In Re New Jersey Title Insurance Litigation

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

________

No. 10-3343

_________

IN RE: NEW JERSEY TITLE INSURANCE LITIGATION

Edward Lamb; Frances Lamb; Pat Pepe;

Olga Pepe; Cynthia Worth;

Pearl & Plumeri Associates, LLC; Julie Baier; Ian Kornbluth;

Ayanna Pacheco; Terrence Pacheco; Anne Marie Sweeney;

Mark Esposito; Christine Esposito,

Appellants

________

On Appeal from the United States District Court

for the District of New Jersey

(D.C. No. 2-08-cv-01425)

District Judge: Honorable Garrett E. Brown, Jr.

_______

Argued April 19, 2012

Before: McKEE, Chief Judge, SLOVITER, Circuit Judge

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

(Filed: June 14, 2012)

___________

∗

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

of the Supreme Court of the United States, sitting by

designation.

Katrina Carroll

Joseph J. De Palma (Argued)

Mayra V. Tarantino

Lite, De Palma, Greenberg

Newark, NJ 07102

Jeffrey B. Gittleman

Gerald J. Rodos

Barrack, Rodos & Bacine

Philadelphia, PA l9l03

Steven J. Greenfogel

Meredith, Cohen, Greenfogel & Skirnick

Philadelphia, PA l9l02

Attorneys for Appellants

Roger B. Kaplan

Kenneth A. Lapatine

Stephen L. Saxl

James I. Serota (Argued)

Greenberg Traurig

New York, NY 10166

Kevin J. Arquit

Barry R. Ostrager

Patrick T. Shilling

Simpson, Thacher & Bartlett

New York, NY 10017

Christine I. Gannon

Liza M. Walsh

Connell Foley

Roseland, NJ 07068

Guy V. Amoresao

Gibbons

Newark, NJ 07102

Craig A. Linder

Gibson, Dunn & Crutcher

New York, NY 10166

2

Joseph N. Froehlich

David G. Greene

Kevin J. Walsh

Locke Lord Bissell & Liddell

New York, NY 10281

Margaret A. Keane

Dewey & LeBoeuf

East Palo Alto, CA 94303

David M. Foster

Fulbright & Jaworski

Washington, DC 20004

Erica A. Reed

Fulbright & Jaworski

New York, NY 10103

Attorneys for Appellees

________

OPINION OF THE COURT

________

SLOVITER, Circuit Judge.

In their challenge to New Jersey’s title insurance

regulations, Appellants would have this court disregard a

decision of the United States Supreme Court and the

numerous cases that have relied on it. We are not about to do

that. Appellants’ efforts belong in another venue.

I.

Background

Appellants, title insurance purchasers, on behalf of

themselves and similarly situated consumers, appeal the

District Court’s orders dismissing their state and federal

antitrust claims against numerous New Jersey title insurance

companies. Appellants claim that the Appellee insurers

3

collectively fixed title insurance rates in violation of the

Sherman Act and the New Jersey Antitrust Act. The District

Court held that Appellants’ complaint is barred by the filed

rate doctrine, a lack of standing, and federal and state antitrust

liability exemptions.

In New Jersey, the Department of Banking and

Insurance (“DOBI”) approves and regulates title insurance

rates. See N.J. Stat. Ann. § 17:1C-19(a)(1). Insurers may

collectively file rates for approval with the DOBI through a

licensed “rating organization.” Id. § 17:46B-46. Appellees

are members of and file their rates through the New Jersey

Land Title Insurance Rating Bureau (“NJTIRB”)—a

“voluntary association of title insurers” acting under New

Jersey law. App. at 31, 74. The NJLTIRB “operates, more or

less, as a clearing house for its constituent members by

collecting their proposed rates and supporting data and

submitting them to the [DOBI].” In re N.J. Title Ins. Litig.,

No. 08-1425, 2009 WL 3233529, at *1 (D.N.J. Oct. 5, 2009).

New Jersey thus specifically “authorize[s] cooperative action

between or among title insurance companies in rate making.”

N.J. Stat. Ann. § 17:46B-41.

