Council of Insurance v. Molasky-Arman

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
COUNCIL OF INSURANCE AGENTS & 
BROKERS and REBECCA RESTREPO,
Plaintiffs-Appellees, No. 04-17271
v.
 D.C. No.
CV-02-00813-JCM
ALICE A. MOLASKY-ARMAN, in her
official capacity as Nevada OPINION
Commissioner of Insurance,
Defendant-Appellant.

Appeal from the United States District Court
for the District of Nevada
James C. Mahan, District Judge, Presiding
Argued and Submitted
October 19, 2006—San Francisco, California
Filed April 10, 2008
Before: Melvin Brunetti, Diarmuid F. O’Scannlain, and
Stephen S. Trott, Circuit Judges.
Opinion by Judge Brunetti
3703
3706 COUNCIL OF INS. AGENTS v. MOLASKY-ARMAN
COUNSEL
George H. Taylor and Robert Auer, Deputy Attorneys Gen-
eral of the State of Nevada, Carson City, Nevada, for the
defendant-appellant.
Scott A. Sinder, Alysa N. Zeltzer, and Daniel S. Blynn, Col-
lier Shannon Scott, PLLC, Washington, District of Columbia,
for the plaintiffs-appellees.
Daniel F. Polsenberg, Lawrence Epstein, and Heidi Parry
Stern, Beckley Singleton, Chtd., Las Vegas, Nevada, for the
plaintiffs-appellees.
OPINION
BRUNETTI, Circuit Judge:
On cross-motions for summary judgment, the district court
declared Nevada’s “countersignature” statute, Nev. Rev. Stat.
COUNCIL OF INS. AGENTS v. MOLASKY-ARMAN 3707
§ 680A.300, unconstitutional, holding that it violates the Priv-
ileges and Immunities Clause of Article IV and the Equal Pro-
tection Clause of the Fourteenth Amendment. 358 F. Supp. 2d
981, 982-83. The district court stayed its injunction pending
appeal, and Defendant-Appellant Alice Molasky-Arman,
Nevada Commissioner of Insurance (the Commissioner), now
appeals. We have jurisdiction under 28 U.S.C. § 1291, and we
affirm and remand.
I. Facts and proceedings below
Plaintiff-Appellee Council of Insurance Agents & Brokers
(the Council) is a national trade association that represents
more than 250 of the nation’s largest commercial property
and casualty insurance agencies and brokerage firms. The
Council’s members, which include corporations and partner-
ships rather than individuals, place over eighty billion dollars
in insurance premiums annually, which constitutes more than
seventy-five percent of the commercial marketplace. The
majority of the Council’s members sell insurance in more
than one state, and in many cases in all fifty states, to large,
sophisticated, commercial end-users that typically have multi-
state exposures. Included in the Council’s members are insur-
ance agencies and brokerage firms based outside of Nevada
that sell insurance in Nevada.
In this case, the Council challenges Nevada’s “countersig-
nature” statute, Nev. Rev. Stat. § 680A.300, which provides
that no authorized insurer may make, write, place, or renew
any insurance policy on persons, property, or risks in Nevada,
“except through its duly appointed and licensed agents resi-
dent in [Nevada], any one of whom shall countersign the poli-
cy.”1 Despite this limitation on insurers, section 680A.300
1
Section 680A.300 states in pertinent part:
1. Except as provided in NRS 680A.310, no authorized insurer
may make, write, place, renew or cause to be made, placed or
3708 COUNCIL OF INS. AGENTS v. MOLASKY-ARMAN
guarantees the “free and unlimited right to negotiate insurance
contracts by licensed nonresident agents or brokers outside
[Nevada], if the policies, endorsements or evidence of those
contracts covering properties or insurance interests in
[Nevada] are countersigned by a resident agent . . . .” Finally,
section 680A.300 requires that the countersigning agent be
paid a commission of at least five percent of any resulting
premium. In its complaint, the Council alleged that section
680A.300 violates the Constitution’s Commerce Clause, Priv-
ileges and Immunities Clause of Article IV, and the Four-
teenth Amendment’s Equal Protection Clause.
renewed, any policy or duplicate policy of insurance of any kind
upon persons, property or risks resident, located or to be per-
formed in this state, except through its duly appointed and
licensed agents resident in this state, any one of whom shall
countersign the policy.
