F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

A L L I A N C E O F N O N P R

O F I T S F O R I N S U R A N C E , R I S K R E T E

N T I O N G R O U P , Plaintiff-Appellee

,

v

.

S C O T T J

. K I P P E R , Commissioner of I nsurance of the State of Nevada, Defendant

,

and

D E P A R T M E N T O F B U S I

N E S S A N D I N D U S T R Y , D I V I S I O N O F I

N S U R A N C E ; S T A T E O F N E V

A D A ; S C O T T J

. K I P P E R , Commissioner of I n surance of the State of Nevada,

Defendants-Appellants

. N o. 11-16836

D.C. No. 2:10-cv-01749- J CM-RJ JA L L I A N C E O F N O N P R

O F I T S V

. K I P P E R 2

A L L I A N C E O F N O N P R

O F I T S F O R I N S U R A N C E , R I S K R E T E

N T I O N G R O U P , Plaintiff-Appellee

,

v

.

S C O T T J

. K I P P E R , Commissioner of I nsurance of the State of Nevada; D E P A R T M E N T O F B U S I

N E S S A N D I N D U S T R Y , D I V I S I O N O F I

N S U R A N C E ; S T A T E O F N E V

A D A , Defendants-Appellants

. N o. 11-17871

D.C. No. 2:10-cv-01749- J CM-RJ J

OPI NI ON

A ppeal from the United States District Court for the District of Nevada J ames C. Mahan, District J udg e, Presiding

Arg ued and Submitted F ebruary 11, 2013—San F rancisco, California

F iled April 8, 2013

B efore: J erome F a

rris, Sidney

R. Thomas, and N. Randy

Smith, Circuit J udg es.

Opinion by

J udg e N.R. SmithA L L I A N C E O F N O N P R

O F I T S V

. K I P P E R 3

SUMMARY *

Insurance / P reem ption

The panel affirmed in part and vacated in part the district court’s judg ment in f

avor of a risk retention g roup, which claimed that an o rder of the Nevada Comm i s s i o ner o f I nsurance violated the L iability Risk Retention Act.

Affirming the district court’s entry of declaratory a nd injunctive relief, the panel h e l d t h at the Act preempted the Commissioner’s order prohibiting the ri s k retention g roup from writing “first dollar” automobile liability in surance policies becau s e t h e o rder made it unlawful for the g roup to operate in N evada. The panel h eld inapplicable an ex c eption for state laws that specify a cceptable m e a n s for demonstrating financial responsibility

, where the st a t e has required such a demonstration as a condition for obtaining a license or permit. The panel stated that the Commissioner’s orde r c o u l d not be saved from preemption because, under National W

arranty Ins. Co. v. G reenfield

, 214 F .3d 1073 (9th Cir. 2000), it violated the Act’s anti-discrimination provision.

The panel vacated the district court’s award of attorney s’ fees under 4 2 U

. S.C. § 1988 because the Act’s preemption
p r o v ision did not unambig uously confer a rig ht to be f r e e from state law that can be enforced u nder 42 U.S.C. § 1983.

* T h is su m m ary co n stitu

tes n o part o f th e o p in io n o f th e co u rt. It h as b een p rep ared b y

co u rt staf

f f o r th e co n v en i en ce o f

th e read er.A L L I A N C E O F N O N P R

O F I T S V

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COUNSEL

Catherine Cortez Masto, A ttorney General, a n d S h ane D

. Chesney (arg

ued), Senior Deputy Attorney General, C a r son City

, Nevada; J o a

n na N. Gri goriev (briefed and arg ued), Deputy A t t o rney General, L as Veg as, Nevada, for Defendants-Appellants.

Kimbe r l y Max son-Rushton (briefed and arg ued), Cooper L evenson A pril Niedelman & W a g enhein, P .A., L a s Veg as, Nevada, for Plaintiff-Appellee.

Rober t H

. My ers, J r. and Cindy Chang

, Morris Manning & Martin, L L P, Wash ing ton, D .C., for Amici Curiae Captive I nsurance Companies Associa tion, National Risk Retention Association, Nevada Captiv e I nsurance Association, a nd Vermont Captive I nsurance Association.

Susan Stapp, A ssistant Chief Counsel; J ill A. J acobi (arg ued), Senior Staff Counsel, California Depart ment of I nsurance, S a n F r ancisco, California, for Amicus Curiae Califor n i a I nsurance Commissioner Dave J ones.

Daniel L abrie, Housing Authority Risk Retention G roup, San F rancisco, California, f

or Amicus Curiae Housing Authority Risk Retention Group, I n c.

J an Holt, United Educators; Thomas W

. B runner, L awrence H. Mirel, A. Xavier B aker, W iley Rein L L P, W ashing ton D.C., for Amicus Curiae United Educators I nsura n c e , a Reciprocal Risk Retention Group.A L L I A N C E O F N O N P R

O F I T S V

. K I P P E R 5

Clifford Peterson and David Cassetty
, Ver m o nt Department of B anking

, I n surance, Securities, and Health Care Administration, Montpelier, Vermont, for Am i c us Curiae Vermont Department of B a nking

, I nsurance, Securities, a nd Health Care Administration.

R o b ert M. McKenna, A ttorney General; Marta U. D eL eon , Assistant Attorney General, Oly mpia, W ashing ton, for Amicus Curiae W as hing ton State I n surance Commissioner Mike Kreidler.

OP INION

N.R. SMI TH, Circuit J udg e :

The L iability Risk Retention Act (the “L RRA ”) b r o adly preempts “any State law, rule, reg ulation, or o r d er to the

e x tent that such law, r

ule, r eg ulation, or order w o uld

. . . m ake unlawful, or reg ulate, directly or indirectly

, th e operation of a r isk retention g roup.” 15 U.S.C. § 3902(a)(1). This provision preem p t s t he Order of the Nevada Commissioner of I nsurance (the “Commissioner ” )

, which
p r o h ibited Alliance of N onprofits for I nsurance, Risk Retention Group (“ANI ” ) f rom writing “first dollar” liability policies in Nevada. Therefore, we affirm the district court’s entry of declaratory and i n junctive relief in f

avor of ANI

. H o w e v e r , b e c ause the L RRA’s preemption provision does n o t unambig uously confe r a rig ht to be free from state law that

c a n be enforced under 42 U.S.C. § 1983, we vacate the fe e award.A L L I A N C E O F N O N P R