Once insurers submit rate filings with the DOBI, the

Commissioner “shall make such review of the filing as may

be necessary to carry out the provisions of [the Title

Insurance Act].” Id. § 17:46B-42(c). The Commissioner

may approve the rates, id. § 17:46B-45(a), or, after holding a

hearing, issue an order disapproving the rates, id. § 17:46B-

45(b). Additionally, the Commissioner can only approve

rates that “are not unreasonably high, and are not inadequate

for the safeness and soundness of the insurer, and are not

unfairly discriminatory.” Id. § 17:46B-45(a). Once the

DOBI issues its approval, each member of the “title insurance

rating organization shall adhere to the filings made on its

behalf.” Id. § 17:46B-47. Members, however, can seek to

modify their individual rates through a “deviation filing.” Id.

Moreover, aggrieved parties can challenge title insurance

rates through an administrative hearing, after which the

4

Commissioner may deem the rates “no longer effective.” 1 Id.

§ 17:46B-45(c).

On September 19, 2008, Appellants filed a putative

class action complaint, alleging that Appellees engaged in

collective price fixing in violation of Section 1 of the

Sherman Act and the New Jersey Antitrust Act. Appellants

alleged that “[t]hrough NJLTIRB, [Appellees] and their co-

conspirators have agreed upon and engaged in concerted

efforts to (i) collectively set and charge uniform and supra-

competitive rates for title insurance and attendant services in

New Jersey, (ii) embed within these title insurance rates

payoffs, kickbacks, and other charges that are unrelated to the

issuance of title insurance or the business of insurance, and

(iii) hide these . . . ‘costs’ from regulatory scrutiny by

funneling them to and through title agents.” App. at 42, 44.

Appellants sought immediate injunctive relief and treble

damages.

The District Court dismissed Appellants’ complaint

under Fed. R. Civ. P. 12(b)(6) but granted Appellants leave to

amend their claims. Specifically, the Court concluded that

Appellants’ claims are barred by the filed rate doctrine, which

precludes antitrust suits based on rates currently filed with

federal or state agencies. See In re N.J. Title Ins. Litig., 2009

WL 3233529, at *3. On November 4, 2009, Appellants filed

a nearly identical amended complaint which the Court also

dismissed under 12(b)(6). See In re N.J. Title Ins. Litig., No.

08-1425, 2010 WL 2710570, at *1 (D.N.J. July 6, 2010). The

Court held that: (1) Appellants lack standing to seek

injunctive relief under Article III of the Constitution and

Section 16 of the Clayton Act; (2) Appellants’ Sherman Act

claim is barred by the McCarran-Ferguson Act’s antitrust

exemption; (3) Appellants’ New Jersey Antitrust Act claim is

1

Specifically, N.J. Stat. Ann. § 17:46B-45(c) provides

that “[a]ny person or organization aggrieved with respect to

any filing which is in effect, may make written application to

the commissioner for a hearing thereon,” which the

commissioner will review to determine if a hearing is

necessary. Id. at § 17:46B-45(c). At oral argument,

Appellants admitted that they have not challenged the

Appellees’ title insurance rates in a formal administrative

hearing.

5

barred by N.J. Stat. Ann. § 56:9-5(b)(4)’s antitrust exemption;

and (4) the subsequent amendment of Appellants’ complaint

would be futile. Plaintiffs appeal.

II.

Discussion

The District Court had jurisdiction pursuant to 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). In addition, we review the

District Court’s refusal to grant Appellants leave to amend

their final complaint for abuse of discretion. Shane v. Fauver,

213 F.3d 113, 115 (3d Cir. 2000).

A. The Filed Rate Doctrine

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

been authorized to charge the challenged rates by the

Interstate Commerce Commission (“ICC”). 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 for 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 [i.e., legal]; at least, in the first

instance.”).

6

The filed rate doctrine stood undisturbed by the

Supreme Court for almost three quarters of a century when

the Court re-examined the doctrine in Square D Co. v.

Niagara Frontier Tariff Bureau Inc., 476 U.S. 409 (1986).

There, various corporations alleged that the respondents

conspired with their rate making bureau 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,” thus 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 the petitioners cannot bring a treble-

damages antitrust action. See id. at 417, 424. Moreover, the

Court approvingly quoted the Second Circuit’s interpretation

of Keogh:

“Rather than limiting its holding to cases where,

as in Keogh, rates had been investigated and

approved by the ICC, the [Keogh] Court said

broadly that shippers could not recover treble-

damages for overcharges whenever tariffs have

been filed.”

