Roberts v. Wells Fargo Bank, NA et al

Filing 61

ORDER granting 36 Motion to Dismiss. The Clerk is Ordered to transmit the record to the Supreme Court of Georgia. This case is stayed pending the Supreme Court's decision on the certified question. Signed by Judge B. Avant Edenfield on 3/27/13. (bcw)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF GEORGIA
SAVANNAH DIVISION

because the amount in controversy exceeds
$5 million, and minimal diversity exists.
See 28 U.S.C. § 1332(d)(2).

LUCY ROBERTS, on behalf of herself
and all others similarly situated,

Lucy Roberts ("Roberts"), on behalf of
herself and a purported class of borrowers,
asserts various state law claims challenging
"a pattern of unlawful and unconscionable
profiteering and self-dealing" by Defendants
that resulted in her paying "excessively high
premiums for insurance forcibly placed by
Wells Fargo." ECF No. 1 at 1-2. Wells
Fargo, WFI, and ASIC primarily challenge
Roberts's right to a lower rate. See, e.g.,
ECF No. 34 at 2. Assurant's central
contention is that it "has no connection to
the events and allegations of the Complaint"
beyond being the corporate parent of ASIC
and that Roberts therefore lacks standing to
assert claims against it. ECF No. 36 at 1.

Plaintiff,
V

4: 12-cv-200

.

WELLS FARGO BANK, N.A.; WELLS
FARGO INSURANCE, INC.;
AMERICAN SECURITIES
INSURANCE COMPANY; and
ASSURANT, INC.,
Defendants.
ORDER
I. INTRODUCTION
Before the Court are the following
motions: (1) Wells Fargo Bank, N.A.
("Wells Fargo")' and Wells Fargo
Insurance's ("WFI") motion to dismiss for
failure to state a claim, ECF No. 34; (2)
Wells Fargo and WFI's motion to dismiss
for lack of subject matter jurisdiction, ECF
No. 35; (3) American Securities Insurance
Company's ("ASIC") motion to dismiss for
failure to state a claim and lack of subject
matter jurisdiction, ECF No. 39; and (4)
Assurant Inc.'s motion to dismiss for failure
to state a claim and lack of subject matter
jurisdiction. ECF No. 36.
This Court has jurisdiction pursuant to
the Class Action Fairness Act of 2005

The Court agrees that Roberts has no
standing to assert claims against Assurant.
Assurant's motion to dismiss for lack of
subject matter jurisdiction is GRANTED.
Roberts's right to a lower rate, however,
involves unsettled questions of Georgia law
surrounding the applicability of the filed rate
doctrine in the insurance rate setting context.
In lieu of what would amount to informed
speculation, the Court elects to certify a
question to the Supreme Court of Georgia.
The Court therefore STAYS this action until
such time as the Supreme Court of Georgia
answers, or declines to answer, the certified
question.
II. BACKGROUND

The Court uses "Wells Fargo" to refer only to Wells
Fargo, N.A., whereas for Roberts "Wells Fargo Bank
and Wells Fargo Insurance may be collectively
referred to as 'Wells Fargo." ECF No. I at 3
(emphasis added).

Because this case is before the Court on
a motion to dismiss, this Order relates the
facts in the light most favorable to Roberts,

As part of this agreement, Assurant also
provides a portfolio tracking service that
monitors all of Wells Fargo's mortgages to
ensure they have valid insurance. Id. at 8.
The cost of the service includes "tracking
for all of Wells Fargo's loans, not just those
charged for force-placed insurance." Id.
That cost is then "passed on to homeowners
in the form of excessive premiums" for
force-placed insurance. Id.

the non-moving party. See Lanfear v. Home
Depot, Inc., 679 F.3d 1267, 1271 n.4 (11th
Cir. 2012). First, this section describes
generally the "force-placed" insurance
system allegedly operated by Defendants.
Second, it relates the facts specific to
Roberts's Wells Fargo mortgage and the
force-placed insurance Wells Fargo charged
Roberts for. Third, this section outlines the
counts in Roberts's complaint and the
defenses asserted in response.

In the event a borrower's insurance
lapses, the tracking agreement provides for
Assurant to automatically place insurance at
a price predetermined by the agreement. Id.
at 8-9. If the borrower cannot pay the
premium out of pocket, the premium is
"added to the mortgage's principal balance"
and "charge[d to] the customer's escrow
account." Id at 10. The cost of the
insurance "bears no relation to each
homeowner's individual home." Id at 10.

A. Force-Placed Insurance
Wells Fargo, a large national bank,
offers a bevy of financial services, including
residential mortgages. ECF No. 1 at 5.
Every borrower whose mortgage is owned
or serviced by Wells Fargo must maintain
homeowner's insurance on the mortgaged
property. Id. If that insurance lapses,
"Wells Fargo can purchase insurance for the
home, 'force-place' it, and charge the
borrower the full cost of the premium." Id
at 6.

Roberts also claims the defendants
"retroactively force-place exorbitant
insurance on homeowners for the periods of
time in the past where coverage ha[s]
lapsed" even though no claims are made
during that period and "the homeowner has
since secured standard insurance." Id. Such
actions—along with including kickbacks
and the costs of Assurant's tracking service
in the price of force-placed insurance—says
Roberts, "represent bad faith and
unconscionable practices" that are
"prohibited by Georgia law." Id. at 11.

According to Roberts, however, those
"premiums are not the actual amount that
Wells Fargo pays, because a substantial
portion of the premiums are refunded to
Wells Fargo." Id. Roberts further alleges
that Wells Fargo, in bad faith, "entered into
an agreement with Assurant to provide
force-placed insurance policies" at
"unreasonably high rates." Id. Under this
agreement, Assurant pays Wells Fargo
kickbacks, commissions, and provides free
services, all of which are included in the
premiums charged consumers like Roberts.
Id at 7. Wells Fargo, then, "has an
incentive to seek higher cost force-placed
policies that offer bigger kickbacks." Id.

