NRRA Files Amicus Curiae Brief in Continuing Effort To Benefit RRGs

A wooden gavel on top of several legal books

May 19, 2016 |

A wooden gavel on top of several legal books

The National Risk Retention Association (NRRA) last month filed an amicus curiae brief in the Louisiana Supreme Court in support of CPA Mutual Insurance Company of America Risk Retention Group (CPA) in the ongoing case of Zeigler v. Hous. Auth. of New Orleans Hano, 2016 La. App. LEXIS 574 (La. App. 4 Cir. Mar. 23, 2016), according to an NRRA press release.

CPA filed its writ of certiorari before the Louisiana Supreme Court on the same day, the press release stated.

In Courville v. Allied Prof'ls Ins. Co., 179 So. 3d 615 (La. 2015), the First Circuit Court of Appeals upheld Allied's right to arbitration, likewise holding that the direct action statute could not be applied to a foreign risk retention group (RRG) as preempted by the Liability Risk Retention Act (LRRA), the press release stated. In Zeigler, however, the Fourth Circuit Court of Appeals denied that right (e.g., the exact opposite of Courville), thus leading NRRA to file its briefing in support of CPA's writ, based on the "split" of authority in the state caused by two conflicting court of appeal decisions, according to the NRRA press release.

CPA was added before the trial court as a named defendant in its capacity as the liability insurer for one of its insured members, under that state's "direct action" statute, the press release explained. CPA was dismissed by the trial court on the same grounds as cited in Courville v. Allied Prof'ls Ins. Co., the press release said. The plaintiff appealed and the Fourth Circuit Court of Appeals reversed using an unusual procedural basis, placing Zeigler at odds with Courville, decided last year by the First Circuit Court of Appeals in Louisiana, the NRRA press release said.

The NRRA amicus curiae (which translated means "friend of the court") brief mirrors that which it filed on behalf of CPA while the case was on appeal and elaborates on the growing list of substantial judicial decisions favoring LRRA preemption, where state insurance regulations are being used to attempt regulation of the insurance being offered by RRGs, the NRRA explained in its press release. This process is expressly preempted by the federal statute.

The brief filed on behalf of CPA Mutual represents the culmination of many years of NRRA's efforts to refine, define, and truly focus on the best of the best arguments, case authorities, and writings of the key court decisions positively affecting this industry, according to the NRRA's press release.

"We have learned how to capitalize upon the favorable findings and nuances of the cases NRRA has prevailed on over the last 20 years, and to articulate intelligently how the handful of unfavorable cases against us are distinguishable simply because they are flawed in their reasoning, or are simply a misinterpretation of the federal law," said Joe Deems, NRRA executive director, as quoted in the press release. "Our amicus cases actually go back into the '90s, and the APIC cases have cemented our posture, because of the ongoing need to have an actual case in controversy as a prerequisite to filing an amicus brief which cannot be filed without an identified litigating party to the case to support.

"CPA is now added to this list," Mr. Deems said in the press release.

NRRA previously filed amicus curiae briefings in both Courville (Allied Professionals) and Zeigler (CPA Mutual), two different cases. As explained in the NRRA's press release, the two cases rested on legal questions that are essentially identical: both companies are reported to have had "arbitration" clauses in their policy, yet both insurers were named directly in the suits under Louisiana's direct action statute, which would have the effect of circumventing each insurer's right to arbitrate claims, in lieu of having them adjudicated before a judge or jury.

"As a lawyer, I am proud of where we have legalistically evolved, so far," said Mr. Deems, as quoted in the press release. "As CEO of NRRA, I am proud of how we have been able to marshal our modest resources and to guide and motivate the landscape and complexity of talented personalities to create an organized and persuasive system for dealing with these issues, which has resulted in a usable library of briefing tools and resources that will benefit our members for many years to come."

May 19, 2016