Court Opinion

ID: 9684848
Source: CourtListenerOpinion
Date Created: 2023-08-24 14:16:28.422636+00
Date Added: 2024-06-11T18:18:00.463903
License: Public Domain

Gordon, J.
(dissenting). I must respectfully dissent. In State Board of Ins. v. Todd Shipyards Corp. (1962), 370 U. S. 451, 82 Sup. Ct. 1380, 8 L. Ed. (2d) 620, it was held that the McCarran Act restored to the states those regulatory powers over the insurance business which the states possessed prior to United States v. South-Eastern Underwriters Asso. (1944), 322 U. S. 533, 64 Sup. Ct. 1162, 88 L. Ed. 1440. In other words, the McCarran Act was construed as having made only a limited grant of *364power to the states. The extent of that limitation is to be found in the Todd Case. At page 455 of the decision in the Todd Case, the court stated:
“For we have in the history of the McCarran-Ferguson Act an explicit, unequivocal statement that the Act was so designed as not to displace those three decisions. The House Report stated:
“ ‘It is not the intention of Congress in the enactment of this legislation to clothe the States with any power to regulate or tax the business of insurance beyond that which they had been held to possess prior to the decision of the United States Supreme Court in the Southeastern Underwriters Association case. Briefly, your committee is of the opinion that we should provide for the continued regulation and taxation of insurance by the States, subject always, however, to the limitations set out in the controlling decisions of the United States Supreme Court, as, for instance, in Allgeyer v. Louisiana (165 U. S. 578), St. Louis Cotton Compress Co. v. Arkansas (260 U. S. 346), and Connecticut General Life Ins. Co. v. Johnson (303 U. S. 77), which hold, inter alia, that a State does not have power to tax contracts of insurance or reinsurance entered into outside its jurisdiction by individuals or corporations resident or domiciled therein covering risks within the State or to regulate such transactions in any way.’ HR Rep. No. 143, 79th Cong., 1st Sess., p. 3.
“Senator McCarran, after reading the foregoing part of the House Report during the Senate debate, stated, ‘. . . we give to the States no more powers than those they previously had, and we take none from them.’ 91 Cong. Rec. 1442.”
It will be noted from the foregoing that the House Report described the three cases of Allgeyer, St. Louis Cotton and Connecticut General Life only as examples of the limitations which would apply; it is quite clear that the limitation upon state powers was not to be confined to those three decisions.
In addition to the limitation of the three recited cases, there is applicable, as a result of the Todd Case, the
constitutional restriction implicit in Minnesota Commer*365cial Men’s Asso. v. Benn (1923), 261 U. S. 140, 43 Sup. Ct. 293, 67 L. Ed. 573. The Benn Case related to the service of process rather than to state regulation. The effect of the Benn Case on the question of the service of process has been changed by subsequent decisions; nevertheless, at the time of the Todd Case the concept of the Benn Case was incorporated into the interpretation of the McCarran Act, and this has not been changed.
Accordingly, it is my opinion that the regulatory powers of the' state of Wisconsin cannot apply to the type of operation that is engaged in by Ministers Life & Casualty Union; the latter’s method of doing business is strikingly similar to that which was employed by the Minnesota Commercial Men’s Association in the Benn Case.
Wisconsin’s interest in regulating the insurance sold to its citizenry does not enable the courts of Wisconsin to surmount the commerce clause or the supremacy clause. Unless the. McCarran Act can be found to have returned regulatory power to the states in this type of case, the insurance business of Ministers Life is in interstate commerce pursuant to the South-Eastern Underwriters Case. I believe that Todd and Benn demonstrate that the Mc-Carran Act did not give the states the power which the majority opinion utilizes to sustain the constitutionality of sec. 201.42, Stats.