B. Roberts's Mortgage

2

Wells Fargo also force-placed flood
insurance on Roberts's property on multiple
occasions, each time "[w]ithout attempting
to re-instate her old policy and without
shopping the open market for a reasonable
premium." Id. at 14. In April 2011, Wells
Fargo force-placed a flood insurance policy
effective from January 15, 2010, to January
15, 2011, charging Roberts $1,121. Id. At
the same time, Wells Fargo force placed
another flood policy, to run from January
15, 2011, again charging Roberts $1,121.
Id. Twice more—in September 2011, and
May 2012—Wells Fargo force-placed flood
insurance, once charging $450, another time
charging $459. Id. After Wells Fargo added
the force-placed policies, both flood and
homeowner's insurance, to Roberts's
mortgage, the monthly payment "was 267%
higher than the mortgage payment prior to
the force-placed policies." Id.

On December 12, 1997, Roberts closed
on a house whose mortgage SouthTrust
Mortgage Corporation originally held. ECF
1-2 at 1. Wells Fargo later acquired
SouthTrust and became the successor in
interest to Roberts's mortgage. ECF No. I
at 12. Wells Fargo also services the
mortgage. Id.
For many years, Roberts maintained
home owner's and flood insurance as
required by the mortgage. Id. at 13. In
January 2011, however, Roberts allowed the
homeowner's insurance to lapse. Id. Wells
Fargo, "without seeking competitive bids on
the open market ... exercised its discretion .
.. and contracted with Assurant" to provide
force-placed homeowner's insurance on
Roberts's property. Id.
Roberts received notice of the forceplaced policy via a letter sent February 28,
2011. Id. In that letter, Wells Fargo
informed Roberts that the policy, purchased
from ASIC,2 would be "backdated to
January 28, 2011." Id.

Complaint
C. Roberts's
Defendants' Responses

and

. Roberts initiated this litigation on July
24, 2012. Id. at 1. In her complaint,
Roberts includes counts of (1) breach of
contract against Wells Fargo; 3 (2) breach of
fiduciary duty against Wells Fargo; (3)
unjust enrichment against all defendants;
and (4) aiding and abetting a breach of
fiduciary duty against ASIC and Assurant
Id. at 18-23.

On April 12, 2011, Wells Fargo notified
Roberts it had purchased a force-placed
homeowner's policy from ASIC effective
from January 28, 2011, to January 28, 2012.
Id. Wells Fargo charged the cost of that
policy, $989, to Roberts's escrow account.
Id.

.4

The Court is painfully aware of the discrepancy
between this sentence, which states ASIC provided
the policy, and the preceding paragraph, which states
Assurant provided the policy. Whether this apparent
contradiction is the result of Roberts lumping
Assurant and ASIC together for purposes of easy
reference or not, see id. at 3, the Court must
nevertheless relate the facts as Roberts alleges them.

As with Roberts's earlier ambiguous references to
ASIC and Assurant, it is unclear whether this count,
and the breach of fiduciary duty count, refer to Wells
Fargo, or Wells Fargo and WFI together.
To complicate matters yet further, Roberts here
refers to Assurant and ASIC individually, when
previously she used "Assurant" to refer to both ASIC
and Assurant.

2

3

3

causation and redressability elements of
standing because Assurant is not an
insurance company; did not issue the
policies at issue in this case; and "has no
connection to the events and allegations of
the Complaint." Id. at 1. Assurant, like the
other three defendants, also argues for a
12(b)(6) dismissal for failure to plead the
essential elements of the claims. Id. at 2.

All four defendants responded by filing
motions to dismiss. See ECF Nos. 34; 36;
39. In their motion pursuant to Federal Rule
of Civil Procedure 12(b)(6), Wells Fargo
and WFI assert four reasons Roberts fails to
state a claim: (1) The rates Roberts paid for
the force-placed insurance were filed with
the Georgia Insurance Commissioner
("Commissioner") and thus the filed rate
doctrine precludes Roberts's claims, ECF
No. 34 at 2; (2) the primary jurisdiction
doctrine required Roberts to exhaust
administrative remedies before the
Commissioner prior to filing suit, something
she did not do, Id.; (3) Roberts failed to
plead essential elements of her claims, Id.;
and (4) the National Bank Act preempts
Roberts's state law claims. Id. at 2-3.

III. ANALYSIS
This Order proceeds as follows: First, the
Order sets forth the appropriate standard of
review for motions to dismiss. Second, it
evaluates Assurant's argument that Roberts
lacks standing because she cannot
demonstrate causation and redressability.
Third, the Order concludes by discussing the
filed rate doctrine and why the question of
its applicability here is best left to the
Supreme Court of Georgia.

Wells Fargo and WFI also filed a motion
to dismiss for lack of subject matter
jurisdiction. ECF No. 35; FED. R. Civ. P.
12(b)(1). That motion argues application of
the filed rate doctrine prevents Roberts from
sustaining a cognizable injury sufficient for
standing. See ECF No. 35 at 1.

A. Standard of Review
The defendants have filed several
motions to dismiss, under both Rule I 2(b)( 1)
and 12(b)(6). In deciding motions under
12(b)(6), courts must accept as true all
factual allegations in a complaint and
construe them in the light most favorable to
the plaintiff. Lanfear, 679 F.3d at 1271 n.4;
Powell v. Thomas, 643 F.3d 1300, 1302
(11th Cir. 2011). But courts "are not bound
to accept as true a legal conclusion couched
as a factual allegation." Bell At!. Corp. v.
Twombly, 550 U.S. 544, 555 (2007).

