Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_07-cv-02660/USCOURTS-caed-2_07-cv-02660-0/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 28:2201 Declaratory Judgement

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28 Since Plaintiff waited until the eleventh hour to file the 1

Application, Defendant was not given much time to respond. 

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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

AUTO DEALERS RISK RETENTION GROUP, )

INC., )

) 2:07-cv-02660-FCD-KJM

Plaintiff, )

)

v. ) ORDER

)

STEVE POIZNER, in his capacity as )

the Commissioner of Insurance of )

the State of California, )

)

Defendant. )

)

On December 13, 2007, Plaintiff filed an Ex Parte

Application for a Temporary Restraining Order (“Application”). A

Minute Order issued on December 13, 2007, scheduling the Application

for hearing on December 14, 2007. Defendant filed his opposition just

before the hearing on December 14, 2007.1

On December 4, 2007 Defendant issued a Cease and Desist

Order to Plaintiff because it had “not established that it is licensed

exclusively as a liability insurance company in a state of the United

States,” and the policies respondent proposes to write “are not

Case 2:07-cv-02660-FCD-KJM Document 20 Filed 12/14/07 Page 1 of 3
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liability insurance as authorized in the Federal Liability Risk

Retention Act of 1986 (“FLRRA” or “ACT”)." (Sweet Decl. Exh. H at 3.)

The cease and Desist Order ordered Defendant “to immediately [cease

and desist] the transaction of insurance in the State of California,

including the solicitation, marketing, sale and issuance of any new or

renewal stop-loss insurance contracts and/or any other type of

insurance contracts in California [and] within ten days of receiving

this Order [by December 17, 2007] notify all of its current California

auto members that any purported policy of stop-loss coverage issued by

Respondent at any time in the past is null and void and immediately

cancelled.” Id. at 4 ¶¶ 19, 20.) 

Plaintiff argues that a temporary restraining order (“TRO”)

must issue to immediately stay the enforcement of the Cease and Desist

order because it provides “too short a period for insureds to obtain

substitute coverage” and may put Defendant out of business. 

(Application at 1-2.) 

“[A] court may issue a [TRO] if the moving party

demonstrates either a combination of probable success on the merits

and the possibility of irreparable injury or that serious questions

are raised and the balance of hardships tips sharply in his favor.” 

Global Horizons, Inc. v. United States Department of Labor, __F.3d__,

2007 WL 4336186. Serious questions are raised as to whether the Act

authorizes the type of policy offered by Defendant, and the balance of

hardships tips in the favor of Plaintiff and its insured as to the

need for Plaintiff’s existing policies not being immediately canceled.

Accordingly, the Defendant is temporarily enjoined from enforcing the

portion of its cease and desist order that holds otherwise. 

Case 2:07-cv-02660-FCD-KJM Document 20 Filed 12/14/07 Page 2 of 3
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A hearing on the preliminary injunction is set for January

3, 2008. Defendant shall file his Opposition on December 26, 2007 by

4:00 p.m. and Plaintiff’s Reply if any shall be filed no later than

4:00 p.m. December 28, 2007. 

 

IT IS SO ORDERED.

Dated: December 14, 2007

 

GARLAND E. BURRELL, JR.

United States District Judge

Case 2:07-cv-02660-FCD-KJM Document 20 Filed 12/14/07 Page 3 of 3