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Supreme Court hears arguments in insurance, bankruptcy cases

[JURIST] The US Supreme Court [official website; JURIST news archive] heard oral arguments [transcript, PDF] Tuesday in the consolidated cases of Safeco Insurance v. Burr and GEICO General Insurance v. Edo [Duke Law case backgrounder; merit briefs], 06-00084 and 06-00100, cases in which plaintiffs claim the insurance companies GEICO [corporate website] and Safeco [corporate website] breached the dictates of the Fair Credit Reporting Act [text, PDF] when they failed to notify customers that poor credit reports were the reason they had been denied favorable rate coverage. The case is on appeal from the US Ninth Circuit Court of Appeals [official website] which held [opinion, PDF] in January 2006 that the requisite state of mind the plaintiffs must prove to establish a violation of the act is reckless disregard, while defendants urged the standard of knowledge would be more appropriate. Justice Samuel Alito [JURIST news archive] indicated at argument that he did not favor the notification requirements urged by plaintiffs. AP has more.

Also on Tuesday, the Court heard oral arguments [transcript, PDF] in Travelers Casualty v. Pacific Gas & Electric Co. [Duke Law case backgrounder; merit briefs], 05-01429, a case which addresses whether a creditor in a federal bankruptcy case can recover the costs of attorneys fees. The issue turns on whether the Supreme Court is willing to overturn the "Fobian Rule" established by the Ninth Circuit in the 1991 case of Fobian v. Western Farm Credit Bureau in which the court held that the federal bankruptcy law did not authorize the recovery of attorneys fees. Justices Ruth Bader Ginsburg [OYEZ profile] and Anthony Kennedy [OYEZ profile] hinted they may be willing to abandon the Fobian precedent. AP has more.

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