Key Points

  • The First Circuit held that Massachusetts law, not the federal filed rate doctrine, governs whether policyholders may challenge motor vehicle insurance rates approved by the Massachusetts Commissioner of Insurance.
  • The court reasoned that applying the federal doctrine in a diversity case about state-approved rates would conflict with the Rules of Decision Act and Erie, because no federal agency, statute or uniquely federal interest is involved.
  • Finding no controlling SJC precedent, the panel certified, on its own motion and over the insurers' objection, whether private parties may sue under Chapter 93A over Commissioner-approved motor vehicle rates.
  • A second certified question asks whether the answer differs for the declaratory, injunctive and restitutionary relief the policyholders seek.
  • The First Circuit retains jurisdiction over the interlocutory appeal pending the SJC's answers.

A federal appeals court ruled on Oct. 28 that Massachusetts law, not a federal judge-made doctrine, decides whether USAA auto insurance customers can sue over rates the state's insurance commissioner approved. The court then asked Massachusetts' highest court to supply the answer.

Writing for a three-judge First Circuit panel, Judge Lynch held that the federal filed rate doctrine has no role in a diversity suit over rates set entirely under state law. That doctrine, in the words of an earlier First Circuit decision the panel quoted, "limits attacks outside the regulatory process on . . . rates filed with federal regulatory agencies." "We find that Massachusetts law, not the federal filed rate doctrine, controls," Judge Lynch wrote. Chief Judge Barron and Judge Gelpí joined the opinion, and no judge wrote separately.

The panel then certified two questions to the Massachusetts Supreme Judicial Court, acting on its own motion and over the insurers' objection. The first asks: "On the facts of this case, under Massachusetts law, are private parties authorized to bring suit under Chapter 93A for alleged violations of state law arising out of motor vehicle insurance rates approved by the Commissioner of the Division of Insurance?" Chapter 93A is the state law under which the policyholders brought unfair and deceptive practices claims. The second question asks whether the answer differs for the declaratory, injunctive and restitutionary relief they seek.

The suit targets two affiliates in the USAA insurance group, United Services Automobile Association and USAA General Indemnity Company, which insure present and former military members. The policyholders said eligibility turns on a member's highest career pay grade: United Services insures those who reached E-7 or higher, and General Indemnity insures grades E-1 to E-6. Each affiliate priced policies on its own group's aggregate data, and General Indemnity charged more.

Current and former policyholders sued in federal court in 2023 over rates approved since 2019. They alleged that the rank-based sorting made the rates impermissibly consider "income" and "occupation." A state regulation bars insurers from using those factors to "determine placement in a particular affiliate within an [i]nsurance [c]ompany [g]roup." They sought a declaration that the practices violate Massachusetts law, injunctions requiring new rate filings, and restitution of excess premiums paid by General Indemnity customers.

Under Chapter 175E, the state's motor vehicle rate statute, the Commissioner of Insurance must approve rates before they take effect. Aggrieved parties may seek a hearing before approval and have 20 days to seek judicial review afterward. No one sought either for these rates, the opinion notes, and the Massachusetts Attorney General, whom a separate statute authorizes to intervene in rate proceedings, did not do so.

U.S. District Judge Allison D. Burroughs denied the insurers' motion to dismiss on May 15, 2024. She then certified for immediate appeal the question "whether the filed-rate doctrine bars the relief Plaintiffs seek." The insurers had argued that the doctrine precluded the entire action. The First Circuit agreed to hear the appeal on Oct. 20, 2025.

The federal doctrine, the panel wrote, quoting a 2005 First Circuit decision, originated "as a judicially created bar to antitrust damages claims in the context of the Interstate Commerce Commission's regulation of common carrier rates." Relying in part on an Oct. 7 concurrence by Second Circuit Judge Park, Judge Lynch concluded that applying it to state-law rates would conflict with the Rules of Decision Act, which requires federal courts sitting in diversity to apply state law. It would also conflict with Erie Railroad Co. v. Tompkins, the 1938 Supreme Court decision that confined federal common law to a few areas. Here, she wrote, "the regulatory scheme is entirely the product of state law, and the insurers' rates were filed with and approved by a state agency."

Nor, the panel found, does SJC precedent settle the question. "The SJC's relevant cases do not use the term 'filed rate doctrine,'" Judge Lynch wrote. "They have never addressed Chapter 175E, the most recent case was decided over forty years ago," and each involved a different Massachusetts statute. The policyholders relied heavily on a 1979 decision allowing a Chapter 93A suit against gas companies accused of deceiving utility regulators. The panel called that case distinguishable. "The plaintiffs here are private party policyholders and not the Attorney General," Judge Lynch wrote. "Their assertions of fraud are nothing like the fraud assertions in Lowell Gas." The insurers pointed instead to a 1983 SJC decision holding that interpreting an approved rate filing was a job for the regulator, not the courts.

"Whether to allow private citizen suits when a statute assigns decision-making and enforcement authority to a state administrative agency and to the state attorney general involves important questions of public policy," the opinion said. If state law bars such suits, the panel wrote, "then plaintiffs' complaint failed to state a claim."

No party had asked for certification. The panel raised it at oral argument, the sides could not agree on wording, and the insurers objected outright. The panel adopted neither side's proposed questions. Quoting a 2025 First Circuit decision, it wrote that the objections were "not a barrier to certification, however, as the [SJC] has previously answered questions even over the objections of both parties."

The opinion also noted that the Ninth Circuit on Sept. 10 certified questions to the California Supreme Court in a similar USAA dispute, but said that because the California provisions differ from Chapter 175E, that certification "addresses questions with no bearing on this case."

Kahn A. Scolnick of Gibson, Dunn & Crutcher LLP represented the insurers. Matthew A. Seligman represented the policyholders.

The court directed its clerk to send the certified questions, the opinion, and the parties' briefs and appendix to the SJC. The panel also invited the state court to offer "any other comments" on relevant points of Massachusetts law. "We retain jurisdiction over this appeal pending resolution of the certified questions," the opinion said.