ASIC also filed a 12(b)(1) motion
arguing a lack of standing based on the filed
rate doctrine. ECF No. 39 at 1-2. In the
same motion, ASIC alleges Roberts failed to
state a claim because she did not plead the
required elements of the unjust enrichment
and aiding and abetting claims against
ASIC. Id. at 2.
Like Wells Fargo, WFI, and ASIC,
Assurant filed a 12(b)(1) motion asserting
lack of standing because of the filed rate
doctrine. ECF No. 36 at 2. Assurant alone,
however, argues that, in addition to a lack of
injury, Roberts cannot demonstrate the

Claims, moreover, must be facially
plausible. That is, they must contain "factual
content that allows the court to draw the
reasonable inference that the defendant is
liable for the misconduct alleged." Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009). Facial
4

jurisdictional discovery given Assurant's
causation and redressability argument). So,
the Court may consider extrinsic evidence in
ruling on that aspect of Assurant's 12(b)(1)
motion. Carmichael, 572 F.3d at 1279.

plausibility "is not akin to a probability
standard requirement, but it asks for more
than a sheer possibility that a defendant has
acted unlawfully." Id.
Rule 12(b)(1) motions come in two
flavors. They "can be asserted on either
facial or factual grounds." Carmichael v.
Kellogg, Brown & Root Servs., Inc., 572
F.3d 1271, 1279 (11th Cir. 2009). Facial
attacks on subject matter jurisdiction are
subject to the same standard of review as
12(b)(6) motions. Gupta v. McGahey, No.
11-14240,2013 WL 562879, at *1(11th Cir.
Feb. 15, 2013) (citing Carmichael, 572 F.3d
at 1279). Attacks on the factual
underpinnings of jurisdiction, on the other
hand, may allow a court to "consider
extrinsic evidence such as deposition
testimony and affidavits." Carmichael, 572
F.3d at 1279. And with factual attacks, "the
burden is on the plaintiff to prove that
jurisdiction exists." Gibbs v. United States,
865 F. Supp. 2d 1127, 1135 (S.D. Fla. 2012)
(quoting OSI, Inc. v. United States, 285 F.3d
947, 951 (11th Cir. 2002)).

Causation
B. Assurant's
Redressability Argument

and

Unlike the other defendants, Assurant
disclaims any relationship with Roberts,
much less one sufficient to give Roberts
standing to sue. See ECF No. 36 at 1
("Assurant has no connection to the events
and allegations of the Complaint.").
Assurant states that it "is not an insurance
company, does not issue insurance policies,
and is not an insurer of plaintiff Lucy
Roberts." Id This lack of a relationship
with Roberts or other connection to this case,
Assurant argues, prevents Roberts from
demonstrating that Assurant caused Roberts
injury, and prevents any remedy the Court
may grant from redressing that injury. ECF
No. 36-1 at 5. Assurant believes Roberts
therefore cannot show standing. And if
Roberts lacks standing the Court would lack
subject matter jurisdiction over Assurant. Id

Wells Fargo, WFI's, and ASIC's
12(b)(1) motions are facial attacks. They are
"based [solely] on the allegations in the
complaint," and therefore will be evaluated
according to the 12(b)(6) standard outlined
above. Id

Roberts points to Assurant's filings with
the Securities and Exchange Commission in
arguing that, in fact, Assurant "is actively
involved in the force-placed scheme." ECF
No. 48 at 2. Roberts also appears to argue
that because Assurant derives income from
its ownership of ASIC the corporate veil
between the two entities should be pierced to
allow Roberts's unjust enrichment claim to
proceed. Id. at 8-9. Alternatively, Roberts
asks the Court to defer ruling on Assurant's
12(b)(1) motion and permit Roberts to

Assurant's 12(b)(1) motion is another
matter. Assurant and Roberts both recognize
that Assurant's causation and redressability
argument attacks facts Roberts alleges. See
ECF Nos. 36-1 (arguing that because
Assurant's 12(b)(1) motion is a factual
attack the Court may consider two affidavits
Assurant submitted); 48 at 2 (requesting
5

engage in limited jurisdictional discovery.
Id at 9-10.
The Court need not allow discovery or
defer ruling because Roberts has not
satisfied her burden of proving that she has
standing to assert claims against Assurant.
See OSI, Inc., 285 F.3d at 951.
The power of federal courts is limited to
"cases" and "controversies." U.S. CONST.
art. III, § 2. Part of the case or controversy
requirement is that a plaintiff have standing
to sue. Hollywood Mobile Estates Ltd v.
Seminole Tribe of Fla., 641 F.3d 1259,126465 (11th Cir. 2011).
Standing implicates "the power of the
court to entertain the suit." Id at 1265
(quoting Wart/i v. Seldin, 422 U.S. 490, 498
(1975)). As such, it must be established, by
the plaintiff, before any consideration of a
claim's merits. See Id ("The party invoking
federal jurisdiction bears the burden of
proving standing."); TSG Water Res., Inc. v.
D 'Alba & Donovan Certified Pub.
Accountants, P.C., 260 F. App'x 191, 195
(11th Cir. 2007) (citing Steel Co. v. Citizens
for a Better Env't, 532 U.S. 83, 94 (1998))
(noting that subject matter jurisdiction is a
threshold concern). A plaintiff, moreover,
must establish standing as to each claim he
or she asserts. See Davis v. Fed Election
Comm 'ii, 554 U.S. 724, 734 (2008).
The
"irreducible
constitutional
minimum" of standing consists of (1) injury
in fact; (2) "a causal connection between the
injury and the conduct complained of[;]" and
(3) a likelihood, not mere speculation, "that
the injury will be redressed by a favorable
decision." Lujan v. Defenders of Wildlife,
504 U.S. 555, 560 (1992) (internal

