Gerling Global Reinsurance Corp. of America v. Garamendi

; and remand tion review with instruc- American Insurance Association - grant reopen. tions to the motion to American Re-Insurance Com pany, Plaintiffs-Appellants, AND REMANDED. GRANTED Garamendi, capacity John in his as the Insurance Commissioner of the State California, Defendant-Appellee. 04-15332, Nos. 04-15455. United Appeals, States Court of Ninth Circuit.

Argued Submitted Dec.

Filed March GERLING GLOBAL REINSURANCE AMERICA,

CORPORATION OF

Branch; Gerling Life Rein Global Company; Gerling

surance Global Company; Gerling

Life Insurance Company;

America Insurance Consti Company;

tution Insurance Revios Canada, Ltd.;

Reinsurance Revios U.S., Inc.;

Reinsurance Assicurazioni s.p.a.;

Generali American Insurance

Association; American Re-Insurance

Company, Plaintiffs-Appellants,

Winterthur International In America Company; Winterthur Inter

national America Underwriters Insur Company; Casualty

ance General

Company Wisconsin; Regent Insur Company; Republic

ance Insurance

Company; Southern Insurance Com

pany; Unigard Indemnity Company;

Unigard Company; Insurance Blue

Ridge Co., Plaintiffs, Insurance n GARAMENDI, capacity

John i his

the Insurance Commissioner California, Defendant-Appel

State of

lee. Brown, Rothfeld, Mayer, A.

Charles Maw, LLP, DC, Washington, Rowe & plaintiffs-appellants. Kaplan, Frank Alschuler Grossman LLP, Monica, CA, Kahan, Stein Santa & defendant-appellee. for the GOODWIN, GRABER, and Before: PAEZ, Judges. Circuit GOODWIN; by Judge Opinion by Judge Concurrence GRABER GOODWIN, Judge. Circuit Senior This case to our calendar for returns following journey timé to the fourth Plaintiffs, three insur- Supreme Court. companies and insurance trade ance one association, originally brought this action In- Commissioner of against California (“Commissioner”) seeking to bar enforcement of Holocaust Victim (“HVIRA”), Act of 1999 Insurance Relief (1999). §§ Cal. Ins.Code 13800-13807 requires disclosure of cer- That statute pertaining tain information to Holocaust- policies Europe. era insurance written Following disposition Court’s favor, sought of the case in their in this court. We remand- fees court, to the district a probability ed the “demonstrated success request. The appealable denied the merits that the HVIRA is unconstitu was appealed. order tional in violation of the federal and a violation Com appeal ques- presents principal This two Quacken merce Clause.” Gerling Global v. First, the err tions. district court bush, (E.D.Cal. 2000 WL *13 June plaintiffs pre- it held that were when 2000). finding After that the balance parties of 42 vailing meaning within the irreparable harm favored plaintiffs, the the Second, § foreign do the U.S.C. 1988? granted district court a preliminary injunc affairs of the Executive branch and enjoined tion and the enforcement of HVI agreements the related executive between RA and implementing regulations. Id. States, Austria, Germany, the United and at *13-14. private rights France create within the

meaning of 42 U.S.C. 1983? The appealed Commissioner and we re- plaintiffs versed,

