Insurance Litigation & Regulation

Coverage Litigation

• Alston & Bird represents Cotton States Mutual Insurance Company in a declaratory judgment action involving over fifty defendants stemming from a large natural gas explosion occurring at a residence in Calhoun, Georgia. The magnitude of the explosion resulted in damage to numerous surrounding homes, implicating approximately a dozen other insurance companies. On account of the intentional act of arson committed by the insured, the declaratory judgment action seeks a declaration that there is no coverage for first-party claims of the insured or third-party subrogation claims of other insurers.
• Alston & Bird has represented Imperial Sugar in insurance coverage claims stemming from the 2008 sugar refinery explosion.
• We represented Lowe’s Corporation in coverage negotiations stemming from multiplaintiff lead paint litigation in Mississippi.
• We were engaged in property coverage analysis and negotiations concerning $100 million in contingent business interruption coverage relating to the terrorist attacks of September 11, 2001.
• We represented a large, national insurer in a case regarding whether products liability coverage was triggered by claims against an insured grain distributor for selling alfa-toxin-contaminated grain that allegedly poisoned and killed an entire 1,000-head dairy herd and forced a substantial dairy operation into bankruptcy.
• We resolved a $100 million coverage dispute arising from an international product recall. We were engaged in product liability coverage litigation regarding coverage for a $50 million product liability claim.
• We obtained a declaratory judgment in favor of the insurer in the first known case in which the insured medical professional sought professional liability coverage for breach of fiduciary duty. The claims against the insured were brought as a class action (Andre Thompson, and The Class of Persons Similarly Situated, v. Michael D. Rankin, Atlanta Family Practice, P.C. and Caremark, Inc., United States District Court for the Northern District of Georgia, Atlanta Division; Civil Action File No. 1:97-CV-0377) and alleged, among other things, that the insured professional breached a fiduciary duty owed to the patient/claimant.

Catastrophic Events & Disaster Recovery

We have multiple engagements related to catastrophic events and disaster recovery. For example, one of the nation’s largest carriers has engaged us as overall coverage and regulatory coordinating counsel concerning Katrina/Rita. See also the descriptions above in the “Coverage Litigation” section regarding representative engagements and experience arising out of a sugar refinery explosion, natural gas explosion and the terrorist attacks of September 11, 2001. We have substantial experience and expertise in dealing with these types of crises and their myriad of insurance implications and complications.

Policyholder Class Actions

We have handled and continue to handle numerous nationwide class actions as lead national counsel:

• We have served as class action counsel and lead trial counsel for Safeco Insurance Company in multiple cases pending throughout the country.
• We serve as national class action counsel to State Farm in lawsuits pending across the country.
• We are lead national counsel to Prudential in numerous cases involving life and disability insurance coverage cases and class actions throughout the country.

Representative examples of Alston & Bird’s policyholder class action experience include:

• Represented a large national insurance carrier and secured a victory in the first actual trial among a series of “diminished value” class actions facing multiple insurance carriers. The case involved consumer protection act claims challenging the insurer’s disclosure practices in the automobile insurance context regarding diminished value. The team won a defense verdict on all counts after a week-long jury trial.
• Obtained a dismissal of a putative class challenging the way all insurance companies calculate premiums for workers' compensation insurance policies.
• Obtained summary judgment in favor of State Farm in the Eastern District of Louisiana in a putative class action alleging violations of federal anti-discrimination statutes (42 U.S.C. §§ 1981 and 1982), violations of the Fair Credit Reporting Act and various state law provisions. We then obtained a favorable decision by the Third Circuit affirming dismissal of the putative class action.
• After a Washington state class had already been certified, Alston & Bird was engaged by a large, national insurance carrier in a case alleging that our client improperly imposed service fees on installment payments in excess of premiums. We immediately moved to dismiss the case based on the doctrine of primary jurisdiction and the trial court referred our proposed certified questions to the Washington Insurance Commissioner. Upon receiving answers to those certified questions, we moved for summary judgment on the client’s behalf, and that motion was granted. The decision was affirmed by the Washington Court of Appeals. Petition for review by the Washington Supreme Court was denied.
• Alston & Bird successfully defeated class certification of a Colorado class action alleging that insureds were entitled to PIP benefits that were never offered or paid pursuant to Colorado statute. The complaint requested reformation of contract pursuant to Colorado statute, and alleged breach of contract, breach of duty of good faith and fair dealing, willful and wanton breach of contract, and violation of state deceptive trade practice laws. The trial court, after a full hearing on the class issues, denied the motion for class certification, which was affirmed by the Colorado Court of Appeals. Writ of certiorari was denied by the Colorado Supreme Court.
• Obtained dismissal of putative state class action alleging that our client’s service charges on their installment plans were excessive and in violation of Florida law.

