Drawdy v. Nationwide Ins. Co. of America

Filing 17

ORDER signed by District Judge John A. Mendez on 7/28/2022 GRANTING 8 Motion to Dismiss. CASE CLOSED(Perdue, C.)

1
2
3
4

UNITED STATES DISTRICT COURT

5

EASTERN DISTRICT OF CALIFORNIA

6
7
8

THOMAS DRAWDY, individually
and on behalf of all others
similarly situated,

9

Plaintiff,

10
11
12

2:22-cv-00271-JAM-KJN

ORDER GRANTING DEFENDANT’S
MOTION TO DISMISS

v.
NATIONWIDE INSURANCE COMPANY
OF AMERICA,
Defendant.

13

I.

14
15

No.

BACKGROUND

This action concerns the adequacy of the premium refund

16

Nationwide Insurance Company of America (“Defendant” or

17

“Nationwide”) provided to California auto policyholders during

18

the COVID-19 pandemic.

19

(“Plaintiff”), one such policyholder, purchased Nationwide

20

insurance for both his personal automobile and a recreational

21

vehicle before the start of the pandemic and its associated

22

government shutdown and stay-at-home orders.

23

the pandemic, Plaintiff “barely drove” either of his vehicles in

24

2020.

25

See Compl., ECF No. 1.

Thomas Drawdy

Id. ¶ 13.

Due to

Id. ¶ 15.

Nationwide provided its insureds, including Plaintiff, with

26

a one-time refund of $50.

Id. ¶ 16.

27

refund on May 7, 2020.

28

“not sufficient to compensate him for the overpayment of premiums

Id.

Plaintiff received his $50

Plaintiff asserts this refund was

1

1

due to the associated decrease in driving and risks stemming from

2

the COVID-19 pandemic.”

3

he cites to various bulletins issued by the California Insurance

4

Commissioner regarding premium refunds during the pandemic.

5

¶¶ 20-25.

6

Id. ¶ 17.

In support of this assertion,

Id.

Plaintiff brings a single claim for violation of the

7

California Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code

8

§ 17200 et seq., on behalf of a class of California residents who

9

purchased personal automobile, motorcycle, or RV insurance from

10

Nationwide covering March 1, 2020, through March 1, 2021.

11

9-11.

12

refund, premiums” is “unfair because it allowed Nationwide to

13

retain refunds that are not based on an accurate assessment of

14

risks, and was an unfair and unreasonable application of approved

15

rates.”

16

Id. at

He claims Defendant’s “retention of, and failure to

Id. ¶ 39.

Defendant moves to dismiss the complaint under Federal Rules

17

of Civil Procedure 12(b)(1) and 12(b)(6).

18

Plaintiff opposed the motion.

19

replied, see Reply, ECF No. 12, and filed a notice of

20

supplemental authority, see Not., ECF No. 15.

21

II.

See Mot., ECF No. 8.1

See Opp’n, ECF No. 11.

Defendant

OPINION

22

A.

Request for Judicial Notice

23

Defendant requests the Court take judicial notice of seven

24

exhibits: (1) the CDI Bulletin 2020-3 issued April 13, 2020;

25

(2) the Nationwide Refund Letter to Thomas Drawdy; (3) the CDI

26
27
28

This motion was determined to be suitable for decision without
oral argument. E.D. Cal. L.R. 230(g). The hearing was scheduled
for July 12, 2022.
2
1

1

Amended Bulletin 2020-8 issued December 3, 2020; (4) the

2

February 1, 2021 Nationwide Insurance Company of America COVID-

3

19 CA reporting form; (5) the CDI Bulletin 2021-03 issued on

4

March 11, 2021; (6) the CDI 2020 CA Property & Casualty Market

5

Share Report for Private Passenger Auto by Group Written

6

Premium; and (7) the March 16, 2022 Order in Rose v. GEICO

7

Casualty Co., Case No. 3:21-cv-00385-DPJ-FKB, 2022 WL 1438551

8

(S.D. Miss. Mar. 16, 2022).

9

(“RJN”), ECF No. 8-2.

Def.’s Req. for Judicial Notice

Plaintiff does not object to the request

10

as to Exhibits 1, 3, 5, and 7, but does object as to Exhibits 2,

11

4, and 6.