O F I T S V

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F ACTS

ANI is a risk retention g r oup (“RRG”), 1 c h a r tered in V ermont. I n 2001, ANI reg istered with the Divisio n o f I nsurance of Nevada’s Department of B usiness and I ndustry (the “Division”) to transact liability insurance in N evada. B y reg istering w ith the Division, ANI obtained a C e r t i f icate o f Reg ist r a t i o n ; however, the Division has not issued ANI a Certificate of Authority

. 2

As a reg istered insurer, AN I provided “first dollar, automobile liability coverag e to its Nevada members.” “F irst dollar” insurance policies a re “motor v ehicle polices that a re required by state law to comply with financial responsibility minimums.” F or ex ample, to reg ist e r a vehicle in Nevada,
state law requires the owner to obtain an insurance policy that
covers, at a minimum, $15,000 pe r person, per accident; $30,000 per two or more persons, per accident; and $10,000 of property damag e, per accident. Nev. Rev. Stat. § 485.185. A policy that meets these coverag e requ irements is a “first dollar” liability policy

, because the first dollars paid out on a claim (up to the coverag e limits) are paid out u n d e r the policy

.

1 In g en eral, an R

RG is an in su

ran ce co m

p an y th at o n ly in su

res th e liab il i t y r i s k s o f its o w n ers. S ee 1 5 U.S.C. § 3 9 01 (a)(4 )(A ), (E). Ho w ev er, § 3 9 0 1(a)(4 ) en u m erates s e v e r a l req u irem en ts th at an RRG m u st satisf y in o rd er to co m e w ith in

th e sco p e o f

th e L RRA ’ s co v erag e.

2 Mo reo v er, it ap p ears th at A N I h as n ev er so u g h t to o b tain o n e.A L L I A N C E O F N O N P R

O F I T S V

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Under Nevada’s Motor Ve hicle I n surance and F inancial Responsibility Act (“NMVI F RA”), 3 Nev. Rev. Stat. §§ 485.010–.420, a u t omobile owners (who have reg istered their cars in the state) must o btain their first dollar liability policy from a provider who is “aut h o r iz ed to transact business” in Nevada. Id. §§ 485.185,

. 037(1), .055(1). Only insurers who possess a “certificate of authority ” f r o m the Commissioner are authoriz ed to transact business in the state. Id. § 679A.030(1). ANI does not have such a certificate. A s

a result, in April 2010, the Nevada Department of Mo t o r Ve h i c les (“DMV”) beg an deny ing vehicle reg istrations to vehicle owners who obtained their first dollar liability policies from ANI

.

I n May 2010
, A N I soug ht a h earing before the Commissioner. F ollowing t h e hearing

, the Commissioner issued a n Order prohibiting A

NI from writing first d ollar liability policies in Nevada. The Co mmissioner’s Order contained the following

relevant provision: 4

1. ANI shall, within six ty (60) day s from the date of this O rder, cease and desist writing first dollar or m a n dated motor vehicle f i n a n c i a l r e s p o n s i b i l i t y i n s u r a n c e coverag e, require d by NRS 485.3091. ANI may d irectly w r i t e ex cess liability

3 L aw s l ik e th e NMVIFRA
, w h ich req u ire m o to rists to p ro v id e p ro o f of f in an cial resp o n sib ility

, are ref erred to g en erically in th is o p i n io n as

“ MVIFRA s”—m o to r v eh icle in s u ran ce an d f in an cial resp o n sib ility

acts.

4 T h e Co m

m issio n er am en d ed p arag rap h 1 of th e Ord er tw o d ay s af ter

en terin g it. T h e p o rtio n o f p arag rap h 1 qu o ted ab o v e co n tain s th e

am en d ed p ro v isio n

.A L L I A N C E O F N O N P R

O F I T S V

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c o v e r a g e ; h o w e v e r , a f r o n t i n g arrang ement with a

n authoriz ed ins u rer that holds a vali d Nevada certificate o f authority shall be required to provide first dollar or mandated motor ve h i c l e financial

r e s p o n s i b i l i t y i n s u r a n c e c o v e r a g e , required by

NRS 485.3091.

Primarily

, the Commissioner enjoined ANI from writing first dollar liability insurance, because it did not possess a Certificate of Author i t y a nd, therefore, was not an “authoriz e d insurer.” 5

ANI then f

iled this lawsuit, in the United S t a t e s District Court for the District of Nevada, seeking declaratory a nd

5 T h ou g h i t co u ld b e im

p lied

, th e Ord er d o es n o t ex p l icitly state th at A NI w as p ro h ib ited f

ro m o b t ain in g a Certif

icate o f A u th o rity f

ro m th e Co m m i ssio n er. It states th at “ [i]n su rers th at h o ld a Nev ad a certif icate of

au t h o r i t y are

. . . su

bj ect to th e Nev ad a In su

ran ce Gu aran ty A s so ciatio n (‘ NIGA ’ ),” b u

t ac k n o w led g es th at—u n d er th e L RRA —RRGs lik e A

NI

“ can n o t p a rticip ate in th e NIGA .” See 1 5 U.S.C. § 3 9 0 2 (a)(2 ). Su ch a statu to ry sch em e w o u ld cl e a r l y b e preem p ted b y th e L RRA u n der Na tio n a l W

a rra n ty In s. Co

. RRG v. G reen field

, 2 1 4 F .3 d 1 0 7 3 (9 th Cir. 2 0 0 0 ). See in

f ra

. Ho w ev er, it ap p ears t

h at th is m ay n o t b e h o w Nev ad a’ s

s t atu to ry sch em e actu ally o p erates. A f ter th e p arties f

iled m o tio n s f

o r

su m m ary j u dg m en t, th e Co m m i ssio n er f

iled an af f id av it to “c l arif

y an y p o ssib le am

big u ity ” in th e O rd er. T h at af f id av it in d icates th a t d om estic RRGs can b eco m e au th o rized in su rers b y o b tain in g a Nev ad a Certif icate

o f A u th ority

, an d th at RRGs are n o t req u ired to j oin th e NIGA in o rd er to

o b tain su ch a certif

icate. A s s u m in g th at t

h e Co m m issio n er’ s af

f id av i t

co rrec t l y s tates th e law

, RRGs m ay th eref ore w rite f irst- d o llar l iab ility
p o licies in N ev ad a. Ho w ev er, t h e af f id a v i t d o es n o t s tate th at t h is ro u te is av ailab l e to f

o reig n RRGs, lik e A

NI. A d d itio n ally

, w

h ile th e Co m m i ssio n er’ s in terp retatio n s o f state statu

tes in th e af

f id av it are w elltak en , th e Co m

m issio n er h as n o t p o in t e d t o a Nev ad a law th at w ou ld
p erm i t h is af

f id av it to ch an g e th e leg al ef f ect o f th e Ord er.A L L I A N C E O F N O N P R

