Court Opinion

ID: 9746503
Source: CourtListenerOpinion
Date Created: 2023-08-27 14:19:16.511127+00
Date Added: 2024-06-11T07:25:13.998997
License: Public Domain

ROBINSON, J.,
dissenting.
I respectfully disagree with the majority’s understanding of certain of the pertinent statutes, and therefore I must dissent. In my judgment, the express provisions of the McCarran-Ferguson Act, 15 U.S.C. § 1011 et seq., render the ADA inapplicable to this case.
My analysis is guided in large measure by what I consider to be the powerful logic and the unflinching approach to statutory construction that is reflected in the decision of the Seventh Circuit in the case of Doe v. Mutual of Omaha Insurance Co., 179 F.3d 557 (7th Cir.1999) (Posner, J.). While I have carefully considered the decisions of other courts that have reached a different result, the Seventh Circuit’s understanding of the McCarran-Ferguson Act and of its applicability in the ADA context has remained persuasive for me.
After considering the rather voluminous legal authorities (case law and scholarly writings) that deal with this issue, I am convinced (1) that Congress has spoken quite definitively in the McCarran-Fergu-son Act; (2) that said Act bars the application of the ADA to insurance coverage cases like this one; and (8) that there is no legally defensible way to circumvent that clear congressional directive.
The McCarran-Ferguson Act, 15 U.S.C. § 1011 et seq., is a federal statute that mandates that, under most circumstances, the individual states rather than the federal government shall regulate the business of insurance. 15 U.S.C. § 1012(b) of the Act provides in pertinent part as follows:
“No Act of Congress shall be construed to invalidate, impair, or supersede any law enacted by any State for the purpose of regulating the business of insurance * * * unless such Act specifically relates to the business of insurance * * (Emphasis added.)22
*754The courts have almost universally recognized the broad reach of the McCarran-Ferguson Act.23 See, e.g., Mutual of Omaha Insurance Co., 179 F.3d at 564 (noting that “[s]tate regulation of insurance is comprehensive and includes rate and coverage issues” and explaining that the McCarran-Ferguson Act forbids construing a federal statute in a manner that would result in federal regulation of those state regulatory functions).
In other words, because of Congress’s clear option in the McCarran-Ferguson Act in favor of state rather than federal regulation of insurance, it has become black letter law that “federal laws should not be construed to supersede state laws ‘regulating the business of insurance.’ ” Metropolitan Life Insurance Co. v. Massachusetts, 471 U.S. 724, 736, 105 S.Ct. 2380, 85 L.Ed.2d 728 (1985) (quoting 15 U.S.C. § 1012(b)).24 The United States Supreme Court has indicated that Congress understood the term “business of insurance” in the McCarran-Ferguson Act, to refer to “the underwriting and spreading of risk.” Group Life & Health Insurance Co. v. Royal Drug Co., 440 U.S. 205, 220-21, 99 S.Ct. 1067, 59 L.Ed.2d 261 (1979);25 see also Union Labor Life Insurance Co. v. Pireno, 458 U.S. 119, 127-28, 102 S.Ct. 3002, 73 L.Ed.2d 647 (1982). In my view, the Rhode Island statute at issue in this case certainly deals with “the underwriting and spreading of risk.”
The Congressional mandate in McCar-ran-Ferguson is so strong that it results in a virtual presumption that Congress has left the core of the insurance field to state regulation unless another federal statute clearly indicates that it “specifically relates” to the business of insurance. Barnett Bank of Marion County, N.A. v. Nelson, 517 U.S. 25, 40-41, 116 S.Ct. 1103, 134 L.Ed.2d 237 (1996) (interpreting the “specifically relates” language in the Act to refer to instances where “Congress had focused upon the insurance industry, and therefore, in all likelihood, consciously intended to exert upon the insurance industry whatever preemptive force accompanied its law”); see also United States Department of Treasury v. Fabe, 508 U.S. 491, 507, 113 S.Ct. 2202, 124 L.Ed.2d 449 (1993).
In his opinion in Kachanis v. United States, 844 F.Supp. 877 (D.R.I.1994), Judge Pettine succinctly and usefully summarized the holdings of several courts as to the criteria to be followed in determining whether or not the McCarran-Fergu-son Act is applicable in a particular context. Pursuant to the three-part analytical approach suggested by Judge Pettine, a court faced with deciding whether the McCarran-Ferguson Act prevents another *755piece of federal legislation from affecting the business of insurance should:
(1) Determine whether the federal statute at issue “specifically relates to the business of insurance within the meaning of [15 U.S.C. § ] 1012b.” Kachanis, 844 F.Supp. at 880. (If the federal statute does specifically relate to the business of insurance, then McCarran-Ferguson does not bar it.)
(2) Determine whether the state statute at issue was “ ‘enacted for the purpose of regulating the business of insurance.’ ” Id. at 881.
(3) Determine whether the federal statute at issue “would ‘invalidate, impair, or supersede state law.’ ” Id.
It is my considered judgment that the ADA does not “specifically relate” to the business of insurance. The focus of the ADA is very wide, and I do not see how it can fairly be said to constitute the specific regulation of the business of insurance. See Doe v. Mutual of Omaha Insurance Co., 179 F.3d 557 (7th Cir.1999). Accordingly, it is clear to me that the McCarran-Ferguson Act renders the ADA inapplicable to insurance coverage issues; and, therefore, I need not address the remaining parts of the Kachanis analytical scheme.
Although the ADA does make some brief reference to insurance, it is my view that it is a general law dealing with a vast array of matters, and I am unable to see how it can be read as relating specifically to the business of insurance. See Humana, Inc. v. Forsyth, 525 U.S. 299, 306-07, 119 S.Ct. 710, 142 L.Ed.2d 753 (1999) (“Section 2(b) [of the McCarran-Ferguson Act] provides that when Congress enacts a law specifically relating to the business of insurance, that law controls. * * * [Section 2(b)] further provides that federal legislation general in character shall not be ‘construed to invalidate, impair, or supersede any law enacted by any State for the purpose of regulating the business of insurance.’ ”).26 It is clear to me that the ADA is “federal legislation general in character.” Humana, Inc., 525 U.S. at 306, 119 S.Ct. 710. Accordingly, since the McCarran-Ferguson Act allows state law to have a reverse preemptive effect when the federal statute at issue is “general in character,” I do not believe that the ADA is applicable to the subject of insurance coverage.
The most notable reference to insurance in the ADA is its “safe-harbor” provision (42 U.S.C. § 12201(c)), pursuant to which an insurer can avoid liability under the ADA if its decision “is consistent with state law and not a subterfuge to evade the purposes of the ADA.” See Boots v. Northwestern Mutual Life Insurance Co., 77 F.Supp.2d 211, 219 n. 8 (D.N.H.1999) (paraphrasing the provisions of 42 U.S.C. § 12201(c)). I view the ADA’s safe harbor language as being a statutory provision that facilitates and protects traditional insurance industry practices; it is not at all a provision that constitutes the specific regulation of the business of insurance. Its evident purpose is to further insulate the insurance industry from the reach of the ADA; its thrust is not regulatory.27
*756Given my view that the ADA is entirely inapplicable to this case, I need not comment upon what the ADA would require if its applicability to this case were not barred by the McCarran-Ferguson Act. Nevertheless, I wish to indicate my view that, even if the ADA were applicable, I would not be inclined to construe Title III as regulating the contents of the goods and services that are made available or rendered. I would be inclined to agree with those appellate courts that have held that Title III does not apply to the contents of insurance policies. See, e.g., McNeil v. Time Insurance Co., 205 F.3d 179, 186 (5th Cir.2000); Ford v. Schering-Plough Corp., 145 F.3d 601, 612-13 (3rd Cir.1998); Parker v. Metropolitan Life Insurance Co., 121 F.3d 1006, 1010-12 (6th Cir.1997); Webster Bank v. Oakley, 265 Conn. 539, 830 A.2d 139, 161 (2003), cert. denied, 541 U.S. 903, 124 S.Ct. 1603, 158 L.Ed.2d 244 (2004); see also Lori Block Izzo, Doe v. Mutual of Omaha Insurance Co.: The ADA Does Not Regulate the Content of Insurance Policies, But What Have Cameras, Braille Books or Wheelchairs Got to Do With it? 7 Conn. Insurance L.J. 263, 310 n. 254 (2000-2001) (“After the decision in Doe v. Mutual of Omaha, the Fifth and Ninth Circuits joined the Sixth and Third Circuits, rejecting the argument that Title III of the ADA regulates the content of insurance policies.”); see generally Luke A. Sobota, Does Title III of the Americans with Disabilities Act Regulate Insurance?, 66 U. Chicago L.Rev. 243 (1999).28 As I read the ADA, it does not even remotely prohibit the traditional risk-assessment process in which the insurance industry has engaged for centuries.
To return to the main focus of this dissent, I wish to reiterate that I am convinced that a clear congressional statute (the McCarran-Ferguson Act) prevents the ADA from being applicable to this case. Therefore, I respectfully dissent.

