Court Opinion

ID: 857488
Source: CourtListenerOpinion
Date Created: 2013-04-08 17:30:06.709527+00
Date Added: 2024-06-11T15:06:35.618441
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

ALLIANCE OF NONPROFITS FOR              No. 11-16836
INSURANCE, RISK RETENTION
GROUP,                                     D.C. No.
                 Plaintiff-Appellee,    2:10-cv-01749-
                                           JCM-RJJ
                 v.

SCOTT J. KIPPER, Commissioner of
Insurance of the State of Nevada,
                           Defendant,

                and

DEPARTMENT OF BUSINESS AND
INDUSTRY, DIVISION OF INSURANCE;
STATE OF NEVADA; SCOTT J. KIPPER,
Commissioner of Insurance of the
State of Nevada,
             Defendants-Appellants.
2         ALLIANCE OF NONPROFITS V. KIPPER

ALLIANCE OF NONPROFITS FOR               No. 11-17871
INSURANCE, RISK RETENTION
GROUP,                                     D.C. No.
                 Plaintiff-Appellee,    2:10-cv-01749-
                                           JCM-RJJ
                 v.

SCOTT J. KIPPER, Commissioner of           OPINION
Insurance of the State of Nevada;
DEPARTMENT OF BUSINESS AND
INDUSTRY, DIVISION OF INSURANCE;
STATE OF NEVADA,
              Defendants-Appellants.

      Appeal from the United States District Court
               for the District of Nevada
       James C. Mahan, District Judge, Presiding

                Argued and Submitted
     February 11, 2013—San Francisco, California

                  Filed April 8, 2013

       Before: Jerome Farris, Sidney R. Thomas,
         and N. Randy Smith, Circuit Judges.

             Opinion by Judge N.R. Smith
             ALLIANCE OF NONPROFITS V. KIPPER                         3

                           SUMMARY*

                    Insurance / Preemption

    The panel affirmed in part and vacated in part the district
court’s judgment in favor of a risk retention group, which
claimed that an order of the Nevada Commissioner of
Insurance violated the Liability Risk Retention Act.

    Affirming the district court’s entry of declaratory and
injunctive relief, the panel held that the Act preempted the
Commissioner’s order prohibiting the risk retention group
from writing “first dollar” automobile liability insurance
policies because the order made it unlawful for the group to
operate in Nevada. The panel held inapplicable an exception
for state laws that specify acceptable means for
demonstrating financial responsibility, where the state has
required such a demonstration as a condition for obtaining a
license or permit. The panel stated that the Commissioner’s
order could not be saved from preemption because, under
National Warranty Ins. Co. v. Greenfield, 214 F.3d 1073 (9th
Cir. 2000), it violated the Act’s anti-discrimination provision.

    The panel vacated the district court’s award of attorneys’
fees under 42 U.S.C. § 1988 because the Act’s preemption
provision did not unambiguously confer a right to be free
from state law that can be enforced under 42 U.S.C. § 1983.

  *
    This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
4          ALLIANCE OF NONPROFITS V. KIPPER

                        COUNSEL

Catherine Cortez Masto, Attorney General, and Shane D.
Chesney (argued), Senior Deputy Attorney General, Carson
City, Nevada; Joanna N. Grigoriev (briefed and argued),
Deputy Attorney General, Las Vegas, Nevada, for
Defendants-Appellants.

Kimberly Maxson-Rushton (briefed and argued), Cooper
Levenson April Niedelman & Wagenhein, P.A., Las Vegas,
Nevada, for Plaintiff-Appellee.

Robert H. Myers, Jr. and Cindy Chang, Morris Manning &
Martin, LLP, Washington, D.C., for Amici Curiae Captive
Insurance Companies Association, National Risk Retention
Association, Nevada Captive Insurance Association, and
Vermont Captive Insurance Association.

Susan Stapp, Assistant Chief Counsel; Jill A. Jacobi (argued),
Senior Staff Counsel, California Department of Insurance,
San Francisco, California, for Amicus Curiae California
Insurance Commissioner Dave Jones.

Daniel Labrie, Housing Authority Risk Retention Group, San
Francisco, California, for Amicus Curiae Housing Authority
Risk Retention Group, Inc.

Jan Holt, United Educators; Thomas W. Brunner, Lawrence
H. Mirel, A. Xavier Baker, Wiley Rein LLP, Washington
D.C., for Amicus Curiae United Educators Insurance, a
Reciprocal Risk Retention Group.
           ALLIANCE OF NONPROFITS V. KIPPER                5

Clifford Peterson and David Cassetty, Vermont Department
of Banking, Insurance, Securities, and Health Care
Administration, Montpelier, Vermont, for Amicus Curiae
Vermont Department of Banking, Insurance, Securities, and
Health Care Administration.

Robert M. McKenna, Attorney General; Marta U. DeLeon,
Assistant Attorney General, Olympia, Washington, for
Amicus Curiae Washington State Insurance Commissioner
Mike Kreidler.

