              Case: 16-12100    Date Filed: 09/24/2018       Page: 1 of 65


                                                                             [PUBLISH]

                IN THE UNITED STATES COURT OF APPEALS

                         FOR THE ELEVENTH CIRCUIT
                           ________________________

                                 No. 16-12100
                           ________________________

                        D.C. Docket No. 0:15-cv-62600-JIC

PANKAJ PATEL,
LAKETHA WILSON,
                                                                Plaintiffs - Appellants,
                                       versus

SPECIALIZED LOAN SERVICING, LLC,
AMERICAN SECURITY INSURANCE COMPANY,
                                                               Defendants - Appellees.
                           ________________________

                                 No. 16-16585
                           ________________________

                        D.C. Docket No. 1:15-cv-24542-JG

RICHARD L. FOWLER,
GLENDA KELLER,
YVONNE YAMBO-GONZALEZ,
on behalf of themselves and all others similarly situated,
                                                                Plaintiffs - Appellants,

                                       versus

CALIBER HOME LOANS, INC,
individually and as successor-in-interest to
Vericrest Financial and Caliber Funding,
AMERICAN SECURITY INSURANCE COMPANY,
                                                              Defendants - Appellees.
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                              ________________________

                     Appeals from the United States District Court
                         for the Southern District of Florida
                            ________________________

                                   (September 24, 2018)

Before JORDAN, HULL, and BOGGS, ∗ Circuit Judges.

BOGGS, Circuit Judge:

       When an individual takes out a mortgage, he or she secures the loan with

real property. To protect its security interest, lenders usually require borrowers to

maintain hazard insurance in an amount that is at least equal to the loan’s unpaid

principal balance. Should a borrower fail to obtain or maintain adequate coverage,

the mortgage may authorize the lender to purchase insurance for the property and

to charge the borrower for the cost of coverage. Such coverage is known as

“force-placed insurance” (“FPI”) or “lender-placed insurance.” Typically, the task

of monitoring borrowers’ insurance coverage—and force-placing it when

necessary—is farmed out to a loan servicer.

       The plaintiffs in these consolidated cases are borrowers who allege that their

mortgage servicers, Specialized Loan Servicing, LLC (“SLS”) and Caliber Home



       ∗
         Honorable Danny J. Boggs, United States Circuit Judge for the Sixth Circuit, sitting by
designation.

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Loans, Inc. (“Caliber”), 1 breached the plaintiffs’ loan contracts, as well as an

implied covenant of good faith and fair dealing, by charging “inflated amounts” for

FPI. Specifically, the plaintiffs claim that SLS and Caliber received “rebates” or

“kickbacks” from the force-placed insurer, American Security Insurance Company

(“ASIC”), but that they did not pass these savings on to the borrowers. As such,

the plaintiffs allege that SLS and Caliber violated the terms of the mortgage

contracts, which authorized the servicers to charge only for the “cost of the

insurance.” In the alternative to these contractual claims, the plaintiffs pleaded an

unjust-enrichment claim against the servicers.

      Additionally, because the plaintiffs claim that SLS and Caliber colluded with

ASIC to disguise the alleged overcharges as legitimate expenses, they also accuse

SLS and Caliber of violating the Federal Truth in Lending Act, 15 U.S.C. § 1601;

ASIC of tortious interference with a business relationship and unjust enrichment;

and all three companies of violating the Racketeer Influenced and Corrupt

Organizations Act, 18 U.S.C. § 1962(c), (d). Patel and Wilson further allege that

SLS’s actions violated the Florida Deceptive and Unfair Trade Practices Act, Fla.

Stat. § 501.201.



      1
         Caliber was created in 2013 when Vericrest Financial and Caliber Funding merged
operations. Although this lawsuit also challenges the FPI practices of Caliber Home Loan’s
predecessors, for ease of exposition, we will refer to their actions as those of Caliber.
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       Complicating this otherwise run-of-the-mill contract dispute is the fact that

ASIC’s FPI rates have been filed with, and approved by, state regulators in the

relevant jurisdictions. 2 Because of this, the possibility arises that the plaintiffs’

claims are barred by the filed-rate doctrine, which, inter alia, “precludes any

judicial action which undermines agency rate-making authority.” Hill v. BellSouth

Telecomms., Inc., 364 F.3d 1308, 1317 (11th Cir. 2004) (quoting Marcus v. AT&T

Corp., 138 F.3d 46, 61 (2d Cir. 1998)). The issue before us now is whether the

plaintiffs’ claims are so barred.

       Because we conclude that the plaintiffs, in their complaints, challenge a rate

filed with regulators, we hold that the filed-rate doctrine applies. We accordingly

affirm the district courts’ dismissals of the cases under Federal Rule of Civil

Procedure 12(b)(6) for failure to state a claim.

                                                I

                                               A

       In June 2005, Pankaj Patel, a Florida citizen, signed a mortgage agreement

with nonparty IndyMac Bank, which required him to maintain hazard insurance on

the subject property for the life of the loan. In pertinent part, the agreement stated:




       2
         The plaintiffs do not dispute that the FPI premiums charged to and paid by the plaintiffs
were not more than the insurance rates filed with, and approved by, the relevant state regulators.
                                                 4
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      5. Property Insurance. Borrower shall keep the improvements now
      existing or hereafter erected on the Property insured against loss by
      fire, hazards included within the term “extended coverage,” and any
      other hazards including, but not limited to, earthquakes and floods, for
      which Lender requires insurance. This insurance shall be maintained
      in the amounts (including deductible levels) and for the periods that
      Lender requires. . . .

      If Borrower fails to maintain any of the coverages described above,
      Lender may obtain insurance coverage, at Lender’s option and
      Borrower’s expense. Lender is under no obligation to purchase any
      particular type or amount of coverage. Therefore, such coverage shall
      cover Lender, but might or might not protect Borrower, Borrower’s
      equity in the Property, or the contents of the Property, against any
      risk, hazard[,] or liability and might provide greater or lesser coverage
      than was previously in effect. Borrower acknowledges that the cost of
      the insurance coverage so obtained might significantly exceed the cost
      of insurance that Borrower could have obtained. Any amounts
      disbursed by Lender under this Section 5 shall become additional debt
      of Borrower secured by this Security Instrument. These amounts shall
      bear interest at the Note rate from the date of disbursement and shall
      be payable, with such interest, upon notice from Lender to Borrower
      requesting payment.
      ...

      9. Protection of Lender’s Interest in the Property and Rights
      Under this Security Instrument. If (a) Borrower fails to perform the
      covenants and agreements contained in this Security Instrument, (b)
      there is a legal proceeding that might significantly affect Lender’s
      interest in the Property and/or rights under this Security Instrument
      (such as a proceeding in bankruptcy, probate, for condemnation or
      forfeiture. . .), or (c) Borrower has abandoned the Property, then
      Lender may do and pay for whatever is reasonable or appropriate to
      protect Lender’s interest in the Property and rights under this Security
      Instrument, including protecting and/or assessing the value of the
      Property, and securing and/or repairing the Property.

Patel Compl., Exhibit A, at 5–7.
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       In June 2014, Patel’s voluntary coverage lapsed. Shortly thereafter, ASIC—

with whom SLS had subcontracted to monitor its loan portfolio—sent Patel a letter

informing him that if proof of coverage was not provided, SLS would purchase

insurance on his behalf. The notice advised Patel of his right to obtain coverage

from an insurance agent or company of his choice, “urge[d] [him] to do so,”

informed him that insurance bought by SLS was “likely” to have a “much higher”

cost and to provide less coverage than what he could obtain on his own, and stated

that “[t]he insurance we obtain may provide benefits to you but is primarily for the

benefit of SLS.” 3 ASIC Motion to Dismiss, Exhibit 1, at 4–5 (No. 0:15-cv-62600-

JIC). It further disclosed that “if [SLS] purchase[d the] insurance . . . , an affiliate

of SLS [could] benefit” by receiving a commission and that “[t]he insurance

company may factor such commission into the rate charged for the coverage.” Id.

at 5. The notice closed by “strongly recommend[ing]” that Patel obtain his own

coverage.


       3
          “Ordinarily, we do not consider anything beyond the face of the complaint and
documents attached thereto when analyzing a motion to dismiss.” Fin. Sec. Assur., Inc. v.
Stephens, Inc., 500 F.3d 1276, 1284 (11th Cir. 2007) (per curiam). An exception exists,
however, where “a plaintiff refers to a document in its complaint, the document is central to its
claim, its contents are not in dispute, and the defendant attaches the document to its motion to
dismiss.” Ibid. Because the various letters and FPI policies that SLS sent to Patel and Wilson
are referenced in the complaint, are central to the plaintiffs’ claims, were attached to ASIC’s
Motion to Dismiss, and were not disputed when they were introduced below, we will consider
them.
        For the same reason, we will consider the notices and FPI policies that Caliber sent to
Fowler, Yambo-Gonzalez, and Keller.
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      One month later, SLS sent Patel a second notice, stating that it still had not

received evidence of insurance. This letter included an insurance binder that

disclosed the annual premium of the policy that SLS would purchase if it did not

receive proof of coverage. On August 22, 2014, after Patel had yet again failed to

provide proof of the contractually-required insurance, ASIC issued a one-year FPI

certificate for the property, effective from June 2014. The policy “authorized

[SLS] to advance all funds to be recovered from the borrower for the insurance

afforded[.]” ASIC Motion to Dismiss, Exhibit 3, at 12 (No. 0:15-cv-62600-JIC).

On June 5, 2015, Patel obtained voluntary coverage.

      Patel’s experience is representative of that of the remaining plaintiffs.

Wilson, Fowler, and Yambo-Gonzalez are Florida citizens whose mortgage

contracts contained provisions that were identical to those quoted above, while

Keller, a Pennsylvania citizen, signed a mortgage contract containing materially

similar provisions.4 Each also received at least one notice from his or her servicer,



      4
        Keller’s mortgage stated:
      5. Hazard Insurance. Borrower shall keep the improvements now existing or
      hereafter erected on the Property insured against loss by fire, hazards included
      within the term “extended coverage,” and such other hazards as Lender may
      require.
      ...

      7. Protection of Lender’s Security. If Borrower fails to perform the covenants
      and agreements contained in this Mortgage, or if any action or proceeding is
      commenced which materially affects Lender’s interest in the Property, then
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which stated that hazard insurance would be force-placed if voluntary coverage

was not obtained and that the cost of FPI was likely to be “much higher” or

“substantially higher” than the cost of insurance that he or she could obtain on his

or her own. Keller, for instance, received two letters warning that the cost of

insurance bought by Caliber was “likely to be much higher than the cost of

coverage [she] could obtain on [her] own” and that “OBTAINING [HER] OWN

INSURANCE [WAS] IN [HER] BEST INTEREST.” ASIC Motion to Dismiss,

Exhibits C-1 and C-2 (No. 1:15-cv-24542-JG). When the plaintiffs failed to heed

these various warnings, their respective servicers force-placed insurance.