Not surprisingly,
quotations omitted).
causation and redressability "are often
interconnected." Kelly v. Harris, 331 F.3d
817, 820 (11th Cir. 2003). "[I]f the injury is
not caused by the challenged acts, an order
directed to them will not redress it." Id.
Assurant has put forth evidence attacking
the factual underpinnings of Roberts's
standing to assert unjust enrichment and
aiding and abetting claims against it. Jessica
M. Ouch ("Olich"), vice president and
assistant secretary of Assurant, avers that
Assurant is not an insurance company; is not
an insurer of Roberts; does not contract with
Wells Fargo or WFI; and does not provide
commissions to either company. ECF No.
36-2 at 2-4. Olich also states that Assurant
does not control the day to day operations of
ASIC; rather, Assurant is the corporate
parent of Interfinancial, Inc., who itself is the
corporate parent of ASIC, both of whom
maintain separate books and corporate
records from ASIC. Id at 3-4.
Assurant also cites the affidavit of
Ronald K. Wilson ("Wilson"), the vice
president of account management for
Assurant Specialty Property. ECF No. 39-2.
Wilson makes clear that Assurant Specialty
Properties is merely a "trade name and
service mark sometimes used by a group of
companies, [including ASIC, but] not
including Assurant ... that provide lenderplaced insurance."
Id. at 3 (emphasis
added). He also avers that Assurant is not a
party to any agreements between ASIC and
Wells Fargo. Id.
Unrebutted, such evidence demonstrates
that Assurant could not have caused
Roberts's alleged injuries. One simply

consist primarily of the capital stock of [its]
subsidiaries." ECF No. 56 at 9 (citing ECF
No. 48-1). Assurant is organized into four
operating segments, each of which is
comprised of many different individual
corporations, one of which is ASIC. See
ECF No. 48-1 at 11. Assurant Specialty
Property—itself a mere trade name—is one
of those segments. Id. at 13. And ASIC is
an indirect insurance company subsidiary
within that segment. ECF No. 56 at 10.
Assurant is not Assurant Specialty Property,
and Assurant Specialty Property is not a
company at all.

cannot cause a contract-based injury if one
played no role whatsoever in the contract
itself either as a party to the contract or an
intended beneficiary. It would be as if a
parent could be considered the cause of their
child committing a crime by virtue of their
role in the child's conception.
Roberts, of course, attempts to rebut the
White and Ouch affidavits. To do so,
Roberts cites liberally to Assurant's Forms
10-K and 10-Q filed with the SEC in arguing
that Assurant itself is directly involved in the
conduct Roberts complains of. 5 See ECF
No. 48 at 6-7.

While Assurant's use of the personal
pronouns "we" and "our" in their annual
report and Form 10-K superficially seems to
indicate the company's involvement in
lender-placed insurance, that description
alone is not dispositive. See, e.g., Doe v.
Unocal Corp., 248 F.3d 915, 928 (9th Cir.
2001) ("[R]eferences in the parent's annual
report to subsidiaries or chains of
subsidiaries as divisions of the parent
company do not establish the existence of an
alter ego relationship."); Jazini v. Nissan
Motor Co., 148 F.3d 181, 185 (2d Cir. 1998)
(finding parent company's statements in its
annual report referring to "our" and "the
company as a whole" not to show pervasive
control by parent over subsidiary sufficient
to pierce the corporate veil).

Roberts concludes that Assurant is
actively involved in the force-placed
insurance scheme of ASIC and Wells Fargo
based on statements such as: "[W]e use a
proprietary insurance-tracking
administration system . . . ." and "The
majority of our lender-placed agreements are
exclusive." Id. at 6 (quoting ECF No 48-1,
Assurant' s 2011 Form 10-K) (emphasis in
original). Such statements, however, are
mere "snippets" and do not paint a full
picture of the relationship between Assurant,
Assurant Specialty Property, and ASIC.
ECF No. 56 at 6.
A complete reading of Assurant's SEC
filings demonstrates that Assurant "is a
holding company and, as such, has limited
direct operations of its own. "[Its] assets

Assurant's wholly owned subsidiaries—
most importantly ASIC—do sell the
insurance products that Roberts challenges in
this suit. See ECF No. 48-1 at 13. But
Assurant itself does not. It is a mere holding
company, a corporation designed only to
own other corporations and profit from that
ownership.
See, e.g., BLACK'S LAW

Assurant may very well be correct that the Court
should not take judicial notice of the SEC filings to
prove the truth of their contents. See ECF No. 56 at 6
n.6. But, as Assurant notes, the SEC filings do not
rebut Assurant's arguments or the Ouch and Wilson
affidavits. Id. at 6. The Court has considered the
SEC filings cited, but only to highlight the depth of
Roberts's failure to carry her burden to show
jurisdiction.

7

actual or apparent agent." Matson v. Noble
Inv. Grp., 288 Ga. App. 650, 659 (2007).

319 (9th ed. 2011) (defining
holding company as one "formed to control
other companies, usually confining its role to
owning stock and supervising
management."). Isolated references to "we"
and "ours" in public disclosures simply do
not rebut that. In fact, a full read through of
those same disclosures demonstrates that
Assurant used the personal pronouns for ease
of description, not to convey that Assurant
itself did anything but own the corporations
comprising its operating segments. See ECF
No. 56 at 9.
DICTIONARY

Roberts's complaint contains no
allegations the veil between Assurant and
ASIC—much less the veil between
Interfinancial and Assurant—should be
pierced, under either the alter ego or agency
theory. See ECF No. 1. Even if that alone
did not fatally undermine Roberts's veil
piercing assertion, Assurant's relationship
with ASIC does not justify holding Assurant
liable for ASIC's actions.