                        OPINION

N.R. SMITH, Circuit Judge:

    The Liability Risk Retention Act (the “LRRA”) broadly
preempts “any State law, rule, regulation, or order to the
extent that such law, rule, regulation, or order would . . .
make unlawful, or regulate, directly or indirectly, the
operation of a risk retention group.” 15 U.S.C. § 3902(a)(1).
This provision preempts the Order of the Nevada
Commissioner of Insurance (the “Commissioner”), which
prohibited Alliance of Nonprofits for Insurance, Risk
Retention Group (“ANI”) from writing “first dollar” liability
policies in Nevada. Therefore, we affirm the district court’s
entry of declaratory and injunctive relief in favor of ANI.
However, because the LRRA’s preemption provision does not
unambiguously confer a right to be free from state law that
can be enforced under 42 U.S.C. § 1983, we vacate the fee
award.
6                 ALLIANCE OF NONPROFITS V. KIPPER

                                   FACTS

    ANI is a risk retention group (“RRG”),1 chartered in
Vermont. In 2001, ANI registered with the Division of
Insurance of Nevada’s Department of Business and Industry
(the “Division”) to transact liability insurance in Nevada. By
registering with the Division, ANI obtained a Certificate of
Registration; however, the Division has not issued ANI a
Certificate of Authority.2

    As a registered insurer, ANI provided “first dollar,
automobile liability coverage to its Nevada members.” “First
dollar” insurance policies are “motor vehicle polices that are
required by state law to comply with financial responsibility
minimums.” For example, to register a vehicle in Nevada,
state law requires the owner to obtain an insurance policy that
covers, at a minimum, $15,000 per person, per accident;
$30,000 per two or more persons, per accident; and $10,000
of property damage, per accident. Nev. Rev. Stat. § 485.185.
A policy that meets these coverage requirements is a “first
dollar” liability policy, because the first dollars paid out on a
claim (up to the coverage limits) are paid out under the
policy.

    1
     In general, an RRG is an insurance company that only insures the
liability risks of its owners. See 15 U.S.C. § 3901(a)(4)(A), (E).
However, § 3901(a)(4) enumerates several requirements that an RRG must
satisfy in order to come within the scope of the LRRA’s coverage.
    2
        Moreover, it appears that ANI has never sought to obtain one.
             ALLIANCE OF NONPROFITS V. KIPPER                         7

    Under Nevada’s Motor Vehicle Insurance and Financial
Responsibility Act (“NMVIFRA”),3 Nev. Rev. Stat.
§§ 485.010–.420, automobile owners (who have registered
their cars in the state) must obtain their first dollar liability
policy from a provider who is “authorized to transact
business” in Nevada. Id. §§ 485.185, .037(1), .055(1). Only
insurers who possess a “certificate of authority” from the
Commissioner are authorized to transact business in the state.
Id. § 679A.030(1). ANI does not have such a certificate. As
a result, in April 2010, the Nevada Department of Motor
Vehicles (“DMV”) began denying vehicle registrations to
vehicle owners who obtained their first dollar liability
policies from ANI.

    In May 2010, ANI sought a hearing before the
Commissioner. Following the hearing, the Commissioner
issued an Order prohibiting ANI from writing first dollar
liability policies in Nevada. The Commissioner’s Order
contained the following relevant provision:4

         1. ANI shall, within sixty (60) days from the
            date of this Order, cease and desist writing
            first dollar or mandated motor vehicle
            financial responsibility insurance
            coverage, required by NRS 485.3091.
            ANI may directly write excess liability

 3
   Laws like the NMVIFRA, which require motorists to provide proof of
financial responsibility, are referred to generically in this opinion as
“MVIFRAs”—motor vehicle insurance and financial responsibility acts.
 4
   The Commissioner amended paragraph 1 of the Order two days after
entering it. The portion of paragraph 1 quoted above contains the
amended provision.
8             ALLIANCE OF NONPROFITS V. KIPPER

              coverage; however, a fronting
              arrangement with an authorized insurer
              that holds a valid Nevada certificate of
              authority shall be required to provide first
              dollar or mandated motor vehicle financial
              responsibility insurance coverage,
              required by NRS 485.3091.

Primarily, the Commissioner enjoined ANI from writing first
dollar liability insurance, because it did not possess a
Certificate of Authority and, therefore, was not an
“authorized insurer.”5

   ANI then filed this lawsuit, in the United States District
Court for the District of Nevada, seeking declaratory and

    5
    Though it could be implied, the Order does not explicitly state that
ANI was prohibited from obtaining a Certificate of Authority from the
Commissioner. It states that “[i]nsurers that hold a Nevada certificate of
authority are . . . subject to the Nevada Insurance Guaranty Association
(‘NIGA’),” but acknowledges that—under the LRRA—RRGs like ANI
“cannot participate in the NIGA.” See 15 U.S.C. § 3902(a)(2). Such a
statutory scheme would clearly be preempted by the LRRA under
National Warranty Ins. Co. RRG v. Greenfield, 214 F.3d 1073 (9th Cir.
2000). See infra. However, it appears that this may not be how Nevada’s
statutory scheme actually operates. After the parties filed motions for
summary judgment, the Commissioner filed an affidavit to “clarify any
possible ambiguity” in the Order. That affidavit indicates that domestic
RRGs can become authorized insurers by obtaining a Nevada Certificate
of Authority, and that RRGs are not required to join the NIGA in order to
obtain such a certificate. Assuming that the Commissioner’s affidavit
correctly states the law, RRGs may therefore write first-dollar liability
policies in Nevada. However, the affidavit does not state that this route
is available to foreign RRGs, like ANI. Additionally, while the
Commissioner’s interpretations of state statutes in the affidavit are well-
taken, the Commissioner has not pointed to a Nevada law that would
permit his affidavit to change the legal effect of the Order.
           ALLIANCE OF NONPROFITS V. KIPPER                 9

