. Time will tell whether State Unfair Claim Handling Practices Acts and Penalties Statutes governing the business of insurance will feel the effects and, if so, how.
Westlaw. © 2018 Thomson Reuters. No Claim to Orig. U.S. Govt. Works.
Spokeo, Inc. v. Robins, U.S. , 136 S. Ct. 1540 (2016).
Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016).
Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547-48 (2016).
See, e.g., Klika v. Capital One Bank, N.A., No. C15-0107RSL, 2016 WL 4544373 at *1 (W.D. Wash. June 30, 2016), and “PLAUSIBILITY AS A STANDARD? DON'T BELIEVE IT,” published on Insurance Claims and Issues Blog on Monday, May 1, 2017, at http://insuranceclaimsissues.typepad.com/insurance_claims_and_issu/2017/05/plausibility-as-a-standard-dont-believe-it-its-just-another-way-of-saying-theres-nothing-left-to-lose-with-apologies-to-m.html.
Stromberg v. Ocwen Loan Servicing, LLC, No.15-cv-04719-JST, 2017 WL 2686540 (N.D. Cal. June 22, 2017).
Stromberg v. Ocwen Loan Servicing, LLC, No.15-cv-04719-JST, 2017 WL 2686540at*1 (N.D. Cal. June 22, 2017).
Stromberg v. Ocwen Loan Servicing, LLC, No.15-cv-04719-JST, 2017 WL 2686540at*6 (N.D. Cal. June 22, 2017).
E.g., Ferrell v. HSI Fin. Serv's, LLC, No. 1:16-cv-04624-RWS-AJB, 2017 WL 8186795 at *4 (N.D. Ga. December 22, 2017) (“After careful consideration of the pleadings and the rapidly expanding catalogue of case law interpreting and applying Spokeo, the undersigned is persuaded that Plaintiff's pleadings are sufficient to establish standing. The Court finds Defendant's motion unavailing on several grounds.”); Abraham v. Ocwen Loan Servicing, LLC, 321 F.R.D. 125, 166 (E.D. Pa. 2017) (“Numerous courts have applying Spokeo found a sufficient ‘injury in fact’ to support a FDCPA claim from allegations that a plaintiff suffered an ‘informational injury’ because the character of a debt had been misrepresented.”).
Progressive Health & Rehab Corp. v. Strategy Anesthesia, LLC, 271 F. Supp. 3d 941 (S.D. Ohio 2017) (“Indeed, as Plaintiff points out, the overwhelming number of courts that have addressed standing in a TCPA case subsequent to Spokeo have found standing.”) (pinpoint page references not available in April 2018).
Lovess v. Embrace Home Loans, Inc., No. JKB-17-2212, 2017 WL 4745452 at *2 (D. Md. October 20, 2017) (“This case is very close to Spokeo, but not quite there. Plaintiff is similarly alleging a procedural violation of FCRA and claiming that she is harmed by potential future consequences. But she has also alleged actual damages in the amount of $100,000 stemming from emotional distress and mental anguish, and therefore this is not a ‘bare’ procedural violation of the type at issue in Spokeo.”).
In re Chrysler-Dodge-Jeep Ecodiesel Marketing, Sales Practices, & Prod's Liab. Lit., No. 17-md-02777-EMC, 2018 WL 1335901 at *6 (N.D. Cal. March 15, 2018)(“Because Plaintiffs allege a financial injury, Spokeo does not support dismissal of their case.”).
Nicklaw v. Citimortgage, Inc., 839 F.3d 998, 1002-03 (11th Cir. 2016).
See, e.g., Weldon v. MTAG Services, LL, No. 3:16-cv-783 (JCH), 2017 WL 776648 at *6 (D. Conn. Feb. 28, 2017).
See Tillman v. Ally Fin. Inc., No. 2:16-cv-313-FtM-99CM, 2016 WL 6996113 at *4 n.7 (M.D. Fla. Nov. 30, 2016).
See also Michael G. McLellan, “Finding a Leg to Stand On: Spokeo, Inc. v. Robins and Statutory Standing in Consumer Litigation,” 31 Antitrust 49 (Summer 2017).
Fat Bullies Farm, LLC v. Devenport, 170 N.H. 17, 28, 164 A.3d 990 (2017).
Fat Bullies Farm, LLC v. Devenport, 170 N.H. 17, 164 A.3d 990, 998–99 (2017).
© 2018 Thomson Reuters. No claim to original U.S. Government Works.
