Petition for Writ of Certiorari — Dorothy A. Smulley, Petitioner v. Safeco Insurance Company of Illinois, et al.

Supreme Court briefMar 25, 2023

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Text

No.

FILED

MAR 2 5 2023

IN THE

SUPREME COURT OF THE UNITED STATES

Dorothy A Smulley

Petitioner

Safeco Insurance Company of Illinois

and

CCC Information Services Inc. aka

CCC Intelligent Solutions Holdings Inc.,

Respondents

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Second Circuit

PETITION FOR WRIT OF CERTIORARI

Dorothy A Smulley

Petitioner pro se

408 Bar Harbour Road

Stratford CT 06614

tel 203 386 0171

QUESTIONS PRESENTED

The Internet revolution has forever altered the

realities of the interstate marketplace. The Internet's

prevalence and power changed the dynamics of the

national and global economies and specifically,

insurance industry practices. State insurance laws and

regulations promulgated by respective state legislatures

and enforced through enactment are neither adequate

nor reasonable. Nor can any state law foresee or control

the alleged fraudulent salvage trafficking activity taking

place on a national scale under the protection of the

McCarran-Ferguson Act (MFA) carve-out for the

business of insurance. A resolution of this conflict is

required. Infra 13, 17-22. Questions are,

Whether personal motor vehicle physical

damage (MVPD) insurance valuations performed

by a third party Software as a Service (SaaS)

company over the Internet in digital real time

transactions which stretch across state lines

constitute Commerce among the several States and

thus subject to regulation by Congress under the

Commerce Clause. Infra 3.

Whether the SaaS as a registered entity is

subject to Securities and Exchange Commission

rules in the valuations created over the Internet.

Infra 6.

PARTIES TO PROCEEDINGS

Petitioner is pro se Dorothy A Smulley, the

plaintiff appellant below.

Respondents are Safeco Insurance Company of

Illinois and CCC Information Services Inc., now known

as CCC Intelligent Solutions Inc. also known as CCC

Intelligent Solutions Holdings Inc., the defendant

appellees below.

All parties appear in the caption of the case on the

cover page.

Ill

TABLE OF CONTENTS

Questions Presented....................................

Parties to the Proceedings............................

Table of Authorities................................. .....

Opinions Below.................................................

Jurisdiction.........................................................

Constitutional and Statutory Provisions

Statement.............................................................

Introduction

Legal Background

McCarran Ferguson Act................

Securities Exchange Act................

CCC is subject to SEC regulation

This matter is first impression....

Factual Background..................................................

Procedural Background...........................................

Petitioner’s underlying state action....

Petitioner’s district court action...........

Reasons for Granting Petition..............................

Petitioner has jurisdiction under both

the Commerce Clause and

SEC Section 10b......................................

Petitioner has jurisdiction

under diversity........................................

Dismissal by the lower courts

conflicts with Stare Decisis...................

State insurance commissioners lack

jurisdiction to regulate SaaS Internet

digital transactions.................................

The questions presented are of public

interest and are reoccurring.................

•<

Fundamental fairness is a right

which requires remedy...............

CONCLUSION

Appendix A - Second Circuit Summary Order......

Appendix B - Second Circuit Denial of Rehearing

Appendix C - Connecticut District Court Order...

Appendix D - Constitutional and Statutory

Provisions.........................................

U.S. Const. Amend. V......................

U.S. Const. Amend. XIV §1............

U.S. Const. Art. I, §8, cl.3............. .

15 U.S.C. § 78j.................................

15 U.S.C. § 78aa..............................

15 U.S.C. § 1011...............................

15 U.S.C. § 1012...............................

28 U.S.C. § 1254..............................

28 U.S.C. § 1337...............................

17 CFR § 240....................................

Conn. Gen. Stat. § 42-110g............

10a

11a

33a

34a

35a

36a

37a

38a

TABLE OF AUTHORITIES

Cases

A.F.A. Tours Inc v Whitchurch,

937 F.2d 82, 87 (2d Cir.1991).................

Am. Booksellers Found v. Dean,

342 F.3d 96, 103 (2d Cir. 2003).............

Ashcroft v. American Civil Liberties Union,

535 U.S. 564, 573 (2002)..........................

Barclays Capital Inc. v Theflyonthewall.com,

700 F.Supp.2d 310, 344 (S.D.N.Y. 2010)

Bell v. Reno,

218 F.3d 86, at 90 (2d Cir.2000).....

Buckley v. Valeo,

424 U.S. 1, 48-49 (1976).................

CCC Info. Servs. Inc. v

Maclean Hunter Mkt. Reports Inc.,

44 F.3d 61 at 67, 72 (2d Cir. 1994)..

Cleburne v. Cleburne Living Center, Inc.,

473 U.S. 432, 439, (1985)................

Chase Manhattan Bank NA v

Am. Nat. Bank and Trust Co of Chicago,

93 F.3d 1064, 1070-71 (2d Cir. 1996).......

Chambers v Dist. Of Columbia,

35 F.4th 870, 873 (2022)...........................

Cipollone v. Liggett Group, Inc.,

505 U.S. 504, 516 (1992)..........................

Columbian Enameling & Stamping Co,

308 US 292, 300 (1939)............................

Cooper v. North Jersey Trust Co.,

226 F.Supp. 972 (SDNY 1964).................

CTS Corp. v. Dynamics Corp of Am.,

481 US 69, 88-89, (1987)..........................

Daniels v. Williams,

474 U.S. 327, 337 (1986).......

Energy Solutions Inc v Realgy LLC,

114 Conn.App. 262, 273, 969 A.2d 807 (2009)....17

Group Life & Health Ins. Co. v. Royal Drug Co.,

5, 6, 19

440 US 205 (1979),.............................

Halliburton Co. v Erica P. John Fund, Inc.,

573 U.S. 258, 266 (2014).....................

Healy v. Beer Institute, Inc.,

491 U.S. 324, 337 (1989).....................

Knowles v. Mirzayance,

556 U.S. Ill, 123 (2009).....................

Lander u. Hartford Life & Annuity Ins. Co.,

251 F.3d 101, 115 (2d Cir.2001).........

MacDermid Inc v Leonetti,

310 Conn. 616, 634 (2013).................

Mathews v Eldridge,

424 U. S. 319, 335 (1976)....................

McNichols v. Geico General Insurance Co,

3:20cv01497 (KAD) (D.Conn. July 21, 2021)