injunctive relief against the Commissioner and the Division
of Insurance under 42 U.S.C. § 1983. The parties filed cross-
motions for summary judgment. Ruling on the motions, the
district court granted summary judgment to ANI in an order
without any discussion. The relevant parts of the order state:

           IT IS FURTHER ORDERED THAT Nev.
       R. Stat. 485.185, Nev R. Stat. 679A.030(1)
       and Nev. R. Stat. 687A.040 and related
       statutes and regulations of the State of Nevada
       are preempted by the [LRRA] pursuant to the
       Supremacy Clause of the Constitution, as
       applied to [ANI] insofar as they prohibit
       [ANI] from issuing first dollar automobile
       liability insurance policies in the State of
       Nevada.

           IT IS FURTHER ORDERED THAT the
       phrase “authorized insurer,” as used in the
       Nev. R. Stat. 679A.030, shall be interpreted to
       include [RRGs] such as [ANI].

           IT IS FURTHER ORDERED THAT
       defendants are permanently enjoined from
       enforcing Nev. R. Stat. 485.185, Nev. R. Stat.
       679A.030(1) and Nev. R. Stat. 687A.040 and
       related statutes and regulations against
       members of [ANI], insofar as they prohibit
       [ANI] from issuing first dollar automobile
       liability insurance policies in the State of
       Nevada.

          IT IS FURTHER ORDERED THAT
       [ANI] is entitled to a remedy under 42 U.S.C.
10           ALLIANCE OF NONPROFITS V. KIPPER

        § 1983 and, therefore is entitled to an award
        of attorney fees under 42 U.S.C. § 1988 to be
        set pursuant to FRCP 54.

    As the prevailing party, ANI then requested $127,828.00
in fees and $4,643.41 in costs. In its request, ANI sought to
recover fees and costs both for itself and for its amicus, the
National Risk Retention Association (NRRA). For itself,
ANI requested $83,572.50 in fees and $3,341.75 in costs. For
the NRRA, ANI requested $44,255.50 in fees and $1,301.66
in costs. On November 2, 2011, the district court awarded
ANI $86,914.25 in fees and costs, but only awarded costs to
the NRRA in the amount of $1,301.66. The Commissioner
then appealed.

    On appeal, the Commissioner challenges both the grant of
summary judgment and the award of attorneys’ fees.6 The
Commissioner argues that ANI was not entitled to declaratory
or injunctive relief, because the LRRA does not preempt
Nevada law. The Commissioner also argues that, even if the
LRRA does preempt Nevada law, ANI was not entitled to
attorneys’ fees. We affirm the district court’s entry of
declaratory and injunctive relief, but vacate the fee award.

  6
    The Commissioner does not challenge the district court’s award of
costs on appeal, and neither ANI nor the NRRA have cross-appealed the
district court’s denial of fees to the NRRA.
              ALLIANCE OF NONPROFITS V. KIPPER                           11

                            DISCUSSION

I. The district court correctly held that the LRRA
   preempts the Commissioner’s Order.

    We review the district court’s grant of summary judgment
to ANI, finding that the LRRA preempts the Commissioner’s
Order, de novo. Schmidt v. Contra Costa Cnty., 693 F.3d
1122, 1132 (9th Cir. 2012). “In this case, there are no
disputes about the material facts.” Samson v. City of
Bainbridge Island, 683 F.3d 1051, 1057 (9th Cir. 2012).
Therefore, “the only question is the legal one of whether [the
LRRA preempts Nevada law].”7 Id.

    The LRRA broadly preempts “any State . . . order to the
extent that such . . . order would . . . make unlawful, or
regulate, directly or indirectly, the operation of [an RRG].”
15 U.S.C. § 3902(a)(1). Here, the Commissioner’s Order
makes it unlawful for ANI, an RRG, to operate in Nevada, to
the extent ANI sought to write first dollar liability insurance.
Thus, the Order plainly fits within the scope of LRRA
preemption. Because the Order fits within the scope of

  7
    The parties did not clearly identify whether the state law at issue was
the Commissioner’s Order or Nevada’s statutory scheme. However, ANI
appealed from the district court’s summary judgment order, where the
court held that the LRRA preempted a group of Nevada statutes “as
applied to [ANI] insofar as they prohibit [ANI] from issuing first dollar
automobile liability insurance policies in the State of Nevada.” Since the
Commissioner’s Order applied Nevada law to ANI, the preemption
effected by the district court’s decision is logically limited to that Order.
Moreover, at the summary judgment hearing, the court clarified that the
relevant issue was whether the Commissioner’s Order was preempted, not
whether the state statutes themselves were preempted. Like the district
court, we therefore confine our analysis to the Commissioner’s Order.
12           ALLIANCE OF NONPROFITS V. KIPPER

LRRA preemption, it is invalid unless one of the LRRA’s
exceptions from preemption applies.