Reprinted from Dennis J. Wall, Litigation and Prevention of Insurer Bad Faith, Third Edition (Thomson Reuters). Further reproduction of this article without the express consent of the publisher is prohibited.
MAYDAY, MAYDAY! INSURANCE ADJUSTERS LIABLE UNDER WASHINGTON CONSUMER PROTECTION ACT!
In Washington State, a motorist was injured in an accident. The injured motorist brought an action against the adjuster for the at-fault motorcyclist's automobile insurance company. The injured motorist sued for bad faith and for alleged violation of the Washington Consumer Protection Act.
The Superior Court, King County, Washington, Case No. 15-2-18663-9, John P. Erlick, J., dismissed the injured motorist's action but certified the case for discretionary review, which was granted.
individual insurance adjusters can be liable for a violation of the Washington Consumer Protection Act.
"Thus, we hold that an individual insurance adjuster may be liable for bad faith and CPA violations." Holding of the appellate court: Reversed and remanded.
The case in the appellate court is published at Keodalah v. Allstate Ins. Co., 413 P.3d 1059 (Wash. Ct. App., Div. 1, 2018).
Please Read The Disclaimer. © 2018 Dennis J. Wall. All Rights Reserved.
WELLS FARGO CONSENTS TO CONSUMER FINANCIAL PROTECTION BUREAU ORDER.
Wells Fargo has consented to "pay a civil money penalty of $100 million to the [Consumer Financial Protection] Bureau." The Consent Order is available here: Download CFPB CONSENT ORDER WITH WELLS FARGO.092016_cfpb_WFBconsentorder, or through a link made available by the CFPB on its website at http://files.consumerfinance.gov/f/documents/092016_cfpb_WFBconsentorder.pdf. The quoted material is from Paragraph 57 on page 17 of 26. The Order was signed on September 4, 2016 (and so that is its "Effective Date," by its terms), and filed on September 8, 2016.
Parenthetically, Wells Fargo also agreed to pay a totally separate amount of "$50,000,000 in civil penalties" in an earlier settlement stipulation with the City Attorney of the City of Los Angeles entered on September 1, 2016 available through this hyperlink provided on the City Attorney's website. That settlement stipulation awaits the entry of Final Judgment in a pending action in the Los Angeles County Superior Court.
These developments are being reported on the day that this article is written. The developments are so new and so related to bad faith that I could not help but make this information and these documents available to my readers. As is often the case, however, there are unanswered questions arising from these developments.
So, the first question is, why?
The answer to the first question may be related to some or all of the remaining questions. The CFPB's Consent Order relied on "an analysis" that Wells Fargo "performed" to "assess" improper sales practices by its employees, which it may or may not have induced, between May, 2011 and July, 2015. (Id., paragraph 15 on page 5.) What "analysis?" No documents resembling an analysis were made available by Wells or by the CFPB, and it even appears that the CFPB did not request any documents.
Whatever the Wells "analysis" may be, Wells attached numbers to two things in the Consent Order as a result.
Perhaps these two areas of apparent misconduct were the only ones mentioned in press reports because they are the only ones provided with numbers in the CFPB Consent Order.
In any event, how did the CFPB come to publish the numbers provided by a Respondent as part of the CFPB's own "Findings and Conclusions" in this Consent Order? If the CFPB performed its own investigation -- and there is no indication that it did -- then the CFPB certainly remained quiet about it.
So, what we end up with are quite a few questions about exactly what went on in this "bad faith" matter. And answers provided only by the accused party, it seems.
This may be the moral equivalent of a stipulated final judgment of bad faith in which the company was willing to stipulate that it did nothing wrong and, such as in this case, the company is paying for the misdeeds of more than 5,300 bad apples or "rogue employees."
Please Read The Disclaimer. ©by Dennis J. Wall. All Rights Reserved.
The problem of systemic or institutional bad faith is pervasive. It goes well beyond the insurance industry.
The numbers show this clearly. For just one telling statistic among many available, "40% of the population … must rely on payday loans". Mehrsa Baradaran, How the Other Half Banks 76 (2015).
Please Read The Disclaimer. ©2016 by Dennis J. Wall, author of Litigation and Prevention of Insurer Bad Faith (3d ed. Thomson Reuters West in 2 Volumes, with Supplements). All rights reserved.
ONCE "ACTING," ONCE "CONFIRMED" PENNSYLVANIA "ACTING" INSURANCE COMMISSIONER OVERRULED.