Id. at 417 n.19 (quoting Square D Co. v. Niagara Frontier

Tariff Bureau, Inc., 760 F.2d 1347, 1351 (2d Cir. 1985)).

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. 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

7

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

preclude their antitrust claims because those claims do not

implicate the doctrine’s underlying policies. Although we

have not previously outlined the policies underlying the filed

rate doctrine, the Court of Appeals for the Second Circuit has

explained that the 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 Ltd., 27 F.3d at 21.

The policies underlying the filed rate doctrine are also

reflected in Supreme Court precedent. In Montana-Dakota

Utilities Co. v. Northwestern Public Service Co., for example,

the Court refused to grant relief to a petitioner who claimed

that its predecessor company had paid unreasonably high

electric rates to the respondent. 341 U.S. 246, 247-48 (1951).

Addressing the issue of damages, the Court stated that “the

problem is whether it is open to the courts to determine what

the reasonable rates during the past should have been.” Id. at

251. Although the Court did not explicitly mention the filed

rate doctrine, it relied on the nonjusticiability principle to

deny relief, concluding that “reduc[ing] the abstract concept

8

of reasonableness to concrete expression in dollars and cents

is the function of the [Agency] Commission.” Id.

In Arkansas Louisiana Gas Co., on the other hand, the

Court relied heavily on the nondiscrimination strand to deny

relief. 453 U.S. at 571. There, the plaintiffs, natural gas

producers, sued a customer to recover an unfiled gas rate

under the parties’ purchase agreement. Id. at 573-74. The

parties’ agreement contained a “favored nations clause,”

which allowed the plaintiffs to charge the defendant at a rate

higher than the filed rate if the defendant ever “purchased . . .

gas from another party at a rate higher than the one it was

paying [the plaintiffs].” Id. at 573. Relying on the filed rate

doctrine, the Court recognized that “‘[t]he considerations

underlying the doctrine . . . are 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

(quoting City of Cleveland v. Fed. Power Comm’n, 525 F.2d

845, 854 (D.C. Cir. 1976)). The Court denied plaintiffs’

requested relief, however, specifically because awarding

damages based on “a rate never filed . . . and thus never found

to be reasonable” would “undermine the congressional

scheme of uniform rate regulation.” Id. at 579.

As a preliminary matter, Appellants argue that the

District Court erred by concluding that “the mere filing and

approval of rates with a regulating agency” triggers the filed

rate doctrine. Appellant’s Br. at 11. According to

Appellants, that approach is only proper where stare decisis

requires the doctrine’s application to the regulatory scheme at

issue. See id. at 12-13. Thus, before extending the doctrine

to a “new regulatory context”—i.e., New Jersey title

insurance—Appellants argue that the District Court should

have determined whether the doctrine’s underlying policies

are implicated. Id. at 11-14. Yet Appellants offer no

authority showing that those policies are elements in

determining whether to extend the doctrine to new areas. The

Supreme Court has indicated that the doctrine applies

whenever rates are properly filed with a regulating agency.

Compare Square D Co., 476 U.S. at 422 (applying the

doctrine to rates governed by the Interstate Commerce Act

and noting that “Keogh simply held that an award of treble

9

damages is not an available remedy for a private shipper

claiming that the rate submitted to, and approved by, the ICC

was the product of an antitrust violation”), with Ark. La. Gas

Co., 453 U.S. at 577 (extending the doctrine to rates governed

by the Natural Gas Act because they were “properly filed

with the appropriate federal regulatory authority”).

Furthermore, the Second Circuit has held that “the doctrine is

applied strictly . . . whenever either the nondiscrimination

strand or the nonjusticiability strand . . . is implicated.”

Marcus, 138 F.3d at 59 (emphasis added).

Appellants argue that this action does not implicate the

nonjusticiability strand because it does “not second-guess any

ratemaking determination made by the DOBI.” Appellants’

Br. at 14. They alleged in their complaint that the DOBI has

neither “actively supervised the Defendants’ collective rate

setting scheme” nor “subjected the Defendants to any analysis

designed to determine whether [their] filed rates for title

insurance and attendant services conformed to . . . statutory

requirements.” App. at 81. Appellants therefore claim that

the doctrine’s policy of deferring to agency rate-making

expertise (i.e., nonjusticiability) is irrelevant because the

DOBI did not exercise any “meaningful review” of the

challenged rates. See Appellants’ Br. at 15.