O F I T S V

. K I P P E R 9

injunctive relief ag ainst the Commiss i oner and the D ivision of I nsurance under 4 2 U.S.C. § 1983. The parties filed crossmotions for summary

judg ment. Ruling on the motions, the district c ourt g ranted summary judg ment to ANI in an o r d e r without any discussion. T he relevant p arts of the order state:

I T I S F URTHER ORDERED THAT Nev. R. Stat. 485

. 1 85, Nev R. Stat. 679A.030(1) and N e v. R. Stat. 687A.040 and r elated
statutes and reg ulations o f the State of Nevada

are preempted by the [ L RRA] pursuant to the Supremacy Clause of th e Constitution, as applied to [ANI] insofar a s they prohibit [ ANI ] from issuing first dolla r automobile lia b i lity insurance policies in the State o f Nevada.

I T I S F URTHER O RDERED THAT the phrase “authoriz ed i n surer,” as used in the Nev. R. Stat. 679A.030, shall be interpreted to include [ RRGs] such as [ ANI ].

I T I S F URTHER ORDERED THAT de f endants are permanently enjoined f rom enforcing Nev. R. Stat. 485.185, Nev. R. Stat. 679A.030(1) and Nev. R. Stat. 687A.040 a nd related statutes a

nd reg ulations ag ainst

me m b ers of [ ANI ], insofar as they prohibit [ ANI ] from issuing first dollar a utomobile liability in s u rance policies in the State o f Nevada.

I T I S F UR T HER ORDERED THAT [ ANI ] is entitled to a remedy under 42 U.S.C.A L L I A N C E O F N O N P R

O F I T S V

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§ 1983 and, therefore is entitled to an award of a ttorney fees under 42 U.S.C. § 1988 to be set pursuant to F RCP 54.

As the prevailing party , ANI then r equested $127,828.00 in fees and $4,643.41 in costs. I n its request, A NI soug ht to

recover fees a

nd costs both for itself and for its amicus
, the Nation a l R i sk Retention Association (NRRA). F or itself, ANI requested $83,572.50 in fees and $3,341.75 in c osts. F o r the NRRA, ANI requested $44,255.50 in fees and $1,301.66 in costs. On November 2, 2 011, the district co u rt awarded ANI $86,914.25 in fees and costs, but only awarded costs to the N RRA in the amount of $1,301.66. The Commissioner then appealed.

On appeal, the Commissioner challeng es both the g rant o f
summary judg ment and the a w ard of attorne y s ’ f

e e s. 6 The Commissioner arg ues that ANI was not entitled to d eclaratory

or injunctive relief, because the L RRA doe s n o t preempt Nevada law. The Commissioner also arg ues that, even if the L RRA does preempt N evada law, ANI was not entitled to attorney s’ f

ees. W e affirm the district court’s entry o f declaratory

and injunctive relief, but vacate the fee award.

6 T h e Co m

m issio n er d oes n o t ch allen g e th e district co u rt’ s a w a rd of

co sts o n ap p eal, an d n eith er A

NI n o r th e NRRA h av e cro ss- ap p ealed th e d istrict co u rt’ s d en ial o f

f ees to th e NRRA

.A L L I A N C E O F N O N P R

O F I T S V

. K I P P E R 11

D ISCUSSION

I. The district c ourt correctly held tha t t h e LRRA
preem pts the Com m issioner’s Order.

W e review the district court’s g rant of summary judg ment to ANI
, finding that the L RRA preempts the Commissioner’s Order, d e n ovo. Schmidt v. Contra Costa Cnty.
, 693 F .3d 1122, 1132 (9th Cir. 2012). “I n this case, there are no disputes about the material facts.” S a m s o n v. City of Ba i n b ridge Island

, 683 F .3d 1051, 1057 ( 9th Cir. 2012). Therefore, “the only question is the leg al one of whether [ the L RRA preempts Nevada law] .” 7 Id.

The L RRA broadly preem p t s “ any State

. . . order to the

ex tent that such

. . . order would

. . . make unlawful, o r reg ulat e , d i rectly or indirectly

, the operation of [ an RRG]

. ” 15 U.S.C. § 3902(a)(1). Here, the Co m m i s sioner’s Order makes it unlawful for ANI
, a n RRG, to o perate in Nevada, to the ex tent ANI soug ht to write first dollar liability insurance. Thus, the Order pla i n l y fits within the scope of L RRA
pr e e m p tion. B ecause the Order fits within the scope o f

7 T h e p arties d id n o t clearly id en tif y w h eth er th e state law

at issu e w as th e Co m m issio n er’ s Ord er o r Nev ad a’ s statu to ry sch em e. Ho w ev er, A NI
ap p eale d fro m th e d istrict co u rt’ s su m m ary j u d g m en t o rd er, w

h ere th e

co u rt h eld th at th e L RRA p ree m p t e d a g ro u

p o f Nev ad a statu tes “ a s

a p p lied to [A

NI] in s o f ar as th ey p ro h ib i t [A

NI] f ro m i ssu in g f

irst do l lar

au to m o b ile liab i lity in su

ran ce p o licies i n th e State o f Nev ad a.” Sin ce th e Co m m i ssio n er’ s Or d e r a p plied Nev ad a law to A N I, t h e p reem p tio n ef f ected b y th e d istrict co u rt’ s d ecisio n is lo g i cally

lim ited to th at Ord er. Mo reo v er, at th e su

m m ary j u d g m en t h earin g , th e co u rt clarif i ed th at th e relev an t issu e w as w

h eth er t h e Co m m issio n er’ s Ord er w as p reem p ted

, n o t

w h eth er th e state s t a tu tes th em selv es w ere p reem p ted

. L ik e th e d istrict

co u rt, w e th eref

ore co n f in e o u r an aly sis to th e Co m m i ssio n er’ s Ord er.A L L I A N C E O F N O N P R

O F I T S V

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L RRA pr e e mption, it is invalid unless one of the L RRA’s

ex c e ptions from preemption applies.

