904 F.3d 1314
11th Cir.2018Background
- Borrowers sued mortgage servicers (Specialized Loan Servicing, LLC and Caliber Home Loans) and insurer American Security Insurance Company (ASIC), alleging servicers charged inflated force-placed insurance (FPI) premiums by keeping unpassed “kickbacks”/commissions from ASIC.
- Mortgages authorized servicers to purchase FPI at the borrower’s expense if borrower’s coverage lapsed and to charge the borrower for the “cost of the insurance.” Notices warned FPI would likely be more expensive and disclosed that affiliates could receive commissions.
- ASIC had filed FPI rate schedules with state insurance regulators in Florida and Pennsylvania; plaintiffs paid premiums no greater than the filed/approved rates.
- Plaintiffs pleaded breach of contract, breach of implied covenant, unjust enrichment, TILA and RICO claims, tortious interference, and state consumer-protection claims.
- District courts dismissed the complaints under Rule 12(b)(6), holding plaintiffs’ claims are barred by the filed-rate doctrine because they challenge regulator-filed insurance rates. Eleventh Circuit consolidated appeals and affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the filed-rate doctrine bars claims that servicers charged inflated FPI by keeping kickbacks | Plaintiffs: claims target lenders’ misconduct and overcharges, not the reasonableness of filed rates; mortgage requires servicers to charge only the insurer cost actually paid | Defendants: plaintiffs attack ASIC’s filed rates and any suit would retroactively undermine regulator rate-making authority | Held: Yes. Complaints directly and effectively challenge components of the filed, regulator-approved FPI rates; filed-rate doctrine applies and bars the suits |
| Whether plaintiffs’ theory (kickbacks reduced insurers’ effective cost) avoids filed-rate doctrine | Plaintiffs: kickbacks were separate, unfiled transactions so mortgage reimbursement should reflect actual net cost paid | Defendants: any alleged kickback is a component (or affects) the filed rate and thus falls within regulators’ exclusive domain | Held: Rejected plaintiffs’ attempt; whether discounts/kickbacks are part of the filed rate is a regulators’ question and courts cannot adjudicate it here |
| Whether the doctrine applies when plaintiff is not a direct rate-payer or when defendant is not the rate-filer | Plaintiffs: doctrine should not bar suits against downstream resellers/servicers who did not file rates | Defendants: applicability does not turn on plaintiff identity; suits that would effectively alter a filed rate are barred regardless | Held: Application does not depend on plaintiff being rate-payer; doctrine bars claims that would challenge filed-rate components even if defendant is an intermediary |
| Whether state law/regulatory structure permits invoking filed-rate doctrine (Erie issue) | Plaintiffs: Florida and Pennsylvania have not clearly adopted a federal-style filed-rate doctrine; certification to state supreme courts appropriate | Defendants: state regulatory schemes closely parallel those in prior Eleventh Circuit cases; Erie guess supports applying doctrine | Held: Court made an Erie-informed prediction that PA and FL schemes support the doctrine and applied it; plaintiffs’ challenge fails |
Key Cases Cited
- Hill v. BellSouth Telecomms., Inc., 364 F.3d 1308 (11th Cir. 2004) (filed-rate doctrine bars suits that would effectively change or retroactively judge reasonableness of a filed rate)
- Taffet v. Southern Co., 967 F.2d 1483 (11th Cir. 1992) (state regulatory schemes can support a filed-rate doctrine; doctrine applies equally to federal and state-approved rates)
- Marcus v. AT&T Corp., 138 F.3d 46 (2d Cir. 1998) (filed-rate doctrine bars judicial action that undermines agency ratemaking)
- Rothstein v. Balboa Ins. Co., 794 F.3d 256 (2d Cir. 2015) (filed-rate doctrine barred mortgagors’ claims that kickbacks led to overbilling where rates were regulator-filed)
- Alston v. Countrywide Fin. Corp., 585 F.3d 753 (3d Cir. 2009) (distinguishing challenges to kickbacks from direct attacks on filed rates; held filed-rate doctrine did not bar certain RESPA-based kickback claims)
- Ark. La. Gas Co. v. Hall, 453 U.S. 571 (U.S. 1981) (filed-rate doctrine forbids charging rates other than those filed with regulator)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleading standard for Rule 12(b)(6))
- Montana-Dakota Utilities Co. v. Northwestern Public Service Co., 341 U.S. 246 (U.S. 1951) (filed-rate principle: ratepayers cannot claim a legal right different from filed rate)