McCray v. Fidelity National Title Insurance

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

________

No. 10-3576

_________

DAWN A. MCCRAY;

WILLIAM H. WILLIAMSON;

DARALICE GRAYO,

on behalf of themselves and all others similarly situated,

Appellants

v.

FIDELITY NATIONAL TITLE INSURANCE COMPANY;

CHICAGO TITLE INSURANCE COMPANY;

TICOR TITLE INSURANCE COMPANY;

TICOR TITLE INSURANCE COMPANY OF FLORIDA;

SECURITY UNION TITLE INSURANCE COMPANY;

FIDELITY NATIONAL FINANCIAL INC.;

FIRST AMERICAN TITLE INSURANCE COMPANY;

UNITED GENERAL TITLE INSURANCE COMPANY;

TA TITLE INSURANCE COMPANY;

CENSTAR TITLE INSURANCE COMPANY;

FIRST AMERICAN CORPORATION;

COMMONWEALTH LAND TITLE INSURANCE

COMPANY; LAWYERS TITLE INSURANCE COMPANY;

TRANSNATION TITLE INSURANCE CORPORATION;

LANDAMERICA FINANCIAL GROUP INC.;

STEWART TITLE GUARANTY COMPANY;

STEWART INFORMATION SERVICES CORPORATION;

OLD REPUBLIC NATIONAL TITLE

INSURANCE COMPANY; OLD REPUBLIC

INTERNATIONAL CORPORATION;

DELAWARE TITLE INSURANCE RATING BUREAU

________

On Appeal from the United States District Court

for the District of Delaware

(D.C. No. 1-08-cv-00775)

District Judge: Honorable Stewart Dalzell

_______

Argued April 19, 2012

Before: McKEE, Chief Judge, SLOVITER, Circuit Judge

and O’CONNOR, Associate Justice (Ret.)∗

(Filed: June 14, 2012)

_______

Steven J. Greenfogel

Meredith, Cohen, Greenfogel & Skirnick

Philadelphia, PA l9l02

Richard M. Hagstrom (Argued)

Zelle, Hofmann, Voelbel & Mason

Minneapolis, MN 55415

John S. Spadaro

Hockessin, DE 19707

David R. Woodward

Heins, Mills & Olson

Minneapolis, MN 55403

Attorneys for Appellants

Kevin J. Arquit

Barry R. Ostrager (Argued)

Patrick T. Shilling

Simpson, Thacher & Bartlett

New York, NY 10017

David A. Felice

Ballard Spahr

Wilmington, DE 19801

∗

Hon. Sandra Day O’Connor, Associate Justice (Ret.)

of the Supreme Court of the United States, sitting by

designation.

2

Darryl J. May

Ballard Spahr

Philadelphia, PA l9l03

Brian T. Feeney

Greenberg Traurig

Philadelphia, PA l9l03

Kenneth A. Lapatine

Stephen L. Saxl

James I. Serota

Greenberg Traurig

New York, NY 10166

David M. Foster

Fulbright & Jaworski

Washington, DC 20004

Basil C. Kollias

Cooch & Taylor

Wilmington, DE 19899

John D. Balaguer

White & Williams

Wilimington, DE 19801

David G. Greene

Kevin J. Walsh

Locke Lord

New York, NY 10281

Peter J. Duhig

Buchanan Ingersoll & Rooney

Wilmington, DE 19801

Jennings F. Durand

Carolyn H. Feeney

Dechert

Philadelphia, PA l9104

Jayson R. Wolfgang

Buchanan Ingersoll & Rooney

3

Harrisburg, PA l7101

Attorneys for Appellees

________

OPINION OF THE COURT

________

SLOVITER, Circuit Judge.

Appellants’ challenge to the Delaware title insurance

program trenches on the challenge raised by other parties to

the New Jersey title insurance program, a challenge that we

rejected today in our opinion in In Re: New Jersey Title

Insurance Litigation. The same result follows here to the

extent the analysis set forth here unavoidably duplicates that

in In Re: New Jersey Title Insurance Litigation.

I.

Background

Dawn McCray, William Williamson and Daralice

Grayo (“Appellants”), on behalf of themselves and similarly

situated consumers, appeal the District Court’s orders

dismissing their federal antitrust claims against numerous

Delaware title insurance companies (“Appellees”).

Appellants assert that Appellees fixed the prices of title

insurance in Delaware in violation of the Sherman Act and

seek treble damages and injunctive relief. The District Court

held that Appellants’ claims are barred by the filed rate

doctrine and the McCarran-Ferguson Act. We will affirm the

District Court’s judgment with respect to the filed rate

doctrine and hold that Appellants lack standing to seek

injunctive relief.

Title insurers in Delaware are required to file their

insurance rates with the state’s Department of Insurance

(“DOI”). See Del. Code Ann. tit. 18, § 2504(a) (2012).

Insurers may comply with the state’s rate filing requirements

through a licensed rating organization. Id. §§ 2510-12.

4

Appellee title insurers are members of and file their rates

through the Appellee Delaware Title Insurance Rating Bureau

(“DTIRB” or “the bureau”), which is licensed by the DOI.

“DTIRB claims to obtain, compile, and analyze statistical

data from its members relating to their title insurance

premiums, losses and expenses.” J.A. at 216.