Only one e x ception is relevant here. 8 Section 3 9 05(d)

saves from preemption st a t e laws that “specify a cceptable

means of demonstrating fi nancial responsibility where the State has required a demonstration of financial responsibility

as a cond i t i o n for obtaining a license or permit to undertake specified activities.” 15 U .S. C. § 3905(d). Nevada’s MVI F RA ( which g ave rise to the Commissioner’s Order) is

an ex ample of such a state statute. T he NMVI F RA requires those who o w n or operate a vehicle in Nevada to demonstrate financial responsibility in order t o r e gister and operate the vehicle. See Nev. Rev. Stat. § 4 8 5.187(1)(a); id. § 482.205. Owners a nd operators demonstrate financial responsibility b y providing proof of insurance from an authoriz ed insurance provider in specified minimum coverag e am o u n t s. Id. § 485.185.

Section 3905(d) of the L RRA preserves Nevada’s ability
to specify which ty

pes of insuran c e may satisfy this

re quirement. Specifically

, § 3905(d) permits states to “include or ex clude insurance coverag e obtained from

. . . [ an RRG] ” as a mea n s of satisfy ing the state’s financial responsibility requirements. 15 U .S.C. § 3905(d). Arg uably

, the Commissioner’s Order does not fit within this ex ception, because it bars ANI from writing a certain ty pe of insurance

8 T h e Co m

m issio n er a n d h i s am i cu s su g g est th at th e ex cep tio n f ro m p reem p tio n in 1 5 U.S.C. § 3 9 0 5 (a) ap p lies in th is c a s e

. T h at sectio n

carv es o u t f

ro m th e LR R A’s g en eral p reem p tio n “ th e p o l icy f

orm or

co v erag e req u irem en t s o f an y State m o to r v eh i c l e n o

- f au lt o r m o to r

v eh icle f i n an cial resp o n s ib ility in su ran ce law .” 1 5 U.S.C. § 3 9 0 5 ( a )

. Ho w ev er, th i s ex cep tio n d o es n o t ap p ly h ere, b ecau se th e Co m m issio n er’ s Ord er h ad

n o th in g to d o w ith

p o licy f o rm o r co v erag e req u i rem en ts.A L L I A N C E O F N O N P R

O F I T S V

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policy altog ether. T h u s, it g o es b ey ond merely ex cluding first dollar l iability policies written by ANI from the acceptable class of insurance policies that w il l s atisfy Nevada’s financial responsibility requirement.

Assuming

, however, that the Orde r f i t s within the scope of § 3905(d), it st i l l w o u l d not qualify for the ex ception. Sectio n 3 9 0 5 ( d) is “ subject to the provisions of section 3902(a)(4)”—the L RRA’s anti-discrimination provision. S ection 3902(a)(4) preempts state laws that “otherwi s e, discriminate ag ainst a risk retention g roup or any of its members.” Under o ur precedent, the Commissioner’s Order discriminates ag ainst ANI in violation of this section.

I n National W

arranty Insurance Co. v

. Greenfield

, 214 F .3d 1073 (9th Cir. 2000), w e held that the L RRA preempted the Oreg on Service Con tract Act (the “OSCA”), and that t h e O S C A did not qualify for the § 3905(d)

ex c e ption from preemption. Similar to the N V M I F RA, the OSCA required car deal er s in Oreg on who sold vehicle service contracts to demonstrate f inancial responsibility b y obtaining insurance coverag e for t h eir contract o blig ations from a n “authoriz ed insurer.” Id. at 1075

– 7 6

. T hroug h a combination of s t a te statutes a n d the L RRA, RRGs not domiciled in Oreg on could not become authori z e d insurers, because they could not obtain a “certificate o f authority

. ” Id.
at 1076. A s a result, Oreg on “effectively preclude[ d] all RRGs from p r o v i ding insurance c overag e for motor vehicle service c o ntracts.” Id. at 1076 (emphasis added). W e concluded that such laws, which ex clude all RRG s from providing a certain ty

p e of ins u r ance, do not qualify for the § 3905(d) ex ception.A L L I A N C E O F N O N P R

O F I T S V

. K I P P E R 14

W e also held that the O S CA violated the § 3902(a)(4) anti-discrimination provision. 9 Id. at 1082. To make that determination, we held that insurers could p r o v e that a state law discriminated in vi o l a tion of § 3902(a)(4) by showing tha t a l a w d i f f e rentiates between insurance providers “without

an acceptable justifica t i o n

. ” Id

. at 1081. Thus, to survive § 3902(a)(4), “t h e state must show that a law differentiating between an RRG and an [authoriz ed insurer] —or between all RRGs a nd all [ authoriz e d insurers] —is justified b y the desire to” “ protect those who would b e n e f it from the purchase o f insuran c e

. ” Id. at 1078, 1 081. Members of the public, w ho
may suffer harm as a result of the policy holde r ’s conduct, benefit from the purchase of first dollar liability policies. The insurer’s oblig ation und e r the policy to pay claims made
ag ainst its insure d i n creases an injured individual’s opportunity for recovery

. The L RRA ex pressly permits states to reg ulate RRGs in o rder to protect the i n terests of such individuals. As a result, “state laws r e q u i ring an RRG to

e ng ag e in fair settlement practices, to desig nate an ag ent for the service of process, to submit to ex aminations necessary to insure financial soundness, [ and] to avoid f alse a nd misleading advertisements” are e x e m p t f r o m p r eemption. Id. ;

see also 15 U.S.C. § 3902(a)(1 )

. Nevertheless, in National W arranty , th e State of Oreg on did not offer such a justification for p reventing all RRGs from writing insurance that would satisfy the OSCA’s financial responsibility

9 In p art o f th at h o ld in g n o t relev an t h ere, w e co n clu d ed th at § 3 9 05 (d )

“ perm its th e state to ex clu de c o v e r a g e o n ly f ro m p articu lar RRGs,” n o t fr o m a ll RRGs. Id

. at 1 07 8
, 1 08 1

– 8 2 (em p h asis ad d ed ). Oreg o n ’s
statu to ry s c h em e d id n ot f it w ith in th is p ro v isio n , b ecau s e th e OIGA

m em b ersh ip req u irem en t ef

f ectiv ely p reclu d ed a l l RRGs f ro m w ritin g

serv ice- co n t r a ct in su

ran ce. Ho w ev er, as d iscu ssed ab o v e, th e Co m m i ssio n er’ s Ord er ex clu d ed o n ly a p articu lar RRG (A NI), w hi c h Na tio n a l W

a rra nty p erm its if

it is n o n

- d iscrim in ato ry

.A L L I A N C E O F N O N P R

O F I T S V

. K I P P E R 15

requirement. Id. at 1 081–82. B y differentiating b etween RRGs a nd authoriz ed insurers wit h o ut an a cceptable justification, the OSCA violated § 3902(a)(4).