Furthermore, Wilson, Fowler, and Yambo-Gonzalez were informed, in writing,

that were the servicer to purchase insurance on their behalf, an affiliate could earn

commissions or income from the transaction. Finally, like Patel, Fowler and Keller




       Lender, at Lender’s option, upon notice to Borrower, may make such
       appearances, disburse such sums, including reasonable attorneys’ fees, and take
       such action as is necessary to protect Lender’s interest.

       Any amounts disbursed by Lender pursuant to this paragraph 7, with interest
       thereon, at the contract rate, shall become additional indebtedness of Borrower
       secured by this Mortgage. Unless Borrower and Lender agree to other terms of
       payment, such amounts shall be payable upon notice from Lender to Borrower
       requesting payment thereof. Nothing contained in this paragraph 7 shall require
       Lender to incur any expense or take any action hereunder.

Caliber Motion to Dismiss, Exhibit (No. 1:15-cv-24542-JG).
                                               8
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received insurance certificates containing provisions that authorized their servicers

to “advance all funds to be recovered from the borrower for the insurance

afforded[.]” 5 ASIC Motion to Dismiss, Exhibits A-3 and C-3 (No. 1:15-cv-24542-

JG).

                                              B

       At the time that insurance was force-placed on the plaintiffs, ASIC was the

exclusive provider of FPI for SLS and Caliber. As part of this arrangement, prior

to any lapse in the plaintiffs’ hazard insurance, ASIC had already issued a master

insurance policy to each servicer that covered the entirety of its mortgage-loan

portfolio.   In exchange, ASIC performed many of SLS’s and Caliber’s loan-

servicing functions. Most notably, ASIC and its affiliates monitored SLS’s and

Caliber’s loan portfolio for lapses in borrowers’ insurance coverage, and once a

lapse was identified, ASIC sent the borrower a notice—on either SLS’s or

Caliber’s behalf—informing him or her that insurance would be force-placed if

voluntary coverage was not obtained. If the lapse continued, ASIC then issued an

insurance certificate, at the borrower’s expense, based on the already-existing

master policy.



       5
         Between 2009, when Yambo-Gonzalez’s voluntary insurance first lapsed, and June
2014, the insurance certificates that she received did not contain this provision. Beginning in
June 2014, however, they did.
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      Once coverage was issued, two further transactions occurred. First, the

servicer paid ASIC for the insurance certificate, for which it then billed the

borrower. Second, ASIC paid the servicers, or their affiliates, either a fee related

to the placement of the coverage or premiums for the servicers’ reinsurance of the

FPI policy.

      On December 10, 2015, Patel and Wilson filed a class-action complaint

against SLS and ASIC, alleging that in exchange for an exclusivity agreement,

ASIC provided “kickbacks” to SLS in the form of “illusory reinsurance that

carrie[d] no commensurate transfer of risk[,]” below-cost mortgage services that

were unrelated to FPI, “‘expense reimbursements’ allegedly paid . . . for expenses

. . . incurred in the placement of FPI coverage notwithstanding the fact that the

coverage is automatically issued pursuant to a master policy already in place[,]”

and “unearned ‘commissions’ . . . for work purportedly performed to procure

individual policies when no work [was] actually performed[.]” Patel Compl. ¶ 5.

In their complaint, the two also asserted that “[b]orrowers ultimately bear the cost

of these kickbacks [because] SLS and ASIC bundle the costs into the amounts

charged for insurance coverage . . . , disguising the charges as legitimate by

characterizing them as income earned by SLS when, in fact, they are unearned[,]

unlawful profits.” Ibid.


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      The same day, Fowler, Yambo-Gonzalez, and Keller filed a separate class-

action complaint against Caliber and ASIC. The complaint’s allegations are nearly

identical to those in the complaint of Patel and Wilson: that in exchange for an

exclusivity agreement, ASIC provided “kickbacks” to Caliber in the form of

“unearned ‘commissions’ . . . for work purportedly performed to procure

individual policies[,]” “‘expense reimbursements’ allegedly paid to reimburse

Caliber for expenses it incurred in the placement of the force-placed insurance

coverage[,]” “payments of illusory reinsurance premiums that carr[ied] no

commensurate transfer of risk[,]” and “free or below-cost” mortgage services; and

that the “[d]efendants attempt[ed] to disguise the kickbacks as legitimate by

characterizing them as income earned by Caliber when, in fact, they [were]

unearned, unlawful profits.” Fowler Compl. ¶ 3.

      In each case, the defendants moved to dismiss the complaint on the grounds

that the plaintiffs’ claims were barred by the filed-rate doctrine or, in the

alternative, that each claim suffered from at least one independent defect. On April

25, 2016, citing the filed-rate doctrine, the district court dismissed Patel’s and

Wilson’s complaint with prejudice pursuant to Rule 12(b)(6). Patel v. Specialized

Loan Servicing, LLC, 183 F. Supp. 3d 1238, 1244 (S.D. Fla. 2016). Then, on July

8, 2016, the court dismissed Fowler’s, Yambo-Gonzalez’s, and Keller’s complaint


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with prejudice on the same ground. Two months later, the district court issued an

amended order in response to a request for clarification from the plaintiffs. Fowler

v. Caliber Home Loans, Inc., 277 F. Supp. 3d 1324, 1326 n.1 (S.D. Fla. 2016).

      Both sets of plaintiffs filed timely appeals. Citing the cases’ similarities—

namely, that they were filed on the same day in the same court by the same

counsel, have a common co-defendant, and involve nearly identical claims,

defenses, and issues—ASIC and SLS filed a Motion to Consolidate Appeals for

Oral Argument. On December 19, 2016, we granted that motion.

                                         II

      We review de novo a district court’s grant of a motion to dismiss for failure

to state a claim. Allen v. USAA Cas. Ins. Co., 790 F.3d 1274, 1277 (11th Cir.

2015). In doing so, we “accept[] the [factual] allegations in the complaint as true

and constru[e] them in the light most favorable to the plaintiff.” Belanger v.

Salvation Army, 556 F.3d 1153, 1155 (11th Cir. 2009). However, while we are

required to accept all factual allegations as true, we “are not bound to accept as

true a legal conclusion couched as a factual allegation.”       Bell Atl. Corp. v.

Twombly, 550 U.S. 544, 555 (2007) (quoting Papasan v. Allain, 478 U.S. 265, 286

(1986)).




                                        12
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      To survive a Rule 12(b)(6) motion to dismiss, a complaint need not provide

detailed factual allegations. Twombly, 550 U.S. at 555. However, dismissal is

appropriate “where it is clear [that] the plaintiff can prove no set of facts in support

of the claims in the complaint.” Marshall Cty. Bd. of Educ. v. Marshall Cty. Gas

Dist., 992 F.2d 1171, 1174 (11th Cir. 1993). For this reason, a court may dismiss a

complaint pursuant to Rule 12(b)(6) on a dispositive issue of law. Ibid.

                                          III

                                           A

      The filed-rate doctrine “forbids a regulated entity [from] charg[ing] rates for

its services other than those properly filed with the appropriate . . . regulatory

authority.” Hill, 364 F.3d at 1315 (quoting Ark. La. Gas Co. v. Hall, 453 U.S. 571,

577 (1981)). As a result, “[w]here the legislature has conferred power upon an

administrative agency to determine the reasonableness of a rate, the rate-payer ‘can

claim no rate as a legal right that is other than the filed rate[.]’” Taffet v. Southern

Co., 967 F.2d 1483, 1494 (11th Cir. 1992) (en banc) (quoting Montana-Dakota

Utils. Co. v. Nw. Pub. Serv. Co., 341 U.S. 246, 251 (1951)). This holds true even

“where a regulated entity allegedly has defrauded an administrative agency to

obtain approval of a filed rate” or where the rate filed with the agency resulted

from price-fixing. Taffet, 967 F.2d at 1489, 1494–95. Furthermore, “the filed[-


                                          13
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]rate doctrine applies whether the rate in question is approved by a federal or state

agency.” Id. at 1494 (quoting H.J. Inc. v. Nw. Bell Tel. Co., 954 F.2d 485, 494 (8th

Cir. 1992)).

      Two rationales underlie the doctrine. The first, which is known as the

“nondiscrimination principle,” is that all rate-payers should be charged the same

rate for the regulated entity’s service. See Hill, 364 F.3d at 1316. The second,

which is termed the “nonjusticiability principle,” is that duly-empowered

administrative agencies should have exclusive say over the rates charged by

regulated entities because agencies are more competent than the courts at the rate-

making process. Ibid. These two principles are “applied strictly,” meaning that

the filed-rate doctrine bars “a plaintiff from bringing a cause of action even in the

face of apparent inequities whenever either the nondiscrimination strand or the

nonjusticiability strand . . . is implicated by the cause of action the plaintiff seeks

to pursue.” Ibid. (emphasis added) (quoting Marcus, 138 F.3d at 59).

      The filed-rate doctrine therefore precludes two types of suits. First, and

most obviously, direct challenges to a filed rate are barred because, if successful,

they necessarily violate the nonjusticiability principle. See Hill, 364 F.3d at 1317.

Second, facially-neutral challenges—i.e., any cause of action that is not worded as

a challenge to the rate itself—are barred when an award of damages “would,


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effectively, change the rate paid by the customer-[plaintiff] to one below the filed

rate paid by other customers” or “would, in effect, result in a judicial determination

of the reasonableness of that rate[.]” Id. at 1316–17.

      An    important,    though    heretofore    overlooked,    corollary   of   the

nondiscrimination and nonjusticiability principles is that the filed-rate doctrine’s

applicability does not turn on whether the plaintiff is a rate-payer. On the one

hand, because the nonjusticiability principle does not rest on the plaintiff’s

identity—it bars any suit that would challenge the rate-making authority of the

appropriate regulatory body—it can preclude causes of action brought by non-rate-

payers. Even non-customers, for instance, cannot directly challenge a filed rate.

On the other hand, even when the plaintiff is a rate-payer, the nonjusticiability and

nondiscrimination principles are not always implicated. Were a rate-payer to

challenge a regulated entity’s practice of giving other, favored rate-payers a rebate,

such a challenge would not necessarily involve the courts in rate-making; nor

would it necessarily grant a subgroup of customers a discount on their rate. See,

e.g., Williams v. Duke Energy Int’l, Inc., 681 F.3d 788, 797 (6th Cir. 2012)

(holding that filed-rate doctrine does not bar rate-payers from challenging

payments allegedly made by regulated entity to large customers in exchange for

their withdrawing objections to proposed rate change, where defendants presented


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no evidence that side agreements were filed with any agency). Rather, for these

principles to be implicated, the suit must challenge, either directly or indirectly,

some component of the approved rate.