Appellees counter that the nonjusticiability strand is

“actually . . . grounded in concerns about the institutional

competence of federal courts to set rates,” not “the expertise

of state regulatory agencies.” Appellees’ Br. at 21-22. Thus,

they contend that the policy is applicable in this case because

Appellants requested the District Court to award damages

based on the rates that “would have been paid in the absence

of . . . antitrust violations.” Id. at 23 (quoting Am. Compl. at

¶ 69, App. at 45). Moreover, Appellees argue that Square D

rejected the idea that the filed rate doctrine only applies if an

agency conducts “meaningful review” of the challenged rates.

Id. at 24.

Appellants’ argument is meritless because the

nonjusticiability strand recognizes that federal courts are ill-

equipped to engage in the rate making process, which does

not depend on whether agencies actually use their superior

expertise. See, e.g., Montana-Dakota Utils. Co., 341 U.S. at

10

251 (finding that it is not “open to the courts to determine

what the reasonable rates during the past should have been”);

Sun City Taxpayers’ Assoc., 45 F.3d at 62 (“[C]ourts lack the

competence to set utility rates. . . .”); Wegoland Ltd., 27 F.3d

at 21 (“Courts are simply ill-suited to systematically second

guess the regulators’ decisions and overlay their own

resolution.”). Indeed, Appellants argue that “[t]here is no

reason a court cannot determine what [rates] the DOBI would

have approved since it does nothing but rubber stamp rates

filed by [Appellees]” but, at the same time, suggest that the

District Court should have determined what the “competitive

rates” would have been in order to award damages.

Appellants’ Reply Br. at 9. Therefore, even accepting

Appellants’ logic, their antitrust claims would require the

District Court to determine the reasonable rate absent the

alleged conspiracy—“a function that . . . regulatory agencies

are more competent to perform.” Marcus, 138 F.3d at 58.

Additionally, to the extent that the justiciability principle is

aimed at “preserv[ing] . . . the agency’s primary jurisdiction

over reasonableness of rates,” Hall, 453 U.S. at 577-78, the

adjudication of Appellants’ complaint would intrude upon

that jurisdiction because it challenges rates that the DOBI has

already approved as “not unreasonably high . . . or unfairly

discriminatory.” N.J. Stat. Ann. § 17:46B-45(a). 2

Appellants seek to reinforce their argument that the

nonjusticiability strand is only implicated where agencies

have meaningfully reviewed the challenged rate by relying on

2

Although Appellants state in their complaint that the

DOBI has not obtained the type of data necessary to

determine whether Appellees’ title insurance rates

“conformed to . . . statutory requirements,” App. at 81, they

nonetheless concede that the DOBI approved Appellees’

rates, see App. at 82. Under New Jersey law, such approval

necessarily requires a determination that the rates are “not

unreasonably high, and are not inadequate for the safeness

and soundness of the insurer, and are not unfairly

discriminatory.” N.J. Stat. Ann. § 17:46B-45(a); see also N.J.

Builders Ass’n v. Sheeran, 402 A.2d 956, 961 (N.J. Super. Ct.

App. Div. 1979) (noting that N.J. Stat. Ann. § 17:46B-45

evidently requires the DOBI Commissioner to conduct “some

degree” of fact-finding).

11

Brown v. Ticor Title Ins. Co., 982 F.2d 386 (9th Cir. 1992).

In that case, consumers alleged that various title insurance

companies conspired to “fix price levels for title search and

examination services.” Id. at 387. Although the insurers filed

their rates with regulating agencies, the relevant statutory

schemes required “only ‘non-disapproval’ of the rates” before

they became effective “and d[id] not require compliance with

strict guidelines.” Id. at 394. The court therefore observed

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.

Furthermore, the court reasoned that “[t]he absence of

meaningful state review allows the insurers to file any rates

they want.” Id. Thus, it concluded that “the act of filing does

not legitimize a rate arrived at by improper action” and

refused to apply the filed rate doctrine. Id.