Melendez v Fresh Start Gen. Remodeling,

183 A.3d 670, 679, 180 Conn.App.355 (2018)....24

Michigan v Bay Mills Indian Community,

572 U.S. 782, 798 (2014).....................

Morrison v. National Australia Bank Ltd.,

561 U.S. 247, 130 S. Ct. 2869, 2873,

177 L. Ed. 2d 535 (2010).....................

Pireno v New York State Chiropractic Ass’n,

650 F.2d 387 (2d Cir. 1981)................

18, 19

Radzanower v. Touche Ross & Co.,

426 US 148, 155-56 (1976)..................

Vll

SEC v. Natl Secs., Inc.,

393 U.S. 453, 459-60 (1969)...........................

Scherer v Equitable Life Assurance Soc’y of U.S.,

347 F.3d 394, 397 (2d Cir.2003).....................

St. Paul Mercury Indem. Co. v Red Cab Co,

303 U.S. 283, 288-289 (1938).........................

Taggart v. Lorenzen,

139 S. Ct. 1795, 204 L. Ed. 2d 129,

587 U.S. (2019)................................................

Tongkook Am. Inc v Shipton Sportswear Co.,

14 F.3d 781, 784 (2d Cir.1994)....................... 14, 16

Union Pacific v Brotherhood of Locomotive Eng.,

558 U.S. 67, 81(2009).................. ..................

United States v Lopez,

514 U.S. 549, (1995).......................................

United States v Redcorn,

528 F.3d 727, 737 (10th Cir. 2008)................. 4, 20

United States v. Salerno,

481 U.S. 739, 746 (1987)................................

United States v South-Eastern Underwriters Ass’n,

322 U.S. 533 (1944)....................... ................. 4, 5,6

United States v Stewart,

955 F.Supp. 385, 391 (E.D.Pa. 1997)............

US v. Aref,

533 F.3d 72, 83 (2d Cir. 2008)............................ 25

US v. Marcus,

130 S. Ct. 2159, 2161, 560 U.S. 258,

176 L. Ed. 2d 1012(2010)................................... 17

Wolde-Meskel v

Vocational InstructionProject Cmty. Servs. Inc,

166 F.3d 59, 63 (2d Cir. 1999)............................. 15

Vlll

Zacharia v Harbor Island Spa Inc,

684 F.2d 199, 202 (2d Cir.1982)

Constitution

U.S. Const. Amend. V..........

U.S. Const. Amend. XIV, § 1

U.S. Const. Art. I, § 8, cl. 3..

1, D33a

1, D34a

U.S. Code

15 U.S.C. § 78j....

15 U.S.C. § 78aa.

15 U.S.C. § 1011.

15 U.S.C. § 1012,

28 U.S.C. § 1254.

28 U.S.C. § 1337.

2, 7, 8, 10, 13, D35a

.......... 1,7, 8, D35a

....... 1,2,4, 7, D36a

......... 1, 2, 4, D36a

..............1, 2, D37a

................ 2, D37a

Agency Regulations

17 CFR § 240.10b-5....

2, 7, 8, D37a

Connecticut General Statutes

Section 42-110g............................

2, 16, D38a

Other Authories

https://dictionary.cambridge.org/eocample/english/

diferential-treatment,........................................ 17

https://ir.cccis.com/home/default.aspx,.................. 6

https://www.justice.gov/archives/jm/

criminal-esource-manual-1366trafficking-certain-motor-vehicleor-motor-vehicle.................................................. 21

https://www.law.cornell.edu/wex/

securities_exchange_act_of_1934...................... 8

https:/www.sec.gov/Archives/edgar/da ...,

EX-99.1 2 dl01043dex991.htm EX-99.1,.,

https:/Zwww.sec.gov/ix?doc=/Archives/edgar/

data/1818201/000095017023005611/

cccs-2022123l.htm#item_l_business,......

PETITION FOR A WRIT OF CERTIORARI

Petitioner pro se Dorothy A Smulley respectfully

petitions for a writ of certiorari to review the judgment

of the United States Court of Appeals for the Second

Circuit.

OPINIONS BELOW

Opinion of the Second Circuit court of appeals is

unreported. (App.A la). Denial of rehearing by the

Second Circuit is unreported (App.B 10a). Order of the

Connecticut district court is unreported (App.C 11a).

JURISDICTION

Judgment of the court of appeals entered

November 8, 2022. Denial of the petition for rehearing

entered December 29, 2022.. This Court has jurisdiction

pursuant to 28 U.S.C. § 1254(1).

