Insurers can’t enjoin discrimination determination letters

The 4th U.S. Circuit Court of Appeals ruled Tuesday that a lawsuit filed by Erie Insurance Exchange and five of its subsidiaries seeking to bar the Maryland Insurance Administration from publicly releasing determination letters regarding discriminatory conduct was correctly dismissed.

The three-judge appellate panel in Erie Insurance Exchange et al. v. Maryland Insurance Administration et al. said a federal judge in Baltimore correctly abstained from presiding over the lawsuit because Maryland’s state court system is better suited to handle the insurer’s claims.

The appeals court also agreed that the judge properly dismissed the suit because the purpose of an injunction “is to prevent future harms rather than redress those that have already occurred.”

Erie and the subsidiaries sued the MIA and its director in June 2023  for allegedly violating its right to due process and Maryland law by allowing confidential information to be included with four letters saying the insurers engaged in racial and geographic discrimination. The letters included information the insurers submitted to the agency as part of its investigation. The insurers claim they were told the information would remain confidential.

The insurers filed their lawsuit after the MIA granted their request for an administrative hearing and sought to have the determination letters withdrawn and barred from future dissemination, court records show.

The MIA asked the trial court to abstain from presiding over the insurers’ lawsuit because the allegations could be resolved through the administrative hearing proceedings or the Maryland court system. The judge agreed and dismissed the lawsuit.  

Representatives for the parties did not respond to requests for comment.