Delaware insurers must propose their own “effective

date” for new insurance rates. Tit. 18, § 2504(a). However,

they must file those rates with the DOI Commissioner “not

less than 30 days prior to the proposed effective date.” Id. §

2506(c). The Delaware Code requires the Commissioner to

“review filings as soon as reasonably possible.” Id. §

2506(a). The Commissioner must consider various factors to

determine whether the rates comport with the law and ensure

that the rates are not “excessive, inadequate or unfairly

discriminatory.” Id. § 2503(a). Filings “shall be deemed to

meet the statutory requirements unless disapproved by the

Commissioner within 30 days.” Id. § 2506(c). If the

Commissioner determines that “additional time is needed to

review a rate filing,” s/he “shall . . . notify the filer that the

review . . . shall be extended” and can extend the review up to

ninety days, “unless the insurer . . . agree[s] to a longer term.”

Id.

In addition to rates, the DOI typically requires

insurers to “develop and file . . . advisory prospective loss

costs and supporting actuarial and statistical data.” 1 J.A. at

206. Prospective loss costs are “the portion of a rate that does

not include provisions for expenses (other than loss

adjustment expenses) or profit, and are based on historical

aggregate losses and loss adjustment expenses.” Id. At

DTIRB’s request, the DOI temporarily exempted DTIRB’s

1

This directive is set forth in Department of Insurance

Forms and Rates Bulletin No. 5. Loss Cost Filing

Requirements, Forms and Rates Bulletin No. 5 (Dep’t of Ins.

amended Nov. 27, 1995), http://delawareinsurance.gov/

departments/documents/ bulletins/formbull5.pdf [hereinafter

Bulletin No.5]. The DOI Commissioner may issue orders,

notices and bulletins regulating Delaware insurance practices.

See Del. Code Ann. tit. 18, § 312(a)-(c).

5

members from its “prospective loss costs” and supporting

data requirement. 2 In particular, the DOI recognized that

“there is no credible historic data, particularly with regard to

expenses, that the rating bureau could use in preparing the

initial rates.” J.A. at 137. It therefore granted the bureau an

“exception to the requirements of using the rating format (loss

cost) prescribed in Bulletin No. 5.” Id. Nevertheless, the

Commissioner required DTIRB to “have an approved

statistical plan in place,” that would “enable the [DOI] to

monitor rate adequacy,” id., which the bureau did until at

least 2007.

On October 15, 2008, Appellants filed a class action

complaint, alleging that Appellees engaged in collective

price-fixing in violation of Section 1 of the Sherman Act. 3

Appellants claim that Appellees used DTIRB as a vehicle for

setting uniform rates, which “consist[] of costs unrelated to

the issuance of title insurance, including kickbacks and other

financial inducements title insurers provide to title agents”

and other parties. J.A. at 56. Appellants allege that as a

result, the title insurance market is non-competitive and

dominated by a relatively small number of insurers. 4

Furthermore, Appellants assert that despite growing profits

and efficiencies, Appellees’ rates have not changed since

2004.

2

The exemption is set forth in Department of

Insurance Forms and Rates Bulletin No. 27. Title Insurance

Filing Requirements, Forms and Rates Bulletin No. 27 (Dep’t

of Ins. Sept. 2, 2010), http://delawareinsurance.gov/

departments/documents/bulletins/ formbull27.pdf [hereinafter

Bulletin No. 27].

3

Appellants also named Appellees’ parent companies

as defendants and asserted an unjust enrichment claim. The

District Court dismissed that claim as well as the parent

companies under Federal Rule of Civil Procedure 12(b)(6).

See McCray v. Fidelity Nat’l Title Ins. Co., 636 F. Supp. 2d

322 (D. Del. 2009). Appellants do not pursue those claims on

appeal.

4

Appellees allegedly account for about 98 percent of

the title insurance premiums paid in Delaware.

6

The District Court dismissed Appellants’ complaint

under Federal Rule of Civil Procedure 12(b)(6) but granted

Appellants leave to amend their request for injunctive relief.

Specifically, the court concluded that Appellants’ Sherman

Act claim is barred by the filed rate doctrine, which precludes

antitrust suits challenging rates currently filed with federal or

state agencies. McCray, 636 F. Supp. 2d at 327 (citations

omitted). Because the doctrine does not bar certain injunctive

relief claims, the Court granted Appellants leave to amend

their complaint, as they “d[id] not describe in much detail the

type of injunctive relief they [sought].” Id. at 334.

Appellants filed a nearly identical amended complaint,

which the District Court also dismissed under Rule 12(b)(6).

The Court held that Appellants’ injunctive relief claim is

barred by Section 1012(b) of the McCarran Ferguson Act,

which exempts conduct from antitrust liability if it constitutes

the “business of insurance” and is “regulated by state law.”

See McCray v. Fidelity Nat’l Title Ins. Co., No. 08-775, 2010

WL 3023164 (D. Del. July 29, 2010). The Court determined

that Appellees’ conduct met both those requirements.

Appellants appeal.

II.

Discussion

The District Court had jurisdiction under 28 U.S.C. §§

1331 and 1367. This court has appellate jurisdiction under 28

U.S.C. § 1291 and reviews de novo the District Court’s

dismissal of Appellants’ initial and amended complaints.

