In its August 2008 opinion, the Court of Appeals for the Eighth Circuit upheld a lower court decision granting the defendant insurers’ motion to dismiss on the grounds that plaintiffs’ price discrimination claims would “impair” the Missouri laws that regulate the “business of insurance” within the meaning of the McCarran-Ferguson Act.  A copy of the decision can be found here.

The decision arises out of purported class actions on behalf of persons living in a “single, contiguous black community in Kansas City.”  The plaintiffs allege, inter alia, that the defendant insurers violated the Fair Housing Act by “charg[ing] higher premium rates for the same type of homeowner’s coverage to homeowners in the Community . . . than [they] charged homeowners in white communities.”  Plaintiffs’ complaints allege that the Insurers “used a multi-tiered rate structure based in whole or in part on the racial composition of Kansas City zip code areas” with the “intentional and/or unintentional unlawful effect of extracting higher premium rates from homeowners” in the predominantly black community.  These practices are generally referred to as “redlining,” which involves drawing boundaries around certain geographical areas.

The Court noted that under Missouri insurance statutes “a person ‘aggrieved by any rate charged’ may ask the insurer to review the rate and, if the request is denied, may ‘file a written complaint and request for hearing with the director [of insurance],’ who must hold a hearing if he finds that the complaint is made in good faith and with probable cause.”  However, the plaintiffs did not file any administrative complaints.