Day v. GEICO Casualty Company

Background

During the COVID-19 pandemic, GEICO announced its Giveback program, which provided a 15% discount on new and renewed insurance policies. Jessica Day sued GEICO Casualty Company, GEICO Indemnity Company, and GEICO General Insurance Company, alleging that GEICO misrepresented that the program passed on savings from fewer insurance claims and withheld information about the amount of those savings.

After two rounds of motions to dismiss, Day’s remaining claim alleged that GEICO’s conduct violated California’s Unfair Competition Law. The court had also granted Day’s motion for class certification. In December 2022, the court declined to abstain—that is, to voluntarily refrain from deciding the case under a doctrine allowing courts to step aside from certain matters involving equitable relief.

In January 2023, a deputy commissioner for the California Department of Insurance emailed a GEICO employee that the department had determined the premiums returned through the Giveback program were enough to account for the lower risk of loss during the pandemic. The deputy commissioner stated that GEICO was not required to return additional premiums to California policyholders. After a separate court granted the department’s motion to quash Day’s deposition subpoena, GEICO sought reconsideration of the earlier decision not to abstain.

GEICO’s Argument and the Court’s Analysis

The court explained that reconsideration of an earlier nonfinal order is disfavored and generally requires newly discovered evidence, clear error, an intervening change in controlling law, or one of the grounds identified in the district’s local rules. A party may not use reconsideration simply to repeat arguments previously made.

The court had previously concluded that resolving Day’s claim would not require it to determine complex economic policy. The court also previously held that Day’s claim challenged GEICO’s application of its approved rate plan during the pandemic and therefore was outside the California Department of Insurance’s exclusive jurisdiction. GEICO did not ask the court to reconsider that holding.

Instead, GEICO argued that the department’s determination showed that continuing the case would improperly review agency deliberations. The court treated that argument as effectively asking it to reconsider whether the issues were better handled by an administrative agency. The court found that the department’s determination appeared to be extremely strong evidence supporting GEICO’s position, but concluded that it did not establish that an administrative agency should handle the issues in the case.

Disposition

Judge Beth Labson Freeman declined to abstain from exercising the court’s equitable jurisdiction and DENIED GEICO’s Motion to Reconsider Abstention of Jurisdiction. The order addressed whether the court should continue hearing the case; it did not decide the merits of Day’s remaining Unfair Competition Law claim.