Council of Insurance Agents & Brokers v. Molasky-Arman

522 F.3d 925, 2008 U.S. App. LEXIS 7652, 2008 WL 962103
CourtCourt of Appeals for the Ninth Circuit
DecidedApril 10, 2008
Docket04-17271
StatusPublished
Cited by51 cases

This text of 522 F.3d 925 (Council of Insurance Agents & Brokers v. Molasky-Arman) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Council of Insurance Agents & Brokers v. Molasky-Arman, 522 F.3d 925, 2008 U.S. App. LEXIS 7652, 2008 WL 962103 (9th Cir. 2008).

Opinion

BRUNETTI, Circuit Judge:

On cross-motions for summary judgment, the district court declared Nevada’s “countersignature” statute, Nev.Rev.Stat. § 680A.300, unconstitutional, holding that it violates the Privileges and Immunities Clause of Article IV and the Equal Protection Clause of the Fourteenth Amendment. 358 F.Suppüd 981, 982-83. The district court stayed its injunction pending appeal, and Defendant-Appellant Alice Molasky-Arman, Nevada Commissioner of Insurance (the Commissioner), now appeals. We have jurisdiction under 28 U.S.C. § 1291, and we affirm and remand.

I. Facts and proceedings below

Plaintiff-Appellee Council of Insurance Agents & Brokers (the Council) is a national trade association that represents more than 250 of the nation’s largest commercial property and casualty insurance agencies and brokerage firms. The Council’s members, which include corporations and partnerships rather than individuals, place over eighty billion dollars in insurance premiums annually, which constitutes more than seventy-five percent of the commercial marketplace. The majority of the Council’s members sell insurance in more than one state, and in many cases in all fifty states, to large, sophisticated, commercial end-users that typically have mul-ti-state exposures. Included in the Council’s members are insurance agencies and brokerage firms based outside of Nevada that sell insurance in Nevada.

*929 In this case, the Council challenges Nevada’s “countersignature” statute, Nev. Rev.Stat. § 680A.300, which provides that no authorized insurer may make, write, place, or renew any insurance policy on persons, property, or risks in Nevada, “except through its duly appointed and licensed agents resident in [Nevada], any one of whom shall countersign the policy.” 1 Despite this limitation on insurers, section 680A.300 guarantees the “free and unlimited right to negotiate insurance contracts by licensed nonresident agents or brokers outside [Nevada], if the policies, endorsements or evidence of those contracts covering properties or insurance interests in [Nevada] are countersigned by a resident agent....” Finally, section 680A.300 requires that the countersigning agent be paid a commission of at least five percent of any resulting premium. In its complaint, the Council alleged that section 680A.300 violates the Constitution’s Commerce Clause, Privileges and Immunities Clause of Article IV, and the Fourteenth Amendment’s Equal Protection Clause.

The Commissioner promptly filed a motion for summary judgment and the Council filed a cross-motion for summary judgment. The district court denied both parties’ motions without prejudice; and after expressing some doubt as to whether the Council had standing to assert its constitutional claims during a hearing on the parties’ motions, the court granted the Council leave to amend its complaint. The Council did so, adding Plaintiff-Ap-pellee Rebecca Restrepo (Restrepo) as co-plaintiff in its First Amended Complaint, in which the Council reasserts its equal protection and privileges and immunities claims.

Restrepo is a resident of California, is licensed to sell insurance in California, and is the Managing Director of the Sacramento office of ABD Insurance and Financial Services (ABD), a member of the Council. Restrepo is also licensed to produce and sell insurance in Nevada as a nonresident agent. In Nevada, the Commissioner issues licenses to nonresidents as producers of insurance if four requirements are satisfied. Nev.Rev.Stat. § 683A.271. The nonresident must be in good standing as a licensed resident in his home state, pay a prescribed fee, submit an application, and *930 the nonresident’s home state must issue nonresident licenses to Nevada residents pursuant to a substantially similar procedure. 2 In its First Amended Complaint, the Council alleges that section 680A.300 causes Restrepo to forfeit approximately $50,000 annually, and that she is suffering immediate injury and being deprived of significant rights.

Following discovery, the Commissioner renewed and supplemented her initial motion for summary judgment, and the Council renewed its motion for summary judgment and supplemented its initial motion with a motion for summary judgment on behalf of Restrepo. This time, the district court granted the plaintiffs’ motion, concluding that “Restrepo has standing,” that the Council “has representative standing to assert the underlying constitutional claims” of “its member firms and their officers, directors, principals, and employees,” and that section 680A.300 “plainly draws a distinction between Nevada-licensed resident agents and brokers,” for which “there is no legitimate rational basis.” 358 F.Supp.2d at 982. Therefore, the district court held, section 680A.300 “violates the Privileges and Immunities Clause and Equal Protection Clause of the United States Constitution because it denies to Nevada-licensed nonresident insurance agents the same rights and privileges that are afforded to Nevada-licensed resident agents.” Id. at 982-83. The district court enjoined the Commissioner from enforcing section 680A.300, but later stayed this injunction pending appeal. This appeal followed.

II. Standard of review

Reviewing de novo the district court’s decision on cross-motions for summary judgment, we must decide whether the record, when viewed in the light most favorable to the non-moving party, shows that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Pocatello Educ. Ass’n v. Heideman, 504 F.3d 1053, 1056 (9th Cir.2007). We also review de novo whether the plaintiffs have standing, whether the plaintiffs’ claims are moot, and the constitutionality of section 680A.300. See Get Outdoors II, LLC v. City of San Diego, 506 F.3d 886, 890(9th Cir.2007); Rosenbaum v. City and County of San Francisco, 484 F.3d 1142, 1152 (9th Cir.2007).

III. Discussion

A. Standing

The Commissioner first argues that Restrepo and the Council lack standing to challenge the constitutionality of section 680A.300. “Article III of the Constitution limits the ‘judicial power’ of the United States to the resolution of ‘cases’ and ‘controversies.’ ” Valley Forge Christian Coll. v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 471, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982). “[Standing is an essential and

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522 F.3d 925, 2008 U.S. App. LEXIS 7652, 2008 WL 962103, Counsel Stack Legal Research, https://law.counselstack.com/opinion/council-of-insurance-agents-brokers-v-molasky-arman-ca9-2008.