CA1: Politically-motivated deprivations of licenses, federalism, and QI

Guillemard-Ginorio v. Gomez, Nos. 04-1331, 04-2045 (unpublished) affirms the grant of a preliminary injunction against the Insurance Commissioner of Puerto Rico("OIC").  OIC apparently conducted a politically-motivated audit of an insurance broker.  The insurance commissioner and others started saying bad things about these brokers.  The brokers sought an injunction.  While the suit was pending, then “without providing notice or a hearing, Contreras issued an order that (1) declared Lone Star plaintiffs non-trustworthy and incompetent; (2) revoked Lone Star plaintiffs' insurance license for five years; (3) barred Lone Star plaintiffs from applying for another license for five years; and (4) imposed a $2,035,000 fine.”  The district court granted a temporary restraining order and scheduled a hearing on the motion for a preliminary injunction.  The OIC, of course, argued sovereign immunity and Younger or Burford doctrines abstention doctrines apply.  But, since the preliminary injunction's function was purely to prevent the revocation of [the brokers'] license pending the administrative hearing and decision – which was held -- the appeal therefore is moot.  But, there still remains a question of whether the commissioner of insurance is entitled to qualified immunity, and concludes that at the motion to dismiss stage, just isn’t enough of a factual record, and “we have no difficulty concluding that a reasonable official in [the commissioner's] position would have known that instigating an investigation to punish Lone Star plaintiffs for their political beliefs, and terminating their insurance license without notice or a hearing in retaliation for their filing of a legal action would violate their constitutional rights.”  Therefore, the appeal of the district court's order granting a preliminary injunction is dismissed as moot, and the decision of the district court denying the motion to dismiss on the grounds of immunity is affirmed.