OHIO AFL-CIO, UNITED AUTOWORKERS OF OHIO, ET AL.
v.
INSURANCE RATING BOARD ET AL.
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Mr. Justice Douglas,
dissenting.
I would grant certiorari in this case.
The District Court dismissed petitioners’ complaint, which alleged that respondents had engaged in an illegal combination and conspiracy in the fixing of automobile insurance premiums in violation of the Sherman Antitrust Act, 26 Stat. 209, as amended, 15 U. S. C. § 1 et seq., for lack of subject matter jurisdiction due to the exemption of the insurance industry from antitrust laws by § 2 of the McCarran-Ferguson Act, 59 Stat. 34, 15 U. S. C. § 1012.
The McCarran-Ferguson Act provides, in part, that the Sherman Antitrust Act “shall be applicable to the business of insurance to the extent that such business is not regulated by State law.” In FTC v. National Casualty Co., 357 U. S. 560, 563, after examining the statute and its legislative history, we held that federal regulation as to advertising practices was prohibited in those States which were regulating such practices under their own laws. We indicated, however, that the grant of exclusive regulatory power to the State would be ineffective if the state statutory provisions which purported to regulate were a “mere pretense” of regulation.
In the instant case the petitioners allege that the state statutory scheme is such a “mere pretense” of regulation. This allegation is based on the following factors: Although rating organizations are required to be examined at least once every five years under-the statutory scheme, the state Department of Insurance has examined only two rate bureaus in the last five years, and only six examinations have been conducted in the last 20 years. The Insurance Rating Board, composed of 129 insurance companies which write approximately 17% of the automobile liability insurance and approximately 22% of the physical damage insurance in the State, is permitted under the statutory scheme to determine the amount of any rate increase and institute that increase at a date picked by it. Review of that determination may occur only upon the challenge of the state Department of Insurance, which has never challenged an increase, and which in fact does not even employ an actuary so as to be able to examine the increase.
A governmental regulatory agency which, in contradiction of a statutory direction, only rarely exercises its examinatory powers; which has never exercised its power of review of rate increases; and which does not even employ the personnel which would be necessary to exercise the power would prima facie seem to be no more than a “mere pretense” of regulation. Perhaps a full hearing would show otherwise. But enough has been tendered to make the trial court's dismissal of the complaint improper and this petition a clear grant.
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Cited By (12 total)
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The Travelers Ins. Co. v. Blue Cross OF Western Pennsylvania, 481 F.2d 80 (3d Cir. 1973)…recent case suggests that the mere existence of such a scheme of regulation, even if ineffective and unenforced, is sufficient to invoke the McCarran-Ferguson Act. Ohio AFL-CIO v. Insurance Rating Board, 451 F. 2d 1178 (6th Cir. 1971), cert. denied, 409 U.S. 917, 93 S. Ct. 215, 34 L.Ed.2d 171 (1972). However that may be, the record here shows aggressive state regulation.11 In fact, as the district court found, the features of the contract which Travelers finds objectionable were mandated by Insurance Depart…
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Battle v. Liberty Nat'l Life Ins. Co., 493 F.2d 39 (5th Cir. 1974)…services and furnish merchandise. . In determining whether there is state regulation of the insurance business, the courts have adopted varying points of view. In Ohio AFL-CIO v. Insurance Rating Board, 451 F. 2d 1178 (6th Cir., 1971), cert. den., 409 U.S. 917, 93 S.Ct. 215, 34 L.Ed.2d 180 (1972), the court stated that the requirement of state regulation under the McCarran Act is satisfied if the state has “ ‘generally authorized or permitted certain standards of conduct.’ ” Id. at 1182. The regulatory…
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Proctor v. State Farm Mut. Auto. Ins. Co., 675 F.2d 308 (D.C. Cir. 1982)…of courts have found the McCarran Act’s “state regulation” requirement easily satisfied by a general scheme for regulating the conduct of insurance companies. E.g., Ohio AFL-CIO v. Insurance Rating Bd., 451 F. 2d 1178 (6th Cir. 1971), cert. denied, 409 U.S. 917, 93 S.Ct. 215, 34 L.Ed.2d 180 (1972); see Sullivan & Wiley, Recent Antitrust Developments: Defining the Scope of Exemptions, Expanding Coverage, and Refining the Rule of Reason, 27 U.C.L.A.L.Rev. 265, 289 (1979) [hereinafter cited as “Sullivan & Wil…
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- Fed. Trade Comm'n v. Nat'l Cas. Co., 357 U.S. 560 (U.S. 1958)