       This observation disposes of two points of confusion that attend challenges

to FPI practices such as those present here, i.e., where an intermediary passes the

cost of regulator-approved rates on to a third party. First, it demonstrates that we

need not debate whether the FPI transaction consists of two, separate

transactions—first, between the insurers and servicers and, second, between the

servicers and the borrowers—or a single “A-to-B-to-C” transaction, where the

servicers are merely a conduit between the insurers and the borrowers. Such a

distinction matters only if the filed-rate doctrine’s applicability turns on a

plaintiff’s status as a rate-payer. 6 Second, it shows that the size of the alleged

“kickback” is irrelevant to the issue before us. Even were an insurer to return 100

percent of the approved premium to the servicer, the question would remain

whether such a payment was a component of the rate filed with regulators. If so,



       6
         In Rothstein, the Second Circuit gives an alternative reason to view “[t]he distinction
between an ‘A-to-B’ transaction and an ‘A-to-B-to-C’ transaction [as being] especially
immaterial in the [F]PI context[.]” 794 F.3d at 265. Specifically, the Second Circuit notes that
“[F]PI travels invariably ‘A-to-B-to-C’” as “[t]he purpose of [F]PI is to enforce the borrower’s
contractual obligation to maintain adequate hazard insurance; the lender [or servicer] acts on the
borrower’s behalf and in the borrower’s place to ‘force place’ a transaction that the borrower
should have entered.” Ibid.
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the nonjusticiability doctrine precludes the cause of action. At best, then, the size

of a “kickback” can only provide circumstantial evidence that the payment was not

a component of the filed rate.7

       Also overlooked is the fact that while the nondiscrimination principle is a

rationale for the filed-rate doctrine, it does not determine the doctrine’s

applicability. If the plaintiff is not a rate-payer, then an award of damages cannot

effectively change the rate paid by a subset of rate-payers. As such, because the

nondiscrimination principle cannot be implicated, the nonjusticiability principle

alone determines whether the filed-rate doctrine applies to such cases. At the same

time, the nondiscrimination principle does not bar all suits that would lead to an

award of damages to a rate-payer. A utility customer, for instance, is not barred

from suing for damages done to his property by the utility company’s employees.

Thus, for the nondiscrimination principle to apply, the cause of action must have a

connection with the rate of service.                 However, when that occurs, the

nonjusticiability principle is also necessarily implicated.            Thus, whenever the

nondiscrimination principle is violated, so is the nonjusticiability principle.



       7
          Because regulators are unlikely to approve a 100-percent “kickback,” its presence
would suggest that it was not a component of the filed rate. However, if it were a component of
the filed rate, the proper recourse for plaintiffs would be through their state’s or the federal
regulatory structures. See, e.g., Taffet, 967 F.2d at 1493–94. Notably, the size of the alleged
kickbacks here was only a portion of the borrowers’ FPI charges.
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      A simple framework therefore emerges for determining whether the filed-

rate doctrine bars a cause of action. First, we must examine whether the complaint

facially attacks a filed rate. Here, this amounts to a determination of whether the

plaintiffs worded their complaints as a challenge to ASIC’s rate for force-placed

insurance. If they did, then their causes of action are barred. Second, if the

complaint does not facially attack a filed rate, we must ask whether it implicates

the nonjusticiability principle by challenging the components of a filed rate. Stated

differently, we must determine whether the cause of action effectively contests the

inclusion of certain charges in (or the omission of certain discounts from) a rate

filed with the appropriate administrative agency. In this case, this requires us to

investigate whether ASIC’s FPI rates include an allowance for commissions and

similar costs. Only if the answer to both inquiries is “no” is the filed-rate doctrine

inapplicable.

                                          B

      Before proceeding to that inquiry, however, we pause to address the

dissent’s claim that we should not apply the filed-rate doctrine. Despite some

suggestions to the contrary, see Dissent at 29 (“The majority … now confidently

decrees that the federal filed rate doctrine is the governing rule [in Florida and

Pennsylvania]”), the dissent could not mean that the filed-rate doctrine is a federal


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doctrine that only applies to rates approved by federal regulatory agencies. Such a

view has already been rejected et dixit magna voce by a unanimous en banc panel

of this court. See Taffet, 967 F.2d at 1494 (“Where the legislature has conferred

power upon an administrative agency to determine the reasonableness of a rate, the

rate-payer ‘can claim no rate as a legal right that is other than the filed rate . . . .’

This principle . . . applies with equal force . . . whether the rate at issue has been set

by a state rate-making authority or a federal one.” (first alteration in original)

(citing Montana-Dakota Utils. Co., 341 U.S. at 251)). Nor is this the only circuit

to hold as much. See, e.g., Rothstein v. Balboa Ins. Co., 794 F.3d 256, 261 (2d Cir.

2015) (“The [filed-rate] doctrine reaches both federal and state causes of action and

protects rates approved by federal or state regulators.”); see also In re N.J. Title

Ins. Litig., 683 F.3d 451, 453 (3d Cir. 2012) (affirming the district court’s

dismissal of “state and federal antitrust claims against numerous New Jersey title

insurance companies” on the grounds that suits were based on rates that had been

filed with New Jersey’s Department of Banking and Insurance and, thus, were

barred by the filed-rate doctrine); H.J. Inc., 954 F.2d at 494 (“[T]he rationale

underlying the filed rate doctrine applies whether the rate in question is approved

by a federal or state agency”). Presumably, then, the dissent faults this opinion for

not analyzing state law to determine whether the “legislature[s of Florida and


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Pennsylvania] ha[ve] conferred power upon an administrative agency to determine

the reasonableness of [the] rate [in question],” Taffet, 967 F.2d at 1494.

      Fair enough. For that reason, we now largely reproduce the reasoning that

the district court offered in Fowler, 277 F. Supp. 3d at 1338–39. Before doing so,

however, we begin with a brief digression—namely, a quick overview of this

court’s discussion in Taffet of Alabama’s and Georgia’s utility rate-making

regimes—to help frame the ensuing Erie guess, see Erie R. Co. v. Tompkins, 304

U.S. 64, 78 (1938).

      In Taffet, we concluded that the filed-rate doctrine existed as to those state

regulatory schemes due, in large part, to the legislatures’ having established

“elaborate administrative schemes to ensure that rates for electricity are just and

reasonable for the affected utilities and for the public.” 967 F.2d at 1490. With

respect to Alabama’s regime, we noted that the legislature had delegated to the

state’s public service commission (“PSC”) the authority to set electric power rates

and to determine what constitutes a fair rate of return; that a utility that wished to

change an existing rate had to file a new rate schedule with the PSC; that upon

written complaint by a rate-payer, the PSC had the duty to investigate the

reasonableness of the challenged rate; that the PSC’s disposition of the complaint

could be appealed to the Alabama Supreme Court, but that the court’s inquiry was


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ordinarily limited to ensuring that there was evidence to support the PSC’s

determination; and that Alabama courts were not permitted to substitute their

judgment for that of the PSC. Id. at 1490–91. We further observed that Alabama’s

scheme left open a means for the PSC to compensate those who had paid excess

rates in the past without undermining the PSC’s authority to set reasonable rates.

Id. at 1492–93. For similar reasons, we concluded that the filed-rate doctrine also

applied to Georgia’s scheme. Id. at 1491–94.

      Florida has enacted a similar regime with respect to insurance rates.

Pursuant to Fla. Stat. § 627.062, insurers “must” file with the Office of Insurance

Regulation (“OIR”) a “copy of rates, rating schedules, [and] rating manuals,”

among other things. Id. § 627.062(2)(a). The OIR is empowered to review these

filings to ensure that they are not “excessive, inadequate, or unfairly

discriminatory[,]” where “excessive” is defined as, inter alia, “likely to produce a

profit . . . which is unreasonably high in relation to the risk involved in the class of

business or if expenses are unreasonably high in relation to services rendered.” Id.

§ 627.062(2)(b), (e). Where the OIR determines that a rate or rate change is

excessive, inadequate, or unfairly discriminatory, it is directed to disapprove the

rate and to compensate the relevant policyholders, id. § 627.062(h) (“The office

shall [] order . . . that premiums charged each policyholder constituting that portion


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of the rate above that which was actuarially justified be returned to the

policyholder[.]”), or, under certain circumstances, to direct the insurer to correct

the noncompliance, including by adjusting the premium, id. § 627.371(2).

Furthermore, whenever an insurer wishes to change a rate, it must notify the OIR

within 30 days after the effective date of the change, id. § 627.062(2)(a), after

which the office reviews the rate to ensure that it is not “excessive, inadequate, or

unfairly discriminatory[,]” Nat’l Council on Comp. Ins. v. Fee, 219 So. 3d 172,

174 (Fla. Dist. Ct. App. 2017) (quoting Fla. Stat. § 627.062(3)(b)).

      Finally, as with Alabama’s utility rate-making regime, in Florida, upon

written complaint and after petitioning the insurer, “[a]ny person aggrieved by any

rate charged, rating plan, [or] rating system . . . followed or adopted by an insurer”

may request OIR review. Fla. Stat. § 627.371(1) (emphasis added); cf. Int'l Patrol

& Detective Agency Co. v. Aetna Cas. & Sur. Co., 419 So. 2d 323, 324 (Fla. 1982).

Should such an individual wish to challenge an OIR decision, he or she can appeal

that decision to the Florida District Court of Appeal, see State Farm Mut. Auto. v.

Gibbons, 860 So. 2d 1050, 1052 (Fla. Dist. Ct. App. 2003) (stating that once

administrative review pursuant to Fla. Stat. § 627.371 is complete, “the exclusive

jurisdiction for judicial review is the District Court of Appeal”), “but the court

shall not substitute its judgment for that of the agency on an issue of discretion[,]”


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Fla. Stat. § 120.68(7)(e); cf. Nationwide Mut. Ins. Co. v. Williams, 188 So. 2d 368,

372 (Fla. Dist. Ct. App. 1966) (“This court is not and should not be burdened with

the responsibility of rate-making.       Insurance rate-making is a technical,

complicated, and involved procedure. It is not an exact science. Judgment based

upon a thorough knowledge of the problem must be applied.”).

      While such data points may not allow us to say with certainty that the

appellate courts of Florida will hold that the filed-rate doctrine exists as to the

regulatory scheme in question, they are enough to make an educated guess, which

is all that Erie requires. And for similar reasons, we can make an educated guess

regarding the determination of the appellate courts of Pennsylvania. See 40 Pa.

Stat. Ann. § 710-6(a) (“Every insurer making a filing with the commissioner . . .

shall file every manual of classifications, rules and rates, every rating plan and

every modification of a manual of classifications, rules and rates and a rating plan

which it proposes to use[.]” (emphasis added)); see also id. § 710-7(b) (permitting

commissioner to disapprove rates that are “excessive, inadequate, or unfairly

discriminatory”); Id. § 710-11(e) (permitting the commissioner to suspend a

previously approved rate if it subsequently deems, inter alia, the rate to be

excessive); 1 Pa. Code § 35.9 (“A person complaining of anything done or omitted

to be done by a person subject to the jurisdiction of an agency, in violation of a


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statute or regulation administered or issued by the agency may file a complaint

with the agency”).

                                         C

      Although the plaintiffs assert on appeal that they are not challenging the

reasonableness of ASIC’s rates, the complaints belie this claim. As such, their

causes of action fail at the first stage of the analysis. The most obvious basis for

this conclusion is the fact that the plaintiffs repeatedly state that they are

challenging ASIC’s premiums. In a section of the complaints titled “The Force-

Placed Insurance Scheme,” they characterize the servicers as being “incentivized to

purchase and force place insurance coverage with artificially inflated premiums[.]”