Appellants’ reliance on Brown is unpersuasive. Brown

adopts a particularly narrow and unprecedented view of the

filed rate doctrine. The regulatory schemes at issue in Brown

also required only “non-disapproval” of the challenged rates,

and it is unclear from the court’s opinion whether the

regulating agencies had to conduct any review of the rates at

all. Here, by contrast, the DOBI affirmatively approved

Appellees’ insurance rates and was legally required to do so

before the rates became effective. See N.J. Stat. Ann. §

17:46B-45(a). Under New Jersey law, the DOBI is required

to review filings to make sure they “produce rates that are not

unreasonably high, . . . are not inadequate for the safeness and

soundness of the insurer, and are not unfairly discriminatory.”

Id. Accordingly, even if Brown adopted a “meaningful

review” standard for applying the doctrine, the DOBI would

easily meet that requirement, as it: (1) affirmatively approved

the challenged rates, and (2) was required to review the rates

before issuing its approval. Finally, given Appellants’ policy

argument, their reliance on Brown seems misplaced because

the Ninth Circuit’s opinion does not mention the

nonjusticiability or nondiscrimination strands.

The Supreme Court moreover has rejected the notion

that agencies must “meaningfully review” rates under the

filed rate doctrine. In Square D, the petitioners argued that

12

the doctrine should not bar their antitrust claim because the

ICC did not conduct a hearing before approving the disputed

rates. Square D Co., 476 U.S. at 417 n.19. The Court,

however, clarified that Keogh is not limited to situations

where rates “‘had been investigated and approved by the

ICC,’” but applied “‘whenever tariffs have been filed.’” Id.

(quoting Square D Co., 760 F.2d at 1351); see also Montana-

Dakota Utils. Co., 341 U.S. at 251 (holding that the petitioner

“can claim no rate as a legal right . . . other than the filed rate,

whether fixed or merely accepted by the [Agency]

Commission”). Similarly, other courts of appeals have held

that the filed rate doctrine does not require “meaningful”

agency review. Goldwasser v. Ameritech Corp., 222 F.3d

390, 402 (7th Cir. 2000) (rejecting the argument that the

doctrine should not apply if reviewing agencies “rarely

exercise their muscle and thus give no meaningful review to

the rate structure”); 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.”). Accordingly,

the nonjusticiability strand fully supports the District Court’s

application of the filed rate doctrine in this case.

Appellants claim that their action does not implicate

the doctrine’s nondiscrimination strand because it “has been

brought on behalf of all those similarly situated to the named

Plaintiffs, thus eliminating any discrimination issues.”

Appellants’ Br. at 17. Appellees, on the other hand, argue

that the nondiscrimination policy is relevant because “not

every [title insurance] purchaser will necessarily become a

member of the class or obtain recovery,” and “some class

members may opt out, while others may fail to receive actual

notice or may be excluded from the class.” Appellees’ Br. at

28.

Various courts have recognized that class-actions

reduce discrimination concerns. In Square D, for instance,

the Supreme Court indicated that “the development of class

actions . . . might alleviate the . . . concern about unfair

rebates” and seems to undermine some of the reasoning

supporting the filed rate doctrine. 476 U.S. at 423. Similarly,

the Second Circuit has noted that “concerns for

discrimination are substantially alleviated in [a] putative class

13

action.” Wegoland Ltd., 27 F.3d at 22. Thus, Appellants are

correct that their action does not clearly impact the doctrine’s

nondiscrimination strand. However, we hold that the

nonjusticiability policy alone warrants the doctrine’s

application to Appellants’ treble damages Sherman Act and

New Jersey Antitrust Act claims. 3 See Marcus, 138 F.3d at

59 (noting that the doctrine applies strictly “whenever either

the nondiscrimination strand or the nonjusticiability strand . .

. is implicated”).

This result is also appropriate under New Jersey law.

See Parkway Garage, Inc. v. City of Philadelphia, 5 F.3d 685,

701 (3d Cir. 1993) (“Federal courts that decide state law

claims are required to apply the substantive law of the state

whose laws govern the action.” (internal quotation marks and

citation omitted)); see also Knevelbaard Dairies v. Kraft

Foods, Inc., 232 F.3d 979, 992-93 (9th Cir. 2000) (applying

state law in rejecting application of the filed rate doctrine to

cases involving rates set by state agencies).

