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.)

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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

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