Patel Compl. ¶ 36 (emphasis added); Fowler Compl. ¶ 35 (emphasis added); see

also Patel Compl. ¶¶ 98(b), 111; Fowler Compl. ¶ 111(b).           Elsewhere, they

describe themselves as “suffer[ing] damages in the form of unreasonably high

force-placed insurance premiums[.]”      Patel Compl. ¶ 156 (emphasis added);

Fowler Compl. ¶ 169 (emphasis added); see also Patel Compl. ¶¶ 150, 162.

Finally, the plaintiffs make clear that they are objecting to ASIC’s—not just

SLS’s—practice of “bundl[ing] the cost [of “kickbacks”] into the amounts charged

for insurance coverage.” Patel Compl. ¶ 5; see also Patel Compl. ¶¶ 38, 120;

Fowler Compl. ¶¶ 37, 115, 124, 125, 150, 166(l). The plain language of the


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complaints therefore shows that the plaintiffs are challenging the reasonableness of

ASIC’s premiums; and since these premiums are based upon rates filed with state

regulators, plaintiffs are directly attacking those rates as being unreasonable as

well.

        That the plaintiffs are challenging ASIC’s rates is further attested to by their

allegation that the defendants have “manipulate[d] the force-placed insurance

market” to “artificially inflate the amounts . . . charge[d] to borrowers” for force-

placed insurance. Patel Compl. ¶ 26; Fowler Compl. ¶ 25. Since ASIC is the

provider in the FPI market, the charge of price manipulation necessarily attacks

ASIC’s premiums.         Given, moreover, that the plaintiffs repeatedly use the

language of market manipulation to characterize their causes of action, Patel

Compl. ¶¶ 14, 47, 75(e), 98(a), 140; Fowler Compl. ¶¶ 12, 45, 89(e), 111(a),

153(i), we cannot avoid the conclusion that they are directly challenging the rates

that ASIC has filed with state regulators.

        Their complaints therefore contain textbook examples of the sort of claims

that we have previously held are barred by the nonjusticiability principle. In

Taffet, for instance, we held that utility customers in Alabama and Georgia could

not sue utilities for damages measured as the difference between the filed rate and

the rate that would have prevailed absent the providers’ fraudulent behavior. 967


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F.2d at 1491. Permitting such a cause of action, we stated, “would disrupt greatly

the states’ regulatory schemes” because for the plaintiff-customers to prevail, a

“trial judge, or a jury, would have to determine what rate should have been set by”

the states’ regulatory bodies. Ibid. Since this would effectively empower the trial

court to set a new rate, the nonjusticiability principle was violated. Ibid. And as

we also noted, there is no fraud exception to the filed-rate doctrine, id. at 1494–95,

defeating the plaintiffs’ attempt at circumventing the rule by alleging a fraudulent

kickback scheme.

      We reached the same conclusion in Hill, where a telecommunications

customer sought monetary damages from a service provider for its billing

practices, specifically, its representation of a given charge as a recoupment of a

mandatory federal fee when, in fact, the charge exceeded the required fee. 364

F.3d at 1311–12. Because that charge had been filed with federal regulators, we

concluded that a decision in the plaintiff’s favor would amount to a retroactive

determination of a filed rate’s reasonableness and was thus barred. Id. at 1317.

Likewise, for the plaintiffs to prevail in this case, a trial court would have to

determine that ASIC’s rates should have been lower than what was filed with

regulators in Florida and Pennsylvania.




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       Because the plaintiffs should be understood as meaning what they say, we

find that they have challenged ASIC’s filed rate. As such, there can be no doubt

that their causes of action are barred by the filed-rate doctrine. 8



       8
          Even were we to proceed to the second stage of the examination, it is unlikely that we
would reverse the district courts’ grants of the defendants’ motions to dismiss. To see why, it
helps to briefly discuss Rothstein.
        In Rothstein, the Second Circuit held that the filed-rate doctrine barred a suit by
mortgagors who claimed that they had been “fraudulently overbilled [for FPI] because the rates
they were charged did not reflect secret ‘rebates’ and ‘kickbacks’ that [the loan servicer]
received from [the insurer] through [the insurer’s] affiliate[.]” 794 F.3d at 259. In reaching that
conclusion, the court noted that:
        The theory behind the claims is that Plaintiffs were overbilled when they were
        charged the full LPI rates (which were approved by regulators), instead of lower
        rates net of the value of loan tracking services provided by [the insurer’s affiliate].
        That theory can succeed only if the arrangement [between the loan servicer and
        the insurer’s affiliate] should have been treated as part and parcel of the [F]PI
        transaction and reflected in the [F]PI rates.
Ibid. (footnote omitted). Since under the nonjusticability principle, “it is squarely for the
regulators to say what should or should not be included in a filed rate[,]” the court concluded that
the claims were barred. Id. at 262. Admittedly, unlike this case, Rothstein only dealt with claims
against the insurer and the insurer’s affiliate, id. at 259; nevertheless, because the Plaintiffs’
claims here rely on the same underlying theory, Rothstein’s reasoning continues to persuade us.
        The Plaintiffs insist, however, that we should instead follow Alston v. Countrywide Fin.
Corp., 585 F.3d 753 (3d Cir. 2009), which they contend is better reasoned and supports reversal
of the district court opinions. Patel Br. 17; Fowler Br. 17. In Alston, the Third Circuit “briefly
address[ed]” the question of whether the filed-rate doctrine barred a suit brought pursuant to
Section 8(d)(2) of the Real Estate Settlement Procedures Act of 1974 (“RESPA”). 585 F.3d at
759. And according to the dissent, the Third Circuit “conclude[ed] that the plaintiffs’ kickback-
scheme claims did not concern a filed rate, and thus it was ‘absolutely clear that the filed rate
doctrine simply d[id] not apply.’” See Dissent at 56–57 (alterations in original) (quoting Alston,
585 F.3d at 765).
        It is far from certain, however, that this is what Alston actually held. While it is true that
the Third Circuit stated that it is “absolutely clear that the filed rate doctrine simply does not
apply here[,]” immediately preceding that statement, it said, “[i]t goes without saying that if we
were to find that the filed rate doctrine bars plaintiffs’ claims, we would effectively be excluding
PMI from the reach of RESPA, a result plainly unintended by Congress.” Id. at 764 (emphasis
added). Given that the filed-rate doctrine rests upon the principle that “[w]here the legislature
has conferred power upon an administrative agency to determine the reasonableness of a rate, the
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                                                IV

       For the reasons noted above, this case triggers an application of the filed-rate

doctrine. We therefore AFFIRM the district courts’ grants of the defendants’

motions to dismiss for failure to state a claim. We DENY the October 24, 2016

motion for judicial notice by defendants-appellees Specialized Loan Servicing

LLC and American Security Insurance Company as moot.




rate-payer ‘can claim no rate as a legal right that is other than the filed rate[,]’” see Taffet, 967
F.2d at 1494 (quoting Montana-Dakota Utils. Co., 341 U.S. at 251), Alston seems to be making
the rather unremarkable point that the reach of the filed-rate doctrine can be circumscribed by
legislation that confers to individuals a private right of action. Since nothing akin to RESPA’s
remedial provision exists here, Alston is not on point.

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JORDAN, Circuit Judge, dissenting:

      The federal filed rate doctrine, a creature of federal common law derived

from various federal statutes, has been around since 1907. Despite its existence for

over 100 years, Pennsylvania and Florida have so far not adopted it. The majority,

without seeking guidance from the supreme courts of Pennsylvania or Florida, now

confidently decrees that the federal filed rate doctrine is the governing rule in these

two states. The majority also expands the filed rate doctrine to also bar claims

against anyone whose contract seemingly concerns a filed rate. The majority then

applies its sweeping rule to parties which have not filed any rates with state

regulators.

      I respectfully disagree with the majority’s analysis and holding. First, I

would certify this case to the supreme courts of Pennsylvania and Florida and ask

whether they have adopted the filed rate doctrine in some form. Second, assuming

that the filed rate doctrine applies in its unadulterated federal form, it does not bar

a breach-of-contract claim that does not challenge a filed rate. Third, the filed rate

doctrine does not—and should not—extend to lenders who are not regulated by

rate-setting agencies, are not required to file rates, and are not sellers of filed rates.




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                                         I

      The Supreme Court derived the federal filed rate doctrine from federal

statutory and regulatory schemes. This case does not involve any such federal

schemes; it instead concerns the regulatory systems of Pennsylvania and Florida.

These two states require insurers to file insurance premiums (i.e., rates) with the

appropriate state regulatory agencies. Because no federal law mandates these

filings and no federal agency regulates these rates, we must look to the laws of

Pennsylvania and Florida to determine whether something akin to the federal filed

rate doctrine governs in these states.

                                         A

      The federal filed rate doctrine is a court-made rule crafted by the Supreme

Court in the early 1900s. In one of the seminal cases, Texas & Pacific Railway Co.

v. Abilene Cotton Oil Co., 204 U.S. 426, 448 (1907), the Court barred a plaintiff

from extracting a lower rate through litigation to avoid paying the higher rate set

by a federal agency. The case turned on the Interstate Commerce Act. One of the

ICA’s goals was to ensure reasonable rates for railroad customers, so it required

railroads to file proposed rates with the Interstate Commerce Commission and then

to charge only those filed rates, assuming the ICC approved the rates as

“reasonable.” Id. But some customers were not satisfied that the ICC’s approved


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rates were low enough, so they sued and demanded that the railroads charge lower

rates. Id. at 430. The Court read the rate-filing provisions of the ICA to impliedly

bar such suits. It reasoned that Congress meant the ICA to ensure “reasonable”

rates only through the rate-setting process itself. Id. at 448.

      The Supreme Court has applied the filed rate doctrine to other claims and

industries regulated under the ICA. See, e.g., Louisville & N. R.R. Co. v. Maxwell,

237 U.S. 94, 97 (1915); Keogh v. Chi. & N.W. Ry. Co., 260 U.S. 156, 160–63

(1922).   And it has expanded the federal filed rate doctrine to other federal

statutory schemes and industries, including utilities, insurers, and common carriers.

See, e.g., Ark. La. Gas Co. v. Hall, 453 U.S. 571, 573 (1981) (rates filed with the

Federal Energy Regulatory Commission pursuant to the Natural Gas Act); AT&T

Co. v. Cent. Office Tel., Inc., 524 U.S. 214, 221–28 (1998) (rates filed with the

Federal Communications Commission pursuant to the Communications Act of

1934).

      These cases and others confirm that the Supreme Court has consistently

treated questions about the existence and scope of the doctrine as a question of

federal statutory interpretation. See, e.g., Cent. Office. Tel., 524 U.S. at 222–24

(concluding that the filed rate doctrine applies to the Federal Communications Act

because its relevant provisions were modeled on those in the ICA); MCI


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Telecomms. Corp. v. AT&T Co., 512 U.S. 218, 234 (1994) (“[T]here is

considerable debate in other forums about the wisdom of the filed rate doctrine . . .