Utilimax.com, Inc. v. PPL Energy Plus, LLC, 378 F.3d 303,

306 (3d Cir. 2004).

A. The Filed Rate Doctrine

Appellants argue that the District Court erred by

applying the filed rate doctrine to dismiss their damages

claims. 5 The District Court invoked the doctrine to dismiss

5

Appellants also argue that District Court erred by

applying the filed rate doctrine to dismiss their injunctive

relief claim. The District Court correctly observed that the

7

Appellants’ demand for: (1) “treble damages as provided by

Section 4 of the Clayton Act, 15 U.S.C. § 15,” and (2) the

return of “overpayments made by [Plaintiffs and the Class]

for defendants’ title insurance policies.” J.A. at 65.

Courts often trace the filed rate doctrine to Keogh v.

Chicago & Northwestern Railway Co., 260 U.S. 156 (1922).

In that case, a shipper alleged that certain railroad carriers

conspired to fix freight transportation rates in violation of the

Sherman Act. Id. at 160-61. The shipper sought damages

based on the unusually high rates. Id. The Supreme Court,

however, denied the shipper’s claim because the carriers had

filed the challenged rates with the Interstate Commerce

Commission (“ICC”), which authorized them. Id. at 162.

The Court reasoned that it would be improper to hold carriers

civilly liable for enforcing rates that the ICC had already

approved as legal. Id. at 162-63. In addition, the Court

expressed a concern about rate discrimination, stating that the

shipper’s potential damages “might, like a rebate, operate to

give him a preference over his trade competitors.” Id. at 163.

Finally, the Court considered the impracticability of awarding

damages based on a lower hypothetical rate, which would

require “reconstituting the whole rate structure”—a task that

the Court viewed the ICC as more competent to handle. Id. at

164 (“[I]t is the Commission which must determine whether a

rate is discriminatory; at least, in the first instance.”).

The Court re-examined the filed rate doctrine in

Square D Co. v. Niagara Frontier Tariff Bureau Inc., 476

U.S. 409 (1986). In that case, various corporations alleged

that the respondents conspired with their rate making bureau

filed rate doctrine precludes injunctive relief to the extent that

such relief “seeks to prevent the defendants from relying on

the filed rate.” McCray, 636 F. Supp. 2d at 334; see

Burlington N., Inc. v. United States, 459 U.S. 131, 138-42

(1982) (vacating an injunction that ordered a reduction in

rates). Because Appellants did not clearly state the type of

injunctive relief they sought in their initial complaint and

requested only that the “unlawful conduct be enjoined,” J.A.

at 65, the District Court properly dismissed the claim and

granted Appellants leave to clarify their demand for relief.

8

to fix freight transportation rates in violation of the Sherman

Act. Id. at 410-11. The petitioners sought treble damages

based on the fixed rates. Id. at 410. They argued that “unlike

Keogh, respondents’ rates . . . were not challenged in a formal

ICC hearing,” thereby claiming that the agency’s approval

was insufficient to trigger the filed rate doctrine. Id. at 417;

see also id. at n.19. Rejecting that argument, the Court

reasoned that respondents’ rates were “duly submitted, lawful

rates under the Interstate Commerce Act in the same sense

that the rates filed in Keogh were lawful.” Id. at 417.

Therefore, the Court concluded that “petitioners may not

bring a treble-damages antitrust action.” Id.

This court has recognized that the filed rate doctrine

“bars antitrust suits based on rates that have been filed and

approved by federal agencies.” Utilimax.com, 378 F.3d at

306 (3d Cir. 2004). Other courts of appeals have also

extended the doctrine to rates filed with state agencies. See,

e.g., Wegoland Ltd. v. NYNEX Corp., 27 F.3d 17, 20 (2d Cir.

1994) (“[C]ourts have uniformly held, and we agree, that the

rationales underlying the filed rate doctrine apply equally

strongly to regulation by state agencies.”); H.J. Inc. v. Nw.

Bell Tel. Co., 954 F.2d 485, 494 (8th Cir. 1992) (“[W]e see

no reason to distinguish between rates promulgated by state

and federal agencies.”). Moreover, although the doctrine “has

its origins in . . . cases interpreting the Interstate Commerce

Act,” it “has been extended across the spectrum of regulated

utilities.” Ark. La. Gas Co. v. Hall, 453 U.S. 571, 577 (1981).

Appellants argue that the filed rate doctrine does not

apply to Delaware title insurance rates because the doctrine is

limited to comprehensive regulatory regimes, such as the

Interstate Commerce Act (“ICA”). Additionally, Appellants

emphasize that the interstate commerce industry, among

others, no longer requires rate filing and argue that such

deregulation “weighs heavily against the district court’s first

time extension of the doctrine to Delaware’s title insurance

regime.” Appellants’ Br. at 19. However, the fact that one

industry has been partially deregulated does not mean that the

filed rate doctrine is no longer valid in other areas. Because

Appellants offer no authority to the contrary, their argument

necessarily fails.

9

Appellants further contend that the filed rate doctrine

should not apply because “there is no clear repugnancy

between the antitrust laws and Delaware’s title insurance

regulations.” Appellants’ Br. at 21. That argument, however,

is also meritless and requires little attention from this court.

