## Facts

- Richard D. Weiss, an investment banker, was covered by his employer’s group long-term disability policy issued by First Unum Life Insurance Company.
- In January 2001, Weiss suffered an acute heart attack requiring emergency angioplasty; in June 2001, he was rehospitalized for ventricular tachycardia and continued to experience serious cardiac dysfunction and related symptoms.
- Weiss sought disability benefits; First Unum paid short-term benefits (January–July 2001) and then long-term disability benefits (July–October 2001) exceeding $11,000 per month, before discontinuing benefits in October 2001.
- Weiss alleged his claim was terminated pursuant to a company scheme to reduce high-dollar disability payouts, including alleged nonmedical “roundtable” decisionmaking and inadequate medical review.
- Weiss initially sued in New Jersey state court asserting state-law causes of action; the case was removed to federal court and certain state claims were dismissed as ERISA-preempted.
- Before Weiss added racketeering claims, First Unum resumed paying long-term disability benefits retroactive to the termination date.
- Weiss later amended his complaint to assert federal civil RICO claims (and related conspiracy allegations), along with other state and common-law claims, based on the alleged fraudulent scheme to terminate or deny expensive claims.
- The district court dismissed the federal RICO claim, holding it was barred by the McCarran–Ferguson Act because applying RICO would “invalidate, impair, or supersede” New Jersey insurance regulation (including the Consumer Fraud Act).

## Issues

1. Whether the McCarran–Ferguson Act reverse-preempts and bars a federal civil RICO claim against an insurer when the alleged conduct is also addressed by New Jersey’s insurance regulatory scheme, including the New Jersey Consumer Fraud Act.
2. Whether RICO’s private remedies (including treble damages) “invalidate, impair, or supersede” state insurance law under the standard articulated in Humana Inc. v. Forsyth.

## Decision

- The Third Circuit reversed the district court’s dismissal of the federal RICO claim.
- The court held that McCarran–Ferguson did not bar Weiss’s federal civil RICO cause of action.
- The case was remanded for further proceedings, permitting Weiss to pursue the RICO theory.

## Legal Principles

- McCarran–Ferguson reverse-preempts a federal statute that does not specifically relate to the business of insurance only if applying the federal statute would “invalidate, impair, or supersede” state laws enacted to regulate the business of insurance.
- Under Humana Inc. v. Forsyth, “impairment” requires more than overlap or additional remedies; the question is whether the federal cause of action conflicts with state law, frustrates declared state policy, or interferes with the state’s administrative regime.
- Federal civil RICO can coexist with state insurance regulation where it provides an additional remedy consistent with, rather than disruptive of, the state’s anti-fraud and consumer-protection objectives.
- The availability of RICO treble damages, by itself, does not establish “impairment” of a state insurance remedial scheme, particularly where state law also permits private enforcement and enhanced remedies.

## Conclusion

The Third Circuit held that allowing a policyholder’s federal civil RICO claim against an insurer does not, without a true conflict, “invalidate, impair, or supersede” New Jersey’s insurance regulatory regime; therefore, the McCarran–Ferguson Act did not reverse-preempt RICO, and the claim could proceed on remand.


Weiss v. First Unum Life Ins. Co., 482 F.3d 254 (3d Cir. 2007)