Heller v. Ross

682 F. Supp. 2d 797, 2010 U.S. Dist. LEXIS 7879, 2010 WL 148341
CourtDistrict Court, E.D. Michigan
DecidedJanuary 14, 2010
DocketCase No. 09-10203
StatusPublished
Cited by1 cases

This text of 682 F. Supp. 2d 797 (Heller v. Ross) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Heller v. Ross, 682 F. Supp. 2d 797, 2010 U.S. Dist. LEXIS 7879, 2010 WL 148341 (E.D. Mich. 2010).

Opinion

OPINION AND ORDER

DENYING PLAINTIFF’S MOTION FOR JUDGMENT ON THE PLEADINGS[9]

GRANTING DEFENDANT’S MOTION FOR JUDGMENT ON THE PLEADINGS [11] and DISMISSING THE CASE

ARTHUR J. TARNOW, District Judge.

In this case, plaintiff Cary Joel Heller (“Plaintiff’) presents facial and as-applied challenges to the constitutionality of the Michigan Insurance Code’s Licensing Statute, MCL 500.1205.

The Court has reviewed the record, considered the parties’ briefs and supplemental authority, and heard oral arguments on the motions. In light of controlling Sixth Circuit precedent and for the reasons set forth below, the Court concludes that Plaintiffs Motion for Judgment on the Pleadings [9] must be DENIED, Defendant’s Motion for Judgment on the Pleadings [11] must be GRANTED, and the case must be DISMISSED.

I. INTRODUCTION

For purposes of the pending cross-motions for judgment on the pleadings, the parties have stipulated to the facts of this case. Plaintiff was born one of three triplets, and endured a difficult family life growing up in West Bloomfield, Michigan. His father suffered from poor health, and his mother suffered from bi-polar disorder and substance addictions. When Plaintiff was eighteen years old, his father died, and his mother died when Plaintiff was twenty-one. Plaintiff began using drugs as a high school student, and was addicted to heroin by the age of twenty-four.

Plaintiff began growing and selling marijuana to fund his heroin purchases, but stopped when he entered drug treatment in 2004. During treatment, he conquered his addiction, embraced his faith, and spent his free time doing volunteer work with special-needs children. Plaintiff has not returned to drug use, and stayed sober while grieving the recent suicide of his triplet brother.

In 2005, Plaintiff faced federal criminal charges based on his prior activities. He pled guilty to one count of conspiracy to [799]*799manufacture and distribute marijuana. In an extreme downward departure from both the federal sentencing guidelines and the range suggested in the plea agreement, the sentencing judge placed Plaintiff on six months of house arrest.

Since 2006, Plaintiff has worked at Invescor, a Farmington Hills-based company that provides insurance-related services. Plaintiffs job involves educating financial professionals and insurance agents about the life insurance settlement industry. He has earned several promotions within the company.

On April 1, 2008, Plaintiff applied for a Resident Producer License (“RPL”), which is required under Michigan law in order for a person to sell certain insurance products. On his RPL application, Plaintiff acknowledged his felony conviction. Plaintiffs application was reviewed by the Office of Financial and Insurance Regulation for the State of Michigan (“OFIR”), which oversees financial and insurance regulatory matters throughout the state. Without considering Plaintiffs personal circumstances, OFIR rejected Plaintiffs RPL application solely on the basis of his prior felony conviction. Plaintiff appealed OFIR’s decision to defendant Ken Ross (“Defendant”),1 who agreed that the applicable statute, MCL 500.1205 (the “Licensing Statute”), prohibits Plaintiff from obtaining a RPL.

II. THE LICENSING STATUTE

The requirements for licensing resident producers are embodied in Michigan’s Insurance Code. See MCL 500.1205. The relevant statute provides:

(1) A person applying for a resident insurance producer license shall file with the commissioner the uniform application required by the commissioner and shall declare under penalty of refusal, suspension, or revocation of the license that the statements made in the application are true, correct, and complete to the best of the individual’s knowledge and belief. An application for a resident insurer producer license shall not be approved unless the commissioner finds that the individual meets all of the following:
(b) Has not committed any act listed in section 1239(1).

Id. The Insurance Code then sets forth the acts that constitute grounds for the discipline of a licensed producer, or for the denial of a license to a new applicant. MCL 500.1239(1). One of those grounds is “[hjaving been convicted of a felony.” MCL 500.1239(1)®.

Thus, in mandatory language, the statute facially prohibits the Commissioner from granting a license to an applicant who has been convicted of a felony.

III. LEGAL ARGUMENTS

After exhausting all potential administrative remedies, Plaintiff filed this action on January 20, 2009. Plaintiff seeks relief in the form of: (1) a declaration that the Licensing Statute, both facially and as applied to him, violates the Equal Protection Clause of the Fourteenth Amendment of the United States Constitution, and; (2) an injunction preventing Commissioner Ross from applying the Licensing Statute to Plaintiffs RPL application, and requiring the Commissioner instead to evaluate the application under the general standards governing RPL applicants. Now pending [800]*800before the Court are the parties’ cross-motions for judgment on the pleadings. The Court heard argument on the motions.

Plaintiff asserts that the Licensing Statute bears no rational relationship to a legitimate state interest,2 and therefore does not withstand scrutiny under the Equal Protection Clause of the Fourteenth Amendment. He identifies three respects in which he claims the Licensing Statute draws irrational and arbitrary classifications, and thus is facially unconstitutional. Additionally, Plaintiff argues that the statute is unconstitutional as applied to the unique facts of his case.

A. Facial Constitutionality

Plaintiff argues that the Licensing Statute is facially unconstitutional in three respects: (I) it draws an irrational line between RPL applicants and current RPL holders; (ii) it is irrationally overinclusive because it denies a RPL to any convicted felon, without regard for the nature of the underlying offense, and; (iii) it draws an irrational line between felony and misdemeanor convictions.

1. The Applicant/Licensee Distinction

Plaintiffs primary argument is that the Licensing Statute is facially unconstitutional insofar as it mandates that OFIR deny a RPL license to any applicant with a felony conviction, but affords OFIR discretion to disregard an identical felony conviction incurred by an individual who already holds a RPL. Plaintiff asserts that this distinction bears no rational relationship to the state’s presumptively legitimate interest in “protecting [the public] against unscrupulous insurance agents.” In support, Plaintiff presents several sources of persuasive authority in which courts have struck down statutory prohibitions against the professional licensing of convicted felons. Plaintiff further urges the Court to distinguish the present case from the Sixth Circuit’s 1984 holding in Darks v. Cincinnati See 745 F.2d at 1044.

In Miller v. Carter,

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Cite This Page — Counsel Stack

Bluebook (online)
682 F. Supp. 2d 797, 2010 U.S. Dist. LEXIS 7879, 2010 WL 148341, Counsel Stack Legal Research, https://law.counselstack.com/opinion/heller-v-ross-mied-2010.