Justia Insurance Law Opinion Summaries

In this case, the parties consented to have their commercial dispute tried before a United States magistrate judge. But, allegedly unbeknownst to Defendant, the judge was longtime family friends with the lead trial lawyer for the plaintiff. Specifically, the lawyer had been a groomsman in the judge’s own wedding, and the judge officiated the wedding of the lawyer’s daughter three months before this lawsuit was filed. None of this information was disclosed to Defendant. After a twenty-day bench trial, the magistrate judge rendered judgment for the Plaintiff, awarding $124.5 million, including over $100 million in trebled damages. After the issuance of the judgment and award, Defendant learned about the undisclosed longstanding friendship and sought to have the magistrate-judge referral vacated. The district judge denied the request and denied discovery on the issue. Defendant appealed.   The Fifth Circuit vacated. The court concluded that the facts asserted here, if true, raise serious doubts about the validity of Defendant’s constitutionally essential consent to have its case tried by this magistrate judge. Further, the court explained remand was necessary because the facts were not sufficiently developed for the court to decide whether Defendant’s consent was validly given or whether vacatur of the referral was otherwise warranted. Accordingly, the court remanded for an evidentiary inquiry. View "I F G Port Hold v. Lake Charles Harbor" on Justia Law

The assignees of two Medicare Advantage Organizations seek reimbursements from insurance companies that they allege qualify as primary payers of beneficiaries’ medical expenses. The insurance companies argued, and the district courts agreed, that the assignees’ claims are barred because both assignees failed to satisfy a procedural requirement: a contractual claims-filing deadline in one case and a statutory requirement of a pre-suit demand in the other. The assignees contend that the procedural requirements are preempted by the Medicare Secondary Payer Act.   The Eleventh Circuit affirmed. The court reasoned that Florida’s pre-suit demand requirement does not meet this relatively high bar. The statutory notice requirement and corresponding 30-day cure period are procedural requirements that may result in a brief delay. But the Florida law does not prevent or meaningfully impede the reimbursement of Medicare Advantage Organizations that Congress sought to facilitate. So, the provision does not create an unconstitutional obstacle to the purposes or operation of the Medicare Secondary Payer Act. View "MSP Recovery Claims, Series LLC v. United Automobile Insurance Company" on Justia Law

Plaintiff appealed the district court’s order affirming the Social Security Administration’s (“SSA”) denial of her application for Social Security Disability Insurance (“SSDI”). In her application, she alleged major depressive disorder (“MDD”), anxiety disorder, and attention deficit disorder (“ADHD”). Following a formal hearing, the Administrative Law Judge (“ALJ”) determined that Plaintiff suffered from severe depression with suicidal ideations, anxiety features and ADHD, but he nonetheless denied her claim based on his finding that she could perform other simple, routine jobs and was, therefore, not disabled. Plaintiff contends that the ALJ erred by (1) according to only little weight to the opinion of her long-time treating psychiatrist (“Dr. B”) and (2) disregarding her subjective complaints based on their alleged inconsistency with the objective medical evidence in the record.   The Fourth Circuit reversed and remanded with instructions to grant disability benefits. The court agreed with Plaintiff that the ALJ failed to sufficiently consider the requisite factors and record evidence by extending little weight to Dr. B’s opinion. The ALJ also erred by improperly disregarding Plaintiff’s subjective statements. Finally, the court found that the ALJ’s analysis did not account for the unique nature of the relevant mental health impairments, specifically chronic depression. The court explained that because substantial evidence in the record clearly establishes Plaintiff’s disability, remanding for a rehearing would only “delay justice.” View "Shelley C. v. Commissioner of Social Security Administration" on Justia Law

The Supreme Court affirmed the judgment of the district court enjoining a regulation to the extent it required insurers to give retroactive premium refunds but otherwise rejecting the lawsuit brought by National Association of Mutual Insurance Companies (NAMIC), holding that the Nevada Division of Insurance (Division) had the statutory and constitutional authority to promulgate R087-20.While the Nevada Insurance Code permits insurers to use customer credit information when underwriting and rating personal property and casualty insurance, the Division promulgated a regulation, R087-20, after the governor's COVID-19 declaration of emergency led to mass unemployment across the state. R087-20 prohibited insurers from adversely using consumer credit information changes that occurred during the emergency declaration, plus two years. On behalf of itself and its members, NAMIC sued to invalidate the regulation. The district court largely rejected NAMIC's claims. The Supreme Court affirmed, holding that the Division did not exceed its authority in promulgating R087-20. View "Nat'l Ass'n of Mutual Insurance Cos." on Justia Law

When the ACA’s mandate and SRP were still in effect, a husband and wife (“Taxpayers”) did not maintain the minimum insurance coverage required by the ACA. The taxpayers did not include their $2409 SRP when they filed their 2018 federal tax return. The Taxpayers filed for Chapter 13 bankruptcy protection in the Eastern District of North Carolina. The IRS filed a proof of claim for the unpaid SRP and asserted that its claim was entitled to priority as an income or excise tax under Section 507 of the Bankruptcy Code. The Taxpayers objected to the government’s claim of priority. The bankruptcy court granted the objection, concluding that, for purposes of the Bankruptcy Code, the SRP is a penalty, not a tax, and therefore is not entitled to priority under Section 507(a)(8). The government appealed to the district court, which affirmed the bankruptcy court’s decision. The district court held that even if the SRP was generally a tax, it did not qualify as a tax measured by income or an excise tax and thus was not entitled to priority. The government thereafter appealed.   The Fourth Circuit reversed and remanded. The court concluded that that the SRP qualifies as a tax under the functional approach that has consistently been applied in bankruptcy cases and that nothing in the Supreme Court’s decision in NFIB requires the court to abandon that functional approach. Because the SRP is a tax that is measured by income, the government’s claim is entitled to priority under 11 U.S.C. Section 507(a)(8)(A). View "US v. Fabio Alicea" on Justia Law