But our estimations, and the Commission’s estimations, of desirable policy cannot

alter the meaning of the [F]ederal Communications Act of 1934. For better or

worse, the Act establishes a rate-regulation, filed-tariff system for common-carrier

communications.”) (citations and quotation marks omitted); T.I.M.E. Inc. v. United

States, 359 U.S. 464, 468–70 (1959) (noting that the issue is one of “statutory

interpretation,” engaging in a lengthy analysis of Congress’ intent, and ultimately

concluding that “[t]he structure and history” of the relevant federal act determined

whether a party to the regulated transaction could challenge the reasonableness of

past rates). And until now, we have applied this same approach. See, e.g., Hill v.

BellSouth Telecomms., Inc., 364 F.3d 1308, 1311–12, 1315 (11th Cir. 2004)

(observing that the federal filed rate doctrine applies to rates approved under the

Federal Communications Act); Fla. Mun. Power Agency v. Fla. Power & Light

Co., 64 F.3d 614, 616 (11th Cir. 1995) (citing Ark. La. Gas Co., 453 U.S. at 571,

for the proposition that the federal filed rate doctrine applies to rates approved by

the Federal Power Commission/Federal Energy Regulatory Commission).

      In short, for the federal filed rate doctrine to apply, it must be tied to a

federal statute creating a federal regulatory scheme. When the regulatory scheme


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is instead created by a state, we must look to that state’s law to figure out whether

a state-law filed rate doctrine exists.

                                           B

      To determine whether a filed rate doctrine exists under state law, we first ask

whether the state has adopted or disclaimed the filed rate doctrine. Barring an

explicit holding from the state courts, we must either certify the question to the

appropriate state supreme court or review the state’s regulatory scheme and make

an Erie guess, see Erie R. Co. v. Tompkins, 304 U.S. 64, 78 (1938), as to whether a

filed rate doctrine exists under state law. What we cannot do is impose the federal

filed rate doctrine on a state because its statutes appear similar to federal laws.

      Our decision in Taffet v. Southern Co., 967 F.2d 1483 (11th Cir. 1992) (en

banc), exemplifies this methodology. There, we addressed whether electricity

customers who sought to bring federal RICO claims against power companies for

rates approved by state regulators in Alabama and Georgia. We analyzed those

states’ regulatory schemes and case law and concluded that those states appeared

to have their own filed rate doctrines. See id. at 1490–94.

      Taffet is not unique. The vast majority of federal and state courts look to

state law to decide whether state regulatory schemes warrant a filed rate doctrine of

some kind. See, e.g., Alston v. Countrywide Fin. Corp., 585 F.3d 753, 763–64 (3d


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             Case: 16-12100     Date Filed: 09/24/2018    Page: 34 of 65


Cir. 2009); Tex. Commercial Energy v. TXU Energy, Inc., 413 F.3d 503, 507–10

(5th Cir. 2005); Knevelbaard Dairies v. Kraft Foods, Inc., 232 F.3d 979, 992–93

(9th Cir. 2000); Rios v. State Farm Fire & Cas. Co., 469 F. Supp. 2d 727, 735–36

(S.D. Iowa 2007); Anzinger v. Ill. State Med. Inter-Ins. Exch., 494 N.E.2d 655,

656–58 (Ill. App. Ct. 1986); Commwealth ex rel. Chandler v. Anthem Ins. Cos.,

Inc., 8 S.W.3d 48, 52–53 (Ky. Ct. App. 1999); Schermer v. State Farm Fire & Cas.

Co., 721 N.W.2d 307, 312–16 (Minn. 2006); Williams v. Union Fid. Life Ins. Co.,

123 P.3d 213, 219 (Mont. 2005); Richardson v. Standard Guar. Ins. Co., 853 A.2d

955, 961–63 (N.J. Super. Ct. App. Div. 2004); N.C. Steel, Inc. v. Nat’l Council on

Comp. Ins., 496 S.E.2d 369, 372–73 (N.C. 1998); Edge v. State Farm Mut. Auto.

Ins. Co., 623 S.E.2d 387, 390–92 (S.C. 2005). There are some outliers, but they do

not explain—much less justify—their approach.            See, e.g., Wegoland Ltd. v.

NYNEX Corp., 27 F.3d 17, 18–22 (2d Cir. 1994).

      The majority cites several cases in an attempt to show that a state law

analysis is unnecessary. But those cases provide the majority with little cover.

First, in In re N.J. Title Insurance Litigation, 683 F.3d 451, 460 (3d Cir. 2012), the

Third Circuit explicitly relied on New Jersey precedent analyzing the state’s

statutory framework and “conclud[ed] that ‘the filed rate doctrine should be

applied.’” Second, in H.J. Inc. v. Northwestern Bell Telephone Co., 954 F.2d 485,


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494 (8th Cir. 1992), the Eighth Circuit failed to engage in any analysis of the issue,

choosing instead to summarily conclude that “[a]lthough little case law exists on

this question, we see no reason to distinguish between rates promulgated by state

and federal agencies.” The majority is correct that the Second Circuit did not

analyze state law in Rothstein v. Balboa Insurance Co., 794 F.3d 256, 261 (2d Cir.

2015), but Rothstein does not explain why its approach is sound. We should not

exacerbate the Second Circuit’s error by importing it into our law, especially when

doing so would require ignoring the sound analysis in a unanimous opinion by the

en banc Eleventh Circuit in Taffet.

      The Rules of Decision Act, in language essentially unchanged since its

original enactment in 1789, provides that “[t]he laws of the several states, except

where the Constitution or treaties of the United States or Acts of Congress

otherwise require or provide, shall be regarded as rules of decision in civil actions

in the courts of the United States, in cases where they apply.” 28 U.S.C. § 1652.

Absent a contrary rule in the U.S. Constitution, federal law, or a federal treaty, “the

law to be applied in any case is the law of the state . . . . There is no federal

general common law.” Erie, 304 U.S. at 78. See also Mid-Continent Cas. Co. v.

Am. Pride Bldg. Co., 601 F.3d 1143, 1148 (11th Cir. 2010) (applying Florida law

to a case regarding an insurer’s “legal duties and obligations” because the issue


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was “not governed by the Constitution or treaties of the United States or Acts of

Congress”).

      Federal common law does exist in areas involving “‘uniquely federal

interests’” that “are . . . committed by the Constitution and laws of the United

States to federal control.” Boyle v. United Techs. Corp., 487 U.S. 500, 504 (1988)

(citing cases). But I fail to see how a state-law breach-of-contract claim against a

private party that contracted with a state-regulated entity somehow touches on

those matters committed to federal control, such as the country’s foreign relations,

the liability and immunity of federal officials, or admiralty law. The same goes for

an affirmative defense based on a state regulatory scheme. See id. at 504–06;

Texas Inds., Inc. v. Radcliff Materials, Inc., 451 U.S. 630, 640–41 (1981).

Permitting the states to fashion rules for their own state agencies in this context

does not create any “significant conflict between some federal policy or interest

and the use of state law” to justify overriding those state rules. See Wallis v. Pan

Am. Petrol. Co., 384 U.S. 63, 68 (1966); Richard H. Fallon, Jr., John F. Manning et

al., Hart and Wechsler’s The Federal Courts and the Federal System 646–49, 675

(7th ed. 2015).




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                                              C

      The majority acknowledges this problem, but fails to grapple with its

significance. It tacks onto its federal analysis a reference to the regulatory schemes

in Pennsylvania and Florida and concludes that there is “enough to make an

educated guess” that these states have adopted a filed rate doctrine. Maj. Op. at 23.

I disagree.

      As the defendants admit, the Pennsylvania and Florida state courts have

never said anything about the filed rate doctrine: “Neither Florida’s nor

Pennsylvania’s highest court has decided whether the filed-rate doctrine bars

claims like plaintiffs’.   Nor have either state’s intermediate appellate courts

squarely addressed the issue.” Fowler Caliber Br. at 16. Given this silence, the

majority’s “educated guess” is nothing more than a hopeful shot in the dark.

      The majority cites several cases from Florida, but not one adopted or even

mentioned the filed rate doctrine. See Nat’l Council on Comp. Ins. v. Fee, 219 So.

3d 172, 175 (Fla. 1st DCA 2017); Int’l Patrol & Detective Agency Co. v. Aetna

Cas. & Sur. Co., 419 So. 2d 323, 324 (Fla. 1982); Nationwide Mut. Ins. Co. v.

Williams, 188 So. 2d 368, 372 (Fla. 1st DCA 1966). I therefore fail to see how

they are helpful.




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      The majority fares no better in Pennsylvania.        The sole state appellate

decision cited by the parties that comes close to being relevant is Petty v. Insurance

Department, 878 A.2d 942, 946–47 (Pa. Commw. Ct. 2005). There, the court

relied on its earlier decision in Ciamaichelo v. Independence Blue Cross, 814 A.2d

800 (Pa. Commw. Ct. 2002), to justify applying a state filed rate doctrine to bar

claims of nonprofit hospital plan subscribers “for what [they] alleged to be the

[insurance plans’] improper maintenance of excess reserve[ funds].” Petty, 878

A.2d at 944. Significantly, however, the Supreme Court of Pennsylvania later

reversed Ciamaichelo, holding that the complaint did “not allege a rate injury

claim” and explicitly declining to “address whether the filed-rate doctrine would

have applied in this context.” Ciamaichelo v. Independence Blue Cross, 909 A.2d

1211, 1218 & n.8 (Pa. 2006). As a result, Petty is no longer a reliable indicator of

Pennsylvania law.

      My own search reveals only one other potentially relevant Pennsylvania

state court case, an unpublished opinion from a Pennsylvania trial court.          In

Milkman v. American Travellers Life Ins. Co., 2002 WL 778272 (Pa. Com. Pl.

Apr.1, 2002), the court noted that “the Plaintiff’s claims may be subject to the filed

rate doctrine.” Id. at *14 (emphasis added). It did not apply the doctrine, but




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simply noted its possible existence as a reason for the court to accept a settlement

between the parties. Id. at *14–15. And it cited no Pennsylvania cases for support.

       If we are looking for help as to Pennsylvania law, we should consider the

Third Circuit’s decision in Alston, 585 F.3d at 764–65, which refused to apply the

federal filed rate doctrine. Although Alston did not definitely resolve whether

Pennsylvania has adopted something akin to the federal filed rate doctrine in every

context, as I discuss in more depth later, at the very least it demonstrates that the

robust federal version the majority imposes here is inappropriate. 1

       We should pay particular attention to Alston because Pennsylvania is within

the Third Circuit. Federal courts have long recognized that they should give some

deference to the decisions of other federal courts deciding the law of a state within

their respective circuits.       See MacGregor v. State Mut. Life Assur. Co. of

Worcester, Mass., 315 U.S. 280, 281 (1942) (leaving “undisturbed the

interpretation placed upon purely local law by a Michigan federal judge of long

experience and by three circuit judges whose circuit includes Michigan” because

there was “[n]o decision of the Supreme Court of Michigan” touching on the


       1
          A district court in the Eastern District of Pennsylvania decided, three months before
Alston, that the filed rate doctrine barred federal antitrust claims against an insurer who filed
rates with the relevant Pennsylvania agency. See In re Penn. Title Ins. Antitrust Litig. 648 F.
Supp. 2d 663, 672-87 (E.D. Pa. 2009). Alston may have effectively overruled Pennsylvania
Title, but even if it did not, the conflict between these two federal decisions demonstrates that
there is an open question whether and in what form Pennsylvania applies the filed rate doctrine.
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issue); Bishop v. Wood, 426 U.S. 341, 346 n.10 (1976) (giving “great deference” to

federal judges’ interpretations of the laws of the state in which they sit);

Westinghouse Elec. Supply Co. v. Wesley Const. Co., 414 F.2d 1280, 1281 n.1 (5th

Cir. 1969) (same). See also Abex Corp. v. Md. Cas. Co., 790 F.2d 119, 125–26

(D.C. Cir. 1986) (noting that when the court of appeals “has essayed its own

prediction of the course of state law on a question of first impression within that

state, the federal courts of other circuits should defer to that holding, perhaps

always”) (citation and quotation marks omitted); Factors Etc., Inc. v. Pro Arts,

Inc., 652 F.2d 278, 279 (2d Cir. 1981) (explaining that “conclusive deference”

should be given to “ruling[s] by a [federal] court of appeals deciding the law of a

state within its circuit”).