....
4. Nothing contained in this section prevents exercise of the
free and unlimited right to negotiate contracts by licensed nonres-
ident agents or brokers outside this state, if the policies, endorse-
ments or evidence of those contracts covering properties or
insurable interests in this state are countersigned by a resident
agent of this state. Every such policy or contract must be counter-
signed by a resident agent.
5. On business produced by a licensed nonresident agent or bro-
ker, which is countersigned by a resident commissioned agent of
this state, there must be a division of the usual commission
between the licensed nonresident producing agent or broker and
the resident countersigning commissioned agent which must pro-
duce for the latter a commission of at least 5 percent of the pre-
mium. No commission or fee is required as to policies with an
annual premium of $250 or less. The insurer issuing any policy
or bond is responsible for payment to the countersigning agent of
the fee or commission for the countersignature. Where the
licensed nonresident agent or broker or the insurer assuming the
risk desires the resident commissioned agent to render additional
services during the life of a policy, the compensation to the coun-
tersigning commissioned resident agent is a matter of contract
between the parties in interest.
COUNCIL OF INS. AGENTS v. MOLASKY-ARMAN 3709
The Commissioner promptly filed a motion for summary
judgment and the Council filed a cross-motion for summary
judgment. The district court denied both parties’ motions
without prejudice; and after expressing some doubt as to
whether the Council had standing to assert its constitutional
claims during a hearing on the parties’ motions, the court
granted the Council leave to amend its complaint. The Coun-
cil did so, adding Plaintiff-Appellee Rebecca Restrepo
(Restrepo) as co-plaintiff in its First Amended Complaint, in
which the Council reasserts its equal protection and privileges
and immunities claims.
Restrepo is a resident of California, is licensed to sell insur-
ance in California, and is the Managing Director of the Sacra-
mento office of ABD Insurance and Financial Services
(ABD), a member of the Council. Restrepo is also licensed to
produce and sell insurance in Nevada as a nonresident agent.
In Nevada, the Commissioner issues licenses to nonresidents
as producers of insurance if four requirements are satisfied.
Nev. Rev. Stat. § 683A.271. The nonresident must be in good
standing as a licensed resident in his home state, pay a pre-
scribed fee, submit an application, and the nonresident’s home
state must issue nonresident licences to Nevada residents pur-
suant to a substantially similar procedure.2 In its First
2
Section 683A.271 states in pertinent part:
1. Unless the Commissioner refuses to issue the license under
NRS 683A.451, the Commissioner shall issue a license as a pro-
ducer of insurance to a nonresident person if:
(a) He is currently licensed as a resident and in good standing in
his home state;
(b) He has made the proper request for licensure and paid the fee
prescribed for the license and a fee established by the Commis-
sioner of not more than $15 for deposit in the Insurance Recovery
Account;
(c) He has sent to the Commissioner the application for licensure
that he made in his home state, or a completed uniform applica-
tion; and
(d) His home state issues nonresident licenses as producers of
insurance to residents of this State pursuant to substantially the
same procedure.
3710 COUNCIL OF INS. AGENTS v. MOLASKY-ARMAN
Amended Complaint, the Council alleges that section
680A.300 causes Restrepo to forfeit approximately $50,000
annually, and that she is suffering immediate injury and being
deprived of significant rights.