As the District Court observed, Appellants’ “repugnancy”

argument relies on characterizing the filed rate doctrine as a

complete bar against antitrust liability. See McCray, 636 F.

Supp. 2d at 328; see also Carnation Co. v. Pac. Westbound

Conference, 383 U.S. 213, 217-18 (1966) (recognizing that

collective ratemaking activities should not be immunized

from antitrust scrutiny unless there is “plain repugnancy

between the antitrust and regulatory provisions” (internal

quotation marks and citation omitted)). But the doctrine itself

does not eliminate “scrutiny under the antitrust laws by the

Government and . . . possible criminal sanctions or equitable

relief.” Square D, 476 U.S. at 422. Furthermore, the

Supreme Court has stated that it “disagree[s]” with the “view

that the issue in Keogh . . . is properly categorized as an

‘immunity’ question,” thus making Appellants’ repugnancy

argument inapplicable. Id.; see also Essential Commc’ns

Sys., Inc. v. Am. Tel. & Tel. Co., 610 F.2d 1114, 1121 (3d Cir.

1979) (“[T]he filed tariff doctrine does not confer immunity

from antitrust liability generally.”).

Alternatively, Appellants argue that the filed rate

doctrine does not apply because Delaware’s title insurance

laws do not require the DOI to “meaningfully regulate title

insurance rate filings.” Appellants’ Br. at 22. Appellees, on

the other hand, argue that the filed rate doctrine is not limited

to situations where the agency has meaningfully regulated or

reviewed the challenged rates. Moreover, even if there is

such a requirement, Appellees argue that Delaware’s title

insurance laws are comprehensive enough to warrant the

doctrine’s application.

To support their “meaningful regulation” argument,

Appellants rely on two Ninth Circuit cases—Wileman Bros.

& Elliott, Inc. v. Giannini, 909 F.2d 332 (9th Cir. 1990), and

Brown v. Ticor Title Insurance Co., 982 F.2d 386 (9th Cir.

1992). In Wileman, the plaintiffs claimed that the defendant

competing fruit producers had issued unfair marketing

standards without authorization from the Secretary of

10

Agriculture. 909 F.2d at 333. Seeking to invoke the filed rate

doctrine, the defendants argued that the Secretary “tacitly

approved” the challenged standards because he never

disapproved them and had the right to do so at any time. Id.

at 337. However, the court reasoned that in Square D,

“governmental approval was required before there could be

any effect from the collective activity and it was such

approval that legitimized the allotments and the rates.” Id.

The court also reasoned that the Secretary’s non-disapproval

did “not guarantee any level of review” and was “equally

consistent with lack of knowledge or neglect.” Id. at 338. It

therefore refused to apply the filed rate doctrine and held that

“[t]he mere fact of failure to disapprove . . . does not

legitimize otherwise anticompetitive conduct.” Id. at 337-38.

The Ninth Circuit went a step further in Brown. There,

the defendant title insurance companies actually filed their

rates with regulatory agencies, but the law required “only

‘non-disapproval’ of the rates” before they became effective

“and d[id] not require compliance with strict guidelines.” 982

F.2d at 394. Relying on its holding in Wileman, the court

refused to apply the filed rate doctrine. The court reasoned

that “[t]he absence of meaningful state review allows the

[defendants] to file any rates they want.” Id. In addition, the

court explained that if the challenged rates “were the product

of unlawful activity prior to their being filed and were not

subjected to meaningful review by the state, then the fact that

they were filed does not render them immune from

challenge.” Id. It therefore concluded that “the act of filing

does not legitimize a rate arrived at by improper action.” Id.

Appellants argue that Brown and Wileman, along with

other district court cases, represent the correct approach to the

filed rate doctrine—applying the doctrine only where

agencies had to engage in meaningful review of the

challenged rates. Although Appellants do not indicate what

level of review is necessary, they suggest that the doctrine, at

a minimum, does not apply if “[r]ates are collectively set by

the insurers themselves and automatically become effective

unless disapproved by the agency.” Appellants’ Br. at 22.

Despite Brown and Wileman, the Supreme Court has

never indicated that the filed rate doctrine requires a certain

11

type of agency approval or level of regulatory review.

Instead, the doctrine applies as long as the agency has in fact

authorized the challenged rate. 6 As the District Court

observed, the relevant statute in Keogh only required common

carriers to provide ten days public notice before charging new

rates, and did not require the ICC to expressly approve such

rates before they went into effect. See 24 Stat. 381-84 (49th

Cong. Feb. 4, 1887). Similarly, the statute in Square D did

not require the ICC to affirmatively approve freight

transportation rates. See Square D. v. Niagara Frontier Tariff

Bureau, Inc., 760 F.2d 1347, 1349 (2d Cir. 1985)

(characterizing the central issue as “whether Keogh . . . has

been overruled so far as its language extends to rates filed

with but not investigated and approved by the [ICC]”).

Square D also endorsed the appellate court’s statement that

the doctrine applies “‘whenever tariffs have been filed.’”

Square D, 476 U.S. at 417 n.19 (citation omitted); see also

Montana-Dakota Utils. Co. v. Nw. Pub. Serv. Co., 341 U.S.