Regulatory Matters

• We are regulatory counsel to a large health insurance carrier, furnishing guidance on a host of issues related to health insurance reform under the Patient Protection and Affordable Care Act, Pub. L. No. 111-148 (2010), as modified by the Health Care and Education Reconciliation Act of 2010, Pub L. No.. 11-152, as well as health insurance reform at the state level.

Contingent Commissions/Fees/Compensation Arrangements

• We have been engaged by carriers and producers in Department of Insurance and attorney general investigations in 23 different states.

Insurance Brokerage Inquiries

• We served as regulatory counsel to Wachovia Insurance Services, Inc., and other insurance brokers in directing inquiries to state regulators concerning the provision of ancillary services pursuant to life or health policies by agents.

Market Conduct/Other Regulatory Examinations

• We assisted a top-tier insurer in various aspects of a massive, multistate market conduct examination that resulted in a 43-state regulatory settlement related to claims-handling practices. We continue to assist on multiple ongoing ancillary and compliance issues concerning the settlement, including open records act requests.
• We were engaged by a top-tier provider of specialized insurance products in connection with the regulatory investigations by California and Georgia into so-called "race-based premiums" charged on certain policies sold by one or more companies acquired over the years. We were involved in negotiating settlements of potential regulatory claims with participating state regulators and the preparation for private litigation.
• We coordinated financial examination reviews of life insurance entities with individual state regulators with the successful result of having reserves lowered and approved in a timely manner.
• We have represented life insurers and their agents on regulatory matters involving insurance investigations, producer compensation issues, rate and form filings, fee and bonus structures, product development and other routine and high-profile matters.
• We represented Equitable Life Insurance Company in a massive investigation of fraudulent life-underwriting practices involving thousands of policyholders potentially exposed to HIV by a rogue underwriting agent and over $300 million of fraudulently procured life insurance.

Premium Finance

• We’ve been engaged to counsel and provide legal opinions to a start-up producer on 50-state premium finance issues relative to a $250M credit facility.

TRIA

• We are engaged to assist the lending group for the Sears Tower in Chicago in evaluating a captive set-up by the borrower to provide TRIA coverage in satisfaction of lending requirements.

E-Insurance Regulatory

• We’ve been engaged by UnumProvident, among others, to provide counsel on a wide range of regulatory and non-regulatory issues related to product distribution via the Internet, electronic benefits enrollment, and related system integration and data management issues.
• We’ve been engaged by a number of insurance companies to monitor, analyze and provide counsel regarding the emerging regulatory environment related to privacy and other e-insurance issues such as e-signatures and documents. Alston & Bird is currently engaged as primary outside counsel to numerous insurance companies on a whole range of regulatory issues driven by the demands of e-commerce.

Privacy

• Alston & Bird serves as general counsel to The National Business Coalition on E-Commerce and Privacy. Several insurance companies comprise the membership of this coalition.

Compliance Counseling

• We’ve been engaged to handle virtually every imaginable regulatory compliance issue in the insurance field before every state insurance regulator in the country.