insurance law

Here's a piece I wrote for the Connecticut Law Tribune on the state of transgender rights:

Studying landmark cases may be a hallmark of a legal education, but there are times when the lack of case law may be a good thing.

In the three years since Connecticut enacted a law banning discrimination based on gender identity, James J. O'Neill, a spokesman for the Connecticut Commission on Human Rights and Opportunities, reports that the commission has not received a single discrimination complaint based on gender identity or expression.

The dearth of complaints to the state's civil rights regulators does not mean that transgender people and those who identify with or express themselves as members of the opposite sex do not face discrimination, advocates say. But the law is working to protect people in unofficial ways, said Rachel Goldberg, general counsel for the Stamford Urban Redevelopment Commission and a board member of the national Lambda Legal organization, which advocates for the civil rights of lesbians, gay men, bisexuals and transgender people.

As an advocate, Goldberg, who is transgender, testified in favor of the Connecticut law three years ago. As an attorney, she said she was able to prevent an employee from being fired for undertaking the process to change genders by citing the Connecticut's explicit protection for gender identity. She explained that going to court is not always the best option for employees because new employers are reluctant to hire workers who have sued their past bosses.

"Having that law on the books makes [avoiding court] possible," she said.

The statute codified a 2000 ruling from the CHRO that Connecticut's nondiscrimination laws cover sex and gender identity, Goldberg said. The 2011 law puts lawyers representing individuals in gender identity cases in a stronger position, she said. While opposing counsel might have been able to argue in the past that gender-identity protection was the opinion of just one judge and a CHRO ruling is the opinion of just a few regulators, it's much harder for them to dismiss point-blank statutory language.

The update to Connecticut's law comes as federal level is expanding as well. The U.S. Department of Labor recently issued a directive to government contractors clarifying that discrimination based on gender identity and transgender status is sex discrimination. President Barack Obama has issued an executive order prohibiting federal contractors from discrimination on the basis of sexual orientation and gender identity, and the Labor Department's directive is an interim step to implement regulations to provide those protections.

The action by the Labor Department is "huge," said Jennifer Levi, director of the Transgender Rights Project at Boston-based Gay & Lesbian Advocates & Defenders, an advocacy group that has been active in Connecticut. "Gay, lesbian and transgender people continue to face an unbelievable amount of discrimination in the workplace," Levi said. "Having a prohibition against discrimination with entities that contract with the federal government really extends the commitment to nondiscrimination."

Levi also said that Connecticut's anti-discrimination law is "a very strong law. It makes it every clear that a person's gender identity is determined by a person's assertion of what it is."

Levi, who has conducted training sessions throughout Connecticut in tandem with the CHRO on the law, said that many of the state's employers have revised their employee manuals to ban discrimination on the basis of gender identity and sexual orientation.

"Laws provide legal protection but they also send an important message to those who are protected under the laws" as well as to those who have to abide by the law, Levi said.

Connecticut's law is not the only legal development that has advanced transgender rights.

Meghan Freed, of Freed Marcroft in Hartford, whose practice includes LGBT law, notes that the Connecticut Insurance Department issued a directive last December to stop insurers from having a blanket ban on providing health insurance benefits related to a person's gender identity or expression.

"The monetary reality of costs associated with gender transition is a huge deal," Freed said. "It's an affirmative thing."

The department said that an insurer's refusal to pay for medically necessary treatment regarding gender transition would be an unfair insurance trade practice. The department cited the General Assembly's enactment of the law to prohibit discrimination based on gender identity and expression.

The Insurance Department also cited Connecticut's law requiring parity between medical coverage and mental health coverage.

Medical services for gender transition are still classified as a medical disorder called "gender dysphoria," although advocates bridle at the notion that the issue is an illness of sorts, Freed said. Gender dysphoria is a diagnosis listed in the American Psychiatric Association's "Diagnostic and Statistical Manual of Mental Disorders" and refers to people who strongly identify with and want to be the opposite gender.

Goldberg agreed that the biggest impact of Connecticut's antidiscrimination laws has been in the area of health care. Before the enactment of the state law, almost every health insurance policy contained language that excluded medical coverage for people who are transgender, even if the same procedure would be available to someone who was not transgender, Goldberg said.