6

As the corporate parent, Assurant
undoubtedly profits from its ownership of
ASIC (assuming, of course, ASIC itself
turned a profit). But unlike the defendants in
Williams v. Wells Fargo Bank N.A., who
received, albeit through subsidiaries, a
portion of the force-placed premium plaintiff
paid, Assurant never received any money
Roberts paid to Wells Fargo. No. 11-21233CIV, 2011 WL 4368980, at *9 (S.D. Fla.
Sept. 19, 2011). Assurant, like a stockholder
paid a dividend by virtue of his or her
ownership of the stock, profited from its
ownership of ASIC, not from payment of
premiums by borrowers with force-placed
insurance.
See ECF No. 56 at 11.
Borrowers like Roberts paid premiums to
ASIC, who allegedly then paid "kickbacks"
to Wells Fargo and WFI. But no evidence
Roberts presents supports the conclusion that
Assurant received payments linked to the
force-placed insurance Roberts objects to.
Absent more than profit derived from
ownership, Roberts cannot justify piercing
the veil between Assurant and ASIC.

Diamond Aircraft Indus., Inc., 645 F.3d 1254, 1257

To be sure, Assurant likely also exercises
the measure of control commensurate with

Roberts alternatively argues that, at a
minimum, her unjust enrichment claim
should survive "[e]ven if this Court finds
that Assurant' s self-serving affidavits
establish that Assurant is not involved in the
force-placed scheme" because "Assurant
profits from th[at] ... scheme." ECF No. 48
at 8. This argument also fails.
Unless a reason to pierce the corporate
veil exists, a "parent corporation . . . is not
liable for the acts of its subsidiaries," much
less an indirect subsidiary like ASIC. United
States v. Bestfoods, 524 U.S. 51, 61(1998).
Two main theories justify piercing the veil:
(1) where a subsidiary acts as the corporate
parent's alter ego; and (2) where a wholly
owned subsidiary becomes, in essence, the
agent of the parent. See Kissun v. Humana,
Inc., 267 Ga. 419, 421 (1997).6 But, "[a]
parent/subsidiary relationship does not in
and of itself establish the subsidiary as either
the alter ego of the parent or as the parent's
As a federal court sitting in diversity jurisdiction,
this Court must apply the substantive law of the
forum state, in this case Georgia. Horowitch v.
(11th Cir. 2011).

8

also assert the doctrine prevents Roberts
from stating a claim. ECF No. 34.

that of a majority shareholder. But such
control, even when coupled with dividend
payments, cannot demonstrate the "total
domination" necessary to support liability
under the alter ego theory. See Kissun, 267
Ga. at 421. Nor does that level of control
support a finding that ASIC acted as agent
for Assurant. See Phoenix Can. Oil Co. v.
Texaco, Lid, 842 F.2d 1466, 1477 (3d Cir.
1988) (noting that for agency liability to
attach one corporation must act on behalf of
the other, not merely involve itself in
managerial decisions). All Roberts has
shown is that Assurant is the corporate
parent of ASIC. That alone is insufficient to
pierce the corporate veil.

Defendants' filed rate defense is best
addressed in a 12(b)(6) motion. Although
affirmative defenses like the filed rate
doctrine typically "will not support a motion
to dismiss.... a complaint may be dismissed
under Rule 12(b)(6) . . . so long as the
defense appears on the face of the
complaint." Quiller v. Barclays Am./Credit,
Inc., 727 F.2d 1067, 1069 (11th Cir. 1984).
The filed rate defense here derives from
Roberts's allegations and so is cognizable in
a 12(b)(6) motion.
Defendants' 1 2(b)( 1) motions, by
contrast, paint a novel picture of the
intersection between the injury requirement
of standing, the filed rate doctrine, and
subject matter jurisdiction. Given a choice
between the well-charted path of dismissal
for failure to state a claim and weighing in
on unanswered standing and jurisdictional
questions,7 the Court finds it prudent to
address the filed rate doctrine in the context
of a 12(b)(6) motion.

Roberts has not demonstrated that
Assurant played any role in the force-placed
insurance scheme she alleges is at the heart
of her injury. She has not shown how any
relief this Court could grant as to Assurant
would redress the injuries she allegedly
suffered. And, she has not shown any reason
for this Court to pierce Assurant's corporate
veil as to Roberts's unjust enrichment claim.
Without standing, this Court cannot
constitutionally adjudicate Roberts's claims
against Assurant. Assurant' s I 2(b)( 1)
motion is therefore GRANTED and
Roberts's claims against Assurant are
DISMISSED.

First, the Court will discuss the filed rate
doctrine's origins and purposes. Second, the
Court will review the contexts—in terms of
state or federal law claims, and state or
federal rate setting agencies—in which both
federal and Georgia courts have applied the

C. The Filed Rate Doctrine

All remaining Defendants—Wells Fargo,
WFI, and ASIC—believe Roberts's claims
must be dismissed because application of the
filed rate doctrine precludes her from
suffering an injury sufficient for standing by
paying the force-placed insurance premiums.
See ECF Nos. 35; 39. Wells Fargo and WFI

The Eleventh Circuit, in Taffet v. Southern Co., did
state that paying filed rates precludes finding a
legally cognizable injury. 967 F.2d 1483, 1494 (11th
Cir. 1992). That court, however, then went on to
state that the appellants therefore "have failed to state
a claim upon which relief can be granted." Id Such
ambiguity, although perhaps supportive of
Defendants' standing argument, does not persuade
this Court to consider this issue in the context of a
12(b)(1) motion.