. In a non-ADA case that preceded its decision in Doe v. Mutual of Omaha Insurance Co., 179 F.3d 557 (7th Cir.1999), the Seventh Circuit emphasized the vastly preemptive reach of the McCarran-Ferguson Act and noted that, unlike the rather common situation where federal law preempts state law, the McCarran-Ferguson Act requires that there be in effect a reverse preemption in most situations where federal and state statutes regulating the business of insurance coincide:
"Congress intended the McCarran Act to allow the states to regulate the business of insurance ‘free from inadvertent preemption by federal statutes of general applicability.' * * * To this end, Congress reversed the standard rules for preemption, creating a 'clear statement rule * * * that state laws enacted "for the purpose of regulating the business of insurance" do not yield to conflicting federal statutes unless a federal statute specifically requires otherwise.’ " Autry v. Northwest Premium Services, Inc., 144 F.3d 1037, 1040 (7th Cir.1998) (quoting Merchants Home Delivery Service, Inc. v. Frank B. Hall & Co., 50 F.3d 1486, 1488-89 (9th Cir.1995) and United States Department of Treasury v. Fabe, 508 U.S. 491, 507, 113 S.Ct. 2202, 124 L.Ed.2d 449 (1993)).
It is interesting to note that the reverse preemptive effect of the McCarran-Ferguson Act does not always act to the detriment of consumers or applicants for insurance coverage. The McCarran-Ferguson Act was enacted in order to leave “the business of insurance” to the several states, and the states are sometimes motivated by pro-consumer sentiments in carrying out their regulatory function. See, e.g., Metropolitan Life Insurance Co. v. Massachusetts, 471 U.S. 724, 105 S.Ct. 2380, 85 L.Ed.2d 728 (1985) (upholding on McCarran-Ferguson grounds a state's mandated-benefit program); New Hampshire-Vermont Health Service v. Whaland, 119 N.H. 886, 410 A.2d 642, 646 (1979) (upholding on McCarran-Ferguson grounds a state mandate that health insurers must provide coverage for mental illnesses).

