Tuesday, December 14, 2004

11th Circuit Dismisses Antitrust Suit Against State Farm

On November 18, 2004, the United States Court of Appeal for the 11 th Circuit in Atlanta dismissed an antitrust law suit brought against State Farm Insurance challenging their premium and licensing practices. The 11th Circuit found that the insurance company was immunized from the suit by the 1945 McCarren-Ferguson Act, which exempts claims involving the "business of insurance" from the antitrust laws.  The 11th Circuit distinguished two Supreme Court cases (Group Life[1979] and Union Labor [1982]), on which the plaintiff relied, in which the Court had ruled the exemption did not apply.  These two cases dealt with business relationships between insurance companies and pharmacies and review boards within insurance companies respectively. Neither of these cases, the 11th Circuit reasonoed, implicated the "business of insurance," which is defined to mean the business relationship between the insurer and the insured.  The case against State Farm, however, challenged premiums and payouts, the heart of the business of insurance. For more information, see the article from law.com.


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