The filed rate doctrine is a general principle that a suit cannot be brought against an insurance company, or other company that is subject to rate regulation (such as a utility) challenging the appropriateness of rates that were filed with a regulatory agency.  The rationale for this doctrine is essentially that ratemaking is properly within the competency and responsibility of the agency, and courts are ill-equipped to set rates, which they would have to do if they concluded the current rates were improper.  This doctrine comes into play in insurance class actions involving underwriting issues where the plaintiff attempts to challenge rates that are filed with one or more state insurance departments.  A recent Third Circuit opinion, in a case in which Retired Supreme Court Justice Sandra Day O’Connor sat on the panel, reaffirmed the breadth of the filed rate doctrine and its applicability to class actions.

In re New Jersey Title Insurance Litigation, No. 10-3343, 2012 U.S. App. LEXIS 12057 (3d Cir. June 14, 2012)  was a putative class action brought against title insurance companies, alleging that they fixed the rates for title insurance in New Jersey, in violation of federal and state antitrust law.  The district court dismissed the complaint based on the filed rate doctrine, and the Third Circuit affirmed.  The Third Circuit’s opinion made two important points: 

  • The court rejected the plaintiffs’ position that the filed rate doctrine would be inapplicable assuming that the New Jersey Department of Banking and Insurance did not conduct a “meaningful review” of the rates but instead essentially simply “rubber stamped” them.  The Third Circuit explained that “[t]he Supreme Court has indicated that the doctrine applies whenever rates are properly filed with a regulating agency,” and “[t]he Supreme Court moreover has rejected the notion that agencies must ‘meaningfully review’ rates under the filed rate doctrine.”  Id. at *13, 19.  The Third Circuit disagreed with a Sixth Circuit case in which that circuit had found that the filed rate doctrine was inapplicable where a regulatory scheme required only “non-disapproval” of rates by the agency rather than affirmative approval of them.  Id. at *17-18.  (The Third Circuit noted, however, that the New Jersey statutes implicated by the case at bar required affirmative approval of title insurance rates.) 
  • The court also rejected the plaintiffs’ argument that achieving nondiscrimination in rates among ratepayers is essential to the applicability of the filed rate doctrine.  As the court noted, putative class actions by their very nature reduce the problem of discrimination among ratepayers (because, assuming the putative class is defined in a sufficiently broad manner and the putative class is certified, all similarly situated ratepayers will either win or lose together).  This portion of the Third Circuit’s decision confirms that the filed rate doctrine applies to class actions.

The potential applicability of the filed rate doctrine should be considered in defending any class action that involves underwriting issues.  Although the allegations of the complaint may not appear to directly implicate the validity of rates, the doctrine can apply in some circumstances where the claims indirectly challenge insurance rates.  The doctrine also might apply in some circumstances where the case challenges policy forms that have been filed with insurance departments and either affirmatively approved or not disapproved.