Davis Polk secured a total victory for its client Verisk Analytics, Inc. in a case filed in federal court in Northern California. The case arose from the fall 2017 wildfires in Sonoma County. Plaintiffs were a number of Sonoma County residents whose homes were destroyed. Their complaint alleged that their insurance carrier had sold them insurance policies that undervalued the replacement costs of their homes, leaving them underinsured. They claimed that our client—which makes software tools used by insurance companies in estimating replacement costs—was also liable, based on theories of antitrust, fraud and negligence, as well as under California consumer protection laws.
In early 2019, we filed a motion to dismiss the complaint. We argued that plaintiffs had failed to allege that our client had made any misrepresentations, much less ones on which plaintiffs had relied, and that plaintiffs had no viable claim since they had no contractual or other relationship with our client. We also argued that plaintiffs’ antitrust claims failed as a matter of law, including because the plaintiffs had not and could not allege that they were customers or competitors of our client, meaning that plaintiffs could not claim antitrust injury.
In July 2019, the court dismissed the antitrust claims without prejudice, agreeing with us that plaintiffs had not demonstrated antitrust injury and that their claims were deficient for various other reasons, and similarly dismissed the fraud and negligence claims. But the court granted plaintiffs leave to replead.
After plaintiffs amended their complaint, we again moved to dismiss. On March 4, 2020, the court granted the motion with prejudice. The court held that plaintiffs still had failed to allege antitrust injury, as we argued, and that the other claims failed due to the absence of factual allegations about any misrepresentations made by our client to plaintiffs. The court accordingly dismissed all claims with prejudice and directed the clerk to enter judgment in our client’s favor.
The Davis Polk litigation team included partners Neal A. Potischman and Micah G. Block, counsel Andrew Yaphe (who argued the motion to dismiss) and associates Daryl K. Griglak and Natalie Cha. Members of the Davis Polk team are based in the Northern California and New York offices.