12

parties’ arguments, applicable caselaw, and the documents

13

themselves, the Court finds Exhibits 1, 3, 4, 5, 6, and 7 to be

14

proper subjects of judicial notice and thus grants Defendant’s

15

request as to those documents.

16

250 F.3d 668, 689-690 (9th Cir. 2001).

17

judicial notice only of the existence of these documents and

18

declines to take judicial notice of their substance, including

19

any disputed or irrelevant facts within them.

20

Opp’n at 13-14.

After careful consideration of the

See Lee v. City of Los Angeles,
However, the Court takes

Id. at 690.

With respect to Exhibit 2, Plaintiff argues it is a non-

21

public document with no evidence in the record confirming if it

22

was sent, when it was sent, whether Plaintiff received it, or

23

any other authenticating evidence.

24

counters that this exhibit is a proper subject of judicial

25

notice because it is based on Plaintiff’s own allegations that

26

(1) Nationwide provided a refund for March and April 2020, and

27

that (2) he received a refund from Defendant on May 7, 2020.

28

Reply at 2-3 (citing to Parrino v. FHP, Inc., 146 F.3d 699, 706
3

Opp’n at 13.

Defendant

1

(9th Cir. 1998)).

2

judicial notice is necessary when the Court already has

3

Plaintiff’s allegations regarding Nationwide’s refund before it.

4

See Compl. ¶ 16.

5

judicial notice, not that it “must.”

6

However, Defendant fails to explain why

Indeed, Defendant states the Court “can” take
Reply at 3 n.2.

The Court declines to take notice of this non-public

7

document which is unnecessary to the determination of this

8

motion.

9

Defendant’s request is denied as to Exhibit 2.

Plaintiff asks the Court to take judicial notice of the

10

Insurance Commissioner’s Brief filed in Rejoice!.

Pl.’s RJN,

11

ECF No. 11-1.

12

therefore a proper subject of judicial notice, the Court grants

13

Plaintiff’s request.

14

the Court takes notice only of the existence of this document,

15

not of any disputed or irrelevant facts within.

As this is a matter of public record and

See Lee, 250 F.3d at 690.

Again, however,

Id.

16

B.

12(b)(1) Motion

17

A defendant may move to dismiss for lack of subject matter

18

jurisdiction pursuant to Federal Rule of Civil Procedure

19

12(b)(1).

20

motion, plaintiff bears the burden of proving the existence of

21

the court’s subject matter jurisdiction.

22

99 F.3d 352, 353 (9th Cir. 1996).

23

Fed. R. Civ. P. 12(b)(1).

Faced with a Rule 12(b)(1)

Thompson v. McCombe,

Here, Defendant raises two arguments for dismissal under

24

Rule 12(b)(1).

Mot. at 10-14.

First, Defendant contends

25

Plaintiff’s claim falls within the Insurance Commissioner’s

26

exclusive jurisdiction over the setting of insurance rates.

27

at 10-13.

28

district courts have rejected that argument and distinguished

However, as Plaintiff points out, three California

4

Id.

1

the same California caselaw cited by Nationwide here.

Opp’n at

2

2-6 (citing to Day v. GEICO Casualty Company, Case No. 21-cv-

3

02103-BLF, 2022 WL 179687 (N.D. Cal. Jan. 20, 2022); Rejoice!

4

Coffee Co., LLC v. Hartford Fin. Serv. Group, Inc., Case No. 20-

5

cv-06789-EMC, 2021 WL 5879118 (N.D. Cal. Dec. 9, 2021); and

6

Boobuli’s LLC v. State Farm Fire & Casualty Co., 562 F.Supp.3d

7

469 (N.D. Cal. 2021)).

8

has also rejected Defendant’s position.

9

of this unanimous weight of authority against its position,

The California Insurance Commissioner
Id. at 6-7.

In spite

10

Defendant asks the Court to find otherwise that these Northern

11

District cases were “wrongly decided.”

12

directs the Court to four out-of-circuit decisions from

13

Mississippi, Missouri, New York, and Nevada.

14

(collecting cases).

15

these decisions interpreting other state’s insurance codes have

16

no bearing on the present analysis of Plaintiff’s UCL claim

17

which is governed by California insurance law.