We hold that are leaving preliminary injunction the parties and thus are entitled to an award place. We remanded case to the the of a reasonable fee. Because district court to consider plaintiffs’ due plaintiffs prevailing par- we hold that are I, process Gerling F.3d at ties, do not reach we whether remand, On granted the district court executive under the foreign actions affairs plaintiffs’ summary motion for judgment justiciable private rights. create enjoined permanently and the Commis Therefore, under the of Maher v. HVIRA, enforcing sioner from holding Gagne, mandating that “[b]y suspension license (1980), L.Ed.2d 653 we remand to the dis- of what non-performance be im trict for a prop- court determination possible tasks without for a allowing mean er fee. ingful hearing, plaintiffs HVIRA deprives protected of a property interest without Background I. and Factual Procedural affording process them due of law.” Ger History Low, ling F.Supp.2d Global Because the facts of case been this have (E.D.Cal.2001). by by court set forth this and appealed The again Commissioner detail, Gerling see Global Rein- During pen- district court decision. Global”) Corp. (“Gerling Am. dency appeal, plaintiffs of that filed (9th Cir.2001) Low, 240 F.3d motion with the seeking district court at- ”); Low, (“Gerling I Gerling Global v. torney’s under 42 U.S.C. 1988. The (9th Cir.2002) II”); (“Gerling motion, district plain- denied and court Garamendi, Am. Ins. Ass’n v. appealed. timely tiffs only procedur- recount the basic II, In Gerling we reversed history al here. court and held that HVIRA did violate brought

Plaintiffs seeking plaintiffs’ process this 'action de- due rights, the Com- claratory injunctive Clause, and relief power, merce HVIRA, claiming Clause, enforcement of that the Bill of Attainder the Contract Clause, Clause, Clause, Equal statute violated Commerce or Protection Clause, Due Process power, the Fourth Amendment. 296 F.3d 832. provisions. and other constitutional “pre- The We concluded that were district court plaintiffs vailing parties” concluded that under U.S.C. e part of the attorney’s fee as to attor- reasonabl not entitled therefore were 1988(b). 42 U.S.C. 42 U.S.C. costs.”

ney’s fees. turn, the “de protects against granted certiorari. Supreme Court The im privileges, or any rights, privation Low, 1100, 123 Ass’n v. Am. Ins. secured the Constitution munities (2003). The first issue is whether laws.” The three of “encompassed grant of certiorari parties.” “prevailing constitute I Gerling [in addressed questions intrudes on HVIRA II]: has summa Supreme Court power, violates foreign affairs the federal party” determination “prevailing rized the Foreign self-executing element as follows: Clause, the State’s or exceeds Commerce ” party, a civil prevailing a qualify [T]o Ass’n, Am. Ins. ‘legislative jurisdiction.’ at least must obtain rights plain tiff 7, The n. 123 S.Ct. 2374. U.S. at 413 claim. merits of his some relief on the judgment, this reversed Court court’s an enforceable must obtain plaintiff The by pre-empted holding that HVIRA was judgment against the defendant foreign over Branch Executive Helms, sought, are [Hewitt whom fees 420, The 123 S.Ct. 2374. policy. Id. at 760, 2672, 107 S.Ct. the Commerce did not address Court (1987)], comparable or re- L.Ed.2d 654 Process Clause issues. Clause and Due or settle- through a consent decree lief (“Because Id. at 413 n. 123 S.Ct. ment, Gagne, 448 U.S. Maher v. preempted under hold that HVIRA is doctrine, we have no the (1980). se- plaintiff relief the Whatever questions.”). the other reason address him at the directly cures must benefit decision, plaintiffs Following the Court’s See judgment of the or settlement. time this sought attorney’s fees and moved Hewitt, at 107 S.Ct. 2672] U.S. [482 oral briefing and supplemental court for short, ‘prevails’ a when ... transferred the fee issue argument. We claim on the merits of his actual relief on a court for consideration relationship materially legal alters Low, 339 Gerling Global v. factual record. by modifying parties between the Cir.2003) III”). (“Gerling F.3d 1078 way in a that di- behavior defendant’s to award fees The district court declined rectly plaintiff. benefits foreign af- that the because it concluded 103, 111-12, 113 Hobby, Farrar v. right,'priv- “a power implicate fairs (1992). S.Ct. immunity by the Consti- ilege, or secured prevailing parties plaintiffs hold that are States” and tution or laws of the United only obtained litigation. this Plaintiffs.not a 42 form the basis of therefore could not on the their “some” relief merits claim. U.S.C. 1983 they sought they received all of the relief injunction permanent in their lawsuit—a Party Prevailing Determina- II. The enjoined the enforcement HVIRA. tion ruling of the Clearly, the Civil, Attorney’s Fee Award Rights The by behavior modified the Commissioner’s “In part: provides, Act of 1976 relevant relationship altering] legal “materially pro a any proceeding action or enforce id. parties.” See between 1983], court, in vision of [42 U.S.C. plain- second issue is whether discretion, The may its allow the fee-generating legal States, under a prevailed a tiffs party, than the United other “right.” The Court decided for claim or in one in which a statutory both plaintiffs relying implied pre- on the a substantial constitutional claim are by emption of HVIRA favorably settled to the plaintiff without Com- adjudication.” of the Executive branch. The at Id. that, argues missioner because the Su- The in Maher advanced claims preme plaintiffs favor of Court ruled Security under the Social Act and the ground plain- covered Equal Protection and Due Process Clauses tiffs prevailing parties. are not We of the Fourteenth Amendment. Id. are faced thus 124-25, parties set- court, containing in an action both fee- through tled a consent decree before a claim supporting § 1983 claims adjudication any final independently fee at 126 & n. 100 S.Ct. 2570. Noting award, may deprive “[njothing language of 1988 condi- by grounding ruling oii non- tions the District Court’s to award fee-generating claim. this Answering litigation fees on full of the issues or on á question in the would affirmative be incon- judicial determination that sistent with both Court and rights violated,” have been and emphasiz- precedent. Ninth Circuit ing policy supporting reading a broad statutes, fees affirmed Beginning assumption with that the plaintiff. award of fees to the Id. at 129- does not confer 30, 100 S.Ct. meaning within the must determine whether claims left in Although matter Maher was set Court, unaddressed but decree, through tled a consent the Maher grant included its of certiorari —the , holding applies equally to the determina