    Only one exception is relevant here.8 Section 3905(d)
saves from preemption state laws that “specify acceptable
means of demonstrating financial responsibility where the
State has required a demonstration of financial responsibility
as a condition for obtaining a license or permit to undertake
specified activities.” 15 U.S.C. § 3905(d). Nevada’s
MVIFRA (which gave rise to the Commissioner’s Order) is
an example of such a state statute. The NMVIFRA requires
those who own or operate a vehicle in Nevada to demonstrate
financial responsibility in order to register and operate the
vehicle. See Nev. Rev. Stat. § 485.187(1)(a); id. § 482.205.
Owners and operators demonstrate financial responsibility by
providing proof of insurance from an authorized insurance
provider in specified minimum coverage amounts. Id.
§ 485.185.

    Section 3905(d) of the LRRA preserves Nevada’s ability
to specify which types of insurance may satisfy this
requirement. Specifically, § 3905(d) permits states to
“include or exclude insurance coverage obtained from . . . [an
RRG]” as a means of satisfying the state’s financial
responsibility requirements. 15 U.S.C. § 3905(d). Arguably,
the Commissioner’s Order does not fit within this exception,
because it bars ANI from writing a certain type of insurance

  8
    The Commissioner and his amicus suggest that the exception from
preemption in 15 U.S.C. § 3905(a) applies in this case. That section
carves out from the LRRA’s general preemption “the policy form or
coverage requirements of any State motor vehicle no-fault or motor
vehicle financial responsibility insurance law.” 15 U.S.C. § 3905(a).
However, this exception does not apply here, because the Commissioner’s
Order had nothing to do with policy form or coverage requirements.
            ALLIANCE OF NONPROFITS V. KIPPER                13

policy altogether. Thus, it goes beyond merely excluding
first dollar liability policies written by ANI from the
acceptable class of insurance policies that will satisfy
Nevada’s financial responsibility requirement.

    Assuming, however, that the Order fits within the scope
of § 3905(d), it still would not qualify for the exception.
Section 3905(d) is “subject to the provisions of section
3902(a)(4)”—the LRRA’s anti-discrimination provision.
Section 3902(a)(4) preempts state laws that “otherwise,
discriminate against a risk retention group or any of its
members.” Under our precedent, the Commissioner’s Order
discriminates against ANI in violation of this section.

    In National Warranty Insurance Co. v. Greenfield,
214 F.3d 1073 (9th Cir. 2000), we held that the LRRA
preempted the Oregon Service Contract Act (the “OSCA”),
and that the OSCA did not qualify for the § 3905(d)
exception from preemption. Similar to the NVMIFRA, the
OSCA required car dealers in Oregon who sold vehicle
service contracts to demonstrate financial responsibility by
obtaining insurance coverage for their contract obligations
from an “authorized insurer.” Id. at 1075–76. Through a
combination of state statutes and the LRRA, RRGs not
domiciled in Oregon could not become authorized insurers,
because they could not obtain a “certificate of authority.” Id.
at 1076. As a result, Oregon “effectively preclude[d] all
RRGs from providing insurance coverage for motor vehicle
service contracts.” Id. at 1076 (emphasis added). We
concluded that such laws, which exclude all RRGs from
providing a certain type of insurance, do not qualify for the
§ 3905(d) exception.
14            ALLIANCE OF NONPROFITS V. KIPPER

    We also held that the OSCA violated the § 3902(a)(4)
anti-discrimination provision.9 Id. at 1082. To make that
determination, we held that insurers could prove that a state
law discriminated in violation of § 3902(a)(4) by showing
that a law differentiates between insurance providers “without
an acceptable justification.” Id. at 1081. Thus, to survive
§ 3902(a)(4), “the state must show that a law differentiating
between an RRG and an [authorized insurer]—or between all
RRGs and all [authorized insurers]—is justified by the desire
to” “protect those who would benefit from the purchase of
insurance.” Id. at 1078, 1081. Members of the public, who
may suffer harm as a result of the policyholder’s conduct,
benefit from the purchase of first dollar liability policies. The
insurer’s obligation under the policy to pay claims made
against its insured increases an injured individual’s
opportunity for recovery. The LRRA expressly permits states
to regulate RRGs in order to protect the interests of such
individuals. As a result, “state laws requiring an RRG to
engage in fair settlement practices, to designate an agent for
the service of process, to submit to examinations necessary to
insure financial soundness, [and] to avoid false and
misleading advertisements” are exempt from preemption. Id.;
see also 15 U.S.C. § 3902(a)(1). Nevertheless, in National
Warranty, the State of Oregon did not offer such a
justification for preventing all RRGs from writing insurance
that would satisfy the OSCA’s financial responsibility

 9
    In part of that holding not relevant here, we concluded that § 3905(d)
“permits the state to exclude coverage only from particular RRGs,” not
from all RRGs. Id. at 1078, 1081–82 (emphasis added). Oregon’s
statutory scheme did not fit within this provision, because the OIGA
membership requirement effectively precluded all RRGs from writing
service-contract insurance.         However, as discussed above, the
Commissioner’s Order excluded only a particular RRG (ANI), which
National Warranty permits if it is non-discriminatory.
           ALLIANCE OF NONPROFITS V. KIPPER                15

requirement. Id. at 1081–82. By differentiating between
RRGs and authorized insurers without an acceptable
justification, the OSCA violated § 3902(a)(4).