18

Moreover, the Court agrees with the detailed exclusive

19

jurisdiction analysis in Day, Rejoice!, and Boobuli’s.

20

WL 179687, at *3-5; 2021 WL 5879118, at *3-7; 562 F.Supp.3d at

21

477-484 (“In sum, State Farm’s exclusive jurisdiction argument

22

fails because [plaintiff] is not seeking to challenge the rate

23

itself, but the misapplication of the rate in light of changed

24

circumstances given the COVID-19 pandemic.”).

25

finds that Plaintiff’s challenge is to the application of

26

approved rates, not to the rates themselves, and therefore does

27

not fall within the Insurance Commissioner’s exclusive

28

jurisdiction.

Mot. at 12.

Defendant

Id. at 11

But the Court agrees with Plaintiff that

Opp’n at 5-6.

See 2022

This Court too

Defendant’s argument for dismissal on exclusive
5

1

jurisdiction grounds thus fails.

2

However, Defendant’s second argument - that the Court

3

should dismiss this case under the primary jurisdiction doctrine

4

- has merit.

5

jurisdiction doctrine allows courts to stay proceedings or to

6

dismiss a complaint without prejudice pending the resolution of

7

an issue within the special competence of an administrative

8

agency.”

9

Cir. 2008); see also Syntek Semiconductor Co., Ltd. v. Microchip

Mot. at 13-14; Reply at 5.

“The primary

Clark v. Time Warner Cable, 523 F.3d 1110, 1114 (9th

10

Tech. Inc., 307 F.3d 775, 781 (9th Cir. 2002) (“[T]he doctrine

11

of primary jurisdiction is committed to the sound discretion of

12

the court when ‘protection of the integrity of a regulatory

13

scheme dictates preliminary resort to the agency which

14

administers the scheme.’”)

15

of the doctrine “will enhance court decision-making and

16

efficiency by allowing the court to take advantage of

17

administrative expertise” and “whether application will help

18

assure uniform application of regulatory laws.”

19

United of Omaha Life Ins. Co., 225 F.3d 1042, 1051 (9th Cir.

20

2000).

21

Courts consider whether application

Chabner v.

As an initial matter, Plaintiff does not dispute the Court

22

has the authority to dismiss this action pursuant to the primary

23

jurisdiction doctrine.

24

over whether the Court should apply the doctrine.

25

Reply at 5.

26

appropriate for the Insurance Commissioner, who has the relevant

27

technical expertise, to consider Plaintiff’s claim.

28

The Court agrees.

See Opp’n at 7-8.

Rather the dispute is
Id.; see also

Defendant argues it should because it would be more

Reply at 5.

Further, Plaintiff had the opportunity in
6

1

opposition to explain why the Court, as opposed to the

2

Commissioner, should consider Plaintiff’s claim yet failed to do

3

so.

4

jurisdiction doctrine “does not require that all claims within

5

an agency’s purview be decided by the agency” nor “is it

6

intended to secure expert advice for the courts from regulatory

7

agencies every time a court is presented with an issue

8

conceivably within the agency’s ambit.”

9

Brands, Inc., 16 F.4th 1283, 1291 (9th Cir. 2021) (internal

See Opp’n at 7-8.

Plaintiff generally contends the primary

Cohen v. ConAgra

10

citation and quotation marks omitted).

11

Plaintiff does not explain why application of the doctrine here

12

would not “enhance court decision-making and efficiency by

13

allowing the court to take advantage of administrative

14

expertise.”

15

This may be so, but

Chabner, 225 F.3d at 1051.

Accordingly, the Court applies the primary jurisdiction

16

doctrine and grants Defendant’s motion to dismiss without

17

prejudice.

18

dismisses under the primary jurisdiction doctrine, the Court

19

does not reach the parties’ additional 12(b)(6) arguments.

20

Mot. at 6-10; see also Opp’n at 9-13.

See Clark, 523 F.3d at 1114.

21
22
23
24
25

III.

Because the Court

ORDER

For the reasons set forth above, the Court GRANTS
Defendant’s motion to dismiss.
IT IS SO ORDERED.
Dated: July 28, 2022

26
27
28
7

See