       The majority disregards this lack of state precedent, sidesteps Alston, and

concludes that the regulatory systems Pennsylvania and Florida have established

are alike enough to those in Taffet to warrant imposing the federal filed rate

doctrine. But we should not be so quick to think that any similar state regulatory

system demands the adoption of the filed rate doctrine in its federal form.

       The federal filed rate doctrine is not without its critics, as the Supreme Court

has noted. See Square D Co. v. Niagara Frontier Tariff Bureau, Inc., 476 U.S.

409, 417–23 (1986). The Court in Square D drew on the opinion below in the


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Second Circuit, written by Judge Friendly. He noted several criticisms of the

robust federal filed rate doctrine adopted in Abilene Cotton and Keogh. For

example, he argued that class actions had undermined one of the key policy

reasons for the doctrine—to ensure equality among ratepayers—because most

ratepayers can have their grievances addressed equally in a single action. See

Square D Co. v. Niagara Frontier Tariff Bureau, Inc., 760 F.2d 1347, 1352 (2d

Cir. 1985). Moreover, trends toward deregulation have undermined another basis

for the doctrine, the protection of rates heavily monitored by regulatory agencies.

These schemes rely “on competition rather than regulation to insure the

reasonableness of . . . rates” so that “[e]xposing ratemaking to competitive forces,”

including antitrust and fraud litigation, is “the most significant aspect[] of this

deregulation.” Id. at 1354–55. See also Brief for the United States as Amicus

Curiae Supporting Petitioners at 7, Square D Co. v. Niagara Frontier Tariff

Bureau, Inc., 476 U.S. 409 (1986) (arguing that modern developments have

“undercut the rationale relied on in Keogh and [have] render[ed] that decision

obsolete and its continued application anomalous”).

      For these and other reasons, some state courts have chosen to adopt a narrow

filed rate doctrine applicable only to certain rates established by particular state

agencies. See, e.g., Schermer, 721 N.W.2d at 313, 317 (initially noting that “[t]his


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court has not [previously] directly decided whether the filed rate doctrine applies to

rates established by Minnesota regulatory agencies,” and ultimately concluding,

after lengthy weighing of various issues, that “the filed rate doctrine applies

generally to rates filed with and approved by the [Minnesota Department of

Commerce]”). Other state courts have ducked the question or adopted the doctrine

only in limited circumstances. See, e.g., Qwest Corp. v. Kelly, 59 P.3d 789, 792

(Ariz. Ct. App. 2002) (noting that “Arizona courts have not yet considered”

whether to adopt a “filed rate doctrine,” and ultimately deferring the question);

Satellite Sys., Inc. v. Birch Telecom of Okla., Inc., 51 P.3d 585, 588 (Okla. 2002)

(refusing to decide whether to adopt a state version of the federal filed rate doctrine

for tariffs filed with the Oklahoma Corporation Commission, but holding that even

if the doctrine were to be adopted it would not bar a claim for common-law fraud).

      Some states have chosen to adopt an alternative to the federal filed rate

doctrine. For example, California rejects the filed rate doctrine and allows lawsuits

challenging the reasonableness of rates. See Cellular Plus, Inc. v. Sup. Ct., 18 Cal.

Rptr. 2d 308, 318 (Cal. App. 1993) (rejecting, in a challenge to state-regulated cell

phone service rates, the contention that a state filed rate doctrine applies: “We

. . . are not compelled to follow the Keogh and Square D rulings . . . [because,

among other reasons,] the instant action pertains to the cellular telephone industry


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and the [state Public Utility Commission’s] regulatory authority over providers of

such service, whereas Keogh and Square D dealt with the [federal] ICC’s

regulatory authority over common carriers”). In Mississippi, claims for breach of

fiduciary duty, breach of the implied covenants of good faith and fair dealing, and

fraud are not barred by the filed rate doctrine because they derive from the

common law. See Am. Bankers Ins. Co. of Fl. v. Alexander, 818 So. 2d 1073, 1083

(Miss. 2001). Montana, for its part, holds that the filed rate doctrine does not apply

to rates set by a state regulatory agency. See Williams v. Union Fidelity Life Ins.

Co., 123 P.3d 213, 219 (Mont. 2005).

      Nor is the filed rate doctrine, even in its federal form, necessarily as robust

as the majority assumes. Federal courts have long held that claims that touch on

regulated entities or rates are not barred by the filed rate doctrine, as long as they

do not challenge the reasonableness of the rate. See Litton Sys., Inc. v. AT&T Co.,

700 F.2d 785, 820 (2d Cir. 1983) (concluding that the filed rate doctrine was

inapplicable to an antitrust challenge that a service connected to the rates was

unlawfully charged by the regulated entity because the issue “is not the

reasonableness of the interface tariff rate as compared to some other rate that might

have been charged, but instead whether the [service] requirement itself was

reasonable, i.e., whether there should have been any charge at all”). See also City


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of Kirkwood v. Union Elec. Co., 671 F.2d 1173, 1179 (8th Cir. 1982) (holding that

the filed rate doctrine does not bar claims for antitrust damages where plaintiffs do

not challenge the reasonableness of rates, but their competitive effect); Gulf States

Utils. Co. v. Ala. Power Co., 824 F.2d 1465, 1472 (5th Cir. 1987) (noting that the

filed rate doctrine does not bar courts from addressing breach-of-contract claims

based on unconscionability or through fraud because “[b]y setting aside the

contracts, the district court would not interfere with the FERC’s rate-making

powers”).

      I could go on, but there is no need to. The point is that states can choose, for

their own reasons, not to have a filed rate doctrine, or to have one that is much

narrower in scope than the federal version.              The majority’s unwarranted

assumption that Pennsylvania and Florida would adopt a full-throated version of

the federal filed rate doctrine is not faithful to our notions of federalism. Given the

vast variety of approaches available to the states, which function as laboratories in

our federal system, see New State Ice Co. v. Liebmann, 285 U.S. 262, 387 (1932)

(Brandeis, J., dissenting), we cannot blithely assume that anything like the federal

filed rate doctrine exists (or will be adopted) in Pennsylvania or Florida. Even if

we can assume the doctrine exists in these states, it requires yet another leap to

assume that it functions in the same way as its federal counterpart.


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                                         D

      We have said that “[w]hen substantial doubt exists about the answer to a

material state law question upon which the case turns . . . [we] should certify that

question to the state supreme court in order to avoid making unnecessary state law

guesses and to offer the state court the opportunity to explicate state law.”

Forgione v. Dennis Pirtle Agency, Inc., 93 F.3d 758, 761 (11th Cir. 1996). See

also Lehman Bros. v. Schein, 416 U.S. 386, 391 (1974) (suggesting that

certification was “particularly appropriate in view of the novelty of the question

and the great unsettlement of Florida law”); Looney v. Moore, 861 F.3d 1303, 1314

(11th Cir. 2017) (“Only a state supreme court can provide what we can be assured

are ‘correct’ answers to state law questions, because a state’s highest court is the

one true and final arbiter of state law.”) (citation and quotation marks omitted).

Certification makes all the more sense where, as here, the issue is one of first

impression and involves “policy implications.” See Altman Contractors, Inc. v.

Crum & Forster Specialty Ins. Co., 832 F.3d 1318, 1326 (11th Cir. 2016).

      Given the dearth of case law in Pennsylvania and Florida, I would certify to

the supreme courts of these states two questions: (1) whether they would adopt a

filed rate doctrine, and, (2) if so, in what form. See Pa. R. App. P. 3341; Fla.

Const. art. V, § 3(b)(6). We should not ignore the interests of these states in


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establishing their own regulatory schemes by harkening back to the now-

discredited days of general federal common law. See Swift v. Tyson, 41 U.S. 1,

18–19 (1842).

                                         II

      Inflicting federal strictures on state regulatory systems is not the majority’s

only error.   Even if something like the federal filed rate doctrine applies in

Pennsylvania and Florida, there is no reason for it to bar the homeowners’ breach-

of-contract claims.

                                           A

      At issue here are two distinct contracts: one between the homeowners and

the lenders of their mortgages, and one between the lenders and the insurance

companies who sold hazard insurance to the lenders. I treat the two actions before

us (Patel and Fowler) as one because the complaints are virtually identical, except

for the identities of the lender defendants.

      The homeowners mortgaged their property or borrowed money through

loans secured by their homes. The lenders are Caliber Home Loans, Inc. and

Specialized Loan Servicing, LLC (collectively, “the lenders”), which bought

commercial hazard insurance from American Security Insurance Company.




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          The mortgage contracts between the homeowners and the lenders are

entirely distinct from the commercial insurance agreements between the lenders

and ASIC. The mortgage contracts give the homeowners a choice to either buy

hazard insurance themselves or to reimburse the lender for “the cost” of insurance.

See Fowler Complaint ¶ 48. 2

          When the homeowners failed to insure their homes, the lenders bought

hazard insurance to protect themselves from loss in case the homes were damaged.

The lenders purported to pay the price of hazard insurance ASIC submitted in

schedules to state insurance regulators in Pennsylvania and Florida. See Patel

Appellees’ Br. at 7–8; Fowler ASIC Br. at 9–10; Fowler Caliber Br. at 17–18.

These schedules disclose the nominal price of the hazard insurance that ASIC

charges every customer, including the lenders.




2
    The specific language in the mortgage contracts is:
          5. Property Insurance. . . .
      If Borrower fails to maintain any of the [hazard insurance] coverages described
      above, Lender may obtain insurance coverage, at Lender’s option and
      Borrower’s expense. . . . Borrower acknowledges that the cost of the insurance
      coverage so obtained might significantly exceed the cost of insurance that
      Borrower could have obtained. Any amounts disbursed by Lender under this
      Section 5 shall become additional debt of Borrower secured by this Security
      Instrument. These amounts shall bear interest at the Note rate from the date of
      disbursement and shall be payable, with such interest, upon notice from Lender to
      Borrower requesting payment.
Fowler Complaint ¶ 48 (emphasis added). See also id. ¶¶ 64, 77; Patel Complaint ¶¶ 49, 62.
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      The homeowners claim that the lenders found a way to pay less than this

regulated price.   The complaints allege that the lenders engaged in several

transactions with ASIC that amounted to kickbacks. See, e.g., Fowler Complaint

¶¶ 3, 6, 25–28, 31–33, 36, 37, 39. These transactions effectively lowered the

amounts the lenders paid for insurance.