CONSTITUTIONAL

AND STATUTORY PROVISIONS

Amend. V................................................ (App.D33a)

Amend. XIV, § 1..................................... (App.D33a)

Art. I, § 8, cl. 3, Commerce Clause...... .(App.D34a)

15 U.S.C. § 1011, McCarran-Ferguson

Act intent................................... (App.D35a)

15 U.S.C. § 1012(b), McCarran-Ferguson

(App.D35a)

Act business of insurance

15 U.S.C. § 78aa, Securities Exchange Act

(App.D35a)

exclusive jurisdiction

15 U.S.C. § 78j Securities Exchange Act

employment of manipulative and

deceptive devices....................... (App.D36a)

15 U.S.C. § 1011 Declaration of policy

business of insurance................ (App.D36a)

15 U.S.C. § 1012 Regulation

(App.D36a)

by state law...........................

28 U.S.C. § 1254 Court of Appeals;

certiorati; certified questions.....(App.D37a)

28 U.S.C. § 1337 Commerce and antitrust

(App.D37a)

regulations

17 CFR § 240.10b-5 Rule for employment

of manipulative and

(App.D38a)

deceptive devices................

Conn. Gen. Stat. § 42-110g

(App.D38a)

Unfair Trade Practices Act

STATEMENT

Introduction

This is a matter of statutory fraud and negbgence.

Allegations involve plaintiffs motor vehicle physical

damage Part D contract of insurance policy issued by

Safeco Insurance Company of Illinois (Safeco). Safeco is

under the umbrella of Liberty Mutual Holding Inc.

(LMH). LMH is described as the sixth largest global

property casualty insurer.

CCC Information Services Inc, now known as

CCC Intelligent Solutions Holdings Inc (CCC) is a

Software as a Service (SaaS) company. CCC is a public

company and traded through the Nasdaq Stock Market.

CCC is registered with the Securities & Exchange

Commisison (SEC) and subject to SEC oversight.

According to CCC’s recent 2022 SEC 10k annual

report for the period ending December 31, 2022, CCC

digitizes workflows and connects with more than 30,000

companies across the property casualty insurance

industry which includes insurers, collision repairer

shops, parts suppliers, automotive manufacturers,

CCC’s

financial institution lenders and others.

permissive software creates valuations in the motor

vehicle physical damage (MVPD) arena.

Through paid subscriptions, CCC’s permits use of

proprietary real time digital software via the Internet.

CCC’s software is permissive programming.

Any

authorized user can override CCC’s objective data and

substitute the user’s own subjective opinion to reach a

predetermined number. In an appraisal valuation, the

predetermination number can be lower than the

objective facts calculate. In a repair valuation, the

predetermination number can be higher than the

objective facts.

Simply put, CCC’s software is

specifically created and programmed to permit data

See Barclays Capital Inc.

exploitation.

Theflyonthewall.com,700 F.Supp.2d 310, 344 (S.D.N.Y.

2010) citing CCC Info. Servs. Inc. v Maclean Hunter

Mkt. Reports Inc., 44 F.3d 61 at 67, 72 (2d Cir. 1994).

LEGAL BACKGROUND

McCarran Ferguson Act

Generally, under the Supremacy Clause when a

federal statute and a state statute conflict, the state

statute yields under the doctrine of preemption. See,

Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516

(1992).

However, the McCarran Ferguson Act (MFA),

U.S.C. §1011 et seq., “...is an exception to this general

rule, in that it permits state laws to trump federal laws

in certain circumstances (or to reverse preempt those

laws). The MFA was enacted in response to the Supreme

Court’s decision in United States v South-Eastern

Underwriters Ass’n, 322 U.S. 533 (1944). See App. 35A

for § 1012(b) of MFA.

The MFA does not shield a person accused of

criminal conduct in violation of the laws of the United

States. See, United States v Redcorn, 528 F.3d 727, 737

(10th Cir. 2008). The Supreme Court specifically

acknowledged insurance companies would continue to

do many things subject to federal regulation; but the

Supreme Court emphasized, only when insurance

companies are engaged in the business of insurance does

federal law potentially yield to state law. See, SEC v.

Nat’l Secs., Inc., 393 U.S. 453, 459-60 (1969).

In United States u Lopez, 514 U.S. 549, (1995), the

Supreme Court reiterated three categories of activity

which Congress can regulate when exercising Commerce

Clause power.

1. regulating the use of the channels of

interstate commerce;

2. regulating and protecting instrumentahties of

interstate commerce, or persons or things

therein, even if the threat is from purely

intrastate activities; and

3. regulating activities which have a substantial

relation to interstate commerce, that is,

substantially affect interstate commerce.

Lopez at 558-59.

Not only can Congress regulate the use of the

channels of interstate commerce but those activities

which substantially affects interstate commerce. Id.

“Commerce is interstate when it concerns more

United States v. South-Eastern

states than one.”

Underwriters Assn., 322 U.S. at 551.

What is regulated here are valuation services on a

MVPD claim “...transmitted from one state to another

whether the mechanism used to make the transaction is

the United States Mail, an electronic funds transfer, or

some other interstate channel." Id at 546. “In short, a

nationwide business is not deprived of its interstate

character merely because it is built upon sales contracts

which are local in nature.” Id at 547.

Here in this matter, the appraisal valuation was

digitally transmitted via Internet from Texas to

Connecticut; repair estimating from New York to

Connecticut. Both via a Cloud server located elsewhere.

Group Life & Health Ins. Co. v. Royal Drug Co.,

440 US 205 (1979), is a case which supports petitioner’s

arguments. The Supreme Court discussed and analyzed

the contractual arrangement between the parties which

is dispositive here.

CCC’s contract with Safeco,“do[es] not

involve any underwriting or spreading of

risk, but [is] merely [a contractual]

arrangement for the purchase of goods and

services...” Id. at 214.

The practice of generating digital Internet

reports is designed not for the benefit of the

policyholders but to provide shortcuts in

claims handling which shortcuts have, as

here, widened the opportunities for fraud

against insured policyholders. Infra 3. CCC

services are neither directed at, nor

necessary for protection of policyholders.

