Class Action

"L.A. Targets Insurers With Unlikely Law"

By Kimberly A. Kralowec

Today's Daily Journal has an article, "L.A. Targets Insurers With Unlikely Law" (subscription) reporting on a group of UCL actions recently filed by the City Attorney of Los Angeles against a number of insurers for cancelling their customers' health insurance policies after a signficant claim is made:

Criminal probes, injunctions and misdemeanor charges - if these are the bread and butter of any big city prosecutor looking for career-propelling headlines, Los Angeles City Attorney Rocky Delgadillo has certainly gobbled his fair share.

But behind the scenes, the Los Angeles city attorney's office has increasingly replaced flashier criminal charges with less common civil litigation aimed at nailing companies for unfair business practices.

Nowhere has this unusual legal strategy played a more crucial role than in Delgadillo's widespread investigation of the health insurance industry. Recent lawsuits against the state's top insurers all rely on a broad and controversial law that gives prosecutors statewide powers to sue companies for perceived abuses, exposing them to hundreds of millions of dollars in penalties.

Invoking the lesser known statute instead of criminal charges holds appeal because a wide range of sanctions can be sought in cases which might not meet the high burden of proof required in criminal complaints, according to prosecutors.

Some of the recently-filed complaints can be accessed at this link. The complaint against Blue Shield was particularly well done.

Full post as published by The UCL Practitioner on August 13, 2008 (boomark / email).