WILLIAM B. SHUBB, District Judge.
Plaintiff Shasta Linen Supply, Inc. filed this putative class action alleging claims for fraud and unfair competition against defendants Applied Underwriters, Inc. ("AU"), Applied Underwriters Captive Risk Assurance Company, Inc. ("AUCRA"), Applied Risk Services, Inc. ("ARS"), and California Insurance Company, Inc. ("CIC"), and seeking to represent a class of California employers who purchased an EquityComp workers' compensation insurance program from defendants.
Plaintiff alleges that, in 2009, defendants marketed the EquityComp program to plaintiff and provided an estimate that plaintiff's annual cost for the program would be between $107,541 and $368,457. (
Plaintiff alleges that it incurred significantly higher costs for the EquityComp program than defendants had marketed. Plaintiff claims that defendants used the RPA to charge excessive rates and additional fees to plaintiff and other program participants. Plaintiff also alleges that defendants deliberately misrepresented the costs of the EquityComp program in their marketing materials to induce plaintiff to rely on those costs and enter the program. (
Plaintiff also alleges that the RPA modified the terms of the existing insurance policies under the EquityComp program by "control[ling] the insurance rates for each program participant." (FAC ¶ 27;
Defendants state that their motion to dismiss is "narrowly tailored to attack Plaintiff's claims to the extent that they seek to invalidate the RPA's rates on the theory that [the RPA] is an unfiled rate plan" pursuant to § 11735. (Defs.' Reply at 7 (Docket No. 26).) They argue that, "[t]o the extent Plaintiff's claims seek to void the RPA's payment obligations on the ground that it has not been filed, those claims for relief must be dismissed because . . . an unfiled rate is not an unlawful rate." (
California's Workers' Compensation Act, Cal. Lab. Code § 3200
Section 11735 requires every insurer to "file with the commissioner all rates, rating plans, and supplementary rate information that are to be used" by the insurer at least 30 days before their effective date. Cal. Ins. Code § 11735(a). Section 11737 additionally provides that "[t]he commissioner may disapprove a rate if the insurer fails to comply with the filing requirements under Section 11735."
The Complaint does not contain any allegations that the Commissioner had conducted a hearing and disapproved the RPA's rates. Plaintiff thus fails to state a claim that the RPA's rates are void based on defendants' alleged failure to comply with § 11735. Accordingly, the court will grant defendants' motion to dismiss plaintiff's claims to the extent they seek to void the RPA's rates on the theory that defendants failed to comply with § 11735. Plaintiff's UCL and fraud claims, however, are not limited to the grounds that defendants challenge here.
IT IS THEREFORE ORDERED that defendants' motion to dismiss plaintiff's First Amended Complaint, (Docket No. 17), be, and the same hereby is GRANTED to the extent that plaintiff seeks to invalidate the Reinsurance Participation Agreement on the theory that defendants violated California Insurance Code § 11735; and DENIED in all other respects.