Duane v. Government Employees Ins. Co.

• Decision Date: 07 February 1992
• Docket Number: Civ. No. HM-91-2654.
• Citation: 784 F. Supp. 1209
• Parties: Vincent P. DUANE v. GOVERNMENT EMPLOYEES INSURANCE CO., et al.
• Court: U.S. District Court — District of Maryland

784 F. Supp. 1209

Vincent P. DUANE v. GOVERNMENT EMPLOYEES INSURANCE CO., et al.

Civ. No. HM-91-2654.

United States District Court, D. Maryland.

February 7, 1992.

COPYRIGHT MATERIAL OMITTED

Vincent P. Duane, pro se.

Jerome V. Bolkcom, Washington, D.C., for plaintiff.

Thomas Waxter, Jr., Kristine A. Howanski, Semmes, Bowen & Semmes, Baltimore, Md., for defendants.

MEMORANDUM

HERBERT F. MURRAY, Senior District Judge.

The plaintiff, Vincent P. Duane, brought this action for discrimination under 42 U.S.C. § 1981 against the defendants, Government Employees Insurance Company and GEICO General Insurance Company (collectively "GEICO"). Presently before the Court is the motion of the defendants to dismiss the complaint pursuant to Rule 12(b) of the Federal Rules of Civil Procedure.¹

I. FACTUAL SUMMARY

This Court recognizes the long-accepted rule that

the Federal Rules of Civil Procedure do not require a claimant to set out in detail the facts upon which he bases his claim. To the contrary, all the Rules require is a "short and plain statement of the claim" that will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests.... The Federal Rules reject the approach that pleading is a game of skill in which one misstep by counsel may be decisive to the outcome and accept the principle that the purpose of pleading is to facilitate a proper decision on the merits.

Conley v. Gibson, 355 U.S. 41, 47-48, 78 S.Ct. 99, 103, 2 L.Ed.2d 80 (1957) (footnote omitted). Consequently, a court may grant a motion to dismiss "only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2232, 81 L.Ed.2d 59 (1984). For the purposes of deciding a motion to dismiss, this Court must take the material allegations of the complaint as admitted by the defendants, Jenkins v. McKeithen, 395 U.S. 411, 421, 89 S.Ct. 1843, 1848, 23 L.Ed.2d 404 (1969), and further must construe those allegations favorably to the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974).

Duane is a lawfully admitted, permanent resident alien of the United States of America and a citizen of Australia. On June 3, 1991, Duane contacted GEICO in an effort to obtain insurance for his newly purchased home. In response to a question from the sales agent, Duane disclosed his citizenship status. The sales agent then informed Duane that GEICO would not write homeowner's insurance for him because he was not a United States citizen.

Duane next spoke with one of GEICO's supervisory personnel. The supervisor, Ms. Henderson, confirmed that GEICO had a policy of refusing to enter into contracts of homeowner's insurance with non-United States citizens. However, Ms. Henderson indicated to the plaintiff that, notwithstanding his citizenship status, he could obtain homeowner's insurance from GEICO if first he agreed to purchase a policy of auto insurance.

Distressed by GEICO's refusal to insure him, the plaintiff filed a complaint with the Maryland Department of Licensing and Regulation, Insurance Division on June 5, 1991. Upon receiving notice of that complaint, GEICO offered a policy of homeowner's insurance to the plaintiff. Having by that time purchased such a policy from another insurance carrier, the plaintiff refused.

Duane also filed this action, pursuant to 42 U.S.C. § 1981. The plaintiff seeks $50,000 in compensatory damages and $100,000 in punitive damages, as well as a declaratory judgment condemning GEICO's policy of denying homeowners insurance to aliens and enjoining GEICO from continuing that practice.

II. MOTION TO DISMISS

GEICO raises several arguments in support of its motion to dismiss the complaint. First, GEICO argues that the complaint presents no case or controversy. Second, GEICO maintains that § 1981 does not provide Duane with a cause of action in this case. Third, GEICO asserts that, under the McCarran-Ferguson Act, § 1981 does not apply to the business of insurance. Lastly, should this Court reject those arguments, GEICO urges this Court to abstain from deciding the case. This Court will address each of these arguments in turn.

