Opinion ID: 1451431
Heading Depth: 1
Heading Rank: 3

Heading: Applying The McCarran-Ferguson Act and Humana.

Text: The McCarran-Ferguson Act bars the application of federal statutes to invalidate, impair, or supersede state laws regulating insurance. In this case, it is not argued that the federal laws invoked by plaintiffs would invalidate or supersede state law. [5] Rather, the issue is whether the theory of liability asserted and the relief sought by plaintiffs would impair state law by interfering with Missouri's comprehensive administrative regime. In Humana, the Supreme Court resolved a conflict in the circuits when it clarified that Congress in using the word impair intended to encompass more than direct conflicts with state law but did not intend to cede the field of insurance regulation to the States. 525 U.S. at 308, 119 S.Ct. 710. The Court went on to conclude that the McCarran-Ferguson Act did not bar the civil RICO fraud claim at issue because Nevada's insurance laws also prohibited insurance fraud, and those laws permitted statutory and common law private actions to remedy such misconduct and allowed the recovery of damages exceeding the treble damages available under RICO. Therefore, the RICO claims at issue complemented rather than impaired Nevada's administrative regime. Id. at 311-13, 119 S.Ct. 710. In applying Humana 's fact-intensive interpretation of the word impair, our focus must be on the precise federal claims asserted. Federal civil rights statutes are drafted broadly, so a statute might impair state insurance laws when applied in some ways, but not in others. For example, a federal claim alleging that an insurer's coverage denial was the product of overt racial animus would doubtless be in harmony with state insurance regulation, while a suit challenging the racially disparate impact of industry-wide rate classifications may usurp core rate-making functions of the State's administrative regime. Compare Moore v. Liberty Nat'l Life Ins. Co., 267 F.3d 1209, 1222-23(11th Cir.2001), cert. denied, 535 U.S. 1018, 122 S.Ct. 1608, 152 L.Ed.2d 622 (2002). It is one thing to say that an insurance company may not refuse to deal with ... persons.... It is another thing to require federal courts to determine whether limitations on coverage are actuarially sound and consistent with state law. Doe v. Mut. of Omaha Ins. Co., 179 F.3d 557, 564 (7th Cir.1999), cert. denied, 528 U.S. 1106, 120 S.Ct. 845, 145 L.Ed.2d 714 (2000). The Missouri insurance laws require insurers to establish rates based upon economic factors such as loss experience that are essential to insurer solvency, and permit insurers to classify risks based upon standards that measure any differences among risks that can be demonstrated to have a probable effect upon losses or expenses. Mo.Rev.Stat. § 379.318.1-2. [6] These state statutes prescribing what rates may be charged are essential to the core of Missouri's regulation of the business of insurance. See SEC v. Nat'l Sec., Inc., 393 U.S. 453, 458-59, 463, 89 S.Ct. 564, 21 L.Ed.2d 668 (1969). In these cases, plaintiffs ask a federal court to determine that the Insurers' filed rates are unlawful using a different federal standard  disparate racial impact  and then to award damages based upon the lower rates they would have paid absent discrimination plus injunctive relief to prevent further violations of federal law. But in Missouri, the Director of Insurance has been delegated the essentially legislative task of rate-making by reviewing Insurer risk classifications and pricing differentials. If a federal court may assess damages based upon what a non-discriminatory rate would have been, and then prescribe the future rate in an injunctive decree, [a] more complete overlap with the state [agency's] pricing decisions is impossible to conceive. Dehoyos, 345 F.3d at 302 (Jones, J., dissenting). Moreover, unlike Nevada law at issue in Humana, 525 U.S. at 312, 119 S.Ct. 710, neither the Missouri insurance laws nor Missouri common law provide a private right of action for unfairly discriminatory insurance rates. Rather, aggrieved insureds must seek relief from the Director of Insurance, who has the exclusive authority to conduct an administrative hearing, or to commence an action in state court to remedy an insurer violation and the insured's financial injury. By mandating an exclusively administrative remedy, Missouri law preserves the agency's primary authority to determine whether rates are excessive or unfairly discriminatory, § 379.318(4), subject only to judicial review for arbitrary and capricious agency action. Even if the same legal standards apply under federal and state law (which would not be the case), transferring their administration from state agency to federal court obviously would interfere with the administration of the state law. The states are not indifferent to who enforces their laws. Doe, 179 F.3d at 564. In response, plaintiffs rely on Dierkes to argue that the Missouri insurance laws do not exclude remedies available under other state laws. But Dierkes held only that the insurance laws do not preclude common law claims arising under a private agreement or from private misconduct .... not new rights created solely by the statute. 991 S.W.2d at 668. The state law right not to pay unfairly discriminatory insurance rates is solely a creature of the insurance statutes. By barring private actions to enforce that right, and by granting the Director of Insurance exclusive authority to seek the limited remedies for violations of Chapter 379 prescribed by statute, Missouri law creates an administrative regime that would be frustrated and interfered with, if not supplanted, by a rate-payer's cause of action to recover damages measured by the difference between the filed rate and the rate that would have been charged absent some alleged wrongdoing. Taffet v. Southern Co., 967 F.2d 1483, 1491 (11th Cir.) (en banc), cert. denied, 506 U.S. 1021, 113 S.Ct. 657, 121 L.Ed.2d 583 (1992); see LaBarre v. Credit Acceptance Corp., 175 F.3d 640, 643 (8th Cir.1999). [7] For the first time on appeal, plaintiffs  joined by the United States as amicus  argue that Missouri allows private actions against insurers for rate discrimination under the Missouri Human Rights Act (MHRA), Mo.Rev.Stat. §§ 213.010 et seq. They fail to cite a case in which a state or federal court has applied the MHRA, which does not specifically mention insurance, to unlawful discrimination in the provision or pricing of insurance. More significantly, after the Insurers moved to dismiss plaintiffs' price discrimination claim as barred by the McCarran-Ferguson Act, plaintiffs failed to raise this issue, even though in Saunders we specifically stated that the availability of state remedies was crucial to the issue of preclusion under the McCarran-Ferguson Act after Humana. 440 F.3d at 946. Therefore, plaintiffs did not preserve the issue for appeal. We decline to consider it, or its significance. See Snider v. United States, 468 F.3d 500, 512 (8th Cir.2006); von Kerssenbrock-Praschma v. Saunders, 121 F.3d 373, 375-76 (8th Cir.1997). The judgment of the district court is affirmed.