Harsh Justice

more+
less-

Concerned that its own decision might have "the potential to conflict" with that of the Pennsylvania Insurance Department, a Pennsylvania federal court relied on the primary jurisdiction doctrine to dismiss a putative class action complaint in Harshbarger v. Pennsylvania Mutual Life Insurance Company. Where regulated entities are concerned, this decision demonstrates the potential persuasive power of arguing that a court should abstain from entertaining the merits of claims encompassed by the "jurisdiction, expertise, and regulatory authority" of the applicable regulatory agency – even if the claim is framed as a breach of contract action.

In Harshbarger, plaintiffs, holders of participating whole-life insurance policies, alleged that the insurer failed to pay them the full amount of annual dividends from the divisible surplus due under the terms of their policies. In its primary jurisdiction analysis, the court closely considered whether the question at issue involved "policy considerations within the Department’s particular field of expertise … [and] discretion" and posed "substantial danger of inconsistent rulings" if the court attempted to resolve plaintiffs’ claim.

First, the court reasoned, plaintiffs’ claims relied on the application of Pennsylvania statutes to create an obligation that otherwise did not exist in their contracts. Second, Pennsylvania law "expressly vests the Department with discretion" to determine when exceptions will be granted, including the power to "permit any corporation to accumulate and maintain a surplus or safety fund in excess of the limit" set by law. Third, "the Department’s oversight of [defendant’s] solvency, financial condition, and surplus levels is an ongoing endeavor," such that "a decision by this Court has the potential to conflict with the Department’s … exercise of its authority and discretion."

 

Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Carlton Fields Jorden Burt | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.
×
Loading...
×
×