Following discovery, the Commissioner renewed and sup-
plemented her initial motion for summary judgment, and the
Council renewed its motion for summary judgment and sup-
plemented its initial motion with a motion for summary judg-
ment on behalf of Restrepo. This time, the district court
granted the plaintiffs’ motion, concluding that “Restrepo has
standing,” that the Council “has representative standing to
assert the underlying constitutional claims” of “its member
firms and their officers, directors, principals, and employees,”
and that section 680A.300 “plainly draws a distinction
between Nevada-licensed resident agents and brokers,” for
which “there is no legitimate rational basis.” 358 F. Supp. 2d
at 982. Therefore, the district court held, section 680A.300
“violates the Privileges and Immunities Clause and Equal Pro-
tection Clause of the United States Constitution because it
denies to Nevada-licensed nonresident insurance agents the
same rights and privileges that are afforded to Nevada-
licensed resident agents.” Id. at 982-83. The district court
enjoined the Commissioner from enforcing section 680A.300,
but later stayed this injunction pending appeal. This appeal
followed.
II. Standard of review
Reviewing de novo the district court’s decision on cross-
motions for summary judgment, we must decide whether the
record, when viewed in the light most favorable to the non-
moving party, shows that there is no genuine issue of material
fact and that the moving party is entitled to judgment as a
matter of law. Pocatello Educ. Ass’n v. Heideman, 504 F.3d
1053, 1056 (9th Cir. 2007). We also review de novo whether
the plaintiffs have standing, whether the plaintiffs’ claims are
moot, and the constitutionality of section 680A.300. See Get
COUNCIL OF INS. AGENTS v. MOLASKY-ARMAN 3711
Outdoors II, LLC v. City of San Diego, 506 F.3d 886, 890 (9th
Cir. 2007); Rosenbaum v. City and County of San Francisco,
484 F.3d 1142, 1152 (9th Cir. 2007).
III. Discussion
A. Standing
The Commissioner first argues that Restrepo and the Coun-
cil lack standing to challenge the constitutionality of section
680A.300. “Article III of the Constitution limits the ‘judicial
power’ of the United States to the resolution of ‘cases’ and
‘controversies.’ ” Valley Forge Christian Coll. v. Americans
United for Separation of Church and State, Inc., 454 U.S.
464, 471 (1982). “[S]tanding is an essential and unchanging
part of the case-or-controversy requirement of Article III.”
Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992).
“The doctrine of standing is based both on prudential con-
cerns and on constitutional limitations on the jurisdiction of
the federal courts.” Doran v. 7-Eleven, Inc., 506 F.3d 1191,
1195 (9th Cir. 2007). Here, the plaintiffs bear the burden of
establishing standing’s three constitutional requirements.
Lujan, 504 U.S. at 561. First, they must establish that they
suffered an injury in fact, “an invasion of a legally protected
interest which is (a) concrete and particularized, and (b) actual
or imminent, not conjectural or hypothetical.” Id. at 560 (cita-
tions, internal quotation marks, and footnote omitted). Sec-
ond, they must establish “a causal connection between the
injury and the conduct complained of.” Id. Third, they must
establish that it is “likely as opposed to merely speculative,
that the injury will be redressed by a favorable decision.” Id.
at 561 (citation and internal quotation marks omitted).
The district court concluded that Restrepo has standing
because she has suffered, and continues to suffer, economic
and other forms of injury because of the requirements
imposed upon nonresident insurance agents by Nevada’s
countersignature law. 358 F. Supp. 2d at 982. The Commis-
3712 COUNCIL OF INS. AGENTS v. MOLASKY-ARMAN
sioner contends that Restrepo provided no evidence of actual
economic injury, and specifically notes Restrepo’s inability to
firmly connect the amount of her compensation with the sale
of products insuring Nevada risks. The Council argues that
while Restrepo is a salaried employee, her overall compensa-
tion (which includes a bonus based on the growth and profit-
ability of her office) is affected by section 680A.300’s
commission-splitting provision. In the end, we need not
resolve the parties’ dispute over Restrepo’s alleged economic
injury because on appeal the Council asserts an alternative
injury, discriminatory administrative burdens placed on
Restrepo because of her nonresident status. While the Com-
missioner argues that we should not consider this argument
because the Council raises it for the first time on appeal, we
may affirm summary judgment on any ground supported by
the record. Doran, 506 F.3d at 1195 n.1.