In 2021, the South Carolina General Assembly passed the Fetal Heartbeat and Protection from Abortion Act ("the Act"), which prohibited an abortion after around six weeks gestation. This was before many women—excluding those who were trying to become pregnant and were therefore closely monitoring their menstrual cycles—even know they were pregnant. The Supreme Court held that the decision to terminate a pregnancy rested upon the "utmost personal and private considerations imaginable," and implicates a woman's right to privacy. "While this right is not absolute, and must be balanced against the State's interest in protecting unborn life, this Act, which severely limits—and in many instances completely forecloses—abortion, is an unreasonable restriction upon a woman's right to privacy and is therefore unconstitutional." View "Planned Parenthood South Atlantic, et al. v. South Carolina, et al." on Justia Law

The Supreme Court affirmed the decision of the court of appeals reversing the judgment of the trial court granting a directed verdict on a bad faith claim, holding that Wittmer v. Jones, 864 S.W.2d 885, 890 (Ky. 1993), established the applicable legal standard for both common law and statutory bad-faith claims.Cincinnati Insurance Company (CIC) brought a declaratory judgment action disputing coverage under a commercial general liability policy insuring K-2 Catering, LLC for claims Haley Belt made stemming from an accident that occurred during an event hosted by K-2's member-managers at their residence. Ultimately, judgment was entered declaring coverage under the policy. While the action was pending, Belt brought a separate action against K-2 and CIC, alleging bad faith and negligence in the settlement of her claims under K-2's policy. The negligence claims were settled and, after a jury trial, the jury returned a verdict against CIC. The court of appeals reversed, concluding that the trial court erred when it failed to grant CIC a directed verdict on the bad faith claims. The Supreme Court affirmed, holding that the trial court erred when it failed to apply the Wittmer standard and grant a directed verdict for CIC. View "Belt v. Cincinnati Insurance Co." on Justia Law

The Fox and Puchlak filed purported class actions, alleging that Michigan counties seized property to satisfy property-tax delinquencies, sold the properties, and kept the difference between the sales proceeds and the tax debts.. The suits assert that the counties committed takings without just compensation or imposed excessive fines in violation of the Michigan and federal constitutions. Genesee County’s insurance, through Safety, precludes coverage for claims “[a]rising out of . . . [t]ax collection, or the improper administration of taxes or loss that reflects any tax obligation” and claims “[a]rising out of eminent domain, condemnation, inverse condemnation, temporary or permanent taking, adverse possession, or dedication by adverse use.”Safety sought a ruling that it owed no duty to defend or to indemnify. The district court entered summary judgment, finding no Article III case or controversy between Safety and Fox and Puchlak. The court also held that Safety owes Genesee County no duty to defend. The Sixth Circuit affirmed. Safety lacks standing to sue Fox and Puchlak over its duty to defend and its claim for the duty to indemnify lacks ripeness. Safety owes no duty to defend; the alleged tax-collection process directly caused the injuries underlying each of Fox’s and Puchlak’s claims. View "Safety Specialty Insurance Co. v. Genesee County Board of Commissioners" on Justia Law

The Court of Appeals reversed the order of the appellate division reversing the judgment of Supreme Court concluding that Petitioners did not establish that the recently amended Insurance Regulation 187, 11 N.Y.C.R.R. part 224, which provides protections to consumers engaging in life insurance and annuity transactions, was invalid, holding that there was no basis to invalidate the regulation.Petitioners commenced this N.Y. C.P.L.R. 78 proceeding alleging that the amended regulation was unconstitutionally vague because certain terms did not satisfy the test for constitutional vagueness and that the Department of Financial Services (DFS) exceeded its authority in promulgating the amendment. Supreme Court held that the amendment was a proper exercise of the powers granted to DFS. The appellate division reversed, ruling that the amended regulation was unconstitutionally vague. The Court of Appeals reversed, holding that DFS appropriately exercised its authority "to create a carefully considered and clear regulation." View "Independent Insurance Agents & Brokers of N.Y., Inc. v. New York State Dep't of Financial Services" on Justia Law

Plaintiff National Rifle Association of America (the "NRA") claims that Defendant, the former Superintendent of the New York State Department of Financial Services ("DFS"), violated its rights to free speech and equal protection when she investigated three insurance companies that had partnered with it to provide coverage for losses resulting from gun use and encouraged banks and insurance companies to consider discontinuing their relationships with gun promotion organizations. The NRA contends that Defendant used her regulatory power to threaten NRA business partners and coerce them into disassociating with the NRA, in violation of its rights.   The district court dismissed the equal protection claim on the basis that Defendant was protected by absolute immunity, but it declined to dismiss the free speech claims, concluding that the NRA plausibly alleged its claims and issues of fact existed as to whether she was protected by qualified immunity.   The Second Circuit reversed and remanded. The court explained that here, the various cases addressing the issue did not provide clear and particularized guidance but involved very different circumstances and much stronger conduct. The cases do not clearly establish that Defendant’s statements, in this case, were unconstitutionally threatening or coercive. Qualified immunity balances the need to hold public officials accountable when they exercise their power irresponsibly with the need to shield officials from harassment, distraction, and liability when they perform their duties responsibly. Here, the Complaint's factual allegations show that, far from acting irresponsibly, Defendant was doing her job in good faith. View "National Rifle Association of America v. Maria T. Vullo" on Justia Law