Commerce Clause and Due Process Clause of pendent through tion claims litigation. may an award of attor See, Anaheim, e.g., City v. claims— Carreras ney’s fees. Due Process Clause and Com Cir.1985), abrogated merce claims both properly are grounds by on other Los Angeles Alliance cognizable, fee-supporting claims under City Angeles, Survival Los See, e.g., Higgins, Dennis v. 352, Cal.Rptr.2d 1, Cal.4th 993 P.2d 334 111 S.Ct. L.Ed.2d (2000) (awarding plaintiff pre fees where (1991) (Commerce Clause); Paul vailed, through litigation, pendent state Davis, 693, 696-97, S.Ct. 1155, 424 U.S. claims). constitutional law (1976) (Due Process provides Carreras some here guidance Clause). urge apply Plaintiffs us Maher it demonstrates applica because Maher’s v. Gagne, 448 U.S. 65 bility in of litigation, the context but it is progeny L.Ed.2d 653 and its panacea that plaintiffs propose. conclude that are appropriate here case, Society the International for Krishna because unaddressed claims were both Beach, Laguna Consciousness of Inc. substantial and arose from a nu common (ISKCON) City sued the of Anaheim over operative cleus of fact with city’s prohibition practice of ISKCON’s claim. soliciting parking donations areas that walkways Maher held an award of fees is surrounding Anaheim a appropriate “plaintiff prevails where on a Anaheim Stadium Convention wholly statutory, -non-civil-rights claim 768 F.2d at 1041. The Center. court, law, pendent to a relying substantial constitutional on federal constitutional (1966)], attorney’s fees was not entitled that ISKCON held de though the court allowed even the stadium area because be as to relief Id. at 1045 for the judgment a forum. public was not clines to enter area However, court did claim, the district long n. 10. so & on that respect to the relief with grant arising ISKCON claim out the non-fee prevails on center, relying upon feder- also convention operative fact.’ nucleus of of a ‘common Id. at reaching conclusion. al law [Gibbs, 1130]. appeal, On this court & n. 15. n. at 132 ques- reach the federal 1558, at 4 n.7 H.R.Rep. No. (quoting constitu- but, on the relying California tion (1976)). formulation, we con- this Under court’s hold- tion, the district we reversed that, purpose qualifying clude for the fact Despite the stadium issue. ing on the unaddressed, fee-sup- party, an the dis- explicitly reverse that we did if an award of fees porting supports claim analysis, federal constitutional court’s trict from a and arises it is both substantial on Maher to n. we relied see id. at 1045 fact operative common nucleus at 1050. attorney’s fees. non-fee-supporting claim ad- dispositive, distinguishable is that Canoras are aware That the substan- by the court. dressed prevail on ISKCON did because feeT of situations which tiality speaks test center claim—the convention supporting dispositive” claim “non-constitutional is More- the district court level. claim—at relevance when a does not dilute its over, court’s con- the district we reversed claim at preemption implied such as the on different holding vention center here, “constitution- may be termed a issue avoiding that issue rather than grounds, decision to resolve one al claim.” A court’s However, we do not read altogether. to avoid others question and ability to impose a limit on our Carreras to attorney’s ques- fee exempt not does Rather, we read a fee in this case. award reasoning of Maher. tion from the support to of Maher application Carreras’s here, where, as the court an award of fees of the application turn to the now avoids of to hear case highest Due Pro- substantiality test to the Maher fee-supporting federal resolution of and Commerce Clause cess Clause claim. if constitutionally A claim is insubstantial wholly ... insub- “essentially it is fictitious A. Maher Applicability of obviously frivolous ... [or] ... stantial “substantiality advocated a Maher Hagans, 415 obviously without merit.” determining pendent whether-a test” for 537-38, (quotations U.S. at S.Ct. an fees: support claim can award of omitted). panel This has citations ... claim with In instances some fee-supporting is- grappled with twice ques may involve a constitutional fees I, 240 at Gerling See sues detail. the courts are reluctant tion which II, 754; F.3d 832. The extent Gerling claim is resolve if the non-constitutional analysis that our demonstrates previous Lavine, [Hagans v. dispositive. Process Clause Commerce the Due 39 L.Ed.2d U.S. S.Ct. brought by were plaintiffs claims (1974) cases, if the claim for such ]. constitutionally insubstantial. meets the may be awarded which from a common nucleus 537-38, arise test, Claims ‘substantiality’ see at [id. fee-supporting claims fact 1372; operative v where Mine Workers S.Ct. United . non-fee claims that Gibbs, interrelated 16 are so 86 S.Ct. ordinarily expected “would be that HVIRA did not conflict with the for try judicial proceeding." all in them one eign affairs power. Id. at 753. In Gerling Gibbs, II, 383 U.S. at 86 S.Ct. 1130. The repeated our conclusion that HVI- Supreme three claims to which the Court RA did violate the Commerce Clause granted certiorari all arose from Califor or the foreign power, and we deter attempted nia’s enforcement HVIRA. mined that did HVIRA also not violate correctly attempted try Plaintiffs all plaintiffs’ due process rights. 296 F.3d at proceeding. their in one issues We con 844, 849. due process clude that unaddressed above, As discussed claims, and Commerce Clause which re did not reach either the Commerce Clause