CCC’s 2022 SEC 10k branding CCC an

independent contract provider of valuation

services bears this out.

CCC’s marketing of SaaS are targeted and

sold to a number of industries including,

repair facilities, auto manufacturers, parts

suppliers, financial lenders, and more.

https://ir.cccis.com/home/default.aspx ,

viewed 9/28/2022.

Thus, with CCC Internet capabilities, Safeco can

effectively know immediately whether the damaged

vehicle is a candidate for repair or pay off. And as

CCC’s marketing touts, immediacy thereby reduces time

and labor accordingly. As in Group Life & Health, the

CCC contract enables insurance companies,

“...to minimize cost and maximize profits. Such

cost-savings arrangements may well be sound

business practice, and may well inure ultimately

to the benefit of policyholders in the form of lower

premiums, but they are not the business of

insurance." Id at 214.

District court dismissed for lack of federal jurisdiction.

In doing so, however, the dismissal was in conflict with

courts within the district who found otherwise. Infra 17.

The Second Circuit declined to take up plaintiff’s

arguments and summarily affirmed dismissal. Here,

too, the circuit’s affirmation is in conflict with previous

circuit decisions. Infra 17-21.

Securities Exchange Act

Section 10(b) of the Securities Exchange Act of

1934 as amended (Exchange Act) prohibits fraud in the

purchase or sale of securities. See 15 U.S.C. § 78j

(App.D35a).

Securities and Exchange Commission

(SEC) Rule 10b-5 contains the general, catch-all antifraud provision of the federal securities laws. See 17

CFR § 240-10b-5 (App.D37a).

“The primary purpose of the Securities Exchange

Act was... [t]o provide fair and honest

mechanisms for the pricing of securities [and] to

assure that dealing in securities is fair and

without undue preferences or advantages among

investors... Its venue provision, §27... [15 U.S.C.

§78aa; App.35a], was intended to facilitate that

goal by enabling suits to enforce rights created by

the Act to be brought wherever a defendant could

be found.” (Cleaned up.)

Radzanower v. Touche Ross & Co., 426 US 148, 155-56

(1976).

Petitioner raised the issue of SEC jurisdiction in

her complaint. However, both lower courts failed to

address the SEC implication when considering federal

jurisdiction.

In Morrison v. National Australia Bank Ltd., 561

U.S. 247, 130 S. Ct. 2869, 2873, 177 L. Ed. 2d 535

(2010), this court found,

“The Second Circuit erred in [not] considering

§ 10(b)..., thus allowing dismissal... What conduct

§ 10(b) reaches is a merits question, while subjectmatter jurisdiction refers to a tribunal's power to

hear a case... The District Court had jurisdiction

under 15 U.S.C. §78aa to adjudicate the § 10(b)

question.” (Cleaned up.) Id.

CCC is subject to SEC regulation.

On February 3, 2021, CCC announced a merger

with Dragoneer Growth Opportunities “...to accelerate

the digital transformation of the property and casualty

insurance economy.” https:/www.sec.gov/Archives/

edgar/da ..., EX-99.1 2 dl01043dex991.htm EX-99.1,

viewed 2/13/2021. CCC operates nationwide and in

China. Id. CCC is subject to regulation by the U.S.

Security and Exchange Commission. Id.

Section 10(b) of the Securities Exchange Act of

1934 (the "Exchange Act") (codified in 15 USC

§78j) is the primary anti-fraud statutory

provision. The SEC primarily enforces this antifraud provision under Rule 10b-5, promulgated

thereunder [17 CFR §240.10b-5] which prohibits

the use of any "device, scheme, or artifice to

defraud." Rule 10b-5 also imposes liability for

any misstatement or omission of a material fact.

https://www.law.cornell.edu/wex/securities_exchange_

act_of_1934, viewed 11/10/2022.

The Second Circuit’s history demonstrates great

familiarity with Rule 10b-5. See generally, Cooper v.

North Jersey Trust Co., 226 F.Supp. 972 (SDNY 1964).

This matter is first impression.

The Internet has spawned a variety of fraud not

thought possible just ten years ago. The defendants’

motivation here is to induce fraud on insureds through

the use of Internet digital technology created,

programmed and controlled by third party CCC.

Safeco benefits by showing a false expediency in

turn-around time from claim initiation through to

closure. Safeco further benefits by salvaging the used

parts thereby gaining profit to offset all claims handling

expenses including trafficking the parts. Safeco also

benefits by minimizing claim reserves mandatory under

law as long as a claim remains open. Thus, Safeco can

claw back substantial dollar reserves statutorily

required to give the false impression of efficiency in the

claims sector when in fact, there is none. And when an

insured protest like petitioner here, Safeco sells off the

statutorily open claim to an unaffiliated entity to

dispose , at will thereby allowing Safeco to prematurely

close the claim on Safeco’s books to claw back dollar

reserves.

CCC derives direct benefits also. CCC promotes

the false positives experienced with Safeco to induce

other insurers to subscribe to the permissive digital

platform. CCC’s trading stock rises, more profit is made

and everyone is happy. Except the insureds.

CCC’s digital technology lacks sufficient pre

programmed user safeguards to prevent Safeco and CCC

users from inducing fraud. CCC knew or in the exercise

of reasonable care, should have known reasonable pre

programmed safeguards prevent fraud.

For example, digital technology for tracking users

and data is not new. Every social platform and media

advertiser uses tracking and cookies to create personal

profiles to direct user thought and buying habits, among

other things. Such technology forms a continuous

transparent record which should be, but is not available

to insureds via the Internet through their policyholder

Technology can also block certain

accounts,

The safeguards are

predetermined fields, etc.

numerous. Any user of the Internet is familiar and if

not, should be.