W e reach the same conclusion in t h i s case. The Commissioner’s Order bars ANI fr om writing first d ollar insurance, because ANI does n ot possess a Certificate o f Authority

. The Order itself does not prov i d e an y other acceptable justification for treating ANI differe n t l y than authoriz ed insurers; the Commissioner has not cited any other acceptable justification on appeal. Thus, the Or d e r violates § 3902(a)(4) by differentiating between ANI an d authoriz ed insurers without an acceptable justification. Accordin g l y , it cannot be saved from preemption by § 3905(d).

None of the Commissioner’s o bjections to this analy sis

are persuasive. F irst, the Commissioner urg es us to o verrule National W

arranty and to instead adopt the reasoning of the Eleventh and Seventh Circuits. See Me ars Transp. Grp. v

. Florida

, 34 F .3d 1013 (11th Cir. 1994); Op t h a l mic Mutual Ins. Co. v. Musser
, 1 43 F .3d 1062 (7th C i r

. 1 9 9 8 )

. Under those cases, a plaintiff could only prove d iscrimination under § 3902(a)(4) by proving intent i o nal discrimination. Mears
, 34 F

. 3d at 1 018; Opthalmic

, 1 43 F .3d at 1069–70. However,

u nder o ur circuit p recedent, we must apply Nationa l W arranty here. I t is b inding authority that n o co m p etent body has overruled. S

ee Gonzalez v. Arizona
, 677 F .3d 383, 389 n.4 ( 9th Cir. 2012) (en banc). Additionally , we decided National W

arranty after both Mears and O pthalmic

, a

nd considered the reasoning of those opinions before reaching

our holding in National W arranty

. See National W arranty , 214 F .3d a t 1082 (“[ W ] e know that, in deciding [ this case] a s

we do, we disag ree with the Seventh and Eleventh Circuits.”).A L L I A N C E O F N O N P R

O F I T S V

. K I P P E R 16

According ly

, we decline the Commissioner’ s invitation to revisit National W

arranty

.
Second, the Commission e r a r g ues that Nevada’s statutory scheme is not discriminatory

. E v en if that is true, t he Commissioner’s arg ument misses the p oint that the state law
at issue here is the Commissioner’s Order, which pr o h i b i t s ANI fr o m w riting first dollar liability insurance. Thus, it is
not relevant to this case that (as th e C o m m issioner asserts)
state statutes do not prevent d omestic RRGs from o b t aining Certificate s o f Authority and, therefore, writing first d ollar liability insurance. I t i s al so n o t relevant that foreig n RRGs l i k e ANI could u se certain workarounds to effectively write first dollar insurance i n other way s, e.g ., by self-insuring

, o r entering into a “fronting ” a rrang ement with a Nevada-based
company

. 1 0 B ecause the Comm issioner’s Order itself is discriminatory , it is preempted by the L RRA.

F inally

, the Commissioner arg ues that, even if Nevada’s M V I F R A d o e s d i s c r i m i n a t e a g a i n s t R R G s , t h a t

10 In ad d itio n to b ein g irrelev an t, th ese o p tio n s are n o t satisf acto ry altern ativ es f

o r f o reig n RRGs lik e A

N I. A NI can n o t u se self

- in su ran ce to p ro v id e liab ility in su

ran ce to its m em

b ers, b ecau se on ly en tities t h at o w n

m o re th an t en v eh icles m ay satisf y th e f in an cial resp o n sib ility req u irem en t b y s elf

- in su rin g

. S ee Nev

. Rev

. S t at. § 4 8 5 .3 8 0 (1 ). A NI is an in su rer , n o t

an in su red

, an d th u s it d o es n o t o w n an y v eh icles in Nev ad a. A d ditio n ally

, f

o rcin g A NI to tak e th e circu ito u s ro u te o f en t erin g in to a f ro n tin g arran g em en t w ith a Nev ad a- b ased en t ity in o rd er to pro v id e f irst d o llar lia b i l i ty p olicies to n o n p ro f its w ith in th e state is co n trary t o th e p u rp o s es o f th e LR R A. On e o f th e m ain p u rp o ses f o r th e L RRA ’ s

en actm en t w as th e elim in atio n o f s tate- l aw h u rd les to in terstate op eratio n

. S ee in fra p

. 2 2

. T h u s, alth o u g h N ev ad a law w o u ld tech n ically p erm it A NI
to ef f ectiv ely p ro v id e f

irst d o llar liab ility in s u

ran ce th ro u g h oth er m ean s, th e f act rem ain s th at A

NI (an d p resu m ab l y oth er f o reig n RRGs) w o u ld b e th e o n ly in su ran ce co m

p an i es req u ired to tak e th o se step s.A L L I A N C E O F N O N P R

O F I T S V

. K I P P E R 17

discrimination is justified, because it is done in the interest o f protecting “innocent third parties” who may be harmed by a policy holder, and therefore make a claim against the insurance company

. Althoug h we are not analy z ing Nevada’s MVI F RA itself here, we will assume that the Commissioner would offer this same justification in support of hi s O r d er. On t h a t a ssumption, we have r ecog n iz ed that the “state’s desire to protect those who would benefit from the purchase of insurance” could justify differentiating betwe en an RRG and another i n s u r er. S

ee National W

arranty , 214 F .3d at 1081. However, t his policy concern fails to justify the Commissioner’s differentiation between ANI and authoriz ed insurers. T he Commissioner does not sug g est t h a t , because it lacks a Certificate o f Authority