mained in the until final disposi case or the due process issues. Even aside Court, tion by pass the “sub- that contention our Com stantiality” test and therefore an e merce process holdings Clause and du plaintiffs. award of fees to Cf. were impliedly by overruled American In (“Although U.S. at ... Ass’n, judge any the trial find constitu 376, however, 156 L.Ed.2d we con violation, tional the constitutional issues that in exercising clude its discretion to in the case remained until the entire dis fees, attorney’s a district court must pute entry was settled of a consent focus on a plaintiff on “succeed[s] decree.”). any significant litigation issue in achieves some the benefit parties B. Holdings Our Previous sought in bringing the suit.” Hensley, 461 We must note that the fee determination (quoting Na complicated by is further lengthy pro deau v. Helgemoe, 581 F.2d 278-79 history case, cedural forcing tous (1st Cir.1978)). our previous holdings address I Gerling proper inquiry zeros end the. II. Recognizing admoni result of the litigation: piecemeal A exami tion of Court that re “[a] arguments nation of the the court quest fees should not result final authority did or did not reach be major litigation,” a second Hensley in Eckerhart, helpful prior our 437, opinions’ determining value, precedential helpful but it is not in (1983), 40 briefly 76 L.Ed.2d we re determining plaintiff “pre whether a is a visit those cases in order to put to rest the vailing party” meaning within the of Commissioner’s contention that at litigation. 1988 the conclusion cannot of “prevailing parties” be considered 435, 103 at See id. in previously rejected (“Litigants because we S.Ct. 1933 their due good faith process legal and Commerce raise alternative In I, outcome, Gerling grounds that for a we held the district court desired and the erroneously rejection of concluded that court’s or failure to cer plaintiffs dem reach a sufficient grounds onstrated likelihood of success on tain not a is reason for reducing Commerce Clause issue. F.3d at a 240 fee. The result is what matt held, out, ers.”).1 incorrectly, We further it unaddressed, turned So an long as fee- Focusing litigation plaintiff on the end result prevailing only of when calculation — (or should answer the Commissioner’s concern highest Court the court of grant that the “mere of certiorari” will be- case) a to hear in of a rules favor granting come a bench for mark fees. The plaintiff grants sought and him relief he grant of certiorari does not factor into the 810 recognized, has substantiality- Supreme Court] as [the claim