What conduct § 10(b) reaches is a merits question,

while subject-matter jurisdiction, “refers to a tribunal's

power to hear a case." Union Pacific v Brotherhood of

Locomotive Eng., 558 U.S. 67, 81 (2009). Plaintiffs

financial loss as an insured is no less than an investor’s

financial loss induced by fraud. The Second Circuit was

silent on the issues raised in plaintiff brief.

FACTUAL BACKGROUND

Petitioner had a contract of insurance policy with

Safeco for the relevant period. The contract included

motor vehicle physical damage (MVPD) under Part D of

the relevant policy. Most terms and conditions under

Part D are standardized throughout the insurance

industry. Also standardized is the Declaration Sheet

(dec sheet) which identifies bodily injury, third party

property damage and uninsured/underinsured motorist

coverage limits. The dec sheet also includes MVPD

limits agreed upon by insured and insurer for the yearly

premium assessed.

Outside her home state, petitioner had a minor

automobile accident on an icy road. The accident

damaged the left front fender and headlight. No other

vehicles or individuals were involved. Soon thereafter,

the vehicle was inspected by a local repair shop and

found to be fully operational and functional. Petitioner

resumed her journey home without incident, a journey of

approximately 380 highway miles.

The discovery evidence shows the damaged

vehicle was inspected by a Safeco employee. The

employee used his computer to access CCC real time

permissive software in situ at the local repair shop.

First, an appraisal was done then a repair valuation.

The repairs were approximately half the appraised

value. CCC’s software designated repair for the vehicle.

Further discovery evidence shows Safeco’s

employee returned to the repair shop, vandalized

plaintiffs vehicle, removed parts estimated over $1,000

and permanently altered the post-accident condition.

CCC’s first repair valuation was then altered, parts

were added, numbers increased, all to give the false

appearance of an original repair valuation. The vehicle

was manually redesignated total loss.

The discovery evidence also shows a second

vandalism by a Safeco agent after Safeco towed the

vehicle elsewhere under promise of repair. Again, more

parts were removed and CCC’s repair valuation altered.

Over $2,200 of parts and services were added onto

The total loss

CCC’s second repair valuation,

designation remained.

The evidence obtained supports petitioner’s

material facts. Why does this type of fraud occur?

Simply put, salvaging and selling used car parts

generates profit for Safeco. Repairing a vehicle does not.

But for the data exploitation intentionally created and

programmed into CCC’s permissive valuation software

without user safeguards to protect insureds, MVPD

salvage trafficking is not possible in the expedient

manner demonstrated here.

PROCEDURAL BACKGROUND

Petitioner’s underlying state action.

Plaintiff first filed an action in Connecticut state

court. However, state court did not reach the merits of

the complaint. Instead, proceedings were stayed with

an order for binding and unrestricted arbitration on

both factual and legal questions.

On appeal, the state Appellate found the

arbitration order insufficient as to law and constituted a

stay only. On remand, state court consistently refused

to conform with the Appellate’s order of insufficiency.

The result of the state-appellate stand-off caused

plaintiff’s action to remain permanently

stayed.

Procedurally, the stay represented an injunction absent

the safeguards statutorily required of an injunction.

Under pressure from Safeco, state court ultimately

dismissed the action. Plaintiffs appeal to the Appellate

is pending.

Safeco refused to act pursuant to Connecticut

statutory requirements. Safeco refused to act under the

terms of the insurance policy contract. Safeco remains

in possession and control of plaintiffs vehicle with no

intent demonstrated to alleviate financial harms done.

The boundaries of CCC’s permissive digital

software cross every state fine and like most Internet

activity, is without regulation. These arguments were

presented to the lower courts. District court dismissed

citing lack of federal jurisdiction. As a tactical choice,

the circuit summarily affirmed.

Petitioner’s district court action.

During the course of the state action, plaintiff

became aware of CCC. To protect her rights, plaintiff

filed a complaint in Connecticut district court.

Plaintiffs complaint alleges Safeco and related Liberty

Mutual companies and agents, concealed, as a standard

business practice, CCC Internet digital -generated

interactive reports specific to plaintiffs vehicle and

falsified those reports to support pre-determined values

The prefavorable to their self-enriching goals,

determined values were numeric adjustments which

lowered the dollar value on the appraisal side and

significantly increased the dollar value on the repair

side. Plaintiff further alleges the falsified reports and

the acts which created them, failed to comply with

Connecticut statutes governing MVPD total loss.

In their motions to dismiss, both Safeco and CCC

cited MFA. District court agreed and dismissed for lack

of federal jurisdiction. The circuit summarily affirmed.

REASONS FOR GRANTING PETITION

Petitioner has jurisdiction under both the

Commerce Clause and SEC Section 10b

"The Supreme Court instructed a court

addressing a preemption claim to determine, first,

whether Congress has spoken directly on the precise

question at issue; if the intent of Congress is clear, it is

dispositive and the inquiry ends." Bell v. Reno, 218 F.3d

86, at 90 (2d Cir.2000).

The pothole here is Congress has not addressed

the Internet in the business of insurance. Thus, Safeco,

CCC and many other insurers hide behind MKA’s

narrow carve-out to conduct fraudulent schemes which

deprive insureds their motor vehicle property interest.

Petitioner has jurisdiction under diversity.

Petitioner’s action is among citizens of different

states. Petitioner resides in Connecticut. Safeco’s

principal place of business is Massachusetts and CCC’s

principal place of business is Illinois. Thus diverse

This fact is

citizenship is among the parties,

undisputed.