9

LI

consumers would pay different rates despite
being members of the same class of
ratepayers (i.e., the prevailing plaintiff
would pay lower rates than other
consumers). See Id. And third, the Court
noted that "the damages alleged are purely
speculative." Id. at 164.

doctrine. And third, the Court will explain
why, given the present context, certifying to
the Supreme Court of Georgia the question
of the filed rate doctrine's application in this
case is the appropriate next step.
A. Origins and Purposes

The Supreme Court first set forth the
filed rate doctrine in Keogh v. Chicago &
Northwestern Railway Co., 260 U.S. 156
(1922). The plaintiff in Keogh alleged that a
railroad company conspired to fix freight
rates, in violation of antitrust laws. See
Wegoland, Ltd v. NYNEX Corp., 806 F.
Supp. 1112, 1113 (S.D.N.Y. 1992), affd27
F.3d 17 (2d Cir. 1994). "The plaintiff
[further] alleged that because he was forced
to pay higher rates than he would have
absent the conspiracy, he suffered damages
to the extent of that difference in rates." Id.
The Supreme Court held that where a
plaintiff challenges a rate filed with and
deemed reasonable by the Interstate
Commerce Commission ("ICC"), the district
court should "dismiss for failure to state a
claim upon which relief can be granted. Id.
at 1113-14; see Keogh, 260 U.S. at 161-62.

The Supreme Court, in the decades after
Keogh, identified additional reasons for the
doctrine. In Montana-Dakota Utilities Co. v.
Northwestern Public Service Co., 341 U.S.
246 (1951), the plaintiff claimed the
defendant's fraud resulted in it paying
unreasonably high utility rates. The Court
once again refused to grant relief, this time
because adjudicating what constituted a
reasonable rate was "the function of the
[ICC]." Id. at 251. As the Court saw it, the
statutorily mandated reasonableness of a rate
an agency is given power to set is not a
"justiciable legal right," but rather a
"criterion for administrative application in
determining a lawful rate." Id
Thirty years after Montana-Dakota, in
Arkansas Louisiana Gas Co. v. Hall, 453
U.S. 571 (1981), the Court identified a
slightly different rationale. This time, the
Court's justifications for the filed rate
doctrine were "preservation of the agency's
primary jurisdiction over reasonableness of
rates and the need to insure that regulated
companies charge only those rates of which
the agency has been made cognizant. Id at
577-78.

The Court pointed to several policy
rationales, also relevant in this case, that
justified the holding in Keogh. First, the
Court stated that paying the rate filed with
the ICC could not violate the plaintiff's legal
rights "in respect to a rate" because the rate
itself determined the extent of his rights and
could not be "varied or enlarged by either
contract or tort of the [railroad]." Keogh,
260 U.S. at 163. Second, the Court
described what has come to be known as the
nondiscrimination rationale. If courts could
change rates retroactively, different

So, the filed rate doctrine can be seen as
furthering two main goals: (I) respecting
statutory grants of rate-setting authority to
agencies (the "nonjusticiability rationale"),
see Arkansas Louisiana Gas, 453 U.S. at
10

n

B. Decisional Contexts—Causes of
Action and Agencies

577; (2) preventing discrimination between
similarly situated rate-payers (the
"nondiscrimination rationale"). See Keogh,
260 U.S. at 163.

For much of its life, the filed rate
doctrine lived and evolved in the context of
federal claims involving rates set or
approved by federal regulatory bodies. See,
e.g., Keogh, 260 U.S. at 156 (dismissing
antitrust claims that challenged a rate set by
the ICC); Montana-Dakota, 341 U.S. at 25051 (bringing cause of action under Federal
Power Act to challenge utility rates set by
the Federal Power Commission); Wegoland,
806 F. Supp. at 1125 (dismissing federal
RICO claims that sought reset of interstate
utility rates).

The Eleventh Circuit also has applied the
filed rate doctrine for these same reasons.
Taffet v. Southern Co. recognized, in keeping
with Keogh and Montana-Dakota, "that
where a legislature has established a scheme
for utility rate-making, the rights of the ratepayer in regard to the rate he pays are
defined by that scheme." 967 F.2d 1483,
1490 (11th Cir. 1992). The court in Taffel
refused to allow the plaintiff to recover on
her RICO claims because to do so "would be
unnecessarily disruptive to the state's
scheme of utility regulation." Id. at 1494.8

Over time, however, the doctrine
expanded to include dismissal of complaints
bringing federal claims challenging rates set
by state agencies, see, e.g., Taffet, 967 F.2d
at 1494 (dismissing RICO claims
challenging rates set by Alabama and
Georgia utility commissions); and
complaints where federally approved rates
formed the basis for the assertion of state
law causes of action. See Hill, 364 F.3d at
1317 (dismissing two state law claims
challenging rates filed with the Federal
Communications Commission); Wegoland,
806 F. Supp. at 1125 (dismissing state law
claims challenging interstate, and intrastate,
utility rates); Commc 'ns Network Servs.. Inc.
v. MCI Worldcom Commc 'ns, Inc., 258 Ga.
App. 208 (2002) (dismissing breach of
contract claims premised on rates approved
by the FCC).

Bellsouth
v.
in
Hill
And
the court saw
Telecommunications, Inc.,
both the nondiscrimination and the
nonjusticiability rationales as counseling
dismissal of the plaintiff's claims. 364 F.3d
1308, 13 16-17 (11th Cir. 2004). In fact, the
court highlighted that "even if a claim does
not directly attack the filed rate," if an award
of damages "would, in effect, result in a
judicial determination of the reasonableness
of that rate," the filed rate doctrine prohibits
adjudicating the claim. Id. at 1317.