supporting meets authority to of of above, grant and the end result 1988 a broad set forth is test desired litigation grants plaintiff attorney’s a his courts award relief, may support claim unaddressed constitutional seeking to vindicate federal Robinson, of regardless of the decision a fee statutory rights.” award and Smith conclude Accordingly, we the court below. 1006, 104 S.Ct. 82 U.S. I holdings Gerling and that our on other overruled court from preclude 1415(l). II do the district Further by 20 grounds U.S.C. discretion to award a reason exercising its Maher, more, a award fee as stated Maher. attorney’s fee under able pendent on claims “furthers based Congressional goal encouraging of stuts holding of our not unaware We are un constitutional without (9th vindicate Felix, F.2d Mateyko v. judicial longstanding policy dermining the Cir.1991). case, that the court did not impor avoidance; rather, avoiding unnecessary decision of “it principles invoke at tant issues.” 448 U.S. [Mateyko] no constitutional had found that Gagne v. all,” (quoting a ver and directed granted claim at (2d Cir.1979)). at claims. Id. F.2d dict on all of Corr., 672 Dep’t Reel v. Ark. the Commissioner’s invitation (quoting decline (8th Cir.1982)). jury, A must that to conclude claims, remaining state law a fee- specific, of a rule favor reviewing contributorily Mateyko found was 96% for a of the case in order supporting aspect infliction negligent his state negligent for prevailing par plaintiff to be considered entered a of emotional distress Rather, applying the Court’s ty. 4% his dam judgment in his favor “generous prevailing formulation” rejected Mateyko’s ages. at Farrar, Id. 825. We definition, at party see victory him claim this small made that Hensley, 461 (quoting at plaintiff. 828-29. This (1983)), hold 103 S.Ct. 1933 holding result consistent with our above is read too that court the district because, litigation at the conclusion that it dis narrowly and assumed lacked verdict, directed ho after we affirmed the compa insurance cretion to in' fee-supporting claims remained attorney’s fee. nies reasonable Mateyko Maher could invoke case— fee-

because there no unaddressed was Foreign III. The Affairs Power pass claim could Maher’s supporting § 1983 case, award substantiality test. In such court concluded ing an inappropriate. fee is power “implicate did not affairs C. Policy Considerations immunity by the right, privilege or secured or laws of United States” Constitution