As to the statutory jurisdictional amount of

$75,000, petitioner argued reasonable probability. See

Tongkook Am. Inc v Shipton Sportswear Co., 14 F.3d

781, 784 (2d Cir.1994). An objective measure is, "..the

amount in controversy as of the date of the complaint."

Scherer v Equitable Life Assurance Soc’y of U.S., 347

F.3d 394, 397 (2d Cir.2003). Petitioner’s complaint and

the undisputed material facts in her underlying state

action show “substantial evidence... [of] the benefit of

the doubt, since it requires not the degree of evidence

which satisfies the court that the requisite fact[s] exist,

but merely the degree which could satisfy a reasonable

fact finder.” See Columbian Enameling & Stamping Co,

308 US 292, 300 (1939). This is an objective test. Id.

In district court, Safeco simply argued a failure to

meet the amount without anything more. CCC was

silent on the issue. Circuit’s reliance rested with

“plausibility of

district’s position where lack of

culpability prerequisites [failed] to substantiate a

claim...” Thus, the circuit unfairly and subjectively

eliminated punitive from the calculation of damages

(App. A5a).

And in support of CCC’s silence on the

jurisdictional amount, the circuit defended and

determined erroneously, CCC didn’t know CCC was

violating the law or doing anything wrong. (App.A5a).

Two factors are in play here.

First, this is a merits question which cannot be

answered until all material factual evidence is

submitted, reviewed and determined. For the circuit to

conclude otherwise was clearly erroneous. And second,

on CCC’s own admission,

“In the automotive insurance sector, which

represents nearly half of the U.S. P&C insurance

industry, processing a single event, such as a

claim, can require hundreds of micro-transactions

across its supporting economy, involving

consumers, lenders, collision repair facilities,

automotive manufacturers,

dealers,

parts

suppliers, medical providers, vehicle auctions, and

others. These transactions depend on extensive

hyper-local decisions and data, creating a level of

complexity that can increase processing costs

as well as the potential for fraud and other

forms of claims leakage(Emphasis added.)

https: / / www.sec.gov/ix?doc=/Archives/edgar/data/

1818201/000095017023005611/cccs2022123l.htm#item_l_business, accessed 3/21/2023

The high bar established by the circuit countered

Supreme Court and circuit precedent. See, WoldeMeskel v Vocational Instruction Project Cmty. Servs. Inc,

166 F.3d 59, 63 (2d Cir.1999) (This [reasonable

probability the claim is in excess] burden is hardly

onerous). This is so because “...the party opposing

jurisdiction must show to a legal certainty that the

amount recoverable does not meet the jurisdictional

threshold.” St. Paul Mercury Indem.Co. v Red Cab Co,

303 US 283, 288-289 (1938). Legal certainty of a

jurisdictional amount is a merits question. The lower

court had jurisdiction to determine the issue on material

facts but did not.

[T]he legal impossibility of recovery must be so

certain as virtually [negate] the plaintiffs good faith in

asserting the claim.” Chase Manhattan Bank NA v Am.

Nat. Bank and Trust Co of Chicago, 93 F.3d 1064, 107071 (2d Cir.1996). "[E]ven where [the] allegations leave

grave doubt about the likelihood of a recovery of the

requisite amount, dismissal is not warranted." Zacharia

v Harbor Island Spa Inc, 684 F.2d 199, 202 (2d

Cir.1982). "Where the damages sought are uncertain,

the doubt should be resolved in favor of the plaintiff's

pleadings." Tongkook America v Shipton Sportsware Co,

14 F.3d at 785 (1994).

As a final item and for clarification.

“[I]f punitive damages are permitted under the

controlling law, the demand for such damages

may be included in determining whether the

jurisdictional amount is satisfied.”

A.F.A. Tours Inc v Whitchurch,

937 F.2d 82, 87 (2d Cir.1991).

The Second Circuit used a recklessness standard

to evaluate whether the opportunity for punitive

damages was present. The court found in the negative

(App.A5-6a). The circuit reviewed under a very narrow

standard. Connecticut Unfair Trade Practices Act § 42llOg (CUTPA) criteria does not require a showing of

recklessness. Connecticut adopted the cigarette rule as

used by the Federal Trade Commission to determine

when a practice is unfair. The standard provides,

(1) Whether the practice without necessarily

having been previously considered unlawful,

offends public policy as it has been established by

statutes, the common law or otherwise - in other

words, it is within at least the penumbra of some

common law, statutory, or other established

concept of unfairness. (2) Whether it is immoral,

unethical, oppressive or unscrupulous. And (3)

whether it causes substantial injury to

consumers. Not all three criteria are necessary to

demonstrate an unfair act.

Energy Solutions Inc v Realgy LLC,

114 Conn.App. 262, 273, 969 A.2d 807 (2009).

Thus, the circuit was in error finding otherwise.

Even if this court supports the recklessness element,

CCC’s own admission of their permissive software

creating fraud (Infra 3), satisfies the recklessness

standard.

Evidence of diversity was overlooked. This failure

“...affects the fairness, integrity, [and] public reputation

of judicial proceedings. US v. Marcus, 130 S. Ct. 2159,

2161, 560 U.S. 258, 176 L. Ed. 2D 1012 (2010).

Dismissal by the lower courts conflicts with

stare decisis.

“[Discrimination connotes any differential

treatment.” Chambers v Dist. Of Columbia, 35 F.4th

870, 873 (2022). Differential treatment means the way

a party deals with or behaves towards another party.

https://dictionary.cambridge.org/example/english/diff

erential-treatment, accessed 3/18/2023. Here, dismissal

for lack of federal jurisdiction was a result of differential

treatment adverse to petitioner. This is so because the

decision of dismissal was contrary to established law.

