Legal Roundup: Baseball Faces Suits Over Ticket Refunds, Clean Water Act Loophole Rejected and More

The latest court decisions impacting risk management and the insurance industry.
By: | May 5, 2020

Supreme Court Rejects Clean Water Act Loophole

The Case: The Clean Water Act was meant to keep pollutants out of America’s navigable rivers, oceans and lakes.

But what if the pollution gets there indirectly through groundwater?

That was the issue at the heart of a case between the Hawaiian island of Maui and the Hawaii Wildlife Fund.

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CNBC reports: “The case concerned Maui’s Lahaina Wastewater Reclamation Facility, which treats millions of gallons of sewage each day and injects the treated waste into wells deep underground. A study ordered by the Environmental Protection Agency showed that nearly all of the waste ends up in the Pacific Ocean.”

Scorecard: The Supreme Court ruled 6-3 for the environmentalists.

In the majority opinion, Justice Stephen Breyer wrote that a company could “simply move the pipe back, perhaps only a few yards, so that the pollution must travel through at least some groundwater before reaching the sea,” according to CNBC.

“We do not see how Congress could have intended to create such a large and obvious loophole in one of the key regulatory innovations of the Clean Water Act.” 

Takeaway: It’s a blow to those in favor of loosening EPA restrictions and a victory for environmentalists. It also shows that justices are crossing traditional political lines.

In this case, conservative justices John Roberts and Brett Kavanaugh joined the court’s four Democratic appointees in the majority.

Supreme Court Sides with Insurers in $12 Billion Obamacare Case

The Case: When the Affordable Care Act was enacted, health insurers were hesitant to participate in the program.

Calculating the risks associated with insuring new populations was uncertain. To entice them to participate and offer low-premium policies to at-risk customers, the ACA offered three years of risk corridors — government funding to cover a portion of any losses.

That bill quickly climbed.

“Expenses overwhelmed savings. For instance, insurers paid $362 million into the fund the first year, but others claimed reimbursable expenses of $2.87 billion,” according to the Washington Post.

When Republican lawmakers passed riders to stop taxpayer funding of the program, insurance companies sued the federal government.

Scorecard: In an 8-1 decision, the Supreme Court ruled that the federal government must pay the health insurers. The price tag could reach a cool $12 billion.

Politico reports: “The high court agreed with insurers that the congressional spending restrictions didn’t release the government from its original promise to fund the Obamacare program. The court said Congress had created ‘a rare money-mandating obligation’ that later appropriations language couldn’t repeal. ‘These holdings reflect a principle as old as the Nation itself: The Government should honor its obligations,’ wrote Justice Sonia Sotomayor in the majority opinion.”

Takeaway: This case doesn’t address the ACA’s constitutionality. That will come in a case likely to reach the Supreme Court later in 2020.

“But the ruling represents a loss for the Trump administration, which argued it wasn’t obligated to make the risk corridor payments and is supporting the red states’ lawsuit,” Politico reported.

Immigrants Sue Over Stimulus Exclusion

The Case: The Mexican American Legal Defense and Educational Fund has sued the federal government on behalf of six American citizens denied COVID-19 stimulus checks, because their spouses are immigrants without Social Security numbers.

The Associated Press reports that the plaintiffs “filed and paid taxes with a spouse who has what’s known as an Individual Taxpayer Identification Number, or a way for immigrants without legal status to still pay federal taxes, which millions do.”

Scorecard: The case has just recently been filed.

Takeaway: The case could determine if certain families will be included in the $2.2 billion relief effort.

According to the AP: “It’s estimated that 2 million U.S. citizens or lawful permanent residents are married to people without social security numbers, although it’s unclear how many of them file jointly with them.”

Baseball Teams and Ticket Partners Sued Over Refunds 

The Case: It’s hard to believe that it’s already May and no Major League Baseball games have been played.

As ballparks sit empty, fans wondered when their beloved pastime would return. Now, two fans have sued the league and their ticket agency partners to recoup ticket costs and ancillary fees.

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According to the Los Angeles Times the lawsuit reads: “While many businesses across this country have acted lawfully and ethically by providing consumers with refunds for events that will never occur during this pandemic, sometimes at the risk of bankruptcy, it remains notable that America’s pastime — baseball — is refusing to do right by its fans. As stadiums remain empty for the foreseeable future, baseball fans are stuck with expensive and unusable tickets for unplayable games in the midst of this economic crisis.” 

The named defendants are the MLB, all 30 teams, StubHub, Ticketmaster, Live Nation and Last Minute Transactions.

Scorecard: The case has just recently been filed.

Takeaway: At issue is the designation by teams that unplayed 2020 games are “postponed” not “cancelled.”

Postponed games are typically treated like rainouts and fans can substitute their tickets for a future game. Cancelled games lead to refunds. The case has the potential to become a class-action. &

Jared Shelly is a journalist based in Philadelphia. He can be reached at [email protected]

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The R&I Editorial Team can be reached at [email protected]