Appellants argue that New Jersey precedent,

particularly Richardson v. Standard Guaranty Ins. Co., 853

A.2d 955 (N.J. Super. Ct. App. Div. 2004), does not support

the doctrine’s application to their New Jersey Antitrust Act

claim. In Richardson, the plaintiff alleged that the sales

practices of various credit card and insurance companies

fraudulently induced her to purchase several insurance

policies. Id. at 961. The court held that the plaintiff’s

action—which alleged, inter alia, that the defendants had

“unfairly or inaccurately calculated premiums”—was barred

by the filed rate doctrine. Id. As Appellants point out, the

court indicated that the “under-enforcement of ratemaking

regulations may constitute a basis for a less rigorous

application of the filed rate doctrine.” Id. at 964. The court,

however, emphasized that the statutory framework at issue

required the rate regulator (the DOBI) to “examine [rate]

filings for their fairness and their ability to disclose terms

3

It is well established that the filed rate doctrine can

serve as a defense against both federal and state actions. See,

e.g., Am. Tel. & Tel. Co. v. Cent. Office Tel., Inc., 524 U.S.

214, 228 (1998) (holding that the “respondent’s state-law

claims are barred by the filed rate doctrine”).

14

relevant to consumers.” Id. Thus, the court ultimately

concluded that “the filed rate doctrine should be applied.” Id.

at 965.

Relying on Richardson, Appellants argue that the filed

rate doctrine should not bar their state claim because New

Jersey’s title insurance regulations are under-enforced. More

specifically, they claim that “the DOBI has not enacted a

single regulation [governing title insurance], despite a

Legislative mandate to do so.” Appellants’ Br. at 43-44.

Even assuming those allegations to be true, Appellants’

argument is unpersuasive. In particular, the regulations in

Richardson required credit insurers to file policy rates with

the DOBI and required the Commissioner to review those

rates for excessiveness. 853 A.2d at 964. A similar

regulatory scheme is present here, since insurers must file

their rates with the DOBI, see N.J. Stat. Ann. § 17:46B-42(a),

and the DOBI must review those rates to ensure that they are

not “unreasonably high” or “unfairly discriminatory,” see id.

§ 17:46B-45(a). Accordingly, state law does not preclude the

doctrine’s application to Appellants’ New Jersey Antitrust

Act claim. 4

B. Standing to Sue

Appellants contend that the District Court erred by

dismissing their injunctive relief claims 5 under Article III of

4

Appellants also argue that “the filed rate doctrine has

been the subject of sustained criticism by the [New Jersey]

courts and has never been applied to the New Jersey title

insurance regulatory regime.” Appellants’ Br. at 40.

However, as the District Court correctly noted, New Jersey

courts have recently affirmed the vitality of the filed rate

doctrine. See, e.g., Richardson, 853 A.2d at 963 (“[T]he

doctrine maintains a substantial role in administrative

ratemaking . . . .”).

5

Appellants sought, inter alia, a “final injunction . . .

enjoining Defendants from engaging in collective rate setting

with regard to all future title insurance rate filings with the

Department of Insurance.” App. at 86.

15

the Constitution and Section 16 of the Clayton Act for lack of

standing. 6 “Section 16 of the Clayton Act, which authorizes

injunctive relief in private antitrust cases, focuses on

‘threatened loss or damage’ resulting from a violation of the

antitrust laws, and it authorizes an injunction when and under

the same conditions as injunctions are granted by ‘courts of

equity.’” Weiss v. York Hosp., 745 F.2d 786, 829 (3d Cir.

1984) (footnote and citations omitted). To establish standing

under Section 16, Appellants must “demonstrate a significant

threat of injury from an impending violation of the antitrust

laws or from a contemporary violation likely to continue or

recur.” Zenith Radio Corp. v. Hazeltine Research, Inc., 395

U.S. 100, 130 (1969). Similarly, to establish Article III

standing, Appellants must show: “(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).

Appellants argue that they have standing to pursue

their Sherman Act and New Jersey Antitrust Act injunctive

relief claims because Appellees’ “collusion has deprived, and

will continue to deprive [them] of the benefits of free, open

and unrestricted competition” in the title insurance market.

