Select insurance case victories before the US Supreme Court by Mayer Brown lawyers include the following:
- We successfully challenged California’s Holocaust Victim Insurance Relief Act, which required each insurer doing business in the state to produce detailed information about every policy issued in Europe between 1920 and 1945 by any affiliate.
- We successfully challenged, on behalf of seven large insurers, a claim that insurers invoking Pennsylvania’s utilization review procedures were state actors bound by due process requirements (obtaining reversal of a Third Circuit decision).
- We successfully argued against restricting the scope of the antitrust exemption for the business of insurance.
- We successfully argued in an insurance bad faith case, on behalf of the Chamber of Commerce, that a Utah jury award of punitive damages of $145 million (145 times the compensatory damages), based largely on evidence of purported bad acts directed at other policyholders not before the court, was unconstitutionally excessive.
Select insurance cases in federal and state appellate courts handled by Mayer Brown lawyers include the following:
- Numerous cases resulting in the reduction or vacatur of excessive punitive damage awards in insurance bad faith cases.
- The submission of numerous amicus briefs on behalf of the American Council of Life Insurers, including one successfully arguing that an insurer’s decisions whether to issue dividends, if made in compliance with the business judgment rule, are immune from challenge by shareholders.
- Involvement in numerous successful oppositions to class certification in putative class actions against insurers and in insurance coverage matters including duty to defend cases.
Select insurance industry-focused appellate cases handled by Mayer Brown lawyers include the following:
- American Manufacturers Mutual Insurance Co. Seven large insurers retained us to seek review of a Third Circuit decision holding that private workers’ compensation insurers who invoke Pennsylvania’s utilization review procedures are state actors subject to due process restrictions, and that due process requires that workers receive an opportunity to be heard before insurers suspend payment of medical bills to health care providers during the utilization review process. The Supreme Court granted review with respect to both issues and ruled in our clients’ favor on each.
- American Insurance Association v. Garamendi. The Supreme Court upheld our client’s challenge to the California Holocaust Victim Insurance Relief Act, which required every insurance company licensed to do business in the state to produce detailed information on every insurance policy issued in Europe between 1920 and 1945 by any corporate relative. The Supreme Court granted our petition for certiorari (which was supported by the solicitor general and several foreign governments) and, by a 5-4 vote, agreed with our contention that the statute intrudes on the federal government’s foreign affairs powers.
- Campbell v. State Farm Mutual Automobile Insurance Co. We represented the insurer on appeal in this Oklahoma case involving a $20 million punitive damages award arising out of an alleged bad-faith delay in paying an underinsured motorist claim. The Oklahoma Court of Appeals reversed and ordered a new trial on the basis of improper expert testimony. After the Oklahoma Supreme Court granted certiorari, the parties settled the case for considerably less than the initial judgment.
- Diamond v. General American Life Insurance Co. We were retained to assist with post-trial motions and to handle the appeal in this case in which an Arizona jury awarded $1 million in compensatory damages and $58 million in punitive damages. Although the specific dispute between the plaintiff and General American related to General American’s interpretation of a five-year limitation on disability benefits, the plaintiff was able to inflame the jury with evidence that General American had identified 58 policyholders with large potential claims and attempted to buy out their policies at a substantial discount. The trial court reduced the punitive damages to $18 million. After the case was fully briefed in the court of appeals, the plaintiff accepted a settlement for considerably less than the judgment.
- Hartford Insurance v. State of California. We represented Hartford Insurance on the appeal of a massive conspiracy case brought by a large number of state attorneys general. The US Supreme Court unanimously accepted our argument that US insurers do not lose McCarran Act immunity as a result of agreements with foreign reinsurers and, by a 5-4 vote, accepted our argument that the McCarran Act “boycott” standard does not encompass agreements among insurers and reinsurers as to acceptable policy terms.
- I/N Kote v. Hartford Steam Boiler Inspection and Insurance Co. The district court granted summary judgment against I/N Kote, a joint venture partially owned by Inland Steel Company, on a $20 million claim under a boiler and machinery policy. We were hired to pursue the appeal. We persuaded the Seventh Circuit to reverse and order the entry of judgment in favor of I/N Kote on the key coverage issue in the case.
- In the Matter of the Liquidation of Union Indemnity Insurance Company of New York. This case involved claims by the New York Superintendent of Insurance, as liquidator of Union Indemnity Insurance Company, and by Michigan National Bank, as beneficiary of a bond issued by Union Indemnity. Both parties were attempting to recover proceeds allegedly due under a reinsurance agreement. We represented a number of the reinsurers on the reinsurance agreement. We moved for summary judgment on the ground that the reinsurance agreement was unenforceable as having been fraudulently procured. Specifically, we argued that Union Indemnity was insolvent, and knew it was insolvent, when it solicited the reinsurance, and failed to disclose that material fact to the reinsurers. We won in the trial court and handled the appeals to both the Appellate Division and the New York Court of Appeals, where summary judgment was affirmed.
- ITT Hartford Group, Inc. v. Virginia Financial Associates. This case arose out of a joint venture between our client ITT Hartford and another insurer to sell an insurance package to dentists. The broker that allegedly introduced ITT Hartford to the other insurer sued, claiming that the insurers breached an implied contract and fraudulently denied it the commissions to which it was entitled. We were retained to assist on the briefing of the appeal and the preparation for oral argument on the appeal of a plaintiff's verdict. The Virginia Supreme Court reversed the judgment on the fraud claim, finding no evidence of fraud. The court also ruled that the damages on the contract claim—based on projected sales 17 years into the future—were speculative and could not stand.