While there has been a lot of progress in protecting people from gender-identity discrimination, the protections for transgender youth needs a lot of work, as has been illustrated in the case of Connecticut's "Jane Doe," a transgender teen who the Department of Children and Families at one point placed in an adult prison because of her allegedly unruly personality. Attorney Aaron Romano has called the state's treatment of his client unconstitutional.

Goldberg said there are significant issues about ensuring youth can get into the right shelters, are able to use the right bathrooms, and have protection for their gender identity if they end up in the juvenile justice system, Goldberg said.

Connecticut was hit less hard by Superstorm Sandy than New York and New Jersey, but there are still Connecticut-based legal issues arising out of the most destructive hurricane of the 2012 season, I reported for the Connecticut Law Tribune: 

In the 18 months since Superstorm Sandy swept in from the Atlantic, Connecticut lawyers have been untangling knotty legal issues that have arisen concerning insurance coverage for home and business owners who suffered property damage.

Lawyers are litigating some cases in Connecticut. But because New Jersey and New York were hit harder by the storm, some Connecticut-based firms are litigating cases in those jurisdictions as well.

More than 1,000 Sandy-related cases are pending in the U.S. District Court of the Eastern District of New York, and 949 cases are pending in the District of New Jersey, according to reports made by two U.S. magistrate judges at a conference held earlier this month focusing on Superstorm Sandy insurance litigation.

As of May 2013, 47,002 residential-property claims were reported in Connecticut as a result of the storm. There were also 4,460 commercial-property claims, 2,772 flood claims and 1,212 business-interruption claims, according to the Connecticut departments of banking and insurance.

Stephen Goldman and Gregory Varga, both partners with Robinson & Cole in Hartford who are defending insurers in Sandy cases, said that the litigation will be influenced by decisions related to other major disasters in courts in other parts of the country. A lot of case law concerning insurance coverage for property damage and interruption to business operations comes out of catastrophes "because the losses are so numerous and losses are often so large," Goldman said.

Judges and insurance litigators look to past experience with other catastrophes around the country when dealing with the large number of cases that arise out of a natural disaster, Goldman said.

"What we're always looking at [is] … 'What was the most recent experience that was analogous to our situation?'" Varga said.

Hurricane Katrina-related decisions from the Mississippi Supreme Court, Louisiana Supreme Court and U.S. Court of Appeals for the Fifth Circuit could be influential in Sandy cases, Varga said.

Like Hurricane Katrina, Superstorm Sandy raises questions of how courts will interpret policy clauses that address situations when there are multiple weather-related reasons for property damage. Often, these policies block claims when one type of weather is covered by the insurance but another type isn't, Varga said.

Most insurance companies will not cover flood damages, and so-called anticoncurrent cause provisions prevent insurance payouts if both wind and flood could have caused damage, he said.

Leonard Isaac, an insurance litigator with offices in Waterbury and West Hartford, represents policyholders and said Connecticut had more wind damage than flood damage from Sandy, so there are fewer situations in which claims might be rejected. In contrast, there was more rain-driven damage from 2011's Hurricane Irene, which has led to more coverage disputes, he said.

Theresa Guertin, an associate with Saxe Doernberger & Vita, said the Hamden firm is handling as many as 20 Superstorm Sandy cases with policyholders suing insurance companies, including cases pending in the Eastern District of New York. Their claims range from a case Guertin is handling involving damages to a new condominium complex that was being developed on Long Island to businesses whose operations were interrupted because electric power was off for several days.

In past disasters, insurance companies did not do a good job of getting agents out to inspect sites in a timely manner, Guertin said. In Sandy's aftermath, insurance companies generally responded quickly, she said.

Goldman agreed that insurance companies are far better at addressing claims quickly than they were when Hurricane Andrew hit Connecticut 20 years ago. "They've been to this rodeo before," he said.

But there are exceptions. "Superstorm Sandy cases that are going to go to litigation here in Connecticut are going to involve bad-faith claims," Guertin said. She explained those are often cases where there has been a lot of back-and-forth communication between insurers and policyholders with no results. "That leaves policyholders feeling like they've been mistreated, or, in fact, [and] that legally amounts to bad faith," Guertin said.