    We reach the same conclusion in this case. The
Commissioner’s Order bars ANI from writing first dollar
insurance, because ANI does not possess a Certificate of
Authority. The Order itself does not provide any other
acceptable justification for treating ANI differently than
authorized insurers; the Commissioner has not cited any other
acceptable justification on appeal. Thus, the Order violates
§ 3902(a)(4) by differentiating between ANI and authorized
insurers without an acceptable justification. Accordingly, it
cannot be saved from preemption by § 3905(d).

    None of the Commissioner’s objections to this analysis
are persuasive. First, the Commissioner urges us to overrule
National Warranty and to instead adopt the reasoning of the
Eleventh and Seventh Circuits. See Mears Transp. Grp. v.
Florida, 34 F.3d 1013 (11th Cir. 1994); Opthalmic Mutual
Ins. Co. v. Musser, 143 F.3d 1062 (7th Cir. 1998). Under
those cases, a plaintiff could only prove discrimination under
§ 3902(a)(4) by proving intentional discrimination. Mears,
34 F.3d at 1018; Opthalmic, 143 F.3d at 1069–70. However,
under our circuit precedent, we must apply National
Warranty here. It is binding authority that no competent
body has overruled. See Gonzalez v. Arizona, 677 F.3d 383,
389 n.4 (9th Cir. 2012) (en banc). Additionally, we decided
National Warranty after both Mears and Opthalmic, and
considered the reasoning of those opinions before reaching
our holding in National Warranty. See National Warranty,
214 F.3d at 1082 (“[W]e know that, in deciding [this case] as
we do, we disagree with the Seventh and Eleventh Circuits.”).
16            ALLIANCE OF NONPROFITS V. KIPPER

Accordingly, we decline the Commissioner’s invitation to
revisit National Warranty.

     Second, the Commissioner argues that Nevada’s statutory
scheme is not discriminatory. Even if that is true, the
Commissioner’s argument misses the point that the state law
at issue here is the Commissioner’s Order, which prohibits
ANI from writing first dollar liability insurance. Thus, it is
not relevant to this case that (as the Commissioner asserts)
state statutes do not prevent domestic RRGs from obtaining
Certificates of Authority and, therefore, writing first dollar
liability insurance. It is also not relevant that foreign RRGs
like ANI could use certain workarounds to effectively write
first dollar insurance in other ways, e.g., by self-insuring, or
entering into a “fronting” arrangement with a Nevada-based
company.10 Because the Commissioner’s Order itself is
discriminatory, it is preempted by the LRRA.

  Finally, the Commissioner argues that, even if Nevada’s
MVIFRA does discriminate against RRGs, that

   10
      In addition to being irrelevant, these options are not satisfactory
alternatives for foreign RRGs like ANI. ANI cannot use self-insurance to
provide liability insurance to its members, because only entities that own
more than ten vehicles may satisfy the financial responsibility requirement
by self-insuring. See Nev. Rev. Stat. § 485.380(1). ANI is an insurer, not
an insured, and thus it does not own any vehicles in Nevada.
Additionally, forcing ANI to take the circuitous route of entering into a
fronting arrangement with a Nevada-based entity in order to provide first
dollar liability policies to nonprofits within the state is contrary to the
purposes of the LRRA. One of the main purposes for the LRRA’s
enactment was the elimination of state-law hurdles to interstate operation.
See infra p. 22. Thus, although Nevada law would technically permit ANI
to effectively provide first dollar liability insurance through other means,
the fact remains that ANI (and presumably other foreign RRGs) would be
the only insurance companies required to take those steps.
            ALLIANCE OF NONPROFITS V. KIPPER                   17

