Fourth Circuit issues dormant commerce clause opinion

In LIFE PARTNERS, INC. v. MORRISON, the Fourth Circuit was presented with the issue of whether the Virginia Viatical Settlements Act,which regulates viatical settlements with insureds who are residents of Virginia, is saved from the dormant Commerce Clause of the U.S. Constitution by the McCarran-Ferguson Act, as state law that "relates to" the regulation of the business of insurance or as a state law enacted "for the purpose of regulating the business of insurance." At base, a Viatical Settlement is one where a terminally ill person sells a life insurance policy for cash in order to help pay for care during the last weeks of the person's life.

After selling her policy, Jane Doe sought to get more money by invoking the minimum pricing provisions of the Virginia Viatical Settlements Act. Life Partners, contended that the Virginia Act violated the dormant Commerce Clause, sought declaratory relief. The District Court ruled for the State and the Fourth Circuit affirmed, holding that in the McCarran-Ferguson Act, Congress delegated its commerce power to Virginia in sufficiently broad terms to cover viatical settlements.