SC 19070

Judicial District of New London


      Insurance; Administrative Appeals; Whether Exhaustion and Aggrievement Requirements of § 4-183 Apply to § 4-175 Declaratory Judgment Action.  The plaintiffs are licensed by the state insurance department to sell life insurance.  In 2009, the department began an investigation into allegations that the plaintiffs were violating state law governing the sale of life insurance policies to military personnel.  In 2011, the department notified the plaintiffs of the allegations, that they might be subject to disciplinary action and that they would have an opportunity to show compliance before any formal proceedings would be instituted.  The plaintiffs then petitioned the department pursuant to General Statutes § 4-176 for a declaratory ruling concerning the issues under investigation.  When the department failed to take action on the petition within sixty days, the plaintiffs brought this declaratory judgment action in Superior Court pursuant to General Statutes § 4-175.  That statute permits a plaintiff to seek a declaratory judgment as to the validity of a statutory provision or regulation where an agency has failed timely to take action on a § 4-176 petition and where the statutory provision or regulation “or its threatened application, interferes with or impairs, or threatens to interfere with or impair, the legal rights or privileges of the plaintiff. . . .”  The trial court dismissed the action, finding that it lacked jurisdiction because the plaintiffs failed to exhaust their administrative remedies and failed to establish aggrievement, both as required by § 4-183 of the Uniform Administrative Procedures Act.  The court rejected the plaintiffs’ claim that the exhaustion and aggrievement requirements do not apply to a § 4-175 action.  As to exhaustion, the court noted that the department had yet to take any adverse action on the plaintiffs’ licenses and that, should it do so, the plaintiffs would have remedies available to them in the administrative proceeding to challenge that action.  As to aggrievement, the court rejected the plaintiffs’ claim that they had established statutory aggrievement because they had satisfied the requirements of § 4-175 for filing the action and found that the plaintiffs were not classically aggrieved because they had not alleged any harm specific to their interest in selling insurance that was different than that of any other insurer in the state.  The plaintiffs appeal, claiming that the trial court wrongly concluded that the exhaustion of administrative remedies doctrine applies to declaratory judgment actions under § 4-175.  The plaintiffs also contend that, while they were not required to show that they were aggrieved, they established both aggrievement and their standing to bring this declaratory judgment action by showing that the threatened enforcement of statutory and regulatory provisions has impaired and continues to impair their property interests.