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.
On St. Patrick's Day 2019, the Chief Judge of a U.S. District Court pointed out that Patel stands only for applying a filed rate doctrine where the complaints at issue challenge the amount of the approved insurance rate (assuming for purposes of decision that the state recognizes a filed insurance rate doctrine):
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).
Even assuming that the District of Columbia would impose a filed rate doctrine in insurance cases (an open question), the District Court had little problem in refusing to apply a filed rate doctrine in this case against AARP, and in which the insurance provider that charged and collected an apparently approved rate was not even made a party:
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.
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