Red Shield Administration Inc v. Kreidler, 3:21-cv-05551

Background

Red Shield Administration, Inc. ("Red Auto") is a Kansas-incorporated, Arizona-based auto service-contract administrator licensed in most states but not Washington; it does not solicit, advertise, maintain employees, property, or a place of business in Washington.
In March 2019 Red Auto sold a service contract in Portland, Oregon to a purchaser who listed a Washington residence; Red Auto later denied a claim and the purchaser complained to the Washington Office of the Insurance Commissioner (OIC).
The OIC issued a Consent Order alleging violations of RCW Title 48 for operating in Washington without registration, proposing a $2,000 fine and requiring Red Auto to consent and waive procedural and judicial challenges; refusal would permit the Commissioner to seek larger penalties administratively.
Red Auto sued in federal court arguing the Commissioner lacks constitutional jurisdiction under the Due Process Clause and sought an ex parte TRO to enjoin entry/enforcement of the Consent Order (which was to become final on Aug. 5, 2021).
The district court found Red Auto raised serious questions on the merits, would suffer irreparable harm (including multistate reporting and potential discipline), and that the balance of equities and public interest supported temporary relief.
The court granted the ex parte TRO: enjoining entry/enforcement of the Consent Order, staying the administrative deadline to demand a hearing, and setting a schedule to consider converting the TRO to a preliminary injunction (TRO expires Aug. 18, 2021 absent extension).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Washington may constitutionally enforce RCW Title 48 against Red Auto (Due Process/minimum contacts)	Red Auto: no purposeful contacts with WA; sale occurred in Oregon; enforcing WA law here would violate Int'l Shoe/minimum contacts	Commissioner: enforcement permissible because a WA resident complained and Red Auto is registered with WA Secretary of State; state has interest in policing insurance activity affecting its residents	Court: raised serious questions going to the merits under the "serious questions" test; TRO appropriate pending resolution
Whether Red Auto faces irreparable harm absent injunctive relief	Red Auto: final Consent Order would be public and trigger mandatory reporting to other states (e.g., NY, NV), risking reputational injury and disciplinary actions	Commissioner: public enforcement interest and prevention of harm to WA consumers	Court: irreparable harm likely and would occur before Commissioner could be heard; favors TRO
Balance of equities	Red Auto: harm from multistate reporting and potential sanctions outweighs temporary delay	Commissioner: limited harm from a temporary stay of enforcement; can still pursue remedies later	Court: equities tip sharply toward Red Auto; delay is minimal and remediable if OIC prevails
Public interest	Red Auto: public interest in preventing state overreach against nonresident businesses	Commissioner: public interest in enforcing state insurance laws and protecting consumers	Court: public interest favors Red Auto here (company in runoff, not actively selling), so TRO permissible

Key Cases Cited

Winter v. Nat. Res. Def. Council, 555 U.S. 7 (2008) (TRO/preliminary injunction requires clear showing of entitlement and consideration of four Winter factors)
Int'l Shoe Co. v. Washington, 326 U.S. 310 (1945) (establishes "minimum contacts"/due process limits on state authority over nonresidents)
Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (unilateral activity of third persons or random contacts do not establish purposeful availment)
N. Carolina Dep't of Revenue v. The Kimberley Rice Kaestner 1992 Fam. Tr., 139 S. Ct. 2213 (2019) (state power limited to those who receive benefits/protection from the State)
Stormans, Inc. v. Selecky, 586 F.3d 1109 (9th Cir. 2009) (applies Winter factors in Ninth Circuit preliminary injunction analysis)
Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127 (9th Cir. 2011) (alternative "serious questions" test may permit injunction when hardships tip sharply)
Washington Equip. Mfg. Co. v. Concrete Placing Co., 85 Wn. App. 240 (1997) (WA appellate decision: corporate registration with the state does not alone establish purposeful availment)