Justia U.S. D.C. Circuit Court of Appeals Opinion Summaries

Articles Posted in Insurance Law
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Plaintiffs sought class certification to pursue various claims against the Hilton Hotels Retirement Plan (“Hilton Plan”) for what they say are unlawfully denied vested retirement benefits. The district court ultimately denied certification on the ground that Plaintiffs had proposed an “impermissibly ‘fail-safe’” class—that is, a class definition for which membership can only be ascertained through “a determination of the merits of the case.”   The DC Circuit reversed and remanded the district court’s decision, finding that the district court, in this case, bypassed Rule 23’s requirements and based its denial of class certification entirely on the class’s “fail-safe” character. The court explained that the textual requirements of Rule 23 are fully capable of guarding against unwise uses of the class action mechanism. So the court rejected a rule against “fail-safe” classes as a freestanding bar to class certification ungrounded in Rule 23’s prescribed criteria. Instead, district courts should rely on the carefully calibrated requirements in Rule 23 to guide their class certification decisions and the authority the Rule gives them to deal with curable misarticulations of a proposed class definition. View "In re: Valerie White" on Justia Law

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The Office of Personnel Management (OPM) administers retirement benefits for civilian employees of the U.S. government. OPM typically pays retirement benefits to retirees themselves. But when a retiree’s benefits are subject to division pursuant to a divorce decree, OPM divides them between the retiree and his or her former spouse according to the terms of the decree. The Federal Law Enforcement Officers Association (Association) brought this action against OPM in district court, claiming that OPM’s method of apportioning one type of retirement benefit, the Annuity Supplement, violates the Administrative Procedure Act. OPM moved to dismiss the complaint on jurisdictional grounds.   The district court acknowledged that federal employees’ claims for retirement benefits are generally routed through that system of review, but held that the Association’s claims fell within an exception allowing pre-enforcement challenges to agency rules to proceed in district court. Exercising jurisdiction, the district court dismissed one of the Association’s counts for failure to state a legally cognizable claim and, after the administrative record was filed, granted summary judgment to OPM as to the others.   The DC Circuit vacated the district court’s orders and remanded with instructions to dismiss for lack of jurisdiction. The court held that the CSRA’s system of review—which channels disputes about FERS retirement benefits through an administrative process, subject to direct review in the Federal Circuit—precludes district court review of the Association’s claims. View "Federal Law Enforcement Officers Association v. Kiran Ahuja" on Justia Law

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Appellants– the former secretary-treasurer and president, respectively, of a District Lodge of the International Association of Machinists – appealed the district court’s denial of their motion for a preliminary injunction. They sued the international union, its president, and its general secretary-treasurer. The controversy concerns the suspensions of Appellants’ and the international union’s imposition of a trusteeship on their District Lodge. Appellants’ first amended complaint alleged one count under Title I and five counts under Title III of the Labor-Management Reporting and Disclosure Act (the “LMRDA”). They sought equitable relief along with compensatory and punitive damages. A month after they filed their first amended complaint, they filed a motion for a preliminary injunction. The district court denied the motion. It held that Appellants had not shown a likelihood of success on the merits. It also held that the other factors did not favor them.   The DC Circuit affirmed. The court held that Appellants’ request under Title III to end the trusteeship is moot. A case becomes moot when a party obtains the relief they sought. Here, the disputed trusteeship has been lifted. Further, the court explained that Appellants seek to invalidate an officer election. It is impossible to reinstate Appellant as secretary-treasurer or allow the District Lodge to elect new members to other positions unless the court invalidates the officer election that just occurred. Thus, the court rejected the Title I claim. View "Ian Scott-Anderman, et al. v. Robert Martinez, et al." on Justia Law

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The Multiemployer Pension Plan Amendments Act (“MPPAA”) requires an employer to pay “withdrawal liability” if it decides to leave a multiemployer pension plan. Calculating the amount of money the employer owes the plan requires an actuary to project the plan’s future payments to pensioners. The MPPAA requires the actuary to use “assumptions and methods which, in the aggregate, are reasonable (taking into account the experience of the plan and reasonable expectations) and which, in combination, offer the actuary’s best estimate of anticipated experience under the plan.” 29 U.S.C. Section 1393(a)(1).   The Energy West Mining Company (“Energy West”) withdrew from the United Mine Workers of America 1974 Pension Plan (“Pension Plan”). In calculating Energy West’s withdrawal liability, the actuary did not rely on the Pension Plan’s performance to determine what discount rate to use but instead adopted a risk-free discount rate. An arbitrator upheld the risk-free discount rate and the district court granted summary judgment to the Pension Plan, enforcing the arbitral award.   The Second Circuit reversed because the actuary’s choice of a risk-free rate violates the MPPAA’s command. The court explained that to calculate Energy West’s withdrawal liability from the Pension Plan, the actuary was required to base his assumptions on the Plan’s actual characteristics. Because the actuary failed to do so, the court reversed the judgment of the district court and remanded for vacatur of the arbitration award. When the actuary calculates Energy West’s withdrawal liability, the discount rate assumption must be similar, but need not be identical, to the discount rate assumption used to calculate minimum funding. View "United Mine Workers of America v. Energy West Mining Company" on Justia Law