246, 251 (1951) (holding that the petitioner “can claim no rate

as a legal right . . . other than the filed rate, whether fixed or

6

Appellants argue that interpreting the filed rate

doctrine as lacking a “meaningful review” requirement would

eradicate the state action doctrine. Under the state action

doctrine, private entities participating in state-administered

price regulation can assert antitrust immunity if, inter alia,

“the State provides active supervision of anticompetitive

conduct undertaken by private actors.” FTC v. Ticor Title

Ins. Co., 504 U.S. 621, 631 (1992). Therefore, “[t]he mere

potential for state supervision” is not sufficient to invoke the

state action doctrine. Id. at 638. However, there is no

apparent requirement to reconcile the filed rate and state

action doctrines, as courts have generally applied them

independently. See, e.g., Trigen-Okla. City Energy Corp. v.

Okla. Gas & Elec. Co., 244 F.3d 1220, 1224-25 (10th Cir.

2001) (dismissing claims under state action doctrine and as a

result declining to reach filed rate doctrine); City of Kirkwood

v. Union Elec. Co., 671 F.2d 1173, 1182 (8th Cir. 1982)

(independently analyzing the filed rate doctrine and the state

action doctrine). Moreover, the doctrines do not completely

overlap because the filed rate doctrine, unlike the state action

doctrine, does not provide complete immunity from antitrust

liability. See Essential Commc’ns, 610 F.2d at 1121.

12

merely accepted by the [Agency] Commission”). Finally, the

First Circuit has held that the filed rate doctrine only requires

rates to be filed, not affirmatively approved or scrutinized.

See Town of Norwood v. New Eng. Power Co., 202 F.3d 408,

419 (1st Cir. 2000) (“It is the filing of the tariffs, and not any

affirmative approval or scrutiny by the agency, that triggers

the filed rate doctrine.”).

Indeed, neither this court nor the Supreme Court has

suggested that a distinction should exist between agency

authorization through “approval” or “non-disapproval” of

filed rates. Moreover, in this case such a distinction would be

meaningless because the DOI was required to review the

challenged rates. Delaware law states that “[t]he

Commissioner shall review filings as soon as reasonably

possible after they have been made in order to determine

whether they meet the [statutory] requirements.” Del. Code

Ann. tit. 18, § 2506(a). Further, the Commissioner must

consider various factors to make sure rate filings are not

“excessive, inadequate or unfairly discriminatory.” Id. §

2503(a). Therefore, even though rate filings are “deemed to

meet the statutory requirements unless disapproved by the

Commissioner within 30 days,” the Commissioner is required

to review the rates during that period and may extend the

review if “additional time is needed.”7 Id. § 2506(c).

Appellants next argue that the filed rate doctrine

should not apply because Appellants cannot obtain retroactive

relief directly from the DOI. To support this argument,

Appellants rely on a series of “price squeeze” cases, which

7

Appellants suggest that the DOI could not genuinely

review the challenged rates because DTIRB did not provide

sufficient data to support its filings. However, Appellants do

not provide any authority showing that the filed rate doctrine

is dependent on the thoroughness of an agency’s fact-finding.

See Goldwasser v. Ameritech Corp., 222 F.3d 390, 402 (7th

Cir. 2000) (rejecting the argument that the doctrine should not

apply where agencies “rarely exercise their muscle and thus

give no meaningful review to the rate structure”).

Additionally, since filing its rates in 2004, DTIRB has

provided a statistical plan that enables the DOI to monitor the

bureau’s rate adequacy.

13

hold that the filed rate doctrine is inapplicable if a single

regulator does not have authority over the challenged rates

and thus cannot grant full relief. See, e.g., City of Kirkwood,

671 F.2d at 1178-79; Borough of Lansdale v. PP & L, Inc.,

503 F. Supp. 2d 730, 740-42 (E.D. Pa. 2007). Yet, as the

District Court held, those cases are irrelevant because the

DOI is “fully empowered to regulate the one rate at issue.”

McCray, 636 F. Supp. 2d at 331. Moreover, Appellants fail

to present any authority showing that plaintiffs must have

access to an alternative regulatory remedy before courts may

apply the filed rate doctrine.8

Finally, Appellants argue that the filed rate doctrine

does not apply because Appellees’ filings do not comply with

Delaware law. The filed rate doctrine applies to rates

“properly filed with the appropriate . . . regulatory authority.”

Ark. La. Gas Co., 453 U.S. at 577. The Supreme Court

explained the properly filed requirement in Security Services,

Inc. v. Kmart Corp., 511 U.S. 431 (1994). In that case, the

petitioner—a corporation that agreed to deliver goods for

Kmart—sued Kmart to enforce the petitioner’s filed delivery

rates. The Court, however, held that the rates were

unenforceable, see id. at 444, because they had become “void

as a matter of law under the Interstate Commerce

Commission’s regulations,” id. at 433. The Court reasoned

that the petitioner’s rates were “incomplete” and therefore

“insufficient to support a reliable calculation of charges.” Id.

at 443. More precisely, the rates included per mile delivery

prices, but relied on an outside source to “calculat[e] charges

8

Indeed, Appellants concede that “cases have noted

that the availability of an alternative regulatory remedy is not

a ‘prerequisite’ for application of the filed rate doctrine.”