discrimination is justified, because it is done in the interest of
protecting “innocent third parties” who may be harmed by a
policyholder, and therefore make a claim against the
insurance company. Although we are not analyzing Nevada’s
MVIFRA itself here, we will assume that the Commissioner
would offer this same justification in support of his Order.
On that assumption, we have recognized that the “state’s
desire to protect those who would benefit from the purchase
of insurance” could justify differentiating between an RRG
and another insurer. See National Warranty, 214 F.3d at
1081. However, this policy concern fails to justify the
Commissioner’s differentiation between ANI and authorized
insurers. The Commissioner does not suggest that, because
it lacks a Certificate of Authority, ANI presents a greater risk
to those who would benefit from the purchase of insurance
than an authorized insurer. Contrary to the Commissioner’s
assertion, a Certificate of Authority is not necessary to
provide such protection. Nevada law requires RRGs (who
don’t have a Certificate of Authority) to comply with
requirements that facilitate the Commissioner’s oversight of
their operations. Nev. Rev. Stat. § 695E.140(3). For
example, each foreign RRG must submit to examinations by
the Commissioner “to determine its financial condition.” Id.
§ 695E.190(1); see also 15 U.S.C. § 3902(a)(1)(E) (excepting
such requirements from preemption under the LRRA).
Further, as recognized in National Warranty, the LRRA
permits states to protect the interest of those who benefit from
the purchase of insurance through a variety of means,
obviating the need for an RRG to obtain a Certificate of
Authority from a state. See National Warranty, 214 F.3d at
1081. Therefore, the Commissioner can still protect innocent
third parties against the risks ANI might present, even though
it does not have a Certificate of Authority. Accordingly, the
18            ALLIANCE OF NONPROFITS V. KIPPER

Commissioner’s proffered justification for treating ANI
differently from an authorized insurer fails.

    We agree with the district court that the LRRA preempts
the Commissioner’s Order. Accordingly, we affirm the
district court’s grant of summary judgment to ANI on its
preemption claim.

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

    Because ANI brought this suit under 42 U.S.C. § 1983
and was the prevailing party, the district court awarded ANI
attorneys’ fees under 42 U.S.C. § 1988. On appeal, the
Commissioner argues that ANI was not entitled to attorneys’
fees, because preemption of state law under the LRRA is not
a “right” that can be enforced under 42 U.S.C. § 1983. We
agree with the Commissioner, and vacate the fee award.11

    As a predicate to an award of attorneys’ fees under
42 U.S.C. § 1988, one must bring an “action or proceeding to
enforce . . . [42 U.S.C. § 1983].” 42 U.S.C. § 1988(b).
Section 1983 provides a cause of action for the “deprivation
of any rights, privileges, or immunities, secured by the
Constitution and laws [of the United States].” Therefore, to
determine whether ANI is entitled to an award of attorneys’

 11
    Because we conclude that the LRRA does not confer a right to be free
from state law that can be enforced under § 1983, we do not need to reach
the Commissioner’s argument that he is immune from liability for fees.
Additionally, we note that federal statutes other than § 1983 provided the
district court with authority to enter declaratory and injunctive relief. See
28 U.S.C. § 2201; 28 U.S.C. § 2202; see Rincon Band of Mission Indians
v. Harris, 618 F.2d 569, 575 (9th Cir. 1980) (noting that 28 U.S.C. § 2202
authorizes district courts to grant injunctive relief).
              ALLIANCE OF NONPROFITS V. KIPPER                         19

fees, we must first determine whether the LRRA’s
preemption provision confers an enforceable right to be free
from state law. No federal courts of appeal have directly
analyzed whether 15 U.S.C. § 3902 of the LRRA confers
such a right on RRGs.12

    “[T]he Supremacy Clause, of its own force, does not
create rights enforceable under § 1983.” See Golden State
Transit Corp. v. City of L.A., 493 U.S. 103, 107 (1989)
(footnote omitted). Accordingly, “it would obviously be
incorrect to assume that a federal right of action pursuant to
§ 1983 exists every time a federal rule of law pre-empts state
regulatory authority.” Id. at 108. Instead, we must analyze
the statute that allegedly gives rise to the enforceable right to
determine whether Congress conferred such a right in the
statute. In Blessing v. Freestone, 520 U.S. 329, 340–41
(1997), the Supreme Court outlined the three-factor
framework for conducting such an analysis. A statute only
confers an enforceable right if (1) the plaintiff demonstrates
that “Congress . . . intended that the provision in question
benefit the plaintiff,” (2) “the plaintiff . . . demonstrate[s] that
the right assertedly protected by the statute is not so ‘vague
and amorphous’ that its enforcement would strain judicial
competence,” and (3) “the provision giving rise to the

 12
     In White Mountain Apache Tribe v. Williams, 810 F.2d 844 (9th Cir.
1987), we held that claims of field and conflict preemption were not rights
that could be enforced under § 1983. Id. at 850. However, White
Mountain does not control this case, because the LRRA preempts state
law expressly. See 15 U.S.C. § 3902(a). Additionally, in National
Warranty, the district court concluded that LRRA preemption could be
enforced under § 1983. 24 F. Supp. 2d. 1096, 1109–10 (D. Or. 1998). We
affirmed, but did not address the issue of whether actual preemption
conferred a right that could be enforced under § 1983. See generally
National Warranty, 214 F.3d 1073.
20          ALLIANCE OF NONPROFITS V. KIPPER

asserted right [is] couched in mandatory, rather than
precatory, terms.” Id. The Supreme Court clarified what
evidence was sufficient to satisfy the first factor in Gonzaga
University v. Doe, 536 U.S. 273, 276 (2002). There, the
Court held that the mere fact that a plaintiff benefited from a
statute did not give him or her a right to sue under § 1983
when the statute was violated. See id. at 283; see also
Blessing, 520 U.S. at 340 (“In order to seek redress through
§ 1983, however, a plaintiff must assert the violation of a
federal right, not merely a violation of federal law.”). Rather,
Congress must have “unambiguously conferred” a right on a
plaintiff for that plaintiff to have a cause of action under
§ 1983. Gonzaga Univ., 536 U.S. at 283.

