In Katz v. Fidelity National Title Insurance Company (No. 10-3545), the Sixth Circuit held that title insurance companies are all but immune to private antitrust claims in Ohio. The plaintiff alleged that twenty-two title insurance companies and the Ohio Insurance Rating Bureau violated antitrust law by pooling claims data and setting a collective and unreasonably high rates. The Sixth Circuit affirmed the dismissal of the claims, finding that the defendants had absolute immunity provided by statutory antitrust exemptions.
The panel held that the federal antitrust claims were barred under the McCarran-Ferguson Act which provides that the “business of insurance” (which includes title-insurance) is governed under state, not federal antitrust law. It then turned to plaintiff’s claims under Ohio law. While Ohio’s Valentine Act generally prohibits price fixing, the court found that R.C. § 3935.06 exempted title-insurers from being found in violation of state antitrust law for cooperatively setting rates. The decision ultimately turned on the language in Ohio’s old statutory law that specifically allowed for “cooperative action among insurers in rate making and other matters.” When Ohio’s Revised Code was adopted, § 3901.01 of the new code provided that the previous insurance law allowing cooperative action would be unchanged.
The Court also noted that pooling data allows insurers to set more appropriate rates through better prediction of future losses, and that the Ohio legislature intended this type of cooperation. And that while Ohio insurers can set collective rates, they do not have free reign to join in anticompetitive conspiracies. Ohio’s Superintendent of Insurance can discontinue any such activities.