[1] “It has long been clear that economic injury is not the
only kind of injury that can support a plaintiff’s standing.”
Vill. of Arlington Heights v. Metro. Hous. Dev. Corp., 429
U.S. 252, 262-63 (1977). “Impairments to constitutional
rights are generally deemed adequate to support a finding of
‘injury’ for purposes of standing.” Doe v. Sch. Bd. of Oua-
chita Parish, 274 F.3d 289, 292 (5th Cir. 2001). The relevant
constitutional provision here is Article IV, § 2, which pro-
vides that the “Citizens of each State shall be entitled to all
Privileges and Immunities of Citizens in the several States.”
“[O]ne of the privileges which the clause guarantees to citi-
zens of State A is that of doing business in State B on terms
of substantial equality with the citizens of that State.” Toomer
v. Witsell, 334 U.S. 385, 396 (1948). Accordingly, here, “the
ability of a citizen in one state to act as an insurance [agent
or broker] in another state must be considered a fundamental
right or privilege protected by the privileges and immunities
clause.” Silver v. Garcia, 760 F.2d 33, 36 (1st Cir. 1985);
Council of Ins. Agents + Brokers v. Viken, 408 F. Supp. 2d
836, 844 (D.S.D. 2005) (nonresident insurance agents and
producers licensed in South Dakota have a fundamental right
COUNCIL OF INS. AGENTS v. MOLASKY-ARMAN 3713
or privilege to place insurance on terms of substantial equality
with licensed resident agents).
[2] Section 680A.300 infringes on Restrepo’s ability, as a
licensed nonresident agent, to do business in Nevada on sub-
stantially equal terms with resident agents. It is undisputed
that Restrepo is a resident of California, that she is licensed
in Nevada as a nonresident agent, and that section 680A.300
treats her differently than resident agents because of her out-
of-state residency. While section 680A.300 protects
Restrepo’s “free and unlimited right to negotiate contracts . . .
if the policies, endorsements or evidence of those contracts
covering properties or insurable interests in [Nevada] are
countersigned by a resident agent,” it also requires that
“[e]very such policy or contract must be countersigned by a
resident agent.” Section 680A.300 precludes Restrepo from
finalizing insurance contracts in Nevada without the counter-
signature of a resident agent. In effect, section 680A.300
creates two classes of insurance agents in Nevada, one class
of licensed resident agents that can finalize insurance con-
tracts, and a second class of licensed nonresident agents that
cannot.
[3] Unfortunately for Restrepo, her California residency
places her squarely within Nevada’s second class of insurance
agents. Despite her “free and unlimited right to negotiate con-
tracts,” Restrepo cannot do business on substantially equal
terms with resident agents because she cannot finalize an
insurance contract without the countersignature of a resident
agent. The Commissioner argues that the impact on Restrepo,
if she is impacted at all, is only minor, as Restrepo has no per-
sonal contact with the countersigning resident agents and that
the only additional burden placed on her is having her staff
mail the policies to obtain the resident agents’ signatures.
However, the Commissioner’s argument misses the mark;
Restrepo’s lack of personal contact with the countersigning
agent does nothing to diminish the fact that section 680A.300
prevents her from doing business in Nevada on substantially
3714 COUNCIL OF INS. AGENTS v. MOLASKY-ARMAN
equal terms with resident agents. Even if the Commissioner
were right that the degree of Restrepo’s injury should factor
into our analysis, as noted in United States v. Students Chal-
lenging Regulatory Agency (SCRAP), 412 U.S. 669 (1973),
the Court has
allowed important interests to be vindicated by
plaintiffs with no more at stake in the outcome of an
action than a fraction of a vote, a $5 fine and costs,
and a $1.50 poll tax . . . . ‘The basic idea that comes
out in numerous cases is that an identifiable trifle is
enough to fight out a question of principle; the trifle
is the basis for standing and the principle provides
the motivation.’
