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Auto Dealers Risk Retention Group, Inc. v. Steve Poizner Doc.

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Case 2:07-cv-02660-FCD-KJM Document 20 Filed 12/14/2007 Page 1 of 3

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8 IN THE UNITED STATES DISTRICT COURT
9 FOR THE EASTERN DISTRICT OF CALIFORNIA
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11 AUTO DEALERS RISK RETENTION GROUP, )
INC., )
12 ) 2:07-cv-02660-FCD-KJM
Plaintiff, )
13 )
v. ) ORDER
14 )
STEVE POIZNER, in his capacity as )
15 the Commissioner of Insurance of )
the State of California, )
16 )
Defendant. )
17 )
18 On December 13, 2007, Plaintiff filed an Ex Parte
19 Application for a Temporary Restraining Order (“Application”). A
20 Minute Order issued on December 13, 2007, scheduling the Application
21 for hearing on December 14, 2007. Defendant filed his opposition just
22 before the hearing on December 14, 2007.1
23 On December 4, 2007 Defendant issued a Cease and Desist
24 Order to Plaintiff because it had “not established that it is licensed
25 exclusively as a liability insurance company in a state of the United
26 States,” and the policies respondent proposes to write “are not
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28 Since Plaintiff waited until the eleventh hour to file the
Application, Defendant was not given much time to respond.

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Case 2:07-cv-02660-FCD-KJM Document 20 Filed 12/14/2007 Page 2 of 3

1 liability insurance as authorized in the Federal Liability Risk


2 Retention Act of 1986 (“FLRRA” or “ACT”)." (Sweet Decl. Exh. H at 3.)
3 The cease and Desist Order ordered Defendant “to immediately [cease
4 and desist] the transaction of insurance in the State of California,
5 including the solicitation, marketing, sale and issuance of any new or
6 renewal stop-loss insurance contracts and/or any other type of
7 insurance contracts in California [and] within ten days of receiving
8 this Order [by December 17, 2007] notify all of its current California
9 auto members that any purported policy of stop-loss coverage issued by
10 Respondent at any time in the past is null and void and immediately
11 cancelled.” Id. at 4 ¶¶ 19, 20.)
12 Plaintiff argues that a temporary restraining order (“TRO”)
13 must issue to immediately stay the enforcement of the Cease and Desist
14 order because it provides “too short a period for insureds to obtain
15 substitute coverage” and may put Defendant out of business.
16 (Application at 1-2.)
17 “[A] court may issue a [TRO] if the moving party
18 demonstrates either a combination of probable success on the merits
19 and the possibility of irreparable injury or that serious questions
20 are raised and the balance of hardships tips sharply in his favor.”
21 Global Horizons, Inc. v. United States Department of Labor, __F.3d__,
22 2007 WL 4336186. Serious questions are raised as to whether the Act
23 authorizes the type of policy offered by Defendant, and the balance of
24 hardships tips in the favor of Plaintiff and its insured as to the
25 need for Plaintiff’s existing policies not being immediately canceled.
26 Accordingly, the Defendant is temporarily enjoined from enforcing the
27 portion of its cease and desist order that holds otherwise.
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Case 2:07-cv-02660-FCD-KJM Document 20 Filed 12/14/2007 Page 3 of 3

1 A hearing on the preliminary injunction is set for January


2 3, 2008. Defendant shall file his Opposition on December 26, 2007 by
3 4:00 p.m. and Plaintiff’s Reply if any shall be filed no later than
4 4:00 p.m. December 28, 2007.
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6 IT IS SO ORDERED.
7 Dated: December 14, 2007
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9 GARLAND E. BURRELL, JR.
10 United States District Judge

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