Nos. 19-1343, 19-1381 IN THE Ziluiteb 6tatc.5 (Court of Zippeett5 for the i jtij Circuit GUARDIAN FLIGHT,LLC, Plaint?ff-Appellantl Cross-Appellee, — v. — JON GODFREAD,in his capacity as North Dakota Insurance Commissioner; WAYNE STENEHJEM in his capacity as North Dakota Attorney General, Defendants-Appellees1 CrossAppellants. On Appeal From a Final Order and Final Judgment of the United States District Court for the District of North Dakota (Hovland, C.J.) BRIEF OF AMICUS CURIAE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS Kevin D. Conneely STINSON LLP 50 South Fifth Street, Suite 2600 Minneapolis Minnesota 55402 Telephone: 612-335-1829 [email protected] Counsel for Amicus Curiae National Association of Insurance Commissioners Appellate Case: 19-1343 Paae: 1 Date Filed: 06/18/2019 Entry ID: 4799171 TABLE OF CONTENTS TABLE OF AUTHORITIES ii CORPORATE DISCLOSURE STATEMENT v IDENTITY,INTEREST, AUTHORITY AND INDEPENDENCE OF AMICUS CURIAE 1 INTRODUCTION AND SUMMARY OF ARGUMENT 6 ARGUMENT 8 I. THE STATES MAINTAIN PRIMARY REGULATORY AUTHORITY OVER THE BUSINESS OF INSURANCE VIA THE MCCARRAN- FERGUSON ACT 8 II. THE MCCARRAN-FERGUSON ACT REVERSE-PREEMPTS THE AIRLINE DEREGULATION ACT 11 III. NEITHER THE CLAIMS SETTLEMENT PROVISION NOR THE MEMBERSHIP PROVISION ARE PREEMPTED BY THE ADA AS BOTH WERE ENACTED FOR THE PURPOSE OF REGULATING THE BUSINESS OF INSURANCE 17 CONCLUSION 20 CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME LIMITATION AND ECF USER MANUAL 22 CERTIFICATE OF SERVICE 23 i Appellate Case: 19-1343 Paae: 2 Date Filed: 06/18/2019 Entry ID: 4799171 TABLE OF AUTHORITIES Page(s) Cases Doe v. Norwest Bank Minnesota, N.A., 107 F.3d 1297 (8th Cir. 1997) 11 Group Life & Health Ins. Co. v. Royal Drug Co., 440 U.S. 205 (1979) 9, 13, 15 Guardian Flight, LLC v. Godfread, 359 F. Supp.3d 744(D.N.D. 2019) 17, 19, 20 Morales v. Trans World Airlines, Inc., 504 U.S. 374 18, 20 Paul v. Virginia, 75 U.S. 168 (1868) 8 U.S. Dep't of Treasury v. Fabe, 508 U.S. 49 (1993) passim U.S. v. South-Eastern Underwriters Ass'n, 322 U.S. 533 (1944) 8, 9 Union Labor Life Ins. Co. v. Pireno, 458 U.S. 119 (1982) 13, 14, 15, 16 Valley Flight Med, Inc. v. Dwelle, 171 F. Supp. 3d 930(D.N.D. 2016) 5 Statutes 15 U.S.C.A. 41 10 49 U.S.C.A. § 41713 18 15 U.S.C. § 1011 9 15 U.S.C. § 1012 10, 13 Airline Deregulation Act of 1978(ADA) passim 11 Appellate Case: 19-1343 Paae: 3 Date Filed: 06/18/2019 Entry ID: 4799171 FAA Reauthorization Act of 2018 3, 4, 21 McCarran-Ferguson Act of 1945, 15 U.S.C.A. §§ 1011, et seq. 6, 8, 11 N.D.C.C. § 23-16 11 N.D.C.C. § 26.1-29-01 17 N.D.C.C. § 26.1-47-08 5, 7, 11, 12 N.D.C.C. § 26.1-47-09 5, 6, 12, 19 Pub. L. No. 80-238, 61 Stat. 448 9, 11 Pub. L. No. 95-904, 92 Stat. 1705 18 Pub. L. No. 115-254 3 Pub. L. No. 115-254(b)(3)(B) 4 Pub. L. No. 115-254(d)(3) 4 Other Authorities U.S. Constitution, Art. 1, § 8(3) 8 8th Cir. Local Rule 28A(h) 22 Black's Law Dictionary 1380 (10th ed. 2014) 19 Fed. R. App. P. 29(a)(2) 1 Fed. R. App. P. 32(f) 22 Fed. R. App. P. 32(g)(1) 22 https://www.gao.gov/assts/690/686167.pdf 19 https://www.naic.org/ 1 https://www.naic.org/documents/consumer_alert_understanding_air_a mbulance_insurance.htm 4 https://www.naic.org/documents/index_health_reform_section_18101 5 Jetter_dot_and_hhs_on_aaa_committee.pdf 3 111 Appellate Case: 19-1343 Paae: 4 Date Filed: 06/18/2019 Entry ID: 4799171 https://www.naic.org/documents/index_health_reform_section_19011 5_godfread_for_air_ambulance_committee.pdf 4 iv Appellate Case: 19-1343 Paae: 5 Date Filed: 06/18/2019 Entry ID: 4799171 Corporate Disclosure Statement Pursuant to Fed. R. App. P. 26.1, the National Association of Insurance Commissioners states that it is a non-stock entity; that it has no parent corporations; and no publicly held corporation has an ownership interest in it. v Appellate Case: 19-1343 Paae: 6 Date Filed: 06/18/2019 Entry I D: 4799171 Pursuant to Fed. R. App. P. 29(a)(2), the National Association of Insurance Commissioners (NAIC) respectfully submits this brief as amicus curiae in support of defendants-appellants Jon Godfread, in his capacity as North Dakota Insurance Commissioner, and Wayne Stenehjem, in his capacity as North Dakota Attorney General (the North Dakota Parties), to the extent it granted in part Defendants' Motion for Judgment on the Pleadings. IDENTITY,INTEREST, AUTHORITY AND INDEPENDENCE OF AMICUS CURIAE Founded in 1871, the NAIC is the United States' standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia, and five United States territories. See generally https://www.naic.org/. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer reviews, coordinate regulatory oversight, and represent the collective views of all state regulators domestically and internationally. The NAIC's members, together with the centralized resources of the NAIC,form the national system of state-based insurance regulation in the United States. Throughout its history, the NAIC's purpose has been to provide its members with a national forum that enables them to work cooperatively on regulatory matters that transcend the boundaries of their own jurisdictions. This not only allows for consistency in regulating companies that do business in multiple states, but it Appellate Case: 19-1343 Paae: 7 Date Filed: 06/18/2019 Entry ID: 4799171 provides a central point of communication and facilitation for joint initiatives with federal and international regulators. The NAIC also regularly assists federal regulators, federal agencies, members of Congress, and the Government Accountability Office by providing information and data related to state insurance regulation, health insurance issues, terrorism insurance, annuities, insurance fraud, and many other topics. Collectively, the state insurance commissioners work to develop model legislation, rules, regulations, handbooks, white papers and actuarial guidelines that promote and establish uniform regulatory policy. The overriding objectives of the NAIC and its members are to protect consumers, to promote competitive markets, and to maintain both the financial solvency of insurance companies and the financial stability of the insurance industry as a whole. As a result of its long history of protecting consumers, the NAIC has a strong interest in appearing as amicus curiae in these appeals as the issues currently before the Court have had a profound impact on insurance consumers in North Dakota and across the country as well. State insurance regulators nation-wide have received numerous complaints from consumers who received air ambulance care in both emergency and non-emergency situations only to be saddled with a surprise bill for tens of thousands of dollars. More often than not, consumers are not provided with the appropriate types of information that would enable them to make cost-conscious choices about their options, either because none is offered (or even available in some 2 ADoellate Case: 19-1343 Paae: 8 Date Filed: 06/18/2019 Entry ID: 4799171 cases) or because the severity of their condition prevents them from being able to timely make their own informed healthcare decisions. The NAIC has been a vocal proponent of increasing consumer protections from excessive air ambulance charges. On May 1, 2018, NAIC sent correspondence to the Committee on Commerce, Science and Transportation at the time the FAA Reauthorization Act of 2018 was being debated.' The NAIC made clear at that time its support of establishing an advisory committee to make recommendations for a rulemaking that would require air ambulance operators: (i) to clearly disclose charges for air transportation medical services provided while onboard an aircraft and (ii) to provide other consumer protections for customers of air ambulance providers. Section 418(a) of the FAA Reauthorization Act did just that, establishing "an advisory committee for the purpose of reviewing options to improve the disclosure of charges and fees for air medical services, better inform consumers of insurance options for such services, and protect consumers from balance billing." Pub. L. No. 115-254. Section 418 provides that the "Composition of the Advisory Committee" shall include state insurance regulators, and the advisory committee "shall make recommendations with respect to disclosure of charges and fees for air ambulance services and insurance coverage, consumer protection and enforcement 1 Found at https://www.naic.org/documents/index health reform section 181015 letter dot and hhs on aaa committee.pdf. 3 AnDeflate Case: 19-1343 Paae: 9 Date Filed: 06/18/2019 Entry ID: 4799171 authorities of both the Department of Transportation and State authorities, and the prevention of balance billing to consumers." Pub. L. No. 115-254(b)(3)(B) and (d). In addition, "[t]he recommendations shall address, at a minimum.. .steps that can be taken by State legislatures, State insurance regulators, State attorneys general, and other State officials as appropriate, consistent with current legal authorities regarding consumer protection." Pub. L. No. 115-254(d)(3). Following 2018 passage of the Federal Aviation Reauthorization Act, the NAIC sent correspondence to the Office of Aviation Enforcement and Proceedings earlier this year in support of North Dakota Insurance Commissioner Jon Godfread's application to serve on the Air Ambulance and Patient Billing Advisory Committee.2 The NAIC has also published a Consumer Alert urging consumers to educate themselves about the services offered by air ambulance providers as well as the coverage issues and balance billing practices that may follow.