S

Georgia too has recognized the filed rate doctrine in
the utility rate setting context. See Carr v. S. Co.,
263 Ga. 771, 771 (1994) (applying Taffei's
nonjusticiability rationale to dismiss a complaint
seeking to "recover sums paid for utility services
under rates set by" the state agency regulating
utilities); see also Ga. Power Co. v. Allied Chem.
Corp., 233 Ga. 558, 560-6 I (1975) (dismissing utility
customer's claims to lower rates for lack of standing
because customer's "remedy against the general
application of allegedly unreasonably high rates lies
at the ballot box.").

A fourth combination of causes of action
and regulatory bodies exists: state law claims
challenging rates filed with a state agency.
Such a context presents issues grounded
11

federal courts sitting in diversity must apply
the substantive law of the forum state).
Should the filed rate doctrine not find
expression in the laws of the forum state, its
application by a federal court would presume
powers reserved to the states long ago in
Erie Railroad Company v. Tompkins, 304
U.S. 64 (1938). With that in mind, the Court
now turns to why the filed rate doctrine's
applicability in this case is a matter best
resolved by the Supreme Court of Georgia.

solely in state law. This case presents that
context.
Roberts only asserts state law claims and
those claims challenge rates filed with a state
official, the Commissioner. So, the only
questions raised by this matter are ones of
state law. But the filed rate doctrine
typically applies in contexts presenting either
a federal cause of action, a federally
approved rate, or both. See Hill, 364 F.3d at
1317 (state law cause of action, federally
approved rate); Taffet, 967 F.2d at 1494
(federal cause of action, state approved rate);
Keogh, 260 U.S. at 156 (federally approved
rate and federal cause of action).

C. Application of the Filed Rate
Doctrine and the Certified
Question
Georgia courts have long applied the
filed rate doctrine in certain contexts. In
Communication Network Services, for
example, the court, deferring to the
"comprehensive federal regulatory scheme
set forth in the Federal Communications
Act," found that the filed rate doctrine
preempted state law counterclaims that
sought a lower telephone service rate as
relief. 258 Ga. App. at 209-10. So too in
Belk-Mathews Company v. Great Southern
Trucking Company, 218 Ga. 610 (1963).
There, the court found the reasonableness of
freight charges already passed upon by the
ICC a non-justiciable issue. Id. at 611.

Neither a state cause of action nor a state
approved rate individually presents an
obstacle to application of the filed rate
doctrine. In fact, "the filed rate doctrine
applies whether the rate in question is
approved by a federal or state agency"
because "[w]here the legislature has
conferred power upon an administrative
agency to determine the reasonableness of a
rate, the rate-payer 'can claim no rate as a
legal right that is other than the filed rate."
Taffet, 967 F.2d at 1494 (quoting MontanaDakota, 341 U.S. at 251). The state law
origins of state causes of action also do not,
by themselves, give cause to bar the
doctrine's application. See Hill, 364 F.3d at
1317.

Importantly, in Carr, the Georgia
Supreme Court applied the filed rate doctrine
to bar state law claims challenging state
approved rates. 263 Ga. at 771. The court
dismissed the plaintiffs fraudulent
misrepresentation claims as nonjusticiable
because the utility rate setting scheme
created by the Georgia legislature gave a
state agency "exclusive power to determine
what are just and reasonable [utility] rates."

When state law claims and a state
approved rate are found side by side in a
case, however, they must give pause to
federal courts considering application of the
filed rate doctrine. See generally Horowitch
v. Diamond Aircraft Indus., Inc., 645 F.3d
1254, 1257 (11th Cir. 2011) (noting that
12

circumstances." ECF No. 46 at 2. Neither
case is binding precedent or persuasive.

Id (quoting O.C.G.A. § 46-2-23(a)). The
court, therefore, could not adjudicate "a ratepayer's cause of action to recover damages
measured by the difference between the filed
rate and the rate that would have been
charged absent some alleged wrongdoing."
Id.

In Kunzelmann, the plaintiffs, like
Roberts, challenged the force-placed
insurance practices of Wells Fargo. 2012
WL 2003337, at *1. Wells Fargo asserted
the same filed rate doctrine defense it does in
this case. Id. at *2. And the plaintiff, once
again like Roberts, asserted that they did not
"challenge the actual insurance rates filed
with the various state agencies." Id. at *1.
Instead, the plaintiffs purported to
"challenge[] the uncompetitive and unfair
method that Wells Fargo used to select its
insurer." Id The court in Kunzelman
accepted that argument without much
elaboration. Id. at 3 (finding that plaintiffs
challenged the manner of selecting insurers,
the manipulation of the force-placed
insurance process, and the impermissible
kickbacks included in the premiums, not the
rates themselves).

In none of these Georgia decisions,
however, did a court apply the filed rate
doctrine to rates filed with the
Commissioner. In determining whether the
filed rate doctrine applies in this case, the
question is two-fold: (1) whether Roberts in
fact challenges insurance rates; and, if she
does, (2) whether the insurance rate setting
scheme in Georgia implicates the
nonjusticiability rationale that underlies
Georgia's application of the filed rate
doctrine. See, e.g., Carr, 263 Ga. at 771.
1. Roberts 's Claims
According to Roberts, her claims do "not
challenge the rates filed by the Assurant
Defendants [and charged by Wells Fargo and
WFI]." ECF No. 46 at 2. "Instead,
[Roberts] challenges the manner in which
her bank, Wells Fargo, selected its insurers,
and the impermissible kickbacks that were
included in the premiums that were added to
the balance of her mortgage loan." Id.

The court in Abel, in confronting a
substantively similar case to Kunzelmann
and this action, also accepted that the
plaintiffs complained about the method of
choosing an insurer, not the rate itself. See
Abel, 678 F. Supp. 2d at 1277. As additional
justification, the court stated that because
Wells Fargo, as a bank, "is not subject to the
extensive administrative oversight that
insurance companies are," the filed rate
doctrine does not apply. Id.