Appellants’ Br. at 28 n.9 (citing Wegoland, Ltd. v. NYNEX

Corp., 806 F. Supp. 1112 (S.D.N.Y. 1992)). And in any

event, Delaware allows interested parties to challenge

insurance rates by making written application to the

Commissioner for an administrative hearing. The

Commissioner will determine if a hearing is justified, after

which the Commissioner may deem the filings “no longer

effective.” Del. Code Ann. tit. 18, § 2520(a)-(c). At oral

argument, counsel for Appellants conceded that they did not

administratively challenge DTIRB’s rates.

14

for a given shipment.” Id. at 433. Because that source was

no longer available to the petitioner, the Court concluded that

the rates were missing an “essential element,” id. at 440, and

were thus void, see id. at 443-44.

Although we have not yet interpreted Kmart, other

courts have understood the decision to mean that the filed rate

doctrine does not apply where: (1) “there is an absence of a

calculable rate,” Whitaker v. Frito-Lay, Inc., 88 F.3d 952, 961

(11th Cir. 1996); or (2) the rates are void per se under a

statutory or regulatory scheme, see Norwest Transp., Inc. v.

Horn’s Poultry, Inc., 37 F.3d 1237, 1239 (7th Cir. 1994)

(finding Kmart inapplicable because the regulations at issue

did not “make the previously filed tariffs void”); see also

Atlantis Express, Inc. v. Associated Wholesale Grocers, Inc.,

989 F.2d 281, 283-84 (8th Cir. 1993) (applying both factors).

According to Appellants, the filed rate doctrine should

not apply under Kmart because Appellees’ filings “lack

essential cost data,” which is required under the DOI’s

regulations. Appellants’ Br. at 32. The DOI typically

requires insurers to “file . . . prospective loss costs” and

supporting data along with their proposed rates. Bulletin No.

5. However, the DOI waived that requirement with regard to

Appellees’ first rate filings. Bulletin No. 27. Because

Appellees never filed additional rates, Appellants assert that

the challenged rates no longer conform with the DOI’s

regulations, making the filed rate doctrine inapplicable. In

response, Appellees contend that their failure to file

additional rates does not show that the existing “rates were

not properly filed” because the DOI “waived loss cost

requirements for DTIRB’s initial rate filing.” 9 Appellees’ Br.

at 38 (internal quotation marks and citation omitted).

9

Appellees also argue that the DOI’s supporting data

requirement governs “filings by rating bureaus for lines of

insurance other than title insurance.” Appellees’ Br. at 7 n.3.

However, nothing in Bulletin No. 5 indicates that the

regulation is limited to certain types of insurance. See

Bulletin No. 5 (stating that the bulletin applies generally to

“participating insurers”).

15

Appellees’ rates do not fall under the Kmart improper

filing exception. First, Appellants do not claim that

Appellees’ filings make it impossible for consumers to

calculate the chargeable rates. See Kmart Corp., 511 U.S. at

443. To the contrary, in their complaint, Appellants provide a

detailed explanation of DTIRB’s title insurance rates and

state that “[t]hese uniform rates are set forth in DTIRB’s

rating manual and on many of defendants’ websites.” J.A. at

222. In addition, there is no indication that DTIRB’s rates are

void per se under a statutory or regulatory scheme. See

Norwest Transp., Inc., 37 F.3d at 1239. Although the DOI

usually requires insurers to accompany their rates with

“prospective loss costs” and supporting data, the DOI waived

that requirement with respect to Appellants’ first rate filing

and was permitted to do so under Delaware law. See Del.

Code Ann. tit. 18, § 2505 (“[T]he Commissioner may, by

written order, suspend or modify the requirement of filing as

to any kind of insurance . . . ”).10 Furthermore, by requiring

Appellees to “have an approved statistical plan in place” that

will “enable the [DOI] to monitor rate adequacy,” Bulletin

No. 27, the DOI complied with its statutory duty to “require

the insurer to furnish the information upon which it supports

10

At oral argument, counsel for Appellant argued that

Appellees’ rate filings are invalid because the Appellees

jointly formulated the proposed rates even though Bulletin

No. 5 required each insurer to “individually determine and

file the rates it will use as a result of its own independent

company decision-making process.” Bulletin No. 5.

However, Bulletin No. 27 “allow[ed] an exception to the

requirements of using the rating format (loss cost) prescribed

in Bulletin No. 5,” which necessarily included the directive to

individually determine and file rates. Bulletin No. 27.

Indeed, the DOI issued Bulletin No. 5 in order to “specif[y]

the framework under which . . . insurers . . . will operate in a

loss cost system.” Bulletin No. 5. Because that system was

temporarily lifted in Bulletin No. 27, Appellants cannot rely

on its requirements to insist that Appellants’ rate filings are

improper. In addition, title 18, section 2501 of the Delaware

Code states that, among other things, “[t]he purpose of this

chapter is to . . . authorize and regulate cooperative action

among insurers in rate making.”

16

the filing.” Tit. 18, § 2504(b). Overall, Appellees have

“properly filed” their rates with the “appropriate . . .

regulatory authority,” thus justifying the District Court’s

application of the filed rate doctrine.11 Ark. La. Gas Co., 453

U.S. at 577.