, ANI presents a g r eater risk
to those who w ould benefit from th e p u r c hase of insurance than an authoriz ed insurer. Contrary to the Commissioner’s assertion, a Certificate of A uthorit y i s not necessary to provide such protection. N evada law re q u i r es RRGs (who d on’t have a Certificate of Authority ) to comply with requirements that facilitate the Commis sioner’s oversig ht o f their o p e r a t i o ns. Nev. Rev. Stat. § 695E.140(3). F o r

ex a mple, each foreig n RRG must submit to ex aminations b y the Commissioner “to determine its financial condition.” Id. § 695E.190(1); see also 15 U .S.C. § 3902(a)(1)(E) ( ex cepting such r equirements f

rom pree m p tion under the L RRA). F urther, a s r e cog n iz ed in National W arranty , the L RRA permits states to protect the interest of those who benefit from the purchase of insurance thr o u gh a variety o f means, obviating the need f

or an RRG to obtain a Certificate o f Authority f

r om a state. See National W arranty , 214 F .3d at 1081. Therefore, the Commissioner can still protect innocent third parties ag ainst the risks A NI mig ht present, even thoug h it does not have a Certificate of Authority

. According ly

, theA L L I A N C E O F N O N P R

O F I T S V

. K I P P E R 18

Commiss ioner’s proffered justification for treating ANI differently

from an authoriz e d insurer fails.

W e ag ree w ith the district court that the L RRA preempts the Commissioner’s Order. Accordi ng ly

, we affirm the d i s trict court’s g rant o f summary judg ment to ANI on its preemption claim.

II. ANI is not entitled to attorneys’ f e es under 42 U.S.C. § 1988.

B e cause ANI broug ht this suit u nder 42 U.S.C. § 1983 and w as the prevailing party , the d istrict court awarded ANI attorney s’ fees u n d er 42 U.S.C. § 1988. On appeal, the Commissioner arg ues that A NI was not entitled to attorney s’ fees, because p reemption of state law under the L RRA is not

a “rig ht” that can be enforced under 42 U

. S .C. § 1 9 83. W e ag ree with the Commissioner, and vacate the fee award. 1 1

As a predicate to an award of attorn e y s ’ f e e s under 42 U.S.C. § 1988, one must bring an “action or proceeding to enforce

. . . [ 42 U.S.C. § 1 983] .” 4 2 U.S.C. § 1 9 8 8 (b). Section 1983 provides a c a use of action for the “deprivation of any rig hts, privileg es, or immunities, secured by the Constitution a

nd laws [ of the United States] .” Therefore, to determine whether ANI is entitled to a n award of attorney s’

11 B ecau se w e co n clu d e th at th e L RRA do es n o t co n f er a rig h t to b e f

ree f ro m state law th at can b e en f o rced u n der § 1 98 3
, w e d o n o t n eed to reach th e Co m m issio n er’ s arg u m en t t

h at h e is im

m u n e f ro m liab i l i t y f

o r f ees. A d ditio n ally

, w e n o t e th at f ed eral statu tes o th er t

h an § 1 9 8 3 p ro v id ed th e d istrict co u rt w ith au th o rity to en ter d eclarato ry an d in j u n ctiv e relief

. S ee 2 8 U .S.C. § 22 0 1 ; 2 8 U.S.C. § 2 2 0 2 ; see Rin co n Ba n d o f Missio n In d ia n s

v. Ha r ris
, 61 8 F.2 d 5 6 9
, 5 7 5 (9 th Cir. 1 9 8 0 ) (n o tin g th at 2 8 U.S.C. § 2 2 0 2

au th orizes d istrict co u rts to g ran t in j u n ctiv e relief

).A L L I A N C E O F N O N P R

O F I T S V

. K I P P E R 19

fees, we must fir s t determine whether the L RRA’s preemption provision confers an enforceable rig ht to be free f r o m s tate law. No federal courts of appeal have direc t l y analy z ed whether 15 U.S.C

. § 3902 of the L RRA confers such a rig ht on RRGs. 1 2

“[ T] he Supremacy Cla u s e , of its o wn force, does not create rig h ts enforceable under § 1 983.” See G old e n S t ate Transit Corp. v. City of L.A.
, 493 U.S. 103, 10 7 ( 1 989) (footnote om i t t e d ). According ly

, “it w ould obviously be incorrect t o a s s u me that a federal rig ht of action p ursuant to § 1983 ex ists e very time a f ederal rule of law pre-empts state reg ulatory authority .” Id. a t 108. I n s t e ad, we must analy z e the statute that alleg edly g ives rise to the enforceable rig ht to determine whether Cong ress conferred such a rig ht in the
statute. I n Blessing v

. Frees t o ne , 5 2 0 U.S. 329, 340–41 ( 1997), the Supreme Court outlined the three-fac t o r framework for conducting such an analy si s

. A statute only

c o n f e rs an enforceable rig h t if (1) the plaintiff demonstrates that “Cong ress

. . . intended that the pro v i s i o n i n question benefit the plaintiff,” (2) “the plaintiff

. . . demonstrate[ s] that the rig ht a ssertedly p r otected b y th e s t a t u t e is not so ‘ v ag ue and amorphous’ that its enforcement would s t ra in judicial competence,” and (3) “the pr o v i s ion g iving rise to the

1 2 In W h ite Mo u n ta in Ap a ch e Trib e v. W illia ms , 8 1 0 F.2 d 8 4 4 (9 th Cir. 1 9 8 7 ), w e h eld th at claim s o f f ield an d co n f

l ict p reem ptio n w ere n o t rig h ts th at co u ld b e en f

o rced u n d er § 1 9 8 3

. Id

. at 8 5 0

. Ho w ev er, W h i te Mo u n t a in d o es n o t co n t r o l t h i s case, b ecau se th e L RRA p reem p ts state law ex p ressly

. S

ee 1 5 U.S.C. § 3 9 0 2 (a). A d d itio n a l l y , i n Na t i o na l W a rra nty , t h e d istrict co u rt co n clu d ed t h at L RRA p reem

p tio n co u ld b e

en f o rced u n d er § 19 8 3

. 2 4 F. Su p p

. 2 d. 1 09 6
, 1 1 0 9

– 1 0 (D. Or. 1 9 9 8 ). W e af f irm ed

, b u t d i d n o t ad d ress th e issu e o f w h eth er actu al p reem

p tio n

co n f erred a rig h t t h a t c o u l d be en f orced u n d er § 19 8 3

. S

ee g en era l ly Na tio n a l W

a rra nty , 2 14 F.3 d 1 07 3

.A L L I A N C E O F N O N P R

O F I T S V

. K I P P E R 20

a sserted rig ht [ is] couched in mandatory

, rather th a n precatory , terms.” I

d

. T he Supreme Court clarified what evidence was sufficient to satisfy the first factor in Gonzaga University v. Doe
, 536 U.S. 273, 2 76 (2002). T h er e, the Court held that the mere f act that a p laintiff benefited from a statute did not g ive h i m o r h er a rig ht to sue under § 1983 whe n t h e s tatute was violated. See id. a t 283; see also Blessing