    Here, even though ANI benefits from the LRRA
(particularly the freedom from multiplicitous and
discriminatory state regulation), “fall[ing] within the general
zone of interest that the statute is intended to protect” is not
enough. Id. at 283. Rather, to enforce LRRA preemption
under § 1983, ANI must demonstrate that Congress
“unambiguously conferred [a] right” on it. Id. Analyzing the
text of 15 U.S.C. § 3902(a)(1) and the legislative history of
the LRRA, we cannot say that Congress unambiguously
conferred a right on RRGs to be free from state law in the
LRRA. See Gonzaga Univ., 536 U.S. at 286; Ball v. Rodgers,
492 F.3d 1094, 1106 (9th Cir. 2007) (“[W]e have sometimes
turned to a statute’s legislative history to help flesh out
congressional intent regarding the creation of a federal
right.”).

    Initially, looking exclusively at the text of § 3902(a)(1),
one could conclude that Congress did employ “rights-creating
language” when it preempted state laws that regulate RRGs.
Gonzaga Univ., 536 U.S. at 287. In Gonzaga University, the
            ALLIANCE OF NONPROFITS V. KIPPER                    21

Court pointed to the “individually focused terminology of
Titles VI and IX” as paradigmatic rights-creating language.
See Gonzaga Univ., 36 U.S. at 284 n.3, 287. Title VI
provides that “No person in the United States shall . . . be
subjected to discrimination under any program or activity
receiving Federal financial assistance.” 42 U.S.C. § 2000d.
Employing a similar construction, Title IX states “No person
in the United States shall, on the basis of sex, . . . be subjected
to discrimination under any education program or activity
receiving Federal financial assistance.” 20 U.S.C. § 1681(a).
Such language, which is “phrased in terms of the persons
benefited,” is necessary evidence that Congress intended to
create an enforceable right. See id. at 284 & n.3.

    Like the terminology of Title VI and Title IX, the
language of § 3902(a) is also phrased in terms of the
“benefited” person. Section 3902(a) specifies that “a risk
retention group is exempt from any State law, rule,
regulation, or order . . . .” 15 U.S.C. § 3902(a). Thus, just as
Titles VI and IX declare that no person shall be subject to
discrimination, § 3902(a) effectively declares that no RRG
shall be subject to state regulation. All three statutes are
phrased in terms of the benefited party. Yet, even if such
language is necessary to the conclusion that Congress
intended to create an enforceable right, see Watson v. Weeks,
436 F.3d 1152, 1159 (9th Cir. 2006), that does not mean it is
sufficient to do so. Rather, we ultimately must determine
whether “Congress intended to create a federal right.”
Gonzaga Univ., 536 U.S. at 283. The legislative history of
the LRRA indicates that Congress had no intention of
conferring a right to be free from state law on RRGs that
would be enforceable under § 1983.
22          ALLIANCE OF NONPROFITS V. KIPPER

    Fundamentally, Congress enacted the LRRA to increase
the supply of commercial liability insurance nationwide—not
to confer rights on individual RRGs. See H. R. Rep. No. 99-
865, at 7–8 (“The purpose of [the LRRA] is to facilitate the
formation and operation of risk retention groups and
purchasing groups.”) (“[The] creation of self-insurance
groups can provide much-needed new capacity.”); see also
Home Warranty Corp. v. Caldwell, 777 F.2d 1455, 1472
(11th Cir. 1985) (discussing purpose of the Product Liability
Risk Retention Act, predecessor to the LRRA). Thus,
Congress primarily enacted the LRRA to benefit buyers of
insurance, rather than the insurance companies themselves.
Preemption of state laws directly effectuated that purpose,
because states had “created capital and other requirements
that ma[de] it difficult for [RRGs] to form or to operate on a
multi-state basis.” H. Rep. No. 99–865, at 8. Clearly, RRGs
stood to benefit from freedom from some state regulations.
However, whatever salutary effect preemption had for
individual RRGs was only incidental to the ultimate purpose
of increasing the available supply of commercial liability
insurance. This sort of incidental benefit does not rise to the
level of the “unambiguously conferred” right that Gonzaga
University requires us to find. Gonzaga Univ., 536 U.S. at
283; see also Golden State, 493 U.S. at 109 (“[W]hen
congressional pre-emption benefits particular parties only as
an incident of the federal scheme of regulation, a private
damages remedy under § 1983 may not be available.”).

    Our analysis of the first Blessing factor is sufficient to
determine that Congress did not intend to confer an
enforceable right on RRGs in the LRRA, so we will not
address the remaining two factors. Therefore, we conclude
that § 3902(a) of the LRRA does not confer on RRGs a right
              ALLIANCE OF NONPROFITS V. KIPPER                          23

to be free from state law that can be enforced under § 1983.13
As a result, the instant litigation ceases to be an “action . . . to
enforce a provision of [§ 1983],” eliminating the statutory
basis for an award of attorneys’ fees. See 42 U.S.C. § 1988.
Accordingly, we vacate the fee award.

