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April 17, 2018 at 02:40 AM
(Image: Shutterstock)
A U.S. district judge mistakenly conflated the injury requirement to have standing with the issue of the case’s merits in a suit over allegedly illegal insurance, a three-judge panel at the 2nd U.S. Circuit Court of Appeals said last week.
The panel, composed of Circuit Judges Rosemary Pooler, Richard Wesley and Peter Hall, vacated the March 2015 dismissal by U.S. District Judge Paul Gardephe of a class action brought by former holders of an accidental disability and medical expense insurance policy. The defendants—insurance companies, banks, and credit card companies—pitched the insurance to credit card holders, even as they allegedly knew the insurance policy was bogus from the start.
The plaintiffs claimed their HealthExtras insurance policies were not issued by eligible entities under state law, did not have approval from the state’s Department of Insurance, and lacked required provisions.
(Related: Aegon Called to the Carpet in Multistate Settlement)
Gardephe dismissed the class action for lack of standing, finding that, since none of the plaintiffs ever tried to actually use the insurance, they couldn’t establish an injury in fact.
At issue was a New York State law that requires a policy to be enforced, even if it’s illegal. The class members could have sought to enforce the policy, then, should they have tried, but since they didn’t, there was no injury in fact, the district court found. A mere statutory violation wasn’t enough to earn them standing.
