Martin

ORDER GRANTING MOTION TO DISMISS

I. INTRODUCTION

Plaintiffs Brenda G. Martin (“Martin”) and Joseph R. Giordano (“Giordano”) own life insurance policies obtained from defendant Metropolitan Life Insurance Company (“MetLife”). Plaintiffs completed, signed, and submitted an insurance application which, together with the ensuing policy, constitutes their respective insurance contracts. One perk of the program is the option for a loan against the accumulated cash value of the policy, an opportunity plaintiffs seized about a decade after they began doing business with MetLife. Plaintiffs eventually learned MetLife compounds interest on all policy loans, even though this practice was not disclosed on the applications plaintiffs signed, to obtain life insurance. Suspecting they’d been hoodwinked, Martin and Giordano elected to file suit.

The crux of the complaint is that Met-Life violates a century-old voter initiative (“the initiative”) by charging compound interest on policy loans without obtaining borrowers’ written consent. MetLife counters it is exempt from this consent requirement by virtue of a constitutional amendment placed on the books by California voters in 1934. MetLife…