Safeco argued petitioner’s events complained of

are the “business of insurance” without anything more.

CCC did not speak. Both lower courts agreed with

Safeco. The practical effect of such a finding permits

Connecticut and all states to control conduct beyond the

boundaries of the state. The ruling is invalid. See,

Healy v. Beer Institute, Inc., 491 U.S. 324, 337 (1989) (if

the practical effect is to control conduct beyond the

boundaries of the state, it is invalid).

In Am. Booksellers Found v. Dean, 342 F.3d 96,

103 (2d Cir. 2003), this same circuit noted, "[b]ecause

the Internet does not recognize geographic boundaries,

it is difficult, if not impossible, for a state to [adjudicate]

Internet activities without projecting its [law on]to other

states." The decision of dismissal for lack of federal

jurisdiction is unreasonably applied under established

federal law. See, Knowles v. Mirzayance, 556 U.S. Ill,

123 (2009).

A brief discussion of Second Circuit

citations follows.

Pireno v New York State Chiropractic Ass’n,

650 F.2d 387 (2d Cir. 1981). (Cleaned up.)

The circuit considered an antitrust challenge to

an insurer's practice of submitting claims for

chiropractic services to a chiropractic review committee

for a determination of whether the services and fees

were reasonable within the meaning of the insurance

policy. The circuit analyzed the Supreme Court's

opinion in Royal Drug, supra, and concluded,

“...the McCarran-Ferguson anti-trust exemption

for the business of insurance is to be strictly

limited to only the quintessential insurance

functions."

Pireno, 650 F.2d at 392.

Underwriting and risk spreading are fundamental

in the business of insurance.

"[A]n activity or procedure that does not either

transfer risk from insured to insurer or spread the

risk among insureds is not the business of

insurance... The peer review process did neither."

(Emphasis added.)

Pireno, 650 F.2d at 393.

The court was unpersuaded by arguments where

the peer review committee performed a traditional

insurance adjusting function. The court suggested

claims adjusting and settlement itself under Royal Drug

might not constitute the business of insurance.

“The antitrust exemption seeks primarily to

shield agreements among insurers, not those

between insurers and persons outside the

industry.”

Pireno, 650 F.2d at 394-95 citing Royal Drug, 440 U.S.

at 221-22m, 224-25, n.32, 99 S.Ct. at 1080, n.32.

“,..[P]eer review is not the business of insurance

within the meaning of § 2(b) of the McCarranFerguson Act, and... defendants' use of the

procedure is therefore not immune from scrutiny

under the antitrust laws.” Id.

The Second Circuit remanded for further proceedings.

Here, the Second Circuit’s affirmation of dismissal on

federal jurisdictional grounds conflicts with the court’s

own precedent.

CTS Corp. v. Dynamics Corp of Am.,

481 US 69, 88-89, (1987)

(generally speaking, the Commerce Clause protects

against inconsistent legislation arising from the

projection of one state regulatory regime into the

jurisdiction of another State).

Lander v. Hartford Life & Annuity Ins. Co.,

251 F.3d 101, 115 (2d Cir.2001).

(they lack the traditional earmarks of insurance. The

[Supreme] Court stated... the concept of insurance

involves some investment risk-taking on the part of the

company), (cleaned up.)

McNichols v. Geico General Insurance Co,

3:20cv01497 (KAD) (D.Conn. July 21, 2021).

(there can be no doubt that an automobile insurance

policy is a contract that affects interstate commerce).

United States v Stewart,

955 F.Supp. 385, 391 (E.D.Pa. 1997)

([MFAJ does not shield a person accused of criminal

conduct in violation of U.S. laws).

United States v Redcom,

528 F.3d 727, 737 (10th Cir. 2008)

(federalprosecution for... mail fraud and wire fraud not

barred by [McCarran-Ferguson] Act...).

Thus, in the context of stare decisis, adherence is

"a foundation stone of the rule of law," Michigan v Bay

Mills Indian Community, 572 U.S. 782, 798 (2014).

“[A]ny departure from the doctrine demands special

justification...” Halliburton Co. v Erica P. John Fund,

Inc., 573 U.S. 258, 266 (2014).

Neither lower courts proffered special justification

for the departure from precedent. Thus, the lower

courts applied differential treatment to support

dismissal. This same analogy is applicable to non

antitrust cases where, as here, plaintiff alleges salvage

trafficking fraud under the guise of business of

insurance.

The district court order and circuit affirmation

are unreported in the federal register. Irrespective,

users of CCC and other SaaS Internet permissive

software programs will continue to manipulate MVPD

repair valuations upwards and appraisal valuations

downward to falsely substantiate total losses and will

continue to reap greater and greater monetary benefit

from salvage sales and auctions. See, https://www.

justice.gov/archives/jm/criminal-esource-manual-1366trafficking-certain-motor-vehicle-or-motor-vehicle-parts,

updated Jan. 17, 2020, accessed 3/18/2023.

Salvage trafficking is a well-known secret which

can and should be brought to the public’s attention

through the grant of this petition.

State insurance commissioners lack

jurisdiction to regulate SaaS Internet digital

transactions

The insurance industry’s complete reliance on the

Internet and CCC’s permissive software should not be

ignored or overlooked as the lower courts have done. As

digital technology progresses, SaaS companies like CCC

have and will continue to expand permsisive software

into other areas.

And not to be overlooked, is the inability of state

insurance commissioners to address the issues

complained of here in their respective states. This is

because CCC internet permissive software is a product

designed specifically to be national and global in scope.

