BLUEFIELD – Nationwide Insurance is arguing that the actions of state Attorney General Patrick Morrisey show that he wants his lawsuit against the company stayed while the U.S. Supreme Court reviews one of his colleagues’ cases.

Morrisey was part of a group of 46 AGs that filed a friend-of-the-court brief with the U.S. Supreme Court in July that urged the court to overturn a decision in Mississippi Attorney General Jim Hood’s lawsuit against AU Optronics.

Hood is fighting a decision by the U.S. Court of Appeals for the Fifth Circuit that determined his case is a “mass action,” and therefore should be heard in a federal court under the provisions of the Class Action Fairness Act.

Hood wants his case heard in state court, where it was first filed.

Nationwide removed Morrisey’s case, filed earlier this year by predecessor Darrell McGraw in McDowell County Circuit Court, to federal court under the same argument and has asked U.S. District Judge David Faber, of the Southern District of West Virginia, to stay the case while the U.S. Supreme Court resolves the Hood appeal.

“Notwithstanding the Supreme Court’s forthcoming decision in Hood, Plaintiff opposed Nationwide’s Motion to Stay claiming that ‘[t]he issues raised in Hood are clearly separate and distinct from [this] case’ and that the two actions were not ‘substantially similar,’” Nationwide wrote Aug. 13.

“Recently, however, Plaintiff filed an amicus brief in the Hood case (together with other state attorneys general) taking precisely the opposite position.

“Plaintiff’s amicus brief before the Supreme Court claims that the Fifth Circuit’s Hood decision represents a ‘break with’ other circuit decisions.”

Those other decisions include two made in the Fourth Circuit, of which West Virginia federal courts are a part.

“Having presented the argument to the Supreme Court that the Fifth Circuit’s decision in Hood is squarely inconsistent with the two cases on which the Motion to Remand in this case is based, Plaintiff cannot seriously maintain that Hood has no bearing on the issues before this Court,” Nationwide wrote.

“Plaintiff’s decision to join the amicus brief in Hood thus confirms that the Supreme Court’s decision will have a significant – and potentially dispositive – effect on the outcome here.”

Morrisey, through private lawyers hired by McGraw to represent the State in the case, asked Faber to strike Nationwide’s brief on Aug. 23.

“The Plaintiff strongly disagrees that the decision in Hood will have a dispositive effect on the Plaintiff’s claims,” wrote William M. Tiano, of the Charleston firm Tiano O’Dell.

“The case against Nationwide and its affiliated companies for civil penalties and other claims brought by the West Virginia Attorney General will continue.

“Nationwide takes two quotes from Plaintiff’s brief out of context as support for its position. Plaintiff points out that Nationwide has repeatedly filed pleadings in this case which either misstate Plaintiff’s pleadings, the law, or create disingenuous arguments by inappropriately spinning language used by Plaintiff. Nationwide is doing that again.”

Tiano argues that Morrisey’s office has argued that the Hood case is “separate and distinct from this case” and that the two actions are not “substantially similar.”

In Hood’s lawsuit, several companies from Japan, Korea and Taiwan were accused of fixing prices for thin film transistor LCD panels from 1999 to 2006.

Hood says he filed the suit under his parens patriae powers — to protect the physical and economic well-being of the residents of his state – and that it is not a mass action.

Several companies sued by McGraw made the argument the cases should be heard in federal court. The Fourth Circuit decided the issue when it rejected the appeal of CVS Pharmacy.

The Nationwide lawsuit concerns the company’s discounts on automobile, homeowners and agribusiness insurances to members of the West Virginia Farm Bureau.

It said the rates as applied to policyholders are discriminatory because the discount offered does not correspond to expected losses and average expenses, and there are no expected average cost differences reflected.

Nationwide has noted that the West Virginia Insurance Commission is charged by statute with reviewing proposed insurance rates and did approve Nationwide’s discounts.

“(T)he insurance code does not authorize Attorney General suits, and the Attorney General is not empowered to pursue actions in civil court unless specifically authorized to do so by statute,” a motion to dismiss filed by Nationwide says.

Nationwide also says the West Virginia Consumer Credit and Protection Act excludes its application to the sale of insurance.

A response filed March 7 by Morrisey’s chief counsel Dan Greear and Tiano O’Dell says Nationwide is applying a discount below the seven percent on file with the insurance commissioner. It adds that the motion to dismiss misrepresents the factual and legal basis for the lawsuit.

From the West Virginia Record: Reach John O’Brien at jobrienwv@gmail.com.

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