, 520 U.S. at 340 (“I n order to se ek redress throug h § 1983, howev e r, a plaintiff must assert the violation of a federal right

, not merely a v iolation of federal law .”). Rather, Cong r ess must have “unambig uously conferred” a rig ht on a plaintiff for that pla i n t i f f to have a cause of action under § 1983. Gonzaga Univ. , 536 U.S. at 283.

Here, even t h o u g h ANI benefits from the L RRA ( p a r t i c u l a r l y t h e f

re e d o m fr o m m u l t i p l i c i t o u s a n d discriminatory state reg ulation), “fall[ ing ] within the g eneral

z one of interest that the statute is i n t e n d e d to protect” is not enoug h. Id. at 2 83. Rather, to enforce L RRA preemption under § 1983, ANI must demonstrate that Co ng ress “unambig uously conferred [ a] r ig ht” on it. Id. Analy z ing the
tex t of 15 U.S.C. § 3902(a)(1) an d t h e leg islative history o f the L RRA, we cannot say t h a t Cong ress unambig uously conferred a r ig ht o n RRGs to be fr ee f ro m s t ate law in the L RRA. S ee G onzaga Univ.
, 536 U .S. at 286; Ball v

. Rodgers

, 492 F .3d 1094, 1106 (9th Cir. 2 007) (“[ W ] e have sometimes turned to a statut e’s leg islative history to help f lesh out cong ressio n a l i ntent r eg arding the c r eation of a federal rig ht.”).

I nitia l ly

, looking ex clusively at the tex t of § 3902(a)(1),

one could conclude that Cong ress did e mplo y “rig hts-creating lang uag e” when it preempted state laws that reg ulate RRGs. Gonzaga Univ.
, 536 U .S. at 287. I n Gonzaga University
, theA L L I A N C E O F N O N P R

O F I T S V

. K I P P E R 21

Court pointed to the “individually focused terminolog y o f Titles VI and I X” as paradig matic r ig hts-creating lang uag e

. See Gonzaga Univ

. , 36 U.S. at 284 n.3, 287. Title VI
pr o v i d e s t h at “No person in the United States shall

. . . be subjected to discriminat i o n under any prog ram o r activity receiving F ederal financial assistance.” 42 U.S.C. § 2 000d. Employ ing a similar c onstruction, Title I X states “No person in the United States shall, on the basis of sex , . . . be subjected
to discrimination under any ed u c ation prog ram or activity receiving F ederal financial assistance.” 20 U.S.C. § 1681(a). Such lang uag e, w hich is “ p h rased in terms of the persons bene fited,” is necessary e v idence that Cong ress intended to create an enforceable rig

ht. S ee id. at 284 & n.3.

L ike the terminolog y of Title VI and Title I X, the lang uag e o f § 3902(a) is al s o p h r ased in terms of the “benefited” person. Section 3902(a) specifies t h a t “ a risk retention gr o u p is ex empt from any State law, rule,
reg ulation, or order

. . . .” 15 U.S.C. § 3902(a). Thus, just a s Titles VI and I X declare that no p erson shall be subject to discrimination, § 3902(a) effectively declares that no RRG shall be subject to state reg ulat i o n

. All three statutes a re phrased in terms o f the b enefi ted party

. Yet, even if such lang uag e is necessary to the conclusion that C ong ress intended to create an enforceable r ig ht, see W a tson v. W

e eks

, 436 F .3d 1152, 1159 (9th Cir. 2006), that does not mean it is sufficient to do so. Rather, w e u ltimately must determine wh ether “Cong ress intended to create a federal r ig ht.” Gonzaga Univ

. , 5 3 6 U.S. at 283. T he leg islative h istory o f the L RRA indicates that Congr e s s had no intention o f conferring a rig ht to be free f rom state law on RR G s t hat would be enforceable under § 1983.A L L I A N C E O F N O N P R

O F I T S V

. K I P P E R 22

F undamentally

, Cong re ss enacted the L RRA to increase the supply of c ommercial liability insurance nationwide—not
to c onfer rig h ts on individual RRGs. See H. R. Rep. No. 99- 86 5
, at 7–8 ( “The purpose of [the L RRA] is to facilitate the formation and o p e r ation of r isk r etention g r oups a nd purchasing g r oups.”) ( “[ T he] cre a tion o f self-insurance
g ro u p s c an provide much-needed new c apacity .”); see also Home W arranty Corp. v

. Caldwell

, 777 F .2d 1455
, 1472 (11th Cir. 1985) (discussing purpose of the Product L iability Risk Retention Act, predecessor to the L RRA). Thus, Cong r ess primar i l y enacted the L RRA to benefit buy ers o f insurance, rather than the insurance companies t hemselves. P re emption of state laws directly effectuated that purpose, because states had “created capital and other requirements that ma[ de] it difficult f

or [ RRGs] to form or to operate on a multi-state basis.” H. Rep. No. 9 9–865, at 8. Clearly

, RRGs stood to benefit from freedom from some s t a t e reg ulations. However, whatever salutary effect preemption had for individual RRGs was only incidental to the ultimate purpose of increasing the available supply of c o m m ercial liability insurance. This sort of incidental benefit does not rise to the level of the “unambig uously conferred” ri gh t that Gonzaga University requires us to find

. G onzaga Univ.
, 536 U.S. at 283; see also G o l d

en State
, 493 U.S. at 109 (“[ W ] h en cong ressional pre-emption benefits particular parties only a s

an incident of the federal schem e of reg ulation, a private damag es remedy

under § 1983 may

not be available.”).