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In this insurance coverage dispute, Plaintiff, an insured company, sought to sidestep its insurer by collecting a $22 million claim from ten insurance brokers and reinsurers. The district court dismissed Plaintiff’s claims for breach of contract and declaratory judgment.   The D.C. Circuit affirmed the district court’s dismissal. The court held that Plaintiff failed to plead facts to establish a contractual relationship with reinsurers. Plaintiff’s evidence of the reinsurance binders did not create a contractual relationship between Plaintiff and reinsurers. Further, the court held that summary judgment for reinsurers was proper; finding that Plaintiff’s claims of implied contract, promissory estoppel, and unjust enrichment are wholly unsupported by record evidence. The court further held that the “economic loss doctrine” bars Plaintiff’s claims against the other defendants. The economic loss doctrine prohibits claims of negligence where, as here, a claimant seeks to recover purely economic losses. View "Vantage Commodities Financial Services v. Assured Risk Transfer PCC" on Justia Law

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UnitedHealthcare Medicare Advantage insurers challenged the Overpayment Rule, promulgated by the Centers for Medicare and Medicaid Services (CMS) under 42 U.S.C. 1301-1320d-8, 1395-1395hhh, in an effort to trim costs. The Rule requires that, if an insurer learns that a diagnosis submitted to CMS for payment lacks support in the beneficiary’s medical record, the insurer must refund that payment within 60 days. UnitedHealth claims that the Overpayment Rule is subject to a principle of “actuarial equivalence,” and fails to comply. Two health plans that pay the same percentage of medical expenses are said to have benefits that are actuarially equivalent.The D.C. Circuit rejected the challenge. Actuarial equivalence does not apply to the Overpayment Rule or the statutory overpayment-refund obligation under which it was promulgated. Reference to actuarial equivalence appears in a different statutory subchapter from the requirement to refund overpayments; neither provision cross-references the other. The actuarial-equivalence requirement and the overpayment-refund obligation serve different ends. The actuarial-equivalence provision requires CMS to model a demographically and medically analogous beneficiary population in traditional Medicare to determine the prospective lump-sum payments to Medicare Advantage insurers. The Overpayment Rule, in contrast, applies after the fact to require Medicare Advantage insurers to refund any payment increment they obtained based on a diagnosis they know lacks support in their beneficiaries’ medical records. View "UnitedHealthcare Insurance Co v. Becerra" on Justia Law

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Plaintiff filed suit against FFIC to recover disputed expenses, largely attorney fees, that he incurred in an underlying action brought by his sister. The district court granted summary judgment for FFIC. The DC Circuit reversed in part and held that there were disputes of material fact as to whether the parties entered into a binding, enforceable rate agreement. In this case, the disputed communications to which FFIC points did not unambiguously show that the parties entered a rate agreement as asserted by FFIC. However, the court affirmed the district court's denial of plaintiff's motion to compel certain communications between FFIC and its attorneys. View "Feld v. Fireman's Fund Insurance Co." on Justia Law

Posted in: Insurance Law
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The DC Circuit vacated its previous opinion and substituted the following opinion.Homeowners filed suit against their insurance company for breach of contract when the company refused to cover flood damage to homeowners' residence. Homeowners also filed suit against their cleaning-and-restoration company for failing to adequately remedy the damage and prevent mold. The district court granted summary judgment for the insurance company and transferred the remaining claim to the district court based on lack of personal jurisdiction. The DC Circuit held that it lacked jurisdiction to review the transfer order. The court affirmed the grant of summary judgment, holding that homeowners' claim against the insurance company failed under Delaware law where there was no dispute that homeowners were away from their beach home for over 72 hours, which under the clear terms of the policy means the flooding occurred while the house was "unoccupied." View "Katopothis v. Windsor-Mount Joy Mutual Insurance Co." on Justia Law

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The DC Circuit affirmed the district court's grant of summary judgment in favor of an insurance company in a breach of contract dispute over a homeowners insurance policy. The court held that plaintiffs could not recover under the clear terms of their insurance policy where plaintiffs were away from their beach home for ten days and failed to shut off the water supply where it entered the house. In this case, there was no question that the damage for which they sought coverage was caused by flooding from the plumbing. The court also affirmed the district court's transfer of the claims against the cleaning-and-restoration company to the district court in Delaware based on lack of personal jurisdiction. View "Katopothis v. Windsor-Mount Joy Mutual Insurance Co." on Justia Law

Posted in: Insurance Law
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The Authority faced a funding shortfall for at least the period immediately after its opening in 2014. To cover the shortfall, the Authority, with emergency authorization from the District’s Council, levied a charge on all insurance policies above a certain premium threshold sold by health carriers in the District. American Council raised statutory and constitutional challenges to that charge and the district court rejected Council's arguments, dismissing the complaint for failure to state a claim. The court agreed with the District that the district court lacked jurisdiction to hear this case because the charge levied by the Authority was a tax rather than a fee. Therefore, the court vacated the district court's judgment for lack of jurisdiction and remanded with instructions to dismiss the case for lack of jurisdiction because the assessment is a tax. View "American Council of Life Ins. v. District of Columbia Health" on Justia Law