Cite as: 525 U. S. 299 (1999)
Syllabus
Court is not persuaded that Congress intended a green light for federal regulation whenever the federal law does not collide head on with state regulation. The dictionary defines "impair" as to weaken, make worse, lessen in power, diminish, relax, or otherwise affect in an injurious manner. The following formulation seems to capture that meaning and to construe, most sensibly, the text of § 2(b): When federal law does not directly conflict with state regulation, and when application of the federal law would not frustrate any declared state policy or interfere with a State's administrative regime, the McCarran-Ferguson Act does not preclude its application. Shaw v. Delta Air Lines, Inc., 463 U. S. 85, 101-103, supports the view that to "impair" a law is to hinder its operation or "frustrate [a] goal" of that law. The Court's standard also accords with SEC v. National Securities, Inc., 393 U. S. 453, 463, where, as here, federal law did not "directly conflict with state regulation," application of federal law did not "frustrate any declared state policy," nor did it "interfere with a State's administrative regime." Pp. 306-311.
(b) Applying the foregoing standard to the facts of this case, the Court concludes that suit under RICO by policy beneficiaries would not "impair" Nevada law and therefore is not precluded by the McCarran-Ferguson Act. Nevada provides both statutory and common-law remedies to check insurance fraud. The Nevada Unfair Insurance Practices Act is a comprehensive administrative scheme that prohibits various forms of insurance fraud and misrepresentation; gives Nevada's Insurance Commissioner the authority to issue charges if there is reason to believe the Act has been violated, to issue cease and desist orders, and to administer fees; and authorizes victims of insurance fraud to pursue private actions under Nevada law for violations of a number of unfair insurance practices, including misrepresentation of pertinent facts or insurance policy provisions relating to coverage. Moreover, the Act is not hermetically sealed; it does not exclude application of other state laws, statutory or decisional. Specifically, Nevada case law recognizes tort actions against insurers for breach of a common-law duty to negotiate with insureds in good faith and to deal with them fairly. Furthermore, aggrieved insureds may be awarded punitive damages if a jury finds clear and convincing evidence that the insurer is guilty of oppression, fraud, or malice, and those damages may exceed the treble damages available under RICO. In sum, there is no frustration of Nevada policy in the RICO litigation at issue. RICO's private right of action and treble damages provision appears to complement Nevada's statutory and common-law claims for relief. The Court notes both that Nevada filed no brief at any stage of this lawsuit urging that application of RICO would frustrate any state policy, or interfere with the State's
301
Page: Index Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 NextLast modified: October 4, 2007