A. Case or Controversy

Plaintiffs who seek to invoke the jurisdictional power of the federal courts first must satisfy the threshold requirement imposed by Article III of the United States Constitution by alleging a case or controversy, U.S. Const. art. III, § 2, cl. 1, for federal courts have no power to issue advisory opinions, United States v. Fruehauf, 365 U.S. 146, 157, 81 S.Ct. 547, 553, 5 L.Ed.2d 476 (1961), and only may decide "questions presented in an adversary context and in a form historically viewed as capable of resolution through the judicial process." Flast v. Cohen, 392 U.S. 83, 95, 88 S.Ct. 1942, 1950, 20 L.Ed.2d 947 (1968). The plaintiff "must have suffered, or be threatened with, an actual injury traceable to the defendant and likely to be redressed by a favorable judicial decision." Lewis v. Continental Bank Corp., 494 U.S. 472, 477, 110 S.Ct. 1249, 1253, 108 L.Ed.2d 400 (1990). The requirement that parties have a personal stake in the outcome of the litigation ensures the clash of adversary argument upon which the courts largely depend for illumination of difficult questions. The competing interests that drive the adversary system help to sharpen the presentation of issues to the court and to explore all possible aspects of often intricate and multifaceted situations. See Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663 (1962); Fruehauf, 365 U.S. at 157, 81 S.Ct. at 553.

In this case, the complaint seeks $50,000.00 to compensate for the "continuing embarrassment, humiliation, indignity, distress and injury to reputation caused by GEICO's refusal to contract with him based solely upon his alienage." Complaint ¶ 29. Although GEICO ignores those allegations in its motion to dismiss,² nothing in that motion indicates that "interim relief or events have completely and irrevocably eradicated" those damages. See Los Angeles County v. Davis, 440 U.S. 625, 631, 99 S.Ct. 1379, 1383, 59 L.Ed.2d 642 (1979). Having alleged that he has suffered damages "fairly traceable to the defendant's acts or omissions," the plaintiff has satisfied the requirements of Article III with respect to those claims. Scott v. Greenville County, 716 F.2d 1409, 1414 (4th Cir.1983) (quoting Village of Arlington Heights v. Metropolitan Housing Dev. Corp., 429 U.S. 252, 261, 97 S.Ct. 555, 561, 50 L.Ed.2d 450 (1977)). This Court is satisfied that, in his efforts to recover damages for the injuries alleged in the complaint, the plaintiff will provide the earnest, zealous, and exhaustive advocacy essential to the adversary system and contemplated by the Constitution.

The plaintiff also seeks relief in the form of a declaratory judgment, which would find that GEICO's discriminatory practice violates § 1981 and permanently would enjoin that practice in the future. GEICO argues that, because the plaintiff refused its offer of homeowner's insurance and obtained insurance elsewhere, the controversy has become moot in regard to declaratory relief.

The Declaratory Judgment Act provides: In a case of actual controversy within its jurisdiction ... any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such.

28 U.S.C. § 2201(a). The Act applies "only in respect to controversies which are such in the constitutional sense." Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 239-40, 57 S.Ct. 461, 463, 81 L.Ed. 617 (1937). Such a controversy must require "specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be on a hypothetical state of facts." Id. at 241, 57 S.Ct. at 464. "The question in each case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273, 61 S.Ct. 510, 512, 85 L.Ed. 826 (1941); White v. National Union Fire Ins. Co., 913 F.2d 165, 167-68 (4th Cir.1990).

Even if a controversy in the constitutional sense exists at first, a case can become moot "when the issues presented are no longer `live' or the parties lack a legally cognizable interest in the outcome." Powell v. McCormack, 395 U.S. 486, 496, 89 S.Ct. 1944, 1951, 23 L.Ed.2d 491 (1969). In this case, Duane obtained homeowner's insurance elsewhere. As a result, he no longer has a "real interest in `live' issues" pertaining to GEICO's future insurance practices. See Kennedy v. Block, 784 F.2d 1220, 1222 (4th Cir.1986). A judicial decree enjoining GEICO's discriminatory practice in the future would neither redress an injury or threat of injury to the plaintiff nor affect significantly his rights or his position in this lawsuit. See Lewis, 494 U.S. at 477, 110 S.Ct. at 1253. Consequently, no case or controversy "of sufficient immediacy and reality to warrant the issuance of a declaratory judgment" exists to support the claims for declaratory and injunctive relief.

Duane argues that a controversy exists because GEICO's policy with respect to non-United States citizens falls within the exception to the mootness doctrine for questions "capable of repetition, yet evading review." Sosna v. Iowa, 419 U.S. 393, 399-403, 95 S.Ct. 553, 557-59, 42 L.Ed.2d 532 (1975); Southern Pacific Terminal Co. v. ICC, 219 U.S. 498, 31 S.Ct. 279, 55 L.Ed. 310 (1911). That exception applies where "(1)...