Dollar Loan Center of SD v. Bret Afdahl, 933 F.3d 1019

Dollar Loan Center (DLC), a South Dakota licensed money lender, changed its loan product in July 2017 to short-term seven-day loans with high weekly late fees; the Division’s review found APRs (including late fees) of ~301%–488% and late fees accounted for ~90% of income.
The South Dakota Division of Banking conducted a targeted exam (July) and a full exam (August 2017), reviewed hundreds of loans, questioned DLC in writing, and met with DLC’s regional manager and counsel during on-site exams.
On September 13, 2017 Director Bret Afdahl issued a combined cease-and-desist and license revocation order: stop lending in SD, notify post–June 21, 2017 borrowers that loans were void, and surrender licenses; the Division later issued a limited stay (~15 days later) allowing servicing of certain preexisting lawful loans.
DLC sued Afdahl under 42 U.S.C. § 1983, alleging procedural due process violation because licenses were revoked without a pre-deprivation hearing; the district court denied Afdahl qualified immunity and found a deprivation for at least 15 days.
The Eighth Circuit reversed, holding Afdahl entitled to qualified immunity because (1) the Division’s extensive factual investigation provided a substantial basis for the revocation, and (2) a reasonable official would not have been on clear notice that his actions violated a clearly established due process right.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether revoking DLC’s licenses without a pre-deprivation hearing violated procedural due process	DLC: revocation was final administrative action requiring a hearing before deprivation	Afdahl: Division conducted extensive exams and provided opportunity to respond; process was sufficient	Court: No clearly established procedural due process violation given the investigation and opportunity to respond; DLC failed to show violation
Whether Afdahl is entitled to qualified immunity for issuing the order	DLC: Freeman precedent makes the right to a pre-deprivation hearing clearly established	Afdahl: Freeman is distinguishable; officials had substantial factual basis from exams	Court: Qualified immunity applies — reasonable official could have believed action lawful; not clearly established that conduct violated rights
Whether the "quick action" (public welfare) exception justified summary action	DLC: no emergency to bypass full hearing	Afdahl: immediate action justified to protect public welfare; at least not clearly established otherwise	Court: did not conclusively adopt the exception here but held it was not clearly established that the exception did not apply; result supports immunity

Freeman v. Blair, 793 F.2d 166 (8th Cir. 1986) (warrantless inspections and summary suspension case informing pre-deprivation hearing analysis)
Freeman v. Blair, 862 F.2d 1330 (8th Cir. 1988) (qualified immunity reconsideration emphasizing limits on summary suspensions)
Mathews v. Eldridge, 424 U.S. 319 (1976) (due process is a flexible inquiry balancing private and public interests)
Messerschmidt v. Millender, 565 U.S. 535 (2012) (qualified immunity protects reasonable but mistaken judgments)
Anderson v. Creighton, 483 U.S. 635 (1987) (contours of clearly established law standard for qualified immunity)