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Civil Rights Click here for the full text of this decision FACTS:This interlocutory appeal presents a pre-emption question. Six members of a proposed class of noncaucasian insurance customers instigated this civil rights action against the appellants, Allstate Insurance Corp., alleging that Allstate engages in racially discriminatory business practices in violation of 42 U.S.C. ��1981 and 1982 of the Civil Rights Act of 1866, and in violation of the Fair Housing Act (FHA), 42 U.S.C. �3601. The appellants filed a Texas Rule of Civil Procedure 12(b)(6) motion to dismiss, arguing that the anti-preemption provision of the McCarran-Ferguson Act, 15 U.S.C. �1012(b), precludes application of federal anti-discrimination laws to the controversy at bar. The district court denied the motion, finding that the application of the civil rights statutes was not precluded by the McCarran-Ferguson Act, but simultaneously granting leave for this interlocutory appeal. HOLDING:Affirmed. The appellants generally contend that the application of federal law to the practices at issues here would impair the state law of Florida and Texas. Under Humana Inc. v. Forsyth, 525 U.S. 299 (1999), to impair state law, the federal law must either directly conflict with state regulation, frustrate a declared policy or interfere with an administrative regime. The appellants argue that the application of the civil rights statutes at issue here would frustrate Texas and Florida state insurance policy by frustrating the ability of those states to regulate insurance pricing policies. However, in this argument the appellants adopt entirely a “field preemption” posture, declining to direct the court to a particular law or declared regulatory policy, and instead confining their argument to the observation that states regulate insurance pricing and then vaguely conjecturing that, somehow, “federal civil rights laws will interfere with and frustrate the abilities of states to regulate insurance rate making.” This assertion is not nearly enough to withstand Humana scrutiny. Appellants cannot demonstrate that the federal law in question frustrates a policy associated with the regulation of insurance pricing without identifying an actual policy. Even filling in for the appellants the fact that Florida and Texas might adopt an approach different from the approach embodied in the federal statutes, the mere fact that the two approaches are different is not sufficient to create a conflict. The approach of the federal statute must tread upon a declared policy goal of the state scheme. Here, as the district court correctly noted, “Defendants have not drawn the court’s attention to any law, regulation, or decision in Texas or Florida requiring . . . [or] condoning” the credit-scoring practice at issue here. Instead, in adopting this view, the appellants and their supporting amicihave implicitly adopted the position that the Humana court’s use of the phrase “or interfere with a state’s administrative regime” means that if the state has a mechanism in place for performing an insurance-related function and the federal law enters that regulatory arena, then the federal law is “interfering” with the state’s administrative regime. This interpretation, however, is manifestly at odds with the facts and express holdings of Humana. In Humana, the court expressly rejected a “field pre-emption” approach to MFA preemption, holding instead that federal and state law can concurrently affect the same issues and further the same goals as long as the federal law does not frustratethe state’s declaredpolicy. “Interference,” then, is not synonymous with “a presence in the regulatory field.” Instead, the question is whether the regulatory goals are in harmony. RICO, the court found, supplemented the state’s mechanisms for eliminating insurance fraud, and consequently the purpose and goals of RICO and the state insurance law were in alignment rather than conflict. This line of reasoning clearly demonstrates that the court has rejected an interpretation of “interference” which is premised on the mere presence of federal law within a facet of insurance regulation for which the state already has an administrative regime in place. The appellants, however, do not point to an insurance pricing regulatory goal which is hampered by the application of the civil rights laws to the credit-scoring practice at issue here, save the implied goal of allowing the states to pursue their pricing regulatory goals in isolation, which the Humana court clearly rejected as a relevant state policy goal. The court concludes, therefore, that the MFA does not preclude the appellees’ claims. OPINION:Benavides, J.; before Davis, Jones and Benavides, JJ. CONCURRENCE AND DISSENT:Jones, J. “The majority, in my view, fails to recognize that a disparate impact claim goes to the heart of the risk adjustment that underlies the insurance business. The Seventh Circuit cogently observed: “Risk discrimination is not race discrimination.’ NAACP v. Am. Family Mut. Ins. Co., 978 F.2d 287, 290 (7th Cir. 1992). Every insurer sets its prices according to the risk embodied in covering particular categories of customers. Thus, young male drivers pay higher premiums than young females or mature drivers because of the higher incidents of policy claims made by that group. To be sure, insurers inflict a disparate impact upon young male drivers, but hardly anyone argues that the impact is unjustified. The relevant inquiries are whether the price differential reasonably conforms to the risk differential and whether, in a regulated rate system, the insurer has received an appropriate return.”

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