Roberts primarily relies on two cases
from the Southern District of FloridaKunzelmann v. Wells Fargo Ban/c, NA,, No.
9:1 1-cv-81373, 2012 WL 2003337 (S.D. Fla.
June 4, 2012) and Abels v. JPMorgan Chase
Ban/c, NA, 678 F. Supp. 2d 1273 (S.D. Fla.
2012)—to show that "[c]ourts in the
Eleventh Circuit hold that the filed rate
doctrine does not apply in these

Even accepting the dubious notion that
Roberts (and thus the plaintiffs from Abel
and Kunzelmann) challenges the method of
choosing an insurer and not the rate itself, 9
'

The Court doubts this is a fully accurate
characterization of Roberts's complaint. For one,

13

Georgia has extensive laws regulating its
insurance industry, including the regulation
of insurance rates. See O.C.G.A. §§ 33-9-1
to -44. The state requires every insurer to
"maintain with the Commissioner copies of
the rates. . . used by it." Id at § 21 (a). And
the state allows "[a]ny person aggrieved by
any rate charged," who is then "aggrieved by
the action of an insurer" in refusing to
review the rate, to "file a written complaint
and request for a hearing with the
Commissioner." Id. at § 26.

the filed rate doctrine still potentially
applies. Whatever else might be said about
Roberts's claims, the damages she seeks can
only be measured by the difference between
the premiums she paid and what the
premiums would have been absent the
allegedly illegal "commissions, kickbacks,
and free services" they contained. ECF No.
I at 2. To calculate that amount "would, in
effect, result in a judicial determination of
the reasonableness of' the premium Roberts
paid) ° See Hill, 364 F.3d at 1317. And if
the legislature has vested in the
Commissioner authority to make that
determination, allowing Roberts's requested
relief would disrespect that statutory grant of
See Arkansas
rate setting authority.
Louisiana Gas, 453 U.S. at 577.

Georgia does not, however, provide the
Commissioner "exclusive power to
determine what are just and reasonable
rates," as it does the Public Service
Commission ("PSC") in the utility rate
arena. O.C.G.A. § 46-2-23(a). In fact,
Georgia regulates its utility and insurance
industries in substantially different ways.

So, should the filed rate doctrine apply to
rates filed with the Commissioner, Roberts's
claims, whether they attack the premium rate
directly or not, would be subject to the
doctrine's limitations. Whether the doctrine
applies to Commissioner approved rates,
however, is precisely the rub.

The PSC, for example, not only has a
clear grant of authority to set utility rates—it
also has "full power and authority to make
rules and regulations to effectuate . . . all
laws conferring powers and duties upon the
commission." Id. at § 30. By comparison,
the Commissioner's rule making authority is
circumscribed to five specific areas and is
subject to approval by the state attorney
general. O.C.G.A. § 33-2-9(a), (b).

2. Georgia's Framework For Insurance
Regulation

Roberts repeatedly decries the "excessively high,"
and "exorbitant and illegal" premiums paid to Wells
Fargo. See, e.g., ECF No. I at 1, 14. Regardless of
the spin put on Roberts's allegations and claims, at
bottom this case calls for relief that itself triggers
aplication of the filed rate doctrine.
An injunction prohibiting Wells Fargo from
charging the full amount of the premium would
likewise run into the same problem, assuming the
filed rate doctrine applies to rates filed with the
Commissioner. It would require the Court to
confront the reasonableness of the rate, something the
filed rate doctrine's nonjusticiability rationale
expressly prohibits.

Perhaps the power to require insurers to
file their rates with the Commissioner is
sufficiently analogous to the PSC's authority
to determine what a reasonable utility rate is.
If so, then the nonjusticiability rationale
underlying the filed rate doctrine would
likely dictate the doctrine's application in
this case. But Georgia courts have never
said that when an insurance rate is filed with
14

dismiss for lack of subject matter
jurisdiction. Roberts's unjust enrichment
and aiding and abetting claims against
Assurant therefore are DISMISSED.

is
the Commissioner such a filing
legislative in character" and therefore
entitled to the deference accorded by the
filed rate doctrine. Carr, 263 Ga. at 771.
IV. CONCLUSION

This 4day of March 2013

"The Court finds that no clear,
controlling precedent from Georgia courts
addresses" whether the filed rate doctrine
applies to force-placed insurance rates filed
with the Commissioner. Stale Auto Prop. &
Cas. Co. v. Malty, No. 4:08-cv-98, 2009 WL
2216605, at *5 (M.D. Ga. July 20, 2009).
"Because the resolution of this issue of first
impression under Georgia law is
determinative of the outcome in this case,
the Court certifies the following question the
Supreme Court of Georgia[:]"

B. AVANT EDENFIELD, JUDGE
UNITED STATES DISTRICT C
SOUTHERN DISTRICT OF GEA] IA

WHETHER THE FILED RATE
DOCTRINE APPLIES TO BAR
CLAIMS WHOSE REQUESTED
RELIEF NECESSARILY
CHALLENGES RATES FILED
WITH THE GEORGIA
INSURANCE COMMISSIONER.
Neither the phrasing of this question, nor
this Court's analysis is intended to limit the
Supreme Court of Georgia's consideration
of the case. To assists in consideration of
this question, the Clerk is ORDERED to
transmit the following documents, along
with any attachments, to the Supreme Court
of Georgia: ECF Nos. 1; 34-37; 39; 46-50;
55-57; 59. This case is STAYED pending
the Supreme Court of Georgia's decision on
the certified question.
In addition to certifying a question, the
Court also GRANTS Assurant's motion to
' Id; see also GA. Sup. Cl". R. 46.

15