Dane v. UnitedHealthcare Ins. Co.
974 F.3d 183
| 2d Cir. | 2020Background
- In 1997 UnitedHealthcare entered a licensing agreement with AARP under which the AARP Insurance Plan deducted a 4.9% "royalty" from member premium contributions and paid it to AARP; UnitedHealthcare's advertising disclosed the royalty.
- Mark Dane, an AARP member insured under United's Medigap plan in Connecticut since 2014, filed a putative class action alleging the royalty was an unlawful premium rebate in violation of Connecticut and D.C. anti-rebating laws and asserting CUTPA/CPPA, statutory theft, consumer fraud, and common-law claims seeking damages and disgorgement.
- Defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6); the district court dismissed, concluding Dane failed to plausibly allege an unlawful rebate that induced purchase and also invoked the filed-rate doctrine as an independent barrier.
- On appeal the Second Circuit assumed (without deciding) the royalty could be an unlawful rebate but affirmed dismissal because Dane failed to plausibly allege any ascertainable loss or injury from paying the regulator‑approved premium.
- The court held Dane paid only the state‑approved filed rate, received the contracted Medigap coverage, and made only speculative allegations that any savings would have been passed to insureds; accordingly CUTPA/CUIPA and CPPA claims, and the remaining common‑law and statutory theft claims, fail.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the AARP 4.9% royalty is an unlawful premium rebate under CT/D.C. law | The royalty is an unlawful rebate siphoning 4.9% from premiums and induces purchases | The royalty was disclosed, part of the filed/regulator‑approved premium, and not a rebate conferring a benefit to insureds | Court assumed arguendo it could be a rebate but did not decide; rejected claim on other grounds (no ascertainable loss) |
| Whether CUTPA/CUIPA claim survives absent an ascertainable loss | Dane: he overpaid (extra 4.9%) and would not have paid but for the scheme | Defendants: Dane paid the regulator‑approved rate and received the contracted coverage; no identifiable loss | CUTPA requires an ascertainable loss; Dane alleged none and CUTPA/CUIPA claim fails |
| Whether CPPA applies / whether Dane alleged CPPA injury | Dane: CPPA has extraterritorial reach; D.C. acts by AARP gave rise to claim | Defendants: Dane purchased/received policy in Connecticut and alleges no D.C. injury | Court did not resolve extraterritoriality; held Dane failed to allege concrete, particularized injury under CPPA |
| Sufficiency of consumer‑fraud, statutory theft, and other common‑law claims | Alleged consumer fraud, statutory theft, breach and implied covenant violations | Defendants: plaintiffs failed to plead essential elements or concrete injury | Court affirmed dismissal: remaining claims not plausibly pleaded |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard: plausible claim required)
- Nielsen v. Rabin, 746 F.3d 58 (2d Cir. 2014) (courts need not credit conclusory allegations)
- Hartford Roman Catholic Diocesan Corp. v. Interstate Fire & Cas. Co., 905 F.3d 84 (2d Cir. 2018) (CUIPA/CUTPA relationship and private enforcement framework)
- Fairchild Heights Residents Ass'n v. Fairchild Heights, Inc., 310 Conn. 797 (2014) (definition of "ascertainable loss")
- Hinchliffe v. American Motors Corp., 184 Conn. 607 (1981) (ASCERTAINABLE‑LOSS threshold for CUTPA standing)