Id. at 689 n.14 (internal citations omitted). Here, because sec-
tion 680A.300 precludes Restrepo from doing business in
Nevada on substantially equal terms with resident agents, a
right guaranteed to her by the Privileges and Immunities
Clause, she suffers an injury which is “concrete,” “actual,”
and amounts to more than an “identifiable trifle,” thereby sat-
isfying standing’s injury in fact requirement.
[4] We similarly conclude that Restrepo satisfies standing’s
causation and redressability requirements. Lujan, 504 U.S. at
561. Section 680A.300 causes Restrepo’s injury by preclud-
ing her from participating in Nevada’s insurance market on
substantially equal terms with resident agents, and a favorable
decision invalidating the statute redresses that injury. There-
fore, Restrepo has standing to challenge the constitutionality
of section 680A.300, and having found standing, we do not
consider whether the Council also has standing. Leonard v.
Clark, 12 F.3d 885, 888 (9th Cir. 1993) (“The general rule
applicable to federal court suits with multiple plaintiffs is that
once the court determines that one of the plaintiffs has stand-
ing, it need not decide the standing of the others.”).
COUNCIL OF INS. AGENTS v. MOLASKY-ARMAN 3715
B. Mootness
The Commissioner also argues on appeal that Restrepo’s
claims are moot because they no longer present a live contro-
versy. While we generally do not consider arguments raised
for the first time on appeal, S.E.C. v. Internet Solutions for
Bus., Inc., 509 F.3d 1161, 1167 (9th Cir. 2007), we have an
independent obligation to address whether a case is moot
because it goes to the Article III jurisdiction of this court. Ari-
zonans for Official English v. Arizona, 520 U.S. 43, 66-67
(1997); Clark v. City of Lakewood, 259 F.3d 996, 1011 (9th
Cir. 2001).
[5] “To qualify as a case fit for federal-court adjudication,
an actual controversy must be extant at all stages of review,
not merely at the time the complaint is filed.” Arizonans for
Official English, 520 U.S. at 67 (internal quotation marks and
citations omitted). “A claim is moot when the issues presented
are no longer live or the parties lack a legally cognizable
interest in the outcome. The basic question is whether there
exists a present controversy as to which effective relief can be
granted.” Outdoor Media Group, Inc. v. City of Beaumont,
506 F.3d 895, 900 (9th Cir. 2007) (internal quotation marks
and citations omitted). “[T]he party moving for dismissal on
mootness grounds bears a heavy burden.” Jacobus v. Alaska,
338 F.3d 1095, 1103 (9th Cir. 2003) (internal quotation marks
and citations omitted). “[D]ismissal of a case on grounds of
mootness would be justified only if it were absolutely clear
that the litigant no longer had any need of the judicial protec-
tion that it sought.” Id. at 1102-03 (internal quotation marks
and citations omitted).
[6] The Commissioner argues that Restrepo’s claims are
moot because in May of 2004, her employer, ABD, acquired
a Nevada-based insurance agency. This acquisition, the Com-
missioner contends, provides Restrepo with in-house counter-
signature services, thereby eliminating the possibility of any
further injury to either Restrepo or ABD. However, “[d]espite
3716 COUNCIL OF INS. AGENTS v. MOLASKY-ARMAN
superseding events, an issue is not moot if there are present
effects that are legally significant.” Id. at 1104. Assuming,
without deciding, that ABD’s acquisition of a Nevada-based
insurance company eliminates the possibility of economic
harm to Restrepo and ABD, section 680A.300 still precludes
Restrepo from participating in Nevada’s insurance market on
substantially equal terms with its resident agents. Restrepo
remains unable to finalize an insurance contract without the
countersignature of a resident agent. Therefore, despite the
availability of an in-house resident agent that is willing and
able to countersign policies negotiated by Restrepo, section
680A.300’s effects remain legally significant and her claims
are not moot.