CCC’s software and the AI algorithms which the

software requires is operative in the United States and

China. The global scope and exchange of American

insurance industry data on insureds and their motor

vehicle personal identifying information readily

accessible are vulnerabilities which require recognition.

The questions presented are of public

interest and are reoccurring.

Plaintiff's claims of salvage trafficking are not

confined to Connecticut. Hundreds of legal complaints

filed in both state and federal courts throughout the

United States complain of this very same abuse. The

only variance is how the parties described the motor

vehicle physical damage contract breaches for which

recompense is claimed. CCC is always a defendant,

sometimes with and sometimes without an insurance

company defendant. This demonstrates the tremendous

inconsistency this dismissal presents with other circuits.

CCC and Safeco’s activities clearly involve

allegations of mail and wire fraud and implicate

interstate commerce. Jurisdiction is exclusive and

preempts state intervention. The source of law militates

in strong favor of federal jurisdiction.

Petitioner’s vehicle was taken by Safeco

November 28, 2018.

Safeco continues to retain

possession and control. Safeco has not provided plaintiff

any recompense under the terms of her MVPD Part D

insurance policy. The vehicle has not been repaired.

The vehicle is unattended, unprotected against the

elements and neglected by Safeco. This was a simple

MVPD claim which should have never resulted in any

litigation whatsoever. Yet, here we are. Why? Because

CCC’s permissive software plus Safeco’s data

exploitation equals fraud. This digital scheme carries

tremendous financial benefits to the insurance company

propounding the scheme. But, to the public at large,

who, like plaintiff, are insured for MVPD, the financial

consequences are monumental against the insured.

Granting the petition will increase public

awareness. The issues complained of here are huge and

increasing within the personal MVPD insurance

industry. More and more consumers will lose their

motor vehicle property irrespective of the contract of

insurance as is the case here. A loss which plaintif

Salvage

argues, constitutes an unlawful taking,

trafficking of used motor vehicle parts reap greater

profit which would not be generated if the vehicle was

repaired.

Fundamental fairness is a right which

requires remedy.

"The right to fundamental fairness in [judicial]

proceedings encompasses a variety of procedural

The scope of the right to

protections...

fundamental fairness... like the scope of the

constitutional right to due process that it

resembles, is a question of law...”

Melendez v Fresh Start Gen. Remodeling,

183 A.3d 670, 679, 180 Conn.App.355 (2018).

"No person shall... be deprived of life, liberty, or

property, without due process of law..."

United States v. Salerno, 481 U.S. 739, 746 (1987). Yet

here, both lower courts refused to take up the matter.

“The Equal Protection Clause of the

Fourteenth Amendment commands that no State

shall deny to any person within its jurisdiction

the equal protection of the laws, which is

essentially a direction that all persons similarly

situated should be treated alike.”

Cleburne v. Cleburne Living Center, Inc., 473 U.S. 432,

439, (1985). “If a discriminatory purpose infects a

legislative Act, the Act itself is inconsistent with the

Equal Protection Clause and cannot validly be applied to

anyone. Id at Fn.25.

When lower courts deprive a person of property,

procedural due process must be fair. See, Mathews v

Eldridge, 424 U. S. 319, 335 (1976). In this matter both

lower courts suppressed precedent and restricted

arguments which fit a narrow channel towards

“[G]overnment has no power to restrict

dismissal.

expression because of its message, its ideas, its subject

matter, or its content.” Ashcroft v. American Civil

Liberties Union, 535 U.S. 564, 573 (2002).

Dismissal of plaintiffs complaint and summary

affirmation by the reviewing court without more is

suppression of evidence . The procedural posture lacks

transparency in the judicial process. “Transparency is

pivotal to public perception of the judiciary's legitimacy

and independence. The political branches of government

claim legitimacy by election, judges by reason. Any step

that withdraws an element of the judicial process from

public view makes the ensuing decision look more like

fiat and requires rigorous justification." US v. Aref, 533

F.3d 72, 83 (2d Cir. 2008).

Dismissal created a collateral advantage in favor

of CCC and Safeco and left petitioner without any

remedy. See, MacDermid Inc v Leonetti, 310 Conn. 616,

634 (2013) (impermissible collateral purposes include

using pleadings as leverage to gain collateral advantage

extraneous to the merits of the case).

Simply put, district court suppressed the judicial

process by failing to address precedent on the relevant

issues raised. Circuit court summarily dismissed which

reinforced suppression. These acts which suppressed

precedent avoided public awareness and judicial

transparency and constitute government censorship.

Substantive due process should be a bar to certain

arbitrary government actions. But is not here. See,

Daniels v. Williams, 474 U.S. 327, 337 (1986).

Dismissal presumed plaintiff possessed no rights.

The negative presumptions proffered by CCC and Safeco

demonstrate the strength of privileged forces which

demanded district court order dismissal to silence

petitioner. Thus, the lower courts’ presumption here is

speech now silenced is a greater goal than permitting

petitioner equal protection.

The concept government may restrict speech of

some elements of our society in order to enhance the

relative voice of others should be wholly foreign in the

judicial system but is not. See, Buckley v. Valeo, 424

U.S. 1, 48-49 (1976). See also, Taggart v. Lorenzen, 139

S. Ct. 1795, 204 L. Ed. 2d 129, 587 U.S. (2019).

Simply put, dismissal failed procedural and

substantive due process and was egregiously inadequate

to protect petitioner’s motor vehicle property interest.

CCC and Safeco’s rights cannot be any greater than

petitioner’s rights. The Supreme Court has authority to

correct.

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted,

DOROTHY A SMULLEY

Petitioner pro se

408 Bar Harbour Road

Stratford CT 06614

March 23, 2023

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.