B. Policies Underlying the Filed Rate Doctrine

In their reply brief, Appellants argue that the policies

underlying the filed rate doctrine do not require its application

in this case. Although we have generally held that “[a]n

appellant waives an argument in support of reversal if he does

not raise that argument in his opening brief,” AT & T v. FCC,

582 F.3d 490, 495 (3d Cir. 2009), rev’d on other grounds,

131 S. Ct. 1177 (2011), it is well settled that “where an

appellee raises a[n] argument not addressed by the appellant

in its opening brief, the appellant may reply.” Bennett v.

Tucker, 827 F.2d 63, 69-70 n.2 (7th Cir. 1987). This court

may thus consider Appellants’ policy argument because

Appellees raised it for the first time in their brief.

11

Appellants also argue that the Kmart improper filing

exception applies because: (1) the DITRB’s filings include

hidden costs based on “kickbacks and other inducements

unrelated to the business of insurance,” Appellants’ Br. at 32

(internal quotation marks and citation omitted); and (2) the

Tenth Circuit addressed a similar situation in TON Services,

Inc. v. Qwest Corp., 493 F.3d 1225 (10th Cir. 2007), and

refused to apply the filed rate doctrine, see Appellants’ Br. at

33. These arguments are meritless. With regard to

Appellants’ “hidden costs” argument, it is well established

that “there is no fraud exception to the filed rate doctrine.”

AT & T Corp. v. JMC Telecom, LLC, 470 F.3d 525, 535 (3d

Cir. 2006). Thus, the fact that Appellees allegedly hid

expenses and engaged in other fraudulent conduct does not

make the doctrine inapplicable. Furthermore, Appellants’

second argument is unpersuasive both because TON Services

is non-binding authority and because the insurers in that case,

unlike Appellees, failed to file new rates and failed to file

supporting data for existing rates absent legal permission

from the regulating agency. See 493 F.3d at 1237.

17

The filed rate doctrine is designed to advance two

“companion principles”: (1) “preventing carriers from

engaging in price discrimination as between ratepayers,” and

(2) “preserving the exclusive role of . . . agencies in

approving rates . . . by keeping courts out of the rate-making

process,” a function that “regulatory agencies are more

competent to perform.” Marcus v. AT&T Corp., 138 F.3d 46,

58 (2d Cir. 1998). These “companion principles” are often

called the “nondiscrimination strand” and the

“nonjusticiability strand.” Id. The “nonjusticiability strand”

recognizes that “(1) legislatively appointed regulatory bodies

have institutional competence to address rate-making issues;

(2) courts lack the competence to set . . . rates; and (3) the

interference of courts in the rate-making process would

subvert the authority of rate-setting bodies and undermine the

regulatory regime.” Sun City Taxpayers’ Assoc. v. Citizens

Utils. Co., 45 F.3d 58, 62 (2d Cir. 1995). The

“nondiscrimination strand” recognizes that “victorious

plaintiffs would wind up paying less than non-suing

ratepayers.” Wegoland, 27 F.3d at 21.

Appellants argue that the nonjusticiability strand does

not compel the doctrine’s application in this case. More

precisely, Appellants claim that nonjusticiability concerns

arise only “when there is an active regulator.” Reply Br. at 6.

Here, Appellants claim that the DOI neither “sets the rates nor

exercises any meaningful review of the rates.” Id. Thus, they

contend that the District Court would not interfere with “the

regulatory authority of the DOI” by awarding damages based

on hypothetical legal rates. Id. at 7. Appellees assert that

such a damage award would implicate the nonjusticiability

strand because it would “second-guess the [DOI’s]

specialized knowledge.” Appellees’ Br. at 27.

The nonjusticiability strand supports the doctrine’s

application in this case. In their initial complaint, Appellants

requested treble damages and “returned overpayments” based

on Appellees’ allegedly inflated title insurance rates. J.A. at

65. To award such damages, the District Court would have to

calculate the legal rate but for DTIRB’s antitrust violations.

That task alone is enough to implicate the nonjusticiability

principle, which is primarily concerned with preventing

courts from engaging in the ratemaking process. See, e.g.,

18

Montana-Dakota Utils., 341 U.S. at 251 (finding that it is not

“open to the courts to determine what the reasonable rates

during the past should have been”). In addition, the District

Court’s interference in the rate making process would

“subvert the authority” of the DOI by second-guessing its rate

determination, thus further implicating the nonjusticiability

strand. Sun City Taxpayers’ Assoc., 45 F.3d at 62.

The nondiscrimination strand, on the other hand, is not

implicated by Appellants’ claims. Appellants brought the

underlying suit on behalf of “themselves and all others

similarly situated.” J.A. at 45. Accordingly, it is unlikely

that a victory would allow Appellants to pay less than other

ratepayers. See Square D, 476 U.S. at 423 (noting that “the

development of class actions . . . might alleviate the . . .

concern about unfair rebates”); Wegoland, 27 F.3d at 22

(“[C]oncerns for discrimination are substantially alleviated in

[a] putative class action.”). Nonetheless, we hold that the

filed rate doctrine applies to Appellants’ claims based on the

nonjusticiability principle alone. See Marcus, 138 F.3d at 59

(stating that the doctrine applies “whenever either the

nondiscrimination strand or the nonjusticiability strand . . . is

implicated”).