      The scheme alleged by the homeowners has two components. First, ASIC

paid the lenders commissions that discounted their cost of insurance. A typical

insurance customer might purchase insurance through an independent broker and

pay that person a commission. Here, the “brokers” were in fact affiliated with the

lenders themselves, so the commissions effectively discounted the lenders’

purchase of insurance. Second, the lenders induced ASIC to provide other forms

of value to retain their business. For instance, ASIC performed some of the

lenders’ mortgage-servicing work for less than fair-market value. The lenders also

“sold reinsurance” of the same policies back to ASIC without risk.              The

homeowners allege that these and other transactions discounted “the cost” the

lenders paid ASIC for insurance, which was significantly lower than the nominal

price the lenders supposedly paid.

      Nevertheless, the lenders still required the homeowners to reimburse them

for the full nominal price, or “the cost,” of the force-placed insurance as required


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by the mortgage contracts. The homeowners contend that because the kickbacks

reduced the cost the lenders paid, the amount they must reimburse the lenders

should also be reduced. Accordingly, they assert various federal and state-law

claims against the lenders, and against ASIC for participating in and benefiting

from the purported unlawful scheme.

                                       B

      ASIC and the lenders argue that the filed rate doctrine bars the homeowners’

claims because they amount to generalized grievances that ASIC’s insurance rates

are unreasonably high, and seek only to force the defendants to sell (in ASIC’s

case) or bill for (in the lenders’ case) insurance at lower rates.      See Patel

Appellees’ Br. at 12; Fowler ASIC Br. at 17; Fowler Caliber Br. at 9. But that

argument misreads the homeowners’ claims.         The homeowners assert that,

regardless of the insurance rate ASIC charged, the lenders are contractually

obligated to charge only the amount of insurance they actually paid. By engaging

in side agreements with ASIC for “commissions,” “reinsurance,” and other

kickbacks—transactions that are of course, unregulated—the lenders found a way

to discount their insurance costs. Given that the mortgage contracts between the

homeowners and the lenders required the lenders to charge the homeowners for

only “the cost” of insurance, the lenders breached those contracts by demanding


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more than the discounted cost they paid ASIC. See, e.g., Patel Compl. ¶¶ 5, 26,

32, 33, 47, 89.

      The majority ignores this theory at the heart of the homeowners’ case. The

majority concludes, in a reductive characterization of the claims, that they are

wholly about challenging filed rates. But at the motion to dismiss stage, we must

read the facts alleged in the light most favorable to the homeowners, allow the

pleading of alternative and inconsistent theories, and keep “the good and leave[]

the bad.” Jones v. Bock, 549 U.S. 199, 221 (2007). See also Gates v. Khokhar,

884 F.3d 1290, 1296 (11th Cir. 2018); United Techs. Corp. v. Mazer, 556 F.3d

1260, 1273–74 (11th Cir. 2009).           The majority violates these precepts by

construing the federal filed rate doctrine so broadly as to bar claims that have

nothing to do with filed rates.

                                           C

      The majority also ignores how the federal filed rate doctrine works in

practice. Even if the doctrine applies here, and even if we read the complaints to

touch on rates filed with state regulators, the defendants have still failed to

demonstrate the facts necessary to invoke the doctrine’s protection.

      The federal filed rate doctrine is an affirmative defense. See In re Rawson

Food Serv., Inc., 846 F.2d 1343, 1349 (11th Cir. 1988). See also E. & J. Gallo


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Winery v. EnCana Corp., 503 F.3d 1027, 1039 n.11 (9th Cir. 2007) (“In a number

of cases, such as this one, a buyer brings a state law or federal antitrust action

against a seller, who in turn raises the filed rate doctrine as an affirmative

defense.”). At the motion to dismiss stage, we may dismiss a complaint based on

an affirmative defense only “when [the] allegations, on their face”—including any

facts established by external documents that the court is permitted to consider—

“show that an affirmative defense bars recovery on the claim.” Cottone v. Jenne,

326 F.3d 1352, 1357 (11th Cir. 2003). Because the federal filed rate doctrine can

bar a claim “only where there are validly filed rates,” Florida Municipal, 64 F.3d

at 616, the defendant relying on the doctrine must show that a validly filed rate

governs the transaction at issue.

      Florida Municipal exemplifies this requirement.         There, an electricity

customer (a municipal agency) wanted to buy certain electricity services—called

“network service”—but the utility refused to sell. See id. at 615. The agency sued,

asserting breach of contract and antitrust claims. The utility countered that the

federal filed rate doctrine barred the suit because the agency actually wanted to

modify different services—called “point-to-point” services—the price for which

was on file with the Federal Energy Regulatory Commission pursuant to the

Federal Power Act. See id. The district court granted summary judgment for the


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utility on the federal filed rate doctrine, but we vacated the judgment. We held that

it was an open question whether “network service” was distinct from “point-to-

point” service, and consequently whether the rates for “point-to-point” service

were at issue. See id. at 617. If network services were “distinct” and there was no

filed rate for that service, then “the doctrine would not confer immunity.” Id. at

616. We therefore remanded for fact-finding as to whether there was a meaningful

distinction between the services sought and the services for which FERC had

approved a filed rate. See id. at 617.

      In short, we confirmed in Florida Municipal that regulated sellers are not

immune from litigation when the claim does not concern the entity’s regulated

services. See id. And we reinforced the common-sense notion that whether a filed

rate applies to a given transaction is a precise factual inquiry, not a loose analysis

to be done freehand.

      In the absence of Pennsylvania or Florida precedent adopting some form of

the filed rate doctrine, we do not know what these states would require for the

lenders or ASIC to assert it as a defense. The scope of an affirmative defense is

usually defined by the jurisdiction that established it. See Hicks on Behalf of

Feiock v. Feiock, 485 U.S. 624, 629–30, n.3 (1988) (holding that federal courts

“are not at liberty to depart” from state court decisions recognizing elements of an


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affirmative defense or “to apply a different rule however desirable it may believe it

to be”). See also Structural Polymer Grp., Ltd. v. Zoltek Corp., 543 F.3d 987, 992

(8th Cir. 2008) (“whether a contention is an affirmative defense is a question of

state law”) (citation and quotation marks omitted). But even if we assume that

Pennsylvania and Florida have adopted the full version of the federal filed rate

doctrine, the defendants have not met their burden to assert it as a defense.

      Here, as in Florida Municipal, the defendants seek to invoke the filed rate

doctrine without having established that a state filed rate actually governs the

challenged transactions—e.g., the kickbacks the lenders received from ASIC. The

record reveals that ASIC submitted some rate filings with the district court. See

Fowler D.E. 91 at 12 (taking judicial notice of Rebecca H. Voyles Decl., D.E. 23-

4); Patel D.E. 36 at 4 (taking judicial notice of various rate-schedule documents

purportedly filed with state regulators, D.E.s 22-7, 22-13, and 22-15 through 22-

18). But none of these documents mention the side agreements described in the

homeowners’ complaints.

      Moreover, while it is theoretically possible that ASIC’s rate filings included

the “commissions” paid to the lenders, the record is devoid of any reference that

such filed rates exist. SLS and ASIC argue at one point that state regulators

approved the commission rates, see Patel Appellees’ Br. at 10, but they cite no


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facts or record evidence in support of this contention. Their only authority is a

Florida circuit court decision under the Florida Public Records Act that is at best

tangentially related because it merely mentions ASIC’s Florida rate filings. See

Am. Sec. Ins. Co. v. Fla. Office of Ins. Reg., 2015 WL 10384359 (Fla. Cir. Ct.

2015).

      Affirmative defenses are not established by silence, especially at the motion

to dismiss stage. We cannot and should not assume that the filed rate doctrine bars

the homeowners’ complaints without proof that such filed rates exist.

                                          D

      Applying the federal filed rate doctrine here also conflicts with the goals that

underpin it.     If the homeowners’ claims are true, ASIC has discounted its

customers’ insurance costs through a kickback scheme, and has failed to charge the

filed rates or treat the lenders equally with other customers in the market.

      The filed rate doctrine avoids unreasonable price discrimination by

“foreclosing the possibility that carriers maintain one rate on file while either

negotiating another (secret) lower rate with some shippers or providing those

shippers with illegal rebates or discounts.” In re Olympia Holding Corp., 88 F.3d

952, 956 (11th Cir. 1996). In this way, the doctrine “protects smaller shippers

from being undercut competitively.” Id. See also Cent. Office Tel., 524 U.S. at


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223 (“While the filed rate doctrine may seem harsh in some circumstances . . . its

strict application is necessary to prevent carriers from intentionally misquoting

rates to shippers as a means of offering them rebates or discounts, the very evil the

filing requirement seeks to prevent.”) (quotation marks and citation omitted).

      This is why the Sixth and Third Circuits have concluded that the filed rate

doctrine does not apply to challenges against agreements for which there are no

filed rates. The Sixth Circuit, for example, allowed the plaintiffs’ “challenge

[because it] d[id] not concern the particular rate set by the [state regulator], but

rather [involved] payments made outside of the rate scheme.” Williams v. Duke

Energy Int’l, Inc., 681 F.3d 788, 797 (6th Cir. 2012). The filed rate doctrine did

not apply because “‘the side agreements at issue and the kickbacks paid pursuant to

those agreements were not approved by, filed with, or even supervised by the [state

regulator].’” Id. at 797. Likewise, in Alston, the plaintiffs argued that they were

“challeng[ing] the payment of kickbacks, not the rates they paid for [private

mortgage insurance].” 585 F.3d at 764. Because “those kickbacks [were] not, of

course, filed with Pennsylvania,” the plaintiffs asserted that “the [filed rate]

doctrine d[id] not apply.”     Id. The Third Circuit agreed, explaining that the

“plaintiffs d[id] not challenge directly the reasonableness or fairness of any rate set

by the Commonwealth of Pennsylvania,” but instead challenged a “captive


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reinsurance arrangement constitut[ing] an alleged [illegal] kickback or fee-splitting

scheme.”    Id.   The plaintiffs’ challenge concerned the defendant’s “allegedly

wrongful conduct, not the reasonableness or propriety of the rate that triggered that

conduct.” Id. at 765. See also Blaylock v. First Am. Title Ins. Co., 504 F. Supp. 2d

1091, 1099–1103 (W.D. Wash. 2007) (declining to extend the filed rate doctrine

under Washington law to claims by homeowners that they obtained title insurance

from insurers who paid illegal kickbacks and inducements).

      The majority argues that Alston is inapposite because the claims there arose

under the Real Estate Settlement Procedures Act of 1974, 12 U.S.C. § 2607(d)(2).