C. Privileges and Immunities Clause of Article IV
As noted, the Privileges and Immunities Clause of Article
IV provides that the “Citizens of each State shall be entitled
to all Privileges and Immunities of Citizens in the several
States.” “While the Privileges and Immunities Clause cites the
term ‘Citizens,’ for analytic purposes citizenship and resi-
dency are essentially interchangeable.” Supreme Court of Vir-
ginia v. Friedman, 487 U.S. 59, 64 (1988). The primary
purpose of the Privileges and Immunities Clause “was to help
fuse into one Nation a collection of independent, sovereign
States.” Toomer, 334 U.S. at 395. The clause “was intended
to create a national economic union,” Supreme Court of New
Hampshire v. Piper, 470 U.S. 274, 280 (1985), and “was
designed to place the citizens of each State upon the same
footing with citizens of other States, so far as the advantages
resulting from citizenship in those States are concerned.”
Friedman, 487 U.S. at 64 (internal quotations omitted);
Toomer, 334 U.S. at 395.
[7] “Like many other constitutional provisions, the privi-
leges and immunities clause is not an absolute.” Id. at 396.
While it bars “discrimination against citizens of other States
where there is no substantial reason for the discrimination
COUNCIL OF INS. AGENTS v. MOLASKY-ARMAN 3717
beyond the mere fact that they are citizens of other States . . .
it does not preclude disparity of treatment in the many situa-
tions where there are perfectly valid independent reasons for
it.” Id. Therefore, we examine claims that a residency classifi-
cation offends the Privileges and Immunities Clause using a
two-step inquiry. First, we decide whether the activity in
question is “sufficiently basic to the livelihood of the nation
. . . as to fall within the purview of the Privileges and Immuni-
ties Clause.” Friedman, 487 U.S. at 64 (citations and internal
quotation marks omitted). “Second, if the challenged restric-
tion deprives nonresidents of a protected privilege, we will
invalidate it only if we conclude that the restriction is not
closely related to the advancement of a substantial state inter-
est.” Id. at 65 (citation omitted).
[8] In the first step of our inquiry, it is “[o]nly with respect
to those ‘privileges’ and ‘immunities’ bearing upon the vital-
ity of the Nation as a single entity must the State treat all citi-
zens, resident and nonresident, equally.” Baldwin v. Fish and
Game Comm’n of Montana, 436 U.S. 371, 383 (1978). As the
court noted in Silver,
There can be no doubt that insurance and occupa-
tions in the insurance industry are important to the
national economy. Consequently, the ability of a citi-
zen of one state to act as an insurance [agent or bro-
ker] in another state must be considered a
fundamental right or privilege protected by the privi-
leges and immunities clause.
760 F.2d at 36. Therefore, the ability of licensed nonresident
agents and brokers to ply their trade in Nevada on substan-
tially equal terms with resident agents falls within the purview
of the Privileges and Immunities Clause. Section 680A.300
deprives licensed nonresident agents and brokers of this privi-
lege by precluding them from finalizing insurance contracts
without the countersignature of a resident agent, thereby satis-
fying the first step of our inquiry.
3718 COUNCIL OF INS. AGENTS v. MOLASKY-ARMAN
[9] In the second step of our inquiry, we ask whether sec-
tion 680A.300 is “closely related to the advancement of a sub-
stantial state interest.” Friedman, 487 U.S. at 64. A
“substantial reason” for discrimination does not exist “unless
there is something to indicate that non-citizens constitute a
peculiar source of the evil at which the statute is aimed.”
