Here’s an interesting question – what is the territorial reach of claims against insurers alleging violations of Massachusetts’ insurance claims handling statute, Chapter 176D, and seeking recovery for such violations under Massachusetts’ consumer protection statute, Chapter 93A? Massachusetts’ well-regarded Business Litigation department gave the statutes a broad territorial reach, finding that they apply to an action brought by a New York resident, concerning his long term disability benefits; the Court held that Massachusetts law, not New York law, applied under the applicable choice of law test, and therefore the plaintiff could bring those Massachusetts statutory claims. But here’s the interesting part – the Court found that the key factor giving rise to application of Massachusetts, rather than New York, law was that the allegedly wrongful claims handling by the insurer occurred in Massachusetts. (For the uninitiated, claims under Chapters 93A and 176D are essentially assertions that an insurer acted wrongly in claims administration, such as settlement efforts or the decision to try the action). The logic of this case, though, would mean that Chapters 93A and 176D have extraterritorial reach anytime an insurer has a claim office in Massachusetts, and the dispute is over the handling of that claim, no matter where the plaintiff resides, or the insured loss was located, or the claims handling allegedly caused injury; the simple fact that the claim adjustment occurred in Massachusetts would be enough to make that claim subject to those Massachusetts statutes.

Seems to me that cannot really be the rule, and there must be some type of limiting principle, reflecting the idea that, at some point, the mere fact that the claims adjustment occurred in Massachusetts can be overcome for purposes of this analysis by far more extensive involvement in the claim of events in other states. So for instance, a chemical explosion at a property in California, giving rise to multiple claims and lawsuits situated in California courts, would be too extensively connected to California for Massachusetts’ claims handling statutes to properly apply, even if the claims were processed out of an office in Massachusetts. That kind of counterweight to the application of Massachusetts law, and its powerful statutory claims against insurers, was absent in the fact pattern before the Business Litigation department when it reached its ruling, but, it seems to me, is the limitation on the territorial reach of Chapters 93A and 176D that is absent from, but nonetheless implicit in, the decision itself.

You can find the decision itself here, and an excellent write up on it by Massachusetts Lawyers Weekly’s Pat Murphy here.