A Pennsylvania Court has overruled a decision promulgated by one-time Pennsylvania "Acting Insurance Commissioner" Teresa D. Miller. It appears that Ms. Miller, then the PIA, later the CIA (Confirmed Insurance Commissioner), approved business transactions between one Erie Insurance Exchange and Erie Indemnity Company through which Indemnity received, or kept, money paid as "installment and other service charges from Exchange subscribers.'” Ms. Miller administratively ruled that these exchanges did not violate "the [Pennsylvania] Insurance Holding Companies Act (IHCA)." The Pennsylvania Court vacated the Commissioner's decision. Erie Ins. Exch. v. Pennsylvania Ins. Dep't, No. 872 C.D.2015, 2016 WL 324682, at *1 (Pa. Commw. January 27, 2016).
Attorney's fees, costs, whatever. Sometimes people keep on paying for someone else's decisions.
While PIA, Ms. Miller previously decided, too, that fracking does not cause earthquakes. As a result of that decision, homeowner's insurance companies in Pennsylvania cannot issue homeowner's insurance policies with an exclusion for earthquake damages caused by fracking, because fracking does not cause earthquakes she said. See the articles posted on Insurance Claims and Issues Blog on April 20, 2015 and April 22, 2015, which contain links to other articles on the subject.
Please Read the Disclaimer. ©2016 by Dennis J. Wall. All rights reserved.
No Coverage, No Bad Faith Under Pennsylvania Law.
Pennsylvania Supreme Court: "Yes" to Assigning Statutory Bad Faith Claim.
Texas Drilling Damage in Pennsylvania: All Risks Property Coverage?
FLORIDA DECEPTIVE AND UNFAIR TRADE PRACTICES ACT PREEMPTED.
"By its express terms," said the Court, the Florida Deceptive and Unfair Trade Practices Act "'does not apply to ... [b]anks and loan associations regulated by federal agencies.'" Wilson v. Everbank, N.A., 77 F. Supp. 3d 1202, (S.D. Fla. 2015), quoting Fla. Stat. Section 501.212(4)(c). The Court accordingly granted a federally regulated savings and loan association's motion to dismiss a FDUTPA claim with prejudice in that lender force-placed insurance practices case.
However, the Court entertained a cornucopia of claims allegedly arising under Florida, New York, or Illinois law, some of which it left standing, including claims based on the Truth-in-Lending Act, and alleged breaches of contract and of the implied covenant of good faith and fair dealing.
Please Read The Disclaimer. Copyright 2015 by Dennis J. Wall, author of "Lender Force-Placed Insurance Practices" (American Bar Association 2015). Listen to the author's most recent Thomson Reuters Legal Current podcast. All Rights Reserved.
Federal Loan Modification Program Another Profit Center for Predatory Lending.
CLASS ACTION SETTLEMENTS BECOME LEGALIZED WEAPONS OF MASS DESTRUCTION.
This article is an adaptation of a much longer article (Wall, 2015).
A possible defense of res judicata arises as a result of recent class action settlement agreements: Can a party obtain the right to raise res judicata in other cases because of a Court-approved class action settlement in one action, that the party could not have obtained unless the Court approved a settlement because the Court never otherwise certified a class in that action?
Not only that, but the case law also features parties raising the settlement agreement who in the end did not have to do anything more than talk about it in order to convince a Federal Judge to bar other claims.
As a starting point, the focus of attention was a Federal case in Florida in which the Federal Court approved a nation-wide class action settlement of lender force-placed insurance (“LFPI”) claims. The settlement agreement in that Florida case included the LFPI claims, if any, which are or might be held by absent persons. The “Order Granting Final Approval to Class Action Settlement” in that case is reported at Fladell v. Wells Fargo Bank, N.A.1 The author’s research has turned up three cases in which the mere fact of a class action settlement in Florida in the Fladell case was raised as a bar to prosecuting the civil actions of other persons in other jurisdictions.
This turns the affirmative defense of res judicata or claim preclusion on its head in several ways. One way is that at least three District Judges were confronted with representations by lawyers that the claims alleged by people in a case at bar should be halted because they, the lawyers, knew about a settlement of allegedly similar claims in a class action in a different State. Further, the burden of proof on affirmative defenses lies with the party raising them, rather than on the parties opposing the defenses.
Among the claims alleged in Lee are claims for damages for Florida unjust enrichment and tortious interference, breach of fiduciary duty, violation of the implied covenant of good faith and fair dealing, and alleged violations as well of the Florida Deceptive and Unfair Trade Practices Act.