It makes sense, the majority says, that a federal statute like RESPA could

circumscribe the filed rate doctrine. But that underscores the doctrine’s federal

nature. As a creature of federal common law derived from federal statutes, like the

ICA in Abilene Cotton, Congress can displace the doctrine with legislation. See

City of Milwaukee et al. v. Illinois et al., 451 U.S. 304 (1981) (“[W]hen Congress

addresses a question previously governed by a decision rested on federal common

law the need for such an unusual exercise of law-making by federal courts

disappears.”). Moreover, if the Third Circuit thought that RESPA preempted

Pennsylvania’s filed rate doctrine, it is curious that it did not discuss RESPA’s

preemptive scope. See Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947)


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(requiring the “clear and manifest purpose of Congress” for a federal statute to

preempt state law). Alston concluded that the plaintiffs’ kickback-scheme claims

did not concern a filed rate, and thus it was “absolutely clear that the filed rate

doctrine simply d[id] not apply.” 585 F.3d at 765. Such a holding is not couched

in the language of preemption.

      The majority says that we should instead look to the Second Circuit’s

example in Rothstein. In that case, the Second Circuit faced similar claims against

an insurer and its customers (lenders) for arranging a kickback scheme that

charged homeowners for more than the actual cost of hazard insurance. See

Rothstein, 794 F.3d at 259.         The Second Circuit held that the “rebates,”

“kickbacks,” and “free services,”—even though they were separate transactions

from the ones between the insurer and lender for the hazard insurance—were still

challenges against the insurance transaction itself. See id. at 259, 263. Rothstein,

however, made two errors that we should not repeat.

      First, the Second Circuit abdicated its duty to consider whether a challenged

arrangement between an insurer and its customer is covered by a filed rate. It

chose not to follow our precedent in Florida Municipal because, although the

plaintiffs’ claims concerned several separate transactions between separate parties,

“there [wa]s a single (regulated) product.”       Id. at 264 n.5.    But, as Florida


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Municipal explained, a court must determine based on the facts of the case whether

each transaction concerns a filed rate. See 64 F.3d at 617. And Florida Municipal,

not Rothstein, constitutes binding precedent in this circuit.

      Second, the Second Circuit doubled down on its error by claiming that once

a regulator has “investigated” a similar complaint and “adopted a regulation

restricting the practice,” then “judicial endorsement of [the] [p]laintiffs’ claims

would displace and distort” the regulation of that practice. Rothstein, 794 F.3d at

263. But no controlling authority extends the filed rate doctrine to bar a lawsuit

challenging transactions that regulators have disapproved, like the side transactions

here. See Fla. Mun., 64 F.3d at 616. Selling a regulated good or service at a

discount from the filed rate is likewise forbidden by the filed rate doctrine, so suits

to recover losses caused by such wrongful behavior are permitted. See, e.g., Sec.

Servs. v. Kmart Corp., 511 U.S. 431, 440 (1994) (cited in Florida Municipal, 64

F.3d at 616); Carnation Co. v. Pac. Westbound Conf., 383 U.S. 213, 216 (1966)

(also cited in Fla. Mun., 64 F.3d at 616).

      As the majority correctly notes, the homeowners’ claims in Rothstein were

solely against the insurer (the lender had settled out of the case). See Maj. Op. at

27 n.8; Rothstein, 794 F.3d at 261. I concede that the homeowners’ claims against

the insurers, both here and in Rothstein, seem to be derivative of the claims against


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the lenders. Given that the homeowners are in privity of contract with only the

lenders, the liability of an insurer would only arise from its participation in the

lenders’ wrongful overcharging of the homeowners under their mortgage contracts.

I see no reason, however, why this dynamic should allow a rate-filer conducting

unregulated transactions (or conducting regulated transactions at a rate other than

the filed rate) to evade a lawsuit by invoking the filed rate doctrine.

      Here, as in Williams and Alston, the challenges are to kickbacks or

agreements other than the regulated transaction. Barring the homeowners’ claims

effectively immunizes all entities in the insurance market, and allows insurers to

engage in side schemes that reduce rates for preferred customers—in violation of

the principle that created the filed rate doctrine in the first place.

                                          III

      The majority’s third and final misstep is the unwarranted extension of the

filed rate doctrine to bar claims against the lenders as if they were regulated

entities like ASIC.      Even assuming that the filed rate doctrine applies in

Pennsylvania and Florida in its federal form, and assuming that the defendants

have successfully shown that a governing rate has been filed with a state regulator,

the filed rate doctrine precludes claims only against regulated sellers—not




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downstream entities or resellers. The majority’s holding, which sweeps in any

entity that touches a regulated rate, is at odds with the federal filed rate doctrine.

      Let us assume, as the lenders contend, that the homeowners complain merely

that they are demanding reimbursement for insurance premiums that are

unreasonably high. Even so, the homeowners’ claims against the lenders should

survive under the filed rate precedent that the majority cites. Why? Because the

claims asserted are not against a regulated seller.

      Pennsylvania and Florida regulate insurers through the Pennsylvania

Insurance Commissioner and the Florida Office of Insurance Regulation. ASIC is

the insurance company that filed rates for the relevant insurance product with these

state agencies. None of the lenders did so, nor were they required to. The lenders

simply bought the regulated insurance, supposedly at the filed rate, from ASIC.

That transaction is the only sale regulated by the state agencies. Or, to look at it

another way, none of the lenders have asserted that they filed a rate or that the

relevant state agencies regulated their “resale” of insurance to the homeowners.

      Allowing the homeowners’ claims to go forward conforms with what have

been called the “[t]wo rationales underl[ying] the [filed rate] doctrine”—

“nonjusticiability” and “nondiscrimination.” Maj. Op. at 14. Here’s why.




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      The nonjusticiability principle decrees that courts should not be rate-setters,

which happens when a plaintiff asks a court to remedy an unreasonably high rate.

But that could not happen here. Some of the homeowners’ claims are against the

lenders, not the regulated seller (ASIC). So any remedy obtained against the

lenders for these claims would not require the homeowners to pay a different

price—a court could never order the regulated seller (ASIC) to sell the regulated

product (hazard insurance) to lenders at a different price.               Thus, the

nonjusticiability principle is not implicated here.     See Hill, 364 F.3d at 1317

(noting that the “purpose of the nonjusticiability principle . . . is to preserve the

FCC’s primary jurisdiction over determinations regarding the reasonableness of

rates charged by regulated carriers”) (emphasis added).

      The same is true for the “nondiscrimination” principle, which forbids

plaintiffs from suing to get lower rates than other customers. See id. at 1316.

Critically, the homeowners here do not seek a lower insurance rate. Imagine, for

instance, that the mortgage contract between the lenders and the homeowners did

not tie the cost of the hazard insurance to the actual cost paid by the lenders. The

lenders are not regulated by the state agencies governing insurance, so they are not

required to pass along the exact same rate they paid the insurer. The lenders could

have charged the homeowners a flat penalty above the cost of insurance for the


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inconvenience of having to insure the homes, or the lenders could have waived any

fee and absorbed the cost of the insurance themselves. In either case, a breach of

contract claim (like a claim that the insurer charged a penalty higher than the

contract allowed) would not concern the rate initially paid by the lenders to the

insurer.

       Significantly, the homeowners’ costs are contractually tied to what the

lenders actually paid for insurance. Although at first glance it might appear that

the homeowners want to pay less for insurance than other customers on the market,

in reality they only seek what their contract requires. Their claims, if true, might

reveal that their lenders paid less than any other customers in the market due to an

unlawful kickback scheme, but that is immaterial to the alleged breach at issue.

The majority’s extension of the filed rate doctrine permits unregulated lenders to

immunize themselves by structuring their contracts to follow the filed rate.3

       In response, the majority reasons that “the filed-rate doctrine’s applicability

does not turn on whether the plaintiff is a rate-payer.” Maj. Op. at 15 (emphasis

added). Maybe so, but the majority never actually justifies expanding the filed rate



       3
          As a policy matter, I am not sure that is a good idea. Cf. Hill v. BellSouth Telecomms.,
Inc., 364 F.3d 1308, 1317–18 (11th Cir. 2004) (Edmondson, C.J., dissenting) (“I think today’s
court extends the judge-made filed-rate doctrine too far: Congress intended not to remove from
the states the power to prevent deceptive trade practices . . . and [claims] for fraud and negligent
misrepresentation.”).
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doctrine to bar a suit where the defendant is not a rate filer.             It cites no

Pennsylvania or Florida statute or regulation that governs regulated insurance

products after ASIC sells it. Nor does it point to any court that has extended the

filed rate doctrine to unregulated entities.

      There are some decisions that have assumed or concluded that the filed rate

doctrine could apply to a regulated buyer who resells a regulated product.

Typically, however, the reason seems to be that no one contested the matter. See,

e.g., Alston, 585 F.3d at 764. The rare cases that address the issue come up empty-

handed, as they can point to no reason to extend the doctrine to unregulated

entities. See, e.g., Roussin v. AARP, Inc., 664 F. Supp. 2d 412, 419 (S.D.N.Y.

2009) (rejecting plaintiff’s challenge to an unregulated defendant’s invocation of a

New York version of the filed rate doctrine for the dubious reason that the plaintiff

“offers no authority . . . for the proposition that the filed rate doctrine cannot bar

claims against entities not directly regulated by the rate-making authority”), aff’d,

379 F. App’x 30 (2d Cir. 2010).

      The majority’s hands are just as empty. The majority extends Rothstein—

which, it admits, “dealt with claims against the insurer”—and argues that because

the “underlying theory” is the same, Rothstein is persuasive. Maj. Op. at 27 n.8. It

points to no case that justifies its expansive view of the filed rate doctrine.


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      If the majority seeks a model for how to address claims against unregulated

sellers of regulated products, it should look no further than Smith v. SBC

Communications, Inc., 839 A.2d 850, 856–60 (N.J. 2004). In that case, the New

Jersey Supreme Court analyzed the federal filed rate doctrine and concluded that

telecommunication resellers generally could not invoke it. It held that the “[t]he

independent resale of [regulated] services to a third party has no discriminatory

effect” because everyone may “purchase the services under the same terms and

with the same rates as those sold to a reseller.” Id. at 859. “[D]amages resulting

from a lawsuit involving the resale w[ould] not provide the victors with any type of

discount” because “their claims arise out of a sales arrangement that exists

completely independent of the original purchase agreement implicating the filed

rate.” Id. “To hold otherwise,” the New Jersey Supreme Court concluded, would

lead to the “nonsensical” outcome of a consumer “violat[ing] the FCA” by

“purchas[ing] a calling card and then giv[ing] that card to a friend or relative free

of charge.” Id.

      The analysis in Smith makes sense. The majority’s contrary rule will allow

unregulated entities to piggyback off the strict protections provided to regulated

entities in exchange for their engagement with the regulatory scheme.

                                         V


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      Whether some version of the filed rate doctrine applies in these cases is a

matter of Pennsylvania and Florida law. We cannot assume, in the absence of state

authority, that the filed rate doctrine applies in its federal form whenever an entity

files rates with state agencies. Given the lack of state precedent on the issue, I

would certify questions about the filed rate doctrine and its scope to the supreme

courts of Pennsylvania and Florida.

      Even if the federal filed rate doctrine exists in Pennsylvania and Florida, it

does not and should not apply to unregulated transactions—like kickbacks—that

do not involve a filed rate. And it should not be extended to lenders who do not

file insurance rates with a state agency.

      With respect, I dissent.




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