Appellants’ Br. at 31-32. Further, Appellants argue that their

injuries are imminent and thus confer standing because: (1)

New Jersey requires Appellees to file any new rates with the

DOBI; and (2) “people who have already purchased real

estate are most likely to do so again and . . . homeowners, on

average, change residence every seven years.” 7 Id. at 36.

6

As the District Court recognized, the filed rate

doctrine does not bar injunctive relief claims against future

rates. See Square D. Co., 476 U.S. at 422 & n.28 (noting that

the filed rate doctrine specifically precludes antitrust claims

for treble damages).

7

Appellants must establish standing based on future

harm, since their previous title insurance purchases do not

constitute a continuing injury. As the District Court held, the

16

Appellees, on the other hand, argue that Appellants lack

standing because they have not alleged that “any new rate

submission to the DOBI by NJLTIRB is imminent, [or] that

any particular Plaintiff will purchase title insurance in the

future.” Appellees’ Br. at 46.

Appellants do not have standing because they have

failed to allege any impending injury. In their complaint,

Appellants alleged that:

(a) price competition in the sale of title

insurance and attendant services has been and

will be suppressed, restrained and eliminated;

(b) prices for title insurance and attendant

services have been and will be raised, fixed,

maintained and stabilized at artificially high and

non-competitive levels; and,

(c) purchasers of title insurance have been

and will be deprived of the benefit of free and

open competition.

App. at 85. However, as the District Court correctly

observed, Appellants did not allege that Appellees have

collectively “filed new proposed insurance rates” or “intend

to do so in the near future.” In re N.J. Title Ins. Litig., 2010

WL 2710570, at *6. Additionally, Appellants did not assert

existing rates do not constitute a cognizable 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

Ltd., 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. See 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.”).

17

that they intend to re-purchase title insurance. Although they

emphasize that New Jersey law requires insurers to file new

rates with the DOBI, that mandate does not make their claims

any less speculative because it does not indicate when

Appellees will file new rates. Likewise, Appellants’ claim

that home owners generally relocate every seven years does

not show that any Appellant plans to buy title insurance in the

future, thus failing to raise their claims above the speculative

level. Therefore, Appellants have neither established “actual

or imminent” injury-in-fact under Article III, Danvers Motor

Co., 432 F.3d at 291, nor an “impending violation of the

antitrust laws” under the Clayton Act. 8 Zenith Radio Corp.,

395 U.S. at 130.

C. Dismissal with Prejudice

Finally, Appellants argue that if they lack standing, we

must hold that the District Court abused its discretion by

denying them leave to amend their complaint and “substitute

an appropriate plaintiff.” Appellants’ Br. at 37-38. Federal

Rule of Civil Procedure 15(a)(2) provides that courts “should

freely give leave [to amend] when justice so requires.”

Further, this court has “held that even when a plaintiff does

not seek leave to amend, if a complaint is vulnerable to

12(b)(6) dismissal, a District Court must permit a curative

amendment, unless an amendment would be inequitable or

futile.” Alston v. Parker, 363 F.3d 229, 235 (3d Cir. 2004).

The District Court did not abuse its discretion by

denying Appellants leave to amend their complaint.

Appellants lack standing to assert their injunctive relief

claims specifically because there is no imminent threat that

the NJTIRB will file future rates. Thus, even if Appellants

substituted a plaintiff with concrete plans to purchase title

insurance, s/he would still lack standing—thus making the

8

Because Appellants lack standing to pursue their

claims, we will not reach their arguments that the District

Court erred by concluding that Appellants’ injunctive relief

claims are barred by the McCarran-Ferguson Act and N.J.

Stat. Ann. § 56:9-5(b)(4) antitrust liability exemptions.

18

amendment of Appellants’ complaint futile. 9 The District

Court therefore did not abuse its discretion by dismissing

Appellants’ action with prejudice.

III.

Conclusion

For the foregoing reasons, we will affirm the District

Court’s orders.

9

Although the District Court dismissed Appellants’

complaint with prejudice because “the McCarran-Ferguson

Act and N.J. Stat. Ann. § 56:9-5(b)(4) bar [Appellants’]

federal and state antitrust claims,” In re N.J. Title Ins. Litig.,

2010 WL 2710570, at *12, we may affirm the District Court’s

decision on different grounds. See Morse v. Lower Merion

Sch. Dist., 132 F.3d 902, 904 n.1 (3d Cir. 1997).

19