Quite applicability of apart § 1983 did constitute a and therefore not the enactment of policy behind been claim. That conclusion have § avoid- prudential policy of and but it proposition, corréct as an abstract sup- ing further questions support further conclusion ports conclusion that should parties. Be- prevailing fee in this case. were be awarded reasonable on cause reverse the district court legislative history “As illustrates and we der 1988. will that be considered un- prevailing party point, we need not reach on stead .considerations of power —will 1983, affairs an action under section not, therefore, independently will private support a claim confers for attorneys’ (alter- rights. plaintiffs’ The fact that fees under Due Pro- section 1988.” (internal ation in original) cess quotation Commerce Clause claims marks omitted)). are properly cognizable claims under inquiry 1983 satisfies our and should 2. The process due and Commerce plaintiffs.

result a fee award to Clause claims are fee-generating claims §§ under 28 U.S.C. 1983 and 1988. But IV. Conclusion Plaintiffs lost those claims before this above, For the reasons set forth court. attorney’s REVERSE the denial of fees, then, Plaintiffs’ entitlement

fees and REMAND this case to the dis- depends on what happened to the various trict court with instructions to exercise its claims at the Court. Had 3154 discretion determine reasonable sought Plaintiffs not certiorari on the fee- of amount accordance claims, generating or had 424, Hensley, upheld claims, our result on those Sloan, 76 L.Ed.2d v. Webb 330 Plaintiffs would not be entitled to fees. (9th Cir.2003). 1167-70 Felix, Mateyko See v. 924 F.2d award shall an include allowance for fees (9th Cir.1991) (“Where, here, there has and costs incurred in contesting the dis- been decision adverse to on the trict court’s denial of fees. claim; section 1983 section 1988 does not fees.”). authorize the of attorney’s GRABER, Judge, concurring Circuit in But things neither those happened here. the result: Rather, Plaintiffs sought and received a I concur in the for following result writ of fee-generat certiorari both their reasons. ing claims and their non-fee-generating 1.The claim preemption by the for claim. The Court held in Plaintiffs’ favor eign is not a fee-generating on the non-fee-generating claim without ably for the reasons explained by reaching fee-generating claims at all. short, the district court. the foreign Under the principles that we announced in power, Clause, Supremacy Anaheim, like the City Carreras v. 768 F.2d rights Cir.1985), creates no individual enforceable un abrogated on der 28 U.S.C. Golden State grounds by Angeles other Los Alliance Cf. Corp. City Angeles, Transit v. Los City 493 Survival Angeles, Los 22 Cal.4th 103, 107, Cal.Rptr.2d (2000), L.Ed.2d 993 P.2d 334 (1989) (“[T]he Clause, Supremacy and that the Supreme Court set forth in force, its own does not 122, 132-33, create en Maher Gagne, 1983.”); forceable under Associated Plain Smith, Gen. Contractors v. 74 F.3d tiffs are entitled to fees. The (9th Cir.1996) (“[Preemption of opportunity state Court had the to decide the law under Supremacy being fee-generating claims and chose not to do Clause— grounded so;1 on individual but in- policies identified in Carreras and Low, thereby 1. The Court's decision leaves our America v. 296 F.3d 832 Cir. opinion 2002), Corp. Global Reinsurance rev’d sub nom. American Insurance in favor of award- counsel therefore ing fees. Petitioner, KASNECOVIC,

Ferida Attorney GONZALES,*

Alberto

General, Respondent.

No. 03-70775. Appeals, Court of

United States

Ninth Circuit. Sept.

Argued and Submitted March

Filed * Garamendi, prede- his Gonzales is substituted for Ass’n v. Alberto cessor, Ashcroft, Attorney General John prece States, R.App. pursuant to Fed. P. the United dential those issues. effect on 43(c)(2).

Case Details

Case Name: Gerling Global Reinsurance Corp. of America v. Garamendi

Court Name: Court of Appeals for the Ninth Circuit

Date Published: Mar 9, 2005

Citation: 400 F.3d 803

Docket Number: 04-15332, 04-15455

Court Abbreviation: 9th Cir.