Missouri Insurance | Sprenger + Lang | Class Action Attorneys

Procedural History & Status of the Litigation

In February, 1996, sixteen black homeowners filed suit against numerous homeowners insurance companies including, but not limited to: Allstate, American Family, American States, Chubb, Farmers, Farm Bureau, Safeco, Shelter and State Farm. The plaintiffs asserted that these companies had discriminated against them in the provision of homeowners insurance based on the racial composition of their property location in violation of the Fair Housing Act, 42 U.S.C. § 3601, et. seq., the Civil Rights Acts of 1866, 1870, and 1871, 42 U.S.C. §§ 1981, 1982, and 1985(3), and Missouri common law prohibiting unlawful conspiracies. U.S. District Judge Fernando Gaitan, Jr. granted in part and denied in part the insurance companies’ motion to dismiss. The parties then engaged in a three-month period of “class” discovery. Following this abbreviated discovery period, plaintiffs moved to maintain the case as a class action. In June 1997, Judge Gaitan denied the motion and sua sponte dismissed the case without prejudice to plaintiffs’ rights to refile. Plaintiffs’ appeal was denied.

While the above-mentioned appeal was pending, plaintiffs filed a series of new class action cases in both federal and state court. The insurance companies “removed” the state court cases to federal court were they were assigned to Judge Gaitan, who entered an order enjoining plaintiffs from prosecuting their state law claims in state court against multiple unrelated insurance companies. In March 2002, plaintiffs’ second appeal was denied following a substantial delay.

During the pendency of the two above-mentioned appeals, the federal court class action cases against Allstate, American Family, American States, Chubb, Farmers, Farm Bureau, Safeco, Shelter and State Farm were “stayed” (i.e., frozen). On September 30, 2002, Judge Gaitan granted plaintiffs’ motion to lift the stay and directed plaintiffs to file a revised second amended complaint in each case. On October 24, 2002, plaintiffs filed their revised second amended complaints. The defendants then filed motions to dismiss the revised second amended complaint each case. On March 26, 2004, Judge Gaitan dismissed all plaintiffs’ claims against American Family, American States, Chubb, Farmers, Farm Bureau, Safeco and Shelter. On the same date, Judge Gaitan sua sponte dismissed the class claims and permitted a single plaintiff to proceed individually against Allstate and two plaintiffs to proceed individually against State Farm.

The parties resolved the Farm Bureau (2004), State Farm (2005), and Allstate (2006) cases by settlement. The plaintiffs appealed Judge Gaitan’s decision in American States, Chubb and Safeco and sought review of his order dismissing the class claims in Allstate in April 2004. The appeals and petition for review were denied. In April 2004, the plaintiffs asked Judge Gaitan to reconsider his orders dismissing their claims in American Family, Farmers, Shelter and Allstate. On March 31, 2005, Judge Gaitan denied plaintiffs’ motions for reconsideration. Plaintiffs then appealed the American Family, Farmers and Shelter decisions. On March 8, 2006, the Court of Appeals upheld the District court’s dismissal of all claims other than the price discrimination claims. However, it reversed the dismissal of the price discrimination claims, ruling that the District Court erred in applying the "filed rate doctrine" to these claims, and remanded the cases.

On March 16, 2007, the District Court again dismissed the price discrimination claims in American Family, Farmers and Shelter, holding that they were pre-empted by the McCarran-Ferguson Act. Plaintiffs again appealed to the 8th Circuit. The United States Department of Justice, The Lawyers’ Committee for Civil Rights Under Law, and the National Community Reinvestment Coalition filed “Friend of the Court” briefs supporting plaintiff arguments that the Federal Civil Rights claims are permitted against insurance companies. The appeals were argued in the 8th Circuit on January 17, 2008. A decision is expected in several months.

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Procedural History & Status of the Litigation In February, 1996, sixteen black homeowners filed suit against numerous homeowners insurance companies including, but not limited to: Allstate, American Family, American States, Chubb, Farmers, Farm Bureau, Safeco, Shelter and State Farm. The plaintiffs asserted that these companies had discriminated against them in the provision of homeowners insurance based on the racial composition of their property location in violation of the Fair Housing Act, 42 U.S.C. § 3601, et. seq., the Civil Rights Acts of 1866, 1870, and 1871, 42 U.S.C. §§ 1981, 1982, and 1985(3), and Missouri common law prohibiting unlawful conspiracies. U.S. District Judge Fernando Gaitan, Jr. granted in part and denied in part the insurance companies’ motion to dismiss. The parties then engaged in a three-month period of “class” discovery. Following this abbreviated discovery period, plaintiffs moved to maintain the case as a class action. In June 1997, Judge Gaitan denied the motion and sua sponte dismissed the case without prejudice to plaintiffs’ rights to refile. Plaintiffs’ appeal was denied. While the above-mentioned appeal was pending, plaintiffs filed a series of new class action cases in both federal and state court. The insurance companies “removed” the state court cases to federal court were they were assigned to Judge Gaitan, who entered an order enjoining plaintiffs from prosecuting their state law claims in state court against multiple unrelated insurance companies. In March 2002, plaintiffs’ second appeal was denied following a substantial delay. During the pendency of the two above-mentioned appeals, the federal court class action cases against Allstate, American Family, American States, Chubb, Farmers, Farm Bureau, Safeco, Shelter and State Farm were “stayed” (i.e., frozen). On September 30, 2002, Judge Gaitan granted plaintiffs’ motion to lift the stay and directed plaintiffs to file a revised second amended complaint in each case. On October 24, 2002, plaintiffs filed their revised second amended complaints. The defendants then filed motions to dismiss the revised second amended complaint each case. On March 26, 2004, Judge Gaitan dismissed all plaintiffs’ claims against American Family, American States, Chubb, Farmers, Farm Bureau, Safeco and Shelter. On the same date, Judge Gaitan sua sponte dismissed the class claims and permitted a single plaintiff to proceed individually against Allstate and two plaintiffs to proceed individually against State Farm. The parties resolved the Farm Bureau (2004), State Farm (2005), and Allstate (2006) cases by settlement. The plaintiffs appealed Judge Gaitan’s decision in American States, Chubb and Safeco and sought review of his order dismissing the class claims in Allstate in April 2004. The appeals and petition for review were denied. In April 2004, the plaintiffs asked Judge Gaitan to reconsider his orders dismissing their claims in American Family, Farmers, Shelter and Allstate. On March 31, 2005, Judge Gaitan denied plaintiffs’ motions for reconsideration. Plaintiffs then appealed the American Family, Farmers and Shelter decisions. On March 8, 2006, the Court of Appeals upheld the District court’s dismissal of all claims other than the price discrimination claims. However, it reversed the dismissal of the price discrimination claims, ruling that the District Court erred in applying the "filed rate doctrine" to these claims, and remanded the cases. On March 16, 2007, the District Court again dismissed the price discrimination claims in American Family, Farmers and Shelter, holding that they were pre-empted by the McCarran-Ferguson Act. Plaintiffs again appealed to the 8th Circuit. The United States Department of Justice, The Lawyers’ Committee for Civil Rights Under Law, and the National Community Reinvestment Coalition filed “Friend of the Court” briefs supporting plaintiff arguments that the Federal Civil Rights claims are permitted against insurance companies. The appeals were argued in the 8th Circuit on January 17, 2008. A decision is expected in several months.
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