Our analy sis of the f

irst B le s sing factor is sufficient to determine tha t C ong ress d id not intend to confer an enf o r c eable rig ht on RRGs in the L RRA, so we will not address the remaining two f a c tors. Therefore, we co n cl u de that § 3902(a) of the L RRA does not confer on RRGs a rig htA L L I A N C E O F N O N P R

O F I T S V

. K I P P E R 23

to be f ree from state law that can be enforced under § 1983. 1 3 As a result, the instant litig a tion ceases to be an “action

. . . to enforce a provision of [ § 1983]
, ” e l iminating the statutory basis for an award of attorney s’ fees. See 42 U.S.C. § 1988. According ly

, we vacate the fee award.

III. The district court did not c om m it reversible error

w hen it ruled on pending m otions bef ore t he deadline f

o r f iling a response had passed.

F inally

, we must determine whether the district court committed reversible error when it g ranted several motions in alleg ed violation of its own local rule. “The ruling s o f the district courts reg arding local r ules are reviewed for a

buse o f discretion.” Prof’l P rogra ms Grp. v. Dep’t of Commerce
, 29 F .3d 1349, 1353 ( 9th Cir. 1994). “Dist r i c t judg es must adhere to their court’s local rules, which have the force o f f ederal law.” In re Corrinet
, 645 F .3d 1141, 1146 ( 9 t h C i r. 2011). However, only “a d eparture from l ocal rules that affects ‘substantial r ig hts’ requires reve r sal.” Prof’l P r o g r ams Grp.
, 2 9 F .3d at 1353; F ed. R. Civ. P. 6 1

. Conversely , a departure should not be reversed “if the effect is so slig ht and unimportan t that the sensible treatment is to overlook it.” Id. (interna l quotation marks and alteration omitted).

13 Su p p o rtin g o u r co n clu sio n , c o u r t s h av e rep eated ly d eclin ed to

reco g n ize t

h at p reem p tio n p ro v isio n s g iv e rise to a n o n

- sp ecif ic rig h t t o b e f ree f ro m state law th a t c a n b e en f o rced u n d er § 1 9 8 3

. E.g

. , S prin t Telep h o n y PCS

, L.P. v. Cn ty. o

f S a n Dieg o , 4 9 0 F.3 d 7 00 (9 th Cir. 20 0 7) (T eleco m m u n icatio n s A ct, 4 7 U.S.C. § 2 5 3 (a)); Lo ya l Tire & Au to C

en ter, In c. v. To wn o

f W o o d sb u r y , 4 45 F.3 d 1 3 6, 1 5 0 (2 d Cir. 2 0 0 6 ) (In terstate Co m m erce A ct, 4 9 U.S.C. § 1 4 5 0 1 (c)(1 )); W a ch ovia Ba nk, N.A. v. Bu rke

, 4 1 4 F.3 d 3 0 5
, 3 23 (2 d Cir. 20 0 5 ) (Natio n al B an k in g A ct, 1 2 U.S.C. § 2 1 et seq

. ).A L L I A N C E O F N O N P R

O F I T S V

. K I P P E R 24

Here, t h e relevant local rule states, “Unless otherwise ordered by the court, points and authorities in response shall b e filed and served by an opposing p arty fifteen (15) d a y s after service of the motion.” D. Nev. R. 7-2(b) (2006). The Commissioner arg ues that the district court violated this rule when it g ranted three different motions in this case.

F irst, we address two motions for leave to submit amicus briefs filed by the NRRA and the Self

- I n s urance I nstitute o f America on J an uary 31, 2 011. T he district court g ranted these motions nine day s later, o n F e bruary 9, 2011, before the Commissioner submitted a response. The distri c t c ourt did

n o t e r r b y ruling on these motions at that time. Under its plain lang u ag e, L ocal Rule 7-2(b) does not g uarantee parties

a period o f time to file a response. Rather, it limits the period in which a response may be filed to fifteen day s. Moreover, assuming that the d istrict court did violate L ocal Rule 7-2(b), neither motion raised issues that affected the Commissioner’s substantial rig hts. T he Commissioner does not articulate h ow the admission of two additional amici af f e c t ed the outcome of the district court proceeding ; he o n l y arg ues that he was denied his chance to file an opposition to their admission.

Second, we address ANI ’s March 21, 2011 moti on seeking leave to supplement a pre v i o usly f iled reply

. The Comm issioner filed a response on March 23, 2011, but the district court g rant e d ANI ’ s motion on March 24, 2011 without acknowledg ing the Commis s i o n er’s response. The Commissioner does n ot alleg e how the district c ourt’s failure
to consider h is response affected any substantial r i gh ts. I nstead, he arg ues that he was “forced to file a motion asking the District Court to ‘ r e

- consider’ a rg uments never even considered.” However, en d u r i ng the process of filing an additional motion does not, by i t s e lf, affect the outcome o fA L L I A N C E O F N O N P R

O F I T S V

. K I P P E R 25

the proceeding

. F urther, in this instance, the outcome clearly

was not a ffected. Af

t e r t h e district court g ranted A NI ’s motion, the Commissioner filed a motion for reconsideration. I n that motion, the Commissioner re-submitted the response
t hat the district court alleg e d ly overlooked the first ti m e. Considerin g t he response e x plicitly w hen ruling on the motion for recons ideration, the district court reached the same conclu s i o n

. Thus, the district court’s failure to consider the Commissioner’s response in the first instance did not affect the outcome of ANI ’s motion, or the litig ation.

The district court’s errors—if any —did not a ffect the C o mmissioner’s substantial rig hts. Rather, they seem “slig h t” and “ u n important,” and we think the “sensible treatment” is to ov e r l ook them. Prof’l Programs Grp.
, 29 F .3d at 1353.

CONCLUSION

The Commissioner’s O r der, which barred A NI from writing first dollar liability insurance policies in Nevada, is preempted by the L RRA, 15 U .S.C. § 3 902(a). Therefore, we AF FI R M the district court’s e ntry of declaratory a nd injunctive r elief. However, the L RRA does not confer a rig ht
to be free from state law that c an be enforced under 42 U .S.C. § 1983, making fees u n d er 42 U.S.C. § 1988 unavailable. Therefore, we VACATE the fee award.A L L I A N C E O F N O N P R

O F I T S V

. K I P P E R 26

F inally

, we REMAND so that the district court c an enter

a new summary judg ment order consistent with this opinion. The parties shall bear their own costs o n appeal. See F ed. R. App. P. 39(a)(4).

AF F IRMED in part, V ACATED in part, a nd REMANDED.