In determining the settlement class in Lee, the Magistrate Judge cited a precedent which held that the Court is not endorsing any evidence or arguments in that process. However in actuality the Magistrate Judge also purported to make determinations that the settlement class in Lee should be certified in part because “[t]here are questions of law or fact common to the members of the Settlement Class.” The Court in Lee made this determination without ever mentioning what those common questions are, let alone making any attempt to identify even one of them as “predominant”.
In sum, the preliminary settlement order submitted by the parties and signed by the Magistrate Judge in Lee contemplates that objections to the settlement and to the Preliminary Order approving the settlement will be considered at the Final Approval Hearing. The final hearing, now rescheduled by Court Order,15 is due to be held as of this writing, in Miami on June 11, 2015. Objections presented in compliance with the Court’s preliminary Order are due to be entertained at that time.
FN1 Fladell v. Wells Fargo Bank, N.A., No. 0:13-cv-60721, 2014 WL 54881677 (S.D. Fla. October 29, 2014). Many notices of appeal were filed from this order. Their dates and dispositions are available on PACER. Several appeals are still pending as of this writing. See also Dennis J. Wall, “Class Action Settlements Have Consequences, From Florida to the State of Washington,” 69 NWLawyer 27 (April/May 2015).
2 Ursomano v. Wells Fargo Bank, N.A.,No. C-13-4381 EMC, 2014 WL 644340 *1-*2 (N.D. Cal. February 19, 2014). The Ursomano case was dismissed by the Court’s own Order on October 30, 2014 and again on November 13, 2014 by Court Order approving the parties’ stipulation of dismissal, which expressly stated that it did not affect claims of absent persons who would not fall within the class in Fladell.
3 Ali v. Wells Fargo Bank, N.A., No. CIV-13-876-D, 2014 WL 819385 *2 (W.D. Okla. March 3, 2014).
4 Keller v. Wells Fargo Bank, N.A., No. C14-422 RAJ, 2014 WL 6684895 *2-*3 (W.D. Wash. November 25, 2014). In this decision, the District Judge in the Keller case allowed Mr. and Mrs. Keller, the plaintiffs, “an opportunity to come forward with evidence or argument that demonstrates that they opted out of the [Fladell Florida] settlement or that their claims are somehow not covered by the settlement.” The District Judge dismissed the Kellers’ case with prejudice after the defendant notified the Court that it was informed that the Kellers would not contest dismissal, and incidentally, that the Kellers had twice filed for bankruptcy already.
The presiding District Judge in the Ursomano case approved this stipulation without issuing a written Order, according to PACER.
6 These efforts are also joined by unrelated third parties such as mortgage servicers and their related affiliates and subsidiaries and partners. Among mortgage servicers, one, Ocwen, is prominent.
7 Lee v. Ocwen Loan Servicing, No. 0:14-cv-60649, 2015 WL 178220 (S.D. Fla. Report and Recommendations of U.S. Magistrate Judge Goodman, January 13, 2015), report and recommendations adopted on appeal, 2015 WL 309441 (S.D. Fla. January 23, 2015 Order by USMJ Goodman sitting by consent of the parties after his report and recommendations were made 10 days earlier).
8 Lee v. Ocwen Loan Servicing, No. 0:14-cv-60649, 2015 WL 178220, *4 (S.D. Fla. Report and Recommendations of U.S. Magistrate Judge Jonathan Goodman, January 13, 2015), report and recommendations adopted, 2015 WL 309441 (S.D. Fla. January 23, 2015; USMJ Jonathan Goodman).
9 Lee v. Ocwen Loan Servicing, No. 0:14-cv-60649, 2015 WL 178220, *3 (S.D. Fla. January 13, 2015 Report and Recommendations of U.S. Magistrate Judge Jonathan Goodman), report and recommendations adopted, 2015 WL 309441 (S.D. Fla. January 23, 2015; USMJ Jonathan Goodman).
10 Lee v. Ocwen Loan Servicing, Docket No. 106 filed 12.01.14 (S.D. Fla. Case No. 0:14-cv-60649).
11 This holding was reached in an earlier lender force-placed insurance practices case in the same Southern District of Florida: Kunzelmann v. Wells Fargo Bank, N.A., No. 9:11-cv-81373-DMM, 2013 WL 139913, *7-*10 (S.D. Fla. January 10, 2013).
13 Lee v. Ocwen Loan Servicing, No. 0:14-cv-60649, 2015 WL 178220, at p. *3, ¶ 5 (S.D. Fla. January 13, 2015 Report and Recommendations of Goodman, USMJ), adopted, 2015 WL 309441 (S.D. Fla. January 23, 2015; Goodman, USMJ).