Also, insurance companies are in a catastrophe mode because of the number of Sandy claims, Isaac said. "As a result, companies sometimes just don't have the ability to take the same positions [in terms of providing coverage] as they might take on an individual claim," Isaac said.

Business-interruption claims are presenting another legal complication, as policyholders must show that their lost profits or additional expenses are directly related to a covered event. Robert Glasser, director of East Coast claims preparation and valuations for Aon Risk Solutions, a risk management and insurance brokerage firm, said it's difficult to define what actual loss of business income is. "If we knew what 'actual' was, you wouldn't need forensic accountants," he said at the conference.

Another emerging issue is "civil authority" coverage, which provides insurance coverage for loss of income if a business had to shut down because of an order made by governmental authorities. Sometimes, government officials don't explicitly prohibit the public from leaving their homes, but they do advise the public that it's best to stay home. In the latter situation, there is litigation over whether businesses affected by the lack of customers can file claims, Guertin said.

Another issue is the liability of insurance brokers, Varga said. Policyholders often argue they thought they had flood coverage, and then when they find out they didn't, "it's my broker's or my agent's fault," he said. That cause of action didn't used to be viable in New York but has become more attractive, Varga said.

Sandy also may lead to changes in how insurance policies are written in the future. Policies are often changed when courts construe policy language in a way no one ever intended, attorneys said.

"You can't make insurance policies clear" because no one would buy them if the exclusions were written in plain language, Jay Levin, a partner at Reed Smith in Philadelphia who represents policyholders, said at the conference. When language is vague, he said, that leads to litigation.

"Insurance is a method of risk transfer of some risk that can be economically modeled and transferred—but not all risk," Levin said. "Insurance is not government handouts."

I'm writing several times a day about products liability and class actions for Law.com/The National Law Journal. Occasionally I cross-post a blog I find particularly interesting.

With federal courts in New Jersey and the Eastern District of New York facing almost 2,000 cases in which insurers are being sued over Hurricane Sandy claims, one judge said that his court is focused on resolving cases.

U.S. Magistrate Judge Ramon E. Reyes Jr. of the Eastern District of New York said he and other judges have asked plaintiffs’ lawyers and defense counsel to get cases ready in order to winnow them down to the most problematic.

What the next phase of litigation will look like after that process is still to be determined, Reyes said.

“I’m the type of judge that acknowledges that I don’t know it all … you folks are the experts. You have to educate me on the best way to handle these things,” Reyes said at a conference held last week about Sandy insurance litigation.

Earlier on, the Eastern District tried to “bucket cases involving the same legal issue, the same policy exclusions,” but lawyers advised that the cases were not ready to be organized that way, Reyes said.

On the one hand, some district judges were ready to start trials without discovery, but, on the other hand, “we were told point blank to forget about arbitration, that no carrier will go to arbitration,” Reyes said.

Now each side has 60 days to respond to n automated discovery process, Reyes said. And the court has a mediation training scheduled for the end of May.

Jared T. Greisman, the defense liaison counsel for Superstorm Sandy cases in the Eastern District and with White Fleischner & Fino in New York, said the Eastern District hopes to get mediations rolling in June.

U.S. Magistrate Judge Lois H. Goodman of the District of New Jersey said her court’s priority also is to get cases moving.

The New Jersey federal judges are aware that people were displaced from their homes and have a right to know if they are entitled to insurance recovery, Goodman said.

Mandatory discovery disclosure was set up for 30 days, Goodman said. “It was giving the attorneys heebie jeebies that we were going to make them go forward without the discovery,” she added.

The federal courts are viewing the process of mediating and settling cases as a way to winnow out cases and then get cases divided into “legal issue buckets,” said Tracey Rannals Bryan, the plaintiffs liaison counsel in the Eastern District and of Gauthier, Houghtaling & Williams, LLP, in Metairie, La.

Reyes said it will be important, once cases are categorized by legal issue, to have the same judges handle cases involving similar legal issues.

Otherwise, cases with conflicting results just wind “up in the circuit [court] and it just creates more work,” Reyes said.

Some of the Sandy litigation has involved class actions, including a lawsuit filed in 2012 accusing several insurance companies of wrongfully denying claims and misinterpreting the term “basement,” a lawsuit over the loss of power in Long Island, and an unsuccessful effort to certify a class about the loss of power in New York City.