III.     The district court did not commit reversible error
         when it ruled on pending motions before the
         deadline for filing a response had passed.

    Finally, we must determine whether the district court
committed reversible error when it granted several motions in
alleged violation of its own local rule. “The rulings of the
district courts regarding local rules are reviewed for abuse of
discretion.” Prof’l Programs Grp. v. Dep’t of Commerce,
29 F.3d 1349, 1353 (9th Cir. 1994). “District judges must
adhere to their court’s local rules, which have the force of
federal law.” In re Corrinet, 645 F.3d 1141, 1146 (9th Cir.
2011). However, only “a departure from local rules that
affects ‘substantial rights’ requires reversal.”         Prof’l
Programs Grp., 29 F.3d at 1353; Fed. R. Civ. P. 61.
Conversely, a departure should not be reversed “if the effect
is so slight and unimportant that the sensible treatment is to
overlook it.” Id. (internal quotation marks and alteration
omitted).

    13
       Supporting our conclusion, courts have repeatedly declined to
recognize that preemption provisions give rise to a non-specific right to be
free from state law that can be enforced under § 1983. E.g., Sprint
Telephony PCS, L.P. v. Cnty. of San Diego, 490 F.3d 700 (9th Cir. 2007)
(Telecommunications Act, 47 U.S.C. § 253(a)); Loyal Tire & Auto Center,
Inc. v. Town of Woodsbury, 445 F.3d 136, 150 (2d Cir. 2006) (Interstate
Commerce Act, 49 U.S.C. § 14501(c)(1)); Wachovia Bank, N.A. v. Burke,
414 F.3d 305, 323 (2d Cir. 2005) (National Banking Act, 12 U.S.C. § 21
et seq.).
24          ALLIANCE OF NONPROFITS V. KIPPER

    Here, the relevant local rule states, “Unless otherwise
ordered by the court, points and authorities in response shall
be filed and served by an opposing party fifteen (15) days
after service of the motion.” D. Nev. R. 7-2(b) (2006). The
Commissioner argues that the district court violated this rule
when it granted three different motions in this case.

    First, we address two motions for leave to submit amicus
briefs filed by the NRRA and the Self-Insurance Institute of
America on January 31, 2011. The district court granted
these motions nine days later, on February 9, 2011, before the
Commissioner submitted a response. The district court did
not err by ruling on these motions at that time. Under its
plain language, Local Rule 7-2(b) does not guarantee parties
a period of time to file a response. Rather, it limits the period
in which a response may be filed to fifteen days. Moreover,
assuming that the district court did violate Local Rule 7-2(b),
neither motion raised issues that affected the Commissioner’s
substantial rights. The Commissioner does not articulate how
the admission of two additional amici affected the outcome
of the district court proceeding; he only argues that he was
denied his chance to file an opposition to their admission.

    Second, we address ANI’s March 21, 2011 motion
seeking leave to supplement a previously filed reply. The
Commissioner filed a response on March 23, 2011, but the
district court granted ANI’s motion on March 24, 2011
without acknowledging the Commissioner’s response. The
Commissioner does not allege how the district court’s failure
to consider his response affected any substantial rights.
Instead, he argues that he was “forced to file a motion asking
the District Court to ‘re-consider’ arguments never even
considered.” However, enduring the process of filing an
additional motion does not, by itself, affect the outcome of
            ALLIANCE OF NONPROFITS V. KIPPER                25

the proceeding. Further, in this instance, the outcome clearly
was not affected. After the district court granted ANI’s
motion, the Commissioner filed a motion for reconsideration.
In that motion, the Commissioner re-submitted the response
that the district court allegedly overlooked the first time.
Considering the response explicitly when ruling on the
motion for reconsideration, the district court reached the same
conclusion. 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 litigation.

    The district court’s errors—if any—did not affect the
Commissioner’s substantial rights. Rather, they seem
“slight” and “unimportant,” and we think the “sensible
treatment” is to overlook them. Prof’l Programs Grp.,
29 F.3d at 1353.

                      CONCLUSION

    The Commissioner’s Order, which barred ANI from
writing first dollar liability insurance policies in Nevada, is
preempted by the LRRA, 15 U.S.C. § 3902(a). Therefore, we
AFFIRM the district court’s entry of declaratory and
injunctive relief. However, the LRRA does not confer a right
to be free from state law that can be enforced under 42 U.S.C.
§ 1983, making fees under 42 U.S.C. § 1988 unavailable.
Therefore, we VACATE the fee award.
26         ALLIANCE OF NONPROFITS V. KIPPER

    Finally, we REMAND so that the district court can enter
a new summary judgment order consistent with this opinion.
The parties shall bear their own costs on appeal. See Fed. R.
App. P. 39(a)(4).

  AFFIRMED in part, VACATED in part, and
REMANDED.