C. Standing

With respect to Appellants’ injunctive relief claims,

they argue that the District Court erred by concluding that

Appellees’ “actions are statutorily exempt from antitrust

liability pursuant to the McCarran-Ferguson Act.”12

Appellants’ Br. at 35. We will not reach this issue because

Appellants lack standing to seek injunctive relief. 13

12

The filed rate doctrine does not bar injunctive relief

claims with respect to future rates. See Square D, 476 U.S. at

422 & n.28 (noting that the filed rate doctrine precludes

antitrust claims for treble damages); Phillip E. Areeda &

Herbert Hovenkamp, Antitrust Law: An Analysis of Antitrust

Principles and Their Application ¶ 247d (3d ed. 2006)

(“[T]here is no reason to think Keogh would prohibit an

injunction against an antitrust violation attending some tariff

that would or might be filed in the future. Such a tariff has

not been ‘filed’ at all.”). However, the McCarran-Ferguson

19

“Absent Article III standing, a federal court does not

have subject matter jurisdiction to address a plaintiff’s claims,

and they must be dismissed.” Taliaferro v. Darby Twp.

Zoning Bd., 458 F.3d 181, 188 (3d Cir. 2006). Article III

standing requires “(1) injury-in-fact, which is an invasion of a

legally protected interest that is (a) concrete and

particularized, and (b) actual or imminent, not conjectural or

hypothetical; (2) a causal connection between the injury and

the conduct complained of; and (3) it must be likely, as

opposed to merely speculative, that the injury will be

redressed by a favorable decision.” Danvers Motor Co., Inc.

v. Ford Motor Co., 432 F.3d 286, 290-91 (3d Cir. 2005).

“Allegations of ‘possible future injury’ are not sufficient to

satisfy Article III.” Reilly v. Ceridian Corp., 664 F.3d 38, 42

(3d Cir. 2011) (citation omitted). Instead, “‘[a] threatened

injury must be certainly impending,’ and ‘proceed with a high

degree of immediacy.’” Id. (citations omitted). In the context

of class actions, Article III standing “is determined vis-a-vis

the named parties.” Krell v. Prudential Ins. Co. of Am., 148

F.3d 283, 306 (3d Cir. 1998).

Appellants lack standing to seek injunctive relief

because they failed to allege an injury-in-fact. 14 In their

Act exempts conduct from antitrust liability if it: (1)

constitutes “the business of insurance,” (2) is “regulated

pursuant to state law,” and (3) does not “constitute acts of

boycott, coercion or intimidation.” Ticor Title Ins. Co. v.

FTC, 998 F.2d 1129, 1133 (3d Cir. 1993) (internal quotation

marks and citation omitted).

13

Although Appellees do not address standing, “we

are required to raise issues of standing sua sponte if such

issues exist.” Steele v. Blackman, 236 F.3d 130, 134 n.4 (3d

Cir. 2001) (citing FOCUS v. Allegheny Cnty. Court of

Common Pleas, 75 F.3d 834, 838 (3d Cir. 1996)).

14

When reviewing a complaint for standing, we

determine “whether the allegations on the face of the

complaint, taken as true, allege facts sufficient to invoke the

[court’s] jurisdiction.” Reilly, 664 F.3d at 41 (internal

quotation marks and citation omitted).

20

amended complaint, Appellants “challenge[d] the defendants’

collective price-setting of rates . . . as per se illegal price-

fixing” and sought “injunctive relief . . . due to the significant

threat of future losses and injuries resulting from those

antitrust violations.” J.A. at 213. However, Appellants did

not indicate when such “future losses and injuries” will occur.

Instead, they vaguely alleged that “[a]s a proximate result of

defendants’ unlawful conduct, plaintiffs and the Class will

suffer future loss or damages in that they will be required to

pay supra-competitive prices for title insurance policies.”

J.A. at 230. Those allegations, taken as true, do not indicate

that a named party has “actual or imminent” plans to purchase

title insurance. Nor do they establish that DTIRB intends to

file new rates in the future.15 On the contrary, Appellants

state in their amended complaint that “[t]here is a remarkable

absence of rate changes by title insurers over the past several

years,” and “Defendants’ current rates, for example, have

been in place since February 2004 without any change.” J.A.

at 225. Therefore, because it is “merely speculative” that

Appellants’ injury will be “redressed by a favorable

decision,” we lack appellate jurisdiction to address

Appellants’ injunctive relief claims.

III.

Conclusion

For the foregoing reasons, we will affirm the District

Court’s orders.

15

DTIRB’s current rates do not constitute a legal

injury under the filed rate doctrine. Keogh, 260 U.S. at 163

(stating that “[u]nless and until suspended or set aside, th[e

filed] rate is made, for all purposes, the legal rate”); see also

Wegoland, 27 F.3d at 18 (“[T]he doctrine holds that any ‘filed

rate’ . . . is per se reasonable and unassailable in judicial

proceedings brought by ratepayers.”). Thus, Appellants must

establish standing based on the possibility of future unfair

rates.

21