14 See, e.g., Karhu v. Vital Pharmaceuticals, Inc., No. 13-60768-CIV, 2014 WL 815253, *10 (S.D. Fla. March 3, 2014), dismissed on March 27, 2014 and appeal filed on April 15, 2014 (both unreported); Kunzelmann v. Wells Fargo Bank, N.A., No. 9:11-cv-81373-DMM, 2013 WL 139913, *7-*10 (S.D. Fla. January 10, 2013).
15 Lee v. Ocwen Loan Servicing, Docket No. 127 (S.D. Fla. Case No. 0:14-cv-60649).
Please Read The Disclaimer. Copyright 2015 by Dennis J. Wall, author of "Lender Force-Placed Insurance Practices" (American Bar Association 2015). www.lenderforceplacedinsurance.com All Rights Reserved. No Claim to Original U.S. Government Works.
ROBOSIGNING VIOLATES LAW, SO DOJ REQUIRES ... PAY MONEY, NO SANCTIONS.
FAILING TO OBEY EVEN COURT RULES WOULD NOT RESULT IN SANCTIONS IMPOSED BY COURT.
The United States Department of Justice has a history of settling claims against large financial institutions rather than trying them. Moreover, it is apparent that the DOJ also has a policy not to accuse individuals at large financial institutions of wrongdoing.
These strains of policy came together in a matter involving the U.S. Trustee Program and the Bankruptcy Courts of the United States. The inappropriate result in this case is the central focus of this article.
The Trustee Program took certain "actions ... in districts around the country concerning [J.P. Morgan] Chase's improper practices in bankruptcy cases, including robo-signing." This is the DOJ's description in a press release announcing that the DOJ has settled the U.S. Trustee Program's "actions." Press Release, Department of Justice Office of Public Affairs, Tuesday, March 3, 2015. These actions and the announced "robo-signing" deserve a little closer look.
First, the announced offense. Statutes and Court Rules require that affidavits and declarations under oath shall be submitted to Judges based on the declarant's personal knowledge, if they are supposed to be considered by the Courts as evidence. "Robosigning" means that the persons testifying to their personal knowledge actually did not have personal knowledge. It means that these same persons had no idea what was in the documents that they swore they knew all about.
"Robosigning" never involves what might be called schoolyard bragging. The robosigned affidavits and declarations -- so-called because they are signed so fast that the declarants swear and sign them like robots -- are always submitted as evidence. Otherwise there is no purpose to them.
Chase "acknowledged," i.e., admitted , according to the DOJ's press release, "that it filed in bankruptcy courts around the country more than 50,000 payment change notices that were improperly signed, under penalty of perjury, by persons who had not reviewed the accuracy of the notices." [Emphasis added.] Chase even outsourced some of the 'signings' to "individuals employed by a third party vender on matters unrelated to checking the accuracy of the filings."
So, the United States Department of Justice was presented with a case in which 50,000 persons allegedly committed perjury. These 50,000 people signed false or incomplete papers which falsely declared that persons in bankruptcy should be subjected to payments for mortgage debts, so-called "payment change notices."
Not one of the 50,000 people involved in this practice faces any sanctions, or at least the DOJ does not mention any in its press release. The only thing achieved in this perjury settlement is that Chase will pay some money.
That is not sufficient to maintain the integrity of the Courts including the Bankruptcy Courts of the United States. No-one should ever be permitted to declare the truth of something under oath which they know not to be true. Declarants committing perjury should still suffer the consequences of their perjury for the sake of preserving the integrity of the judicial system -- and for preserving the willing obedience of every member of society to the rules and rulings of the Courts. This settlement does not even come close to serving that purpose.
The DOJ's settlement on behalf of the U.S. Trustee Program has reportedly been submitted for approval to the United States Bankruptcy Court in the U.S. District Court, Eastern District of Michigan. The DOJ press release does not provide the case number. An Internet Search by the author does not reveal it either, although the author's search did turn up many places in which the terms of the DOJ's press release are either repeated or summarized.
The readers of this column are invited to register their comments in accordance with the rules of the Court.
PRAYER FOR RELIEF. The Court in that case is respectfully requested to impose sanctions and require more than the payment of money in this settlement, which is all that the Department of Justice was content to require, if this settlement proceeds at all.
Secret Insurance Bad Faith: Presumptions, Rebuttals and ... Stipulations.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 § 3
 § 9
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.