COURT CASES

Victory for ALAS, HARRG and NRRA in Michigan
By Phillip Olsson of Olsson, Frank and Weeda, P.C.

NRRA can share a piece of the credit for this victory because United States District Judge Enslen relies substantially on the precedent created by NRRA in its Louisiana litigation, National Risk Retention Association v. Brown 127F. Supp. 195 (N.D. La. 1996), affirmed without opinion, 114F. 3rd 1183 (5th Cir. 1997) and also cites the amicus curiae brief submitted by NRRA in this proceeding.

The Enslen decision holds that the fee imposed by Michigan on risk retention groups is a regulatory fee, not a tax, and is therefore barred by the Liability Risk Retention Act. In addition, the Court holds that the employee-related coverages issued by the two risk retention groups are not barred by the Risk Retention Act. The Court accepts the arguments put forward by ALAS, HARRG and NRRA that the statutory language only excludes risk retention groups from writing workers and compensation coverages.

The new decision from the Michigan court is extremely important to risk retention groups because it provides a second opinion, which accords with the 1996 decision in National Risk Retention Association v. Brown, holding that non-domiciliary states may not impose significant regulatory fees on risk retention groups.

In addition, the Court has now invited the plaintiffs to submit requests for reimbursement of their legal fees pursuant to Sections 1983 and 1988 of Title 42 of the United States Code. The court relies on the recent Oregon risk retention litigation, National Warranty Ins. Co. v. Greenfield, 24F. Supp. 2d 1096, 1109-10 (D. Or. 1998) to support this ruling on fee reimbursement.

For a copy of the Court's Decision, CLICK HERE.
(PDF file, 1.4MB, requires Adobe Acrobat 3.0 or newer to read.)

The National Risk Retention Association has taken a lead role as a participant in litigation that has defined and interpreted the Liability Risk Retention Act of 1986. For a brief summary of these activities click here.

Details of the two most recent court cases in which the plaintiffs and NRRA prevailed on behalf of its members are available to NRRA members in the Member Links section. Click Here

About NRRA's Legal Counsel

Philip Olsson of the Washington, D.C. law from of Olsson, Frank and Weeda, P.C. has represented the National Risk Retention Association as General Counsel since 1991. Mr. Olsson was the lead counsel in NRRA v. Brown, where NRRA successfully challenged Louisiana statutes and regulations, which would have totally gutted the preemptive effect of the Liability Risk Retention Act of 1985 (LRRA). In addition, Mr. Olsson has represented NRRA as an amicus curiae in four major federal court cases where state agencies have tried to use restrictive state laws to exclude risk retention groups from providing financial responsibility coverage. In each of these cases NRRA has supported one of its members and had a significant role in obtaining an increasing level of judicial recognition for the broad preemption provided by the LRRA.

Click here to go to the Olsson, Frank and Weeda, P.C. firm web site.