. See Barnett Bank of Marion County, N.A. v. Nelson, 517 U.S. 25, 40-41, 116 S.Ct. 1103, 134 L.Ed.2d 237 (1996) (tracing the history of the McCarran-Ferguson Act); Kachanis v. United States, 844 F.Supp. 877 (D.R.I.1994) (describing the genesis of the McCarran-Fer-guson Act); see also United States Department of Treasury v. Fabe, 508 U.S. 491, 113 S.Ct. 2202, 124 L.Ed.2d 449 (1993).

. It goes without saying that the wisdom fyel non) of the decision made by Congress in enacting the McCarran-Ferguson Act should play no role in judicial construction of that statute. See United States v. Great Northern Railway Co., 343 U.S. 562, 575, 72 S.Ct. 985, 96 L.Ed. 1142 (1952) ("It is our judicial function to apply statutes on the basis of what Congress has written, not what Congress might have written.”).

. In Group Life & Health Insurance Co. v. Royal Drug Co., 440 U.S. 205, 215, 99 S.Ct. 1067, 59 L.Ed.2d 261 (1979), the Supreme Court specifically noted that "the contract between the insurer and the insured” constitutes "[ajnother commonly understood aspect of the business of insurance.”

. Section 2(b) of the McCarran-Ferguson Act is codified at 15 U.S.C. § 1012(b).

. In addition, the ADA also includes "insurance office” among the numerous itemized places that are statutorily deemed to constitute a public accommodation. 42 U.S.C. § 12181(7)(F). In my view, however, that provision relates solely to physical access. See, e.g., Weyer v. Twentieth Century Fox Film Corp., 198 F.3d 1104, 1115 (9th Cir.2000) ("Although Title III of the ADA requires an insurance office to be physically accessible to the disabled, it does not address the terms of the policies the insurance companies sells."). In my judgment, 42 U.S.C. § 12181(7)(F) has no bearing on rate or coverage issues. See *756SEC v. National Securities, Inc., 393 U.S. 453, 460, 89 S.Ct. 564, 21 L.Ed.2d 668 (1969) (“Statutes aimed at protecting or regulating [the relationship between the insurance company and the policy holder], directly or indirectly, are laws regulating the 'business of insurance.’ ’’).

. But see Carports Distribution Center, Inc. v. Automotive Wholesaler’s Association of New England, Inc., 37 F.3d 12 (1st Cir.1994).
It is important to bear in mind that the First Circuit’s decision in Carports, considered and ultimately reversed the trial court's dismissal of a complaint pursuant to a motion that defendant had filed under Fed.R.Civ.P. 12(b)(6). In view of that procedural context, it goes without saying that the First Circuit’s ruling in Carports is far from definitive. See Carports, 37 F.3d at 20 ("We think that at this stage it is unwise to go beyond the possibility that the plaintiff may be able to develop some kind of claim under Title III * * *. Not only the facts but, as we have already noted, even the factual allegations are quite sparse.").
It should also be noted that the Supreme Court of our neighboring state of Connecticut has recently expressed its "doubts about the continued validity of the analysis by the First Circuit Court of Appeals in Carports * * Webster Bank v. Oakley, 265 Conn. 539, 830 A.2d 139, 162 n. 38 (2003). The basis for the Connecticut court's doubts was the United States Supreme Court’s decision in PGA Tour, Inc. v. Martin, 532 U.S. 661, 121 S.Ct. 1879, 149 L.Ed.2d 904 (2001).