Toomer, 334 U.S. at 398. The Commissioner states that sec-
tion 680A.300 protects Nevada’s consumers and that Nevada
benefits by having a record of all transactions so that it can
collect its premium tax. According to the Commissioner, sec-
tion 680A.300 protects Nevada’s consumers by providing a
local point of contact for policyholders, by providing a local
agent that can offer advice on coverage issues, by providing
a local agent to assist in the claims process, by protecting
Nevada residents from unqualified or unlicensed insurance
agents, and by giving consumers greater assurance that they
will receive reputable and qualified services. However, as the
Commissioner’s contentions are not supported by the record,
there is no support for a conclusion that licensed nonresident
agents and brokers are a “peculiar source of evil” to either
Nevada’s consumers or its tax collection efforts; therefore,
Nevada does not have a substantial reason to discriminate
against them. See Toomer, 334 U.S. at 398. However, even
assuming that licensed nonresident agents and brokers were a
“peculiar source of evil,” section 680A.300 also fails to sur-
vive the second step of our inquiry because it is not closely
related to either consumer protection or tax collection.
[10] Section 680A.300 is not closely related to providing a
“local” point of contact for the policyholder as a source of
advice on coverage issues and to assist in the claims process.
See Barnard v. Thorstenn, 489 U.S. 546, 553-554 (1989)
(geographic isolation insufficient to justify discrimination
against nonresidents); Council of Insurance Agents + Brokers
v. Gallagher, 287 F. Supp. 2d 1302, 1312-13 (N.D. Fla. 2003)
(same). The court confronted a similar argument in Gal-
lagher, where Florida’s Commissioner of Insurance sought to
uphold the state’s countersignature statute against a Privileges
COUNCIL OF INS. AGENTS v. MOLASKY-ARMAN 3719
and Immunities Clause challenge. Id. As the Gallagher court
noted, “the notion that an agent cannot provide assistance out-
side his home state is nonsense; whatever may have been said
when people traveled by horseback and communicated by
regular mail, today people communicate by telephone and
facsimile and e-mail and overnight courier . . . ; state bounda-
ries pose no obstacle.” Id. at 1312; Council of Ins. Agents &
Brokers v. Juarbe-Jimenez, 363 F. Supp. 2d 47, 55 (D.P.R.
2005), aff’d on other grounds, 443 F.3d 103 (1st Cir. 2006).
Here, too, just as in Gallagher, section 680A.300’s disparate
treatment of licensed nonresident agents and brokers is also
over-inclusive. Id. at 1312-13. For example, section 680A.300
allows a “local” resident agent in Las Vegas, Nevada, to final-
ize an insurance contract with a consumer more than 400
miles away in Stateline, Nevada, while allowing a licensed
nonresident agent or broker in South Lake Tahoe, California,
to negotiate, but not finalize, that same contract with the con-
sumer, even though the licensed nonresident agent/broker and
consumer may be separated by nothing more than the
Nevada-California state line. Id. This contradicts the Commis-
sioner’s argument that section 680A.300 allows Nevada’s
consumers to walk right into the office of the “local” counter-
signing resident agent with policy questions and concerns.
Not only is the Commissioner’s argument not supported by
the record before us, it also flies in the face of all notions of
modern business practices and commerce. “[E]recting a fence
at the [Nevada] border does nothing to promote geographic
proximity.” Id. Therefore, section 680A.300 is not closely
related to providing Nevada consumers with a “local” point of
contact to provide advice and assist with claims.
Furthermore, section 680A.300 is neither closely related to
protecting Nevada consumers from unqualified and unli-
censed agents, nor assuring consumers that they will receive
reputable and qualified services. In conformity with the well-
established principle that residency does not equate with pro-
fessional competence, nonresident producers of insurance
(that are licensed for the same lines of authority in another
3720 COUNCIL OF INS. AGENTS v. MOLASKY-ARMAN
state) are exempt from completing both the state’s education
and written examination requirements, and becoming resident
agents if they move to Nevada. See Thorstenn, 489 U.S. at
555; Piper, 470 U.S. 285 (“Nor may we assume that a nonres-
ident lawyer-any more than a resident-would disserve his cli-
ents by failing to familiarize himself with the rules.”); Nev.
