D.C. Appleseed Center for Law & Justice, Inc. v. District of Columbia Department of Insurance, Securities, & Banking
54 A.3d 1188
D.C.2012Background
- GHMSI is a DC nonprofit-health insurer under charter; surplus reviewed under MIEAA to determine excess/reinvestment.
- MIEAA created a two-step test: RBC-ACL-based threshold and whether surplus is unreasonably large and inconsistent with reinvestment obligation.
- DC DISB initially found 2008 GHMSI surplus not excessive; hearing held Sept. 2009–July 2010 with many actuarial reports.
- Appleseed, a health-consumer advocate, urged greater District charitable reinvestment and challenged the surplus decision.
- Record showed 2008 GHMSI surplus ~ $687 million with RBC-ACL ~ 845%; 2009 surplus ~ $761 million (902%).
- DC Court held Appleseed has standing as a GHMSI subscriber and as an organization; remanded for proper tandem consideration of reinvestment obligation and surplus level.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Appleseed has standing to challenge the surplus decision. | Appleseed has subscriber and organizational standing. | GHMSI contends no standing as a subscriber/organization. | Appellate standing found; Appleseed aggrieved and within zone of interests. |
| Whether the MIEAA requires two in tandem determinations and reinvestment obligations. | Court should interpret statute to require simultaneous consideration of unreasonably large surplus and reinvestment obligations. | Commissioner interpreted as two-step process (unreasonably large then reinvestment). | Statute requires tandem consideration; remand for coherent interpretation balancing reinvestment and financial soundness. |
| Whether the final order adequately explains the basis for selecting 850% RBC-ACL as the surplus target. | Need fuller explanation and integration of reinvestment mandate. | Expert reports support chosen range; governing statute supports framework. | Remand for fuller explanation consistent with statutory framework. |
| Whether the three-year deferral of 2009–2010 surplus review was lawful. | Immediate review warranted given 2009 surplus above threshold. | Three-year review provision allowed; delay not an abuse of discretion. | Not plainly arbitrary; within statutory scheme. |
Key Cases Cited
- Environmental Defense Fund, Inc. v. Hardin, 428 F.2d 1093 (D.C. Cir. 1970) (consumer standing for regulated products; zone of interests)
- Havens Realty Corp. v. Coleman, 455 U.S. 363 (U.S. 1982) (organizational standing via concrete injury to organization’s activities)
- Abigail Alliance for Better Access to Developmental Drugs v. Eschenbach, 469 F.3d 129 (D.C. Cir. 2006) (public-interest standing; injury in fact to organization’s activities)
- Warth v. Seldin, 422 U.S. 490 (U.S. 1975) (standing requirements; injury in fact and redressability)
- Grayson v. AT&T Corp., 15 A.3d 219 (D.C. 2011) (standing under DCAPA; consumer/subscriber standing)
- Abigail Alliance for Better Access to Developmental Drugs v. Eschenbach, 469 F.3d 129 (D.C. Cir. 2006) (standing analysis for public-interest organizations)