- MIC Life Insurance Company and General Motors Acceptance Corporation v. Hicks. A Mississippi state court jury awarded $30 million in punitive damages against GMAC and $6 million against its indirect subsidiary MIC Life Insurance Company for failing to refund the unearned premiums on a credit life insurance policy. We were retained to draft the post-trial motions and appellate briefs for both GMAC and MIC Life. We persuaded the trial court to reduce the punitive damages against GMAC to $5 million and those against MIC Life to $1 million. On appeal, the Mississippi Court of Appeals awarded GMAC a new trial as to all issues and awarded MIC Life a new trial as to all issues except for liability for the refund. On petitions for review by all three parties, the Mississippi Supreme Court affirmed the new trial for GMAC, but held that the trial errors did not prejudice MIC and therefore reinstated the $1 million punitive award against that company. 2001 WL 1336445 (Miss. Oct. 31, 2001). We then filed a petition for rehearing. The court granted rehearing, found the $1 million punitive award against MIC to be unconstitutionally excessive and also held that the trial errors were prejudicial to both GMAC and MIC.
- Milton Hambrice, Inc. v. State Farm Fire & Casualty Co. We were retained to handle the appeal to the Eighth Circuit in this malicious prosecution case in which Hambrice received $312,000 in compensatory damages and $7.5 million in punitive damages. The case arose when a restaurant insured by State Farm was damaged by an electrical fire. After paying the claim, State Farm sought contribution from the contractor that had been renovating the restaurant. When State Farm later learned that the restaurant’s employees had been aware of the dangerous condition that caused the fire and had not corrected it, State Farm voluntarily dismissed its claim against the contractor, who then sued State Farm for malicious prosecution. The Eighth Circuit, finding insufficient evidence to support two key elements of the claim, reversed the entire judgment and remanded with instructions to enter judgment in favor of State Farm.
- Northern Ins. Co. v. Chatham County. After a yacht was damaged in a collision with a drawbridge, the yacht’s insurer filed an admiralty suit in federal court against the operator of the bridge, a county in Georgia. The district court held that the county was entitled to sovereign immunity, and the Eleventh Circuit affirmed. The Supreme Court unanimously reversed, holding that an entity that does not qualify as an “arm of the State” for Eleventh Amendment purposes cannot assert sovereign immunity as a defense to an admiralty suit. In the Supreme Court, we argued the case for the United States as amicus curiae supporting the insurer.
- Petrulis v. Prudential Insurance Co. In this case, which is currently pending before the California Court of Appeal, Prudential has appealed a California state trial court decision that applied a provision of the California Probate Code to the insurer’s invocation of a suicide exclusion clause and effectively awarded the plaintiff treble damages as a result. We were retained by the American Council of Life Insurers to draft an amicus curiae brief in support of Prudential. Our brief argued that the trial court’s novel application of section 859 of the Probate Code exposes all insurers providing life insurance in California to double or even triple liability in any case in which they deny benefits pursuant to the terms of a contract for life insurance. It further argued that the trial court’s use of the Probate Code was inconsistent with any previous application of the statute and dramatically expanded the scope of double recovery beyond anything ever intended by the legislature. The court did not need to reach the Probate Code issue because it agreed with Prudential that the suicide exclusion was fully applicable.
- Prudential Insurance Company of America v. Stewart. In this insurance bad-faith case, a Mississippi jury awarded the plaintiff $35 million in punitive damages based on Prudential’s denial of a claim under a $1 million life insurance policy. Prudential’s own investigation of the claim concluded that a contract was never formed, and the plaintiff’s evidence to the contrary was based entirely on self-interested hearsay testimony. We were retained by the American Council of Life Insurers to draft an amicus curiae brief in support of Prudential addressing the excessiveness of the punitive award under the Due Process Clause and state law. The appeal is pending before the Mississippi Supreme Court.
- State Farm Mutual Automobile Insurance Co. v. Campbell. In this insurance bad-faith case, a Utah jury awarded the plaintiff policyholder $145 million in punitive damages based largely on evidence of purported bad acts directed at other policyholders. The trial court ordered a remittitur to $25 million, but the Utah Supreme Court reinstated the jury’s verdict. The US Supreme Court granted State Farm’s petition to consider whether the punitive award, which is 145 times the compensatory damages, was unconstitutionally excessive. We submitted an amicus curiae brief on behalf of the US Chamber of Commerce arguing that it is improper to use an individual case to punish a defendant for conduct directed at individuals not before the court. The Court agreed with our argument, holding the punitive award to be unconstitutionally excessive.
- Toy v. Metropolitan Life Insurance Co. The plaintiff in this case sued MetLife for misrepresentation and for violating the state consumer protection law, alleging that MetLife’s agent represented that she was purchasing a “retirement plan” and that she continued to rely on that representation even after receiving a document conspicuously designated as a “Whole Life Policy.” The Court of Common Pleas dismissed the case on the ground that the plaintiff could not establish justifiable reliance, but the Superior Court reversed. We were retained by the American Council of Life Insurers to draft an amicus curiae brief in support of MetLife in the Pennsylvania Supreme Court. In a 3-2 decision, the Supreme Court affirmed, holding that the defendants were not entitled to summary judgment on the issue of justifiable reliance.
- UNUM Life Insurance Co. v. Ward. In this case, we filed an amicus curiae brief for the Business Roundtable in the US Supreme Court in support of Unum. We argued that state-law rules relating to the administration of disability insurance policies – in particular, (1) a rule that prevents insurance companies from enforcing notice requirements absent prejudice and (2) a rule that makes an employer that administers an insurance policy the agent of the insurer – are preempted by ERISA. Although the Supreme Court disagreed with our position on the first issue, it agreed with us on the second and held that the state rule deeming the employer an agent of the insurer was preempted.