Rev. Stat. §§ 683A.241, 683A.291. There is no evidence in
the record that licensed nonresident agents and brokers are
inherently less trustworthy or less competent insurance pro-
fessionals than Nevada’s resident agents. See Silver, 760 F.2d
at 38-39. In fact, Nevada’s statutory exemption directly con-
tradicts both that notion and the Commissioner’s arguments
that licensed nonresident agents and brokers are any less qual-
ified than resident agents, and that consumers need any assur-
ance of their qualifications. Therefore, section 680A.300 is
not closely related to protecting Nevada’s consumers from
unqualified insurance agents and brokers.
Admittedly, Nevada has a valid interest in protecting its
consumers from unlicensed agents. See Nev. Rev. Stat.
§ 683A.201 (“A person shall not sell, solicit or negotiate
insurance in this state for any class of insurance unless he is
licensed for that class of insurance.”). However, here, the
plaintiffs challenge the constitutionality of section 680A.300
because of its treatment of licensed nonresident agents and
brokers, not unlicensed persons. Therefore, section 680A.300
is not closely related to protecting consumers from unlicensed
agents.
[11] Finally, the Commissioner states that Nevada benefits
by having a record of all transactions so that it can collect its
premium tax. While Nev. Admin. Code § 680A.410 requires
countersigning agents to “maintain complete records of coun-
tersignature transactions, including daily reports, correspon-
dence, names of nonresident agents and brokers who wrote
the policies, and evidence of fees and commissions charged,”
there is no indication in the record that the Commissioner can-
not obtain any information needed by Nevada to collect its
COUNCIL OF INS. AGENTS v. MOLASKY-ARMAN 3721
premium tax from licensed nonresident agents and brokers in
the first instance. Therefore, it appears that the Commissioner
already has a less restrictive means of obtaining that informa-
tion. As the Piper Court noted, “[i]n deciding whether the dis-
crimination bears a close or substantial relationship to the
State’s objective, [we consider] the availability of less restric-
tive means.” 470 U.S. at 284; see also Viken, 408 F. Supp. 2d
at 844 (noting less restrictive means available to advance
South Dakota’s goals). Here, obtaining records directly from
nonresident agents and brokers is less restrictive than requir-
ing them to obtain the countersignature of a resident agent
who must then maintain the same transaction records under
section 680A.410. The Commissioner has direct control over
licensed nonresident agents and brokers, as Nev. Rev. Stat.
§ 683A.281 requires every nonresident producer of insurance
to “appoint the commissioner in writing as his attorney upon
whom may be served all legal process,” to agree “to appear
before the commissioner pursuant to notice of hearing, show
cause order or subpoena issued by the commissioner,” and
allows the commissioner to impose penalties on the licensee
if he fails to appear. Again, modern technology and business
practices make records in the possession of nonresident agents
and brokers just as accessible as records in the possession of
resident agents. Therefore, section 680A.300 is not closely
related to the collection of Nevada’s premium tax.
[12] In sum, section 680A.300 is unconstitutional under the
Privileges and Immunities Clause because it discriminates
“against citizens of other States where there is no substantial
reason for the discrimination beyond the mere fact that they
are citizens of other States . . . .” Toomer, 334 U.S. at 396.
Having concluded that section 680A.300 violates the Privi-
leges and Immunities Clause, we don’t consider the plaintiffs’
alternative argument under the Equal Protection Clause of the
Fourteenth Amendment. Id. at 403 (after concluding statute
violated the privileges and immunities clause the Court did
not consider an equal protection argument); Friedman, 487
U.S. at 63 n.* (same).
3722 COUNCIL OF INS. AGENTS v. MOLASKY-ARMAN
IV. Conclusion
Restrepo has standing because she suffers an injury, which
is caused by section 680A.300, and which a favorable deci-
sion invalidating that provision redresses. Restrepo’s claims
are not moot because section 680A.300’s effects on her
remain legally significant. Section 680A.300 violates the
Privileges and Immunities Clause because Nevada’s discrimi-
nation against licensed nonresident agents is not closely
related to a substantial reason for that discrimination beyond
the mere fact that they are citizens of other states.
AFFIRMED and REMANDED for further proceedings on
the injunction that was stayed pending appeal.