Court Opinion

ID: 9900895
Source: CourtListenerOpinion
Date Created: 2023-11-20 18:00:45.717491+00
Date Added: 2024-06-11T09:21:21.972507
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                       NOV 20 2023
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

JACOB BENSON, an individual; JOSEPH             No.    22-16829
BENSON; DEBORAH BENSON, husband
and wife; K. B., a minor, by and through        D.C. No. 2:18-cv-00006-DWL
Jacob Benson, guardian ad litem,

                Plaintiffs-Appellees,           MEMORANDUM*

 v.

CONTINUING CARE RISK RETENTION
GROUP, INC., Garnishee,

                Defendant-Appellant,

and

CASA DE CAPRI ENTERPRISES, LLC, an
Arizona limited liability company;
UNKNOWN PARTIES, named as John Does
1-20; ABC Corporations I-X; XYZ
Partnerships I-X,

                Defendants.

                   Appeal from the United States District Court
                            for the District of Arizona
                    Dominic Lanza, District Judge, Presiding

                     Argued and Submitted November 8, 2023
                                Phoenix, Arizona

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Before: HAWKINS and COLLINS, Circuit Judges, and S. MURPHY,** District
Judge.

      Continuing Risk Retention Group, Inc. (“CCRRG”) appeals the district

court’s order denying its renewed motion to compel arbitration.1 We review de novo

the district court’s denial of a motion to compel arbitration, Cape Flattery Ltd. v.

Titan Mar., LLC, 647 F.3d 914, 917 (9th Cir. 2011), and affirm.

      CCRRG argues that it is entitled to compel arbitration because the Liability

Risk Retention Act (“LRRA”) preempts Arizona Revised Statutes (“A.R.S.”)

section 12-1584 and the Arizona Supreme Court’s decision in Benson v. Casa de

Capri Enterprises, LLC, 502 P.3d 461, 465 (Ariz. 2022), which both require a court

to resolve all issues in a contested garnishment action. We disagree.

      The LRRA “leaves regulation of [a risk retention group (“RRG”)] to the state

where the RRG is chartered,” Atty’s Liab. Prot. Soc’y, Inc. v. Ingaldson Fitzgerald,

P.C., 838 F.3d 976, 980 (9th Cir. 2016), and “broadly preempts the authority of

nonchartering states to regulate the operation of risk retention groups within their

borders,” Allied Pros. Ins. Co. v. Anglesey, 952 F.3d 1131, 1132 (9th Cir. 2020).

With several exceptions, the LRRA provides that foreign RRGs are “exempt from

      **
             The Honorable Stephen Joseph Murphy III, United States District
Judge for the Eastern District of Michigan, sitting by designation.
1
      The motion of the National Risk Retention Association to join as amicus
curiae is granted, and the brief at Docket Entry 21 is filed.

                                         2                                   22-16829
any [non-chartering] 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). Importantly,

however, the statute also provides that “nothing in this section shall be construed to

affect the applicability of State laws generally applicable to persons or corporations.”

Id. § 3902(a)(4).

      A.R.S. § 12-1584 and the Arizona Supreme Court’s decision in Benson

provide that participants in an Arizona garnishment proceeding must adhere to a

certain set of statutory procedures. See A.R.S. § 12-1584(E) (providing generally

that, in a garnishment action, “[t]he court, sitting without a jury, shall decide all

issues of fact and law”); Benson, 502 P.3d at 465 (holding that application of direct

benefits estoppel in a garnishment action would “contravene the legislature’s

directive that garnishment proceedings adhere to prescribed statutory procedures”).

Thus, contrary to CCRRG’s arguments, the challenged laws are not specific to

regulation of the insurance business and are distinguishable from the law at issue in

Allied Professionals Insurance Co. See 952 F.3d at 1132 (analyzing state insurance

code provision governing limitations in insurance contracts, including arbitration

clauses). Because the laws are non-specific to the insurance business and are

generally applicable to all corporations and persons, they fall within § 3902(a)(4)’s

savings clause. See Nat’l Warranty Ins. Co. RRG v. Greenfield, 214 F.3d 1073, 1081

                                            3                                     22-16829
(9th Cir. 2000) (describing § 3902(a)(4)’s savings clause as allowing “regulation by

state laws not specifically regulating insurance”). Consequently, the LRRA does not

exempt CCRRG from the challenged provisions of A.R.S. § 12-1584 or the Arizona

Supreme Court’s holding in Benson.2 See 15 U.S.C. § 3902(a).

      AFFIRMED.

2
       During oral argument, CCRRG suggested for the first time that the Federal
Arbitration Act also preempts the Arizona laws at issue. CCRRG did not raise this
argument in its briefing on appeal or in the district court. Therefore, we do not
consider it. See United States v. Kama, 394 F.3d 1236, 1238 (9th Cir. 2005)
(“Generally, an issue is waived when the appellant does not specifically and
distinctly argue the issue in [its] opening brief.”).

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