Armed Citizens' Legal Def. Network v. Wash. State Ins. Comm'r

Docket Number57043-2-II
Decision Date29 August 2023
CourtWashington Court of Appeals



No. 57043-2-II

Court of Appeals of Washington, Division 2

August 29, 2023


Armed Citizens' Legal Defense Network (ACLDN) appeals the trial court's order affirming an Office of the Insurance Commissioner (OIC) order granting summary judgment for OIC and fining ACLDN $50,000 for unlawfully transacting insurance.

ACLDN is a for-profit Washington corporation. ACLDN offers memberships that include, among other benefits, financial assistance to members for legal expenses incurred as a result of a self-defense incident. RCW 48.01.040 states, "Insurance is a contract whereby one undertakes to indemnify another or pay a specified amount upon determinable contingencies."

In March 2020, the OIC served a cease and desist order on ACLDN requiring that ACLDN cease selling its memberships in Washington without having the necessary authority. The OIC later imposed a $200,000 fine for violating Washington's insurance laws. ACLDN appealed the OIC's order to OIC's hearing unit, and both parties filed for summary judgment. The presiding officer denied summary judgment for ACLDN but granted summary judgment for


OIC. The presiding officer concluded that ACLDN transacted insurance without the necessary authority and ordered ACLDN to pay a $50,000 fine. The superior court affirmed.

We hold that (1) ACLDN contracted with members to provide funds for members' legal expenses, (2) ACLDN undertook to indemnify or pay a specified amount of members' legal expenses, (3) self-defense and the resulting legal expenses incurred after an incident of selfdefense are determinable contingencies, (4) ACLDN fails to provide any meaningful argument concerning whether RCW 48.01.040 is unconstitutionally vague beyond a reasonable doubt, and (5) ACLDN fails to demonstrate that SUBSTITUTE S.B. 5810 (S.S.B. 5810), LAWS OF 2023, ch. 3, § 1, applies in this appeal. Consequently, we affirm.


A. Background

ACLDN was formed in June 2011 as a Washington for-profit corporation. ACLDN is not authorized to operate as an insurer in Washington. ACLDN is comprised of over 17,000 members.

In its online advertising, ACLDN describes itself as "an organization of gun owners pooling their strength to protect one another when a member comes under scrutiny of the legal system after acting in self defense." Admin. Rec. (AR) at 316. ACLDN is "committed to the defense of its members should they be involved in a self-defense incident." AR at 280. ACLDN's website describes the organization's

two core missions: first, to help members in the legal fight after they justifiably use force in self defense by paying for the services of attorneys, expert witnesses, private investigators and other professionals essential to mounting a vigorous legal
defense of self defense on behalf of our members. Our second mission is educating our members (and to some extent, the gun-owning public) in the law governing use of force in self defense and how armed citizens can protect against unmeritorious prosecution

AR at 317.

Following a self-defense incident, ACLDN provides financial assistance for a member's legal expenses through the ACLDN's Legal Defense Fund (Fund). The Fund receives "25% of all Network membership dues and renewals, plus 100% of corporate donations, estate and bequest gifts, and personal contributions." AR at 336. The Fund contains over $2,000,000 and has been used to fund 22 members' legal expenses following an incident involving self-defense. The amount expended by ACLDN on each member's claim varied, ranging from $400 to $75,000. Of the 22 members that have received funds from ACLDN, one was in Washington. In that case, ACLDN provided $2,000 to the member for legal expenses. ACLDN declined to provide funds in three instances, including one instance in Washington.

ACLDN's membership brochure encourages individuals to join the network and not "face the legal aftermath of self defense alone." AR at 262. In order to join the organization, prospective members must select a membership term length and pay a membership fee. The membership brochure states that "members receive financial assistance to assure vigorous legal representation after using deadly force in self defense. [Members] can rely on the Network leadership, attorneys and legal experts for knowledgeable assistance and guidance." AR at 261. The brochure further explains that "[w]hen a member uses force in self defense, the Network immediately sends up to $25,000 to the member's attorney and can provide up to $25,000 in bail


assistance.[1] This assistance is extended after any legal self-defense incident whether [a member] use[s] a firearm or other defense option." AR at 262. ACLDN makes clear that its financial assistance "pays attorney fees and if needed, the expertise of an additional attorney or attorneys . . . as well as pay[s] for expert witnesses, private investigators and other expenses to defend the member's self-defense actions," including "legal funding to defend against [a] civil law suit," retrial, or appeal. AR at 262. ACLDN's brochure provides an explicit disclaimer that "membership benefits are not insurance reimbursements." AR at 262.

After joining ACLDN, members receive an "Explanation of Member Benefits." AR at 264 (most capitalization omitted). ACLDN explains that members will receive educational materials, "access to listings for Network Affiliated Attorneys," an initial attorney fee deposit in incidents of self-defense, and bail assistance "upon a showing of legal self defense." AR at 26465. When a member requests additional funding "to defray the cost of going to trial," ACLDN's "Advisory Board will review the facts of the case and advise [ACLDN] leadership on specific issues of legal self defense on which decisions to grant financial support rest." AR at 265.


ACLDN explains that its review process "is never undertaken to deny assistance to a member who acted in legitimate self defense, but rather to prevent accusations that the [ACLDN] supports or encourages use of force without justification." AR at 265.

ACLDN's online materials reiterated that it is not insurance or a pre-paid legal service plan. ACLDN explains that it pays a fee deposit to a member's attorney

to ensure a member has legal representation immediately after an incident, and that the member's attorney can pull out all the stops in protecting the member's rights, including being with the member during contact with law enforcement, hiring a private investigator . . . keeping the news media away . . ., and other services as may be needed.

AR at 273. ACLDN does not require members to repay the fee deposit paid to their attorney.

Furthermore, where "charges are not dropped or if a grand jury is convened," ACLDN will ask the member's counsel "to estimate how much money is needed to prepare for and go to trial." AR at 345. Once the question of cost is settled, ACLDN "will fund the entire defense, assuming no new evidence has surfaced that invalidates the self-defense claim." AR at 345-46. ACLDN does not automatically pay a set amount to a member's attorney, instead ACLDN works with the member's attorney to ensure that ACLDN provides a sufficient retainer. ACLDN explains that membership benefits apply "to any justifiable use of force." AR at 321 (underline omitted). Receipt of funding "is subject to a review of the facts of the case as known at the time and a determination [that] it was a legitimate act of self defense." AR at 336. Members "are entitled to case review by one of the [ACLDN's] experts." AR at 336.

A grant of bail assistance is also subject to ACLDN's review. Before providing funding for bail expenses, ACLDN requires sufficient evidence that the member's use of force was for


self-defense. ACLDN cautions members "that assistance with posting bail may not meet in full the requirements of the bail bonding agent, and in all likelihood will require financial participation from the member, as well." AR at 342.

B. OIC Investigation and Administrative Proceedings

In April 2019, after reviewing ACLDN's website, the OIC's regulatory investigations unit formally began investigating ACLDN.[2] In March 2020, the OIC issued a...

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