author: MESKILL, Circuit Judge: WINTER, Circuit Judge,

text:
    UNITED STATES of America, Appellee, v. Mark A. SIMON, Defendant-Appellant.
    No. 1110, Docket 95-1514.
    United States Court of Appeals, Second Circuit.
    Argued Feb. 28, 1996.
    Decided May 29, 1996.

      Stephen Robert LaCheen, Philadelphia, PA (Peter Goldberger, Ardmore, PA, of counsel), for Appellant.
    Eric Comgold, Assistant United States Attorney (Zachary W. Carter, United States Attorney for the Eastern District of New York, Peter A. Norling, Assistant United States Attorney, Eastern District of New York, Brooklyn, NY, of counsel), for Appellee.
    Before: VAN GRAAFEILAND, MESKILL and WINTER, Circuit Judges.
   MESKILL, Circuit Judge:

This is an appeal from a judgment' of conviction by a jury entered August 18, 1995 in the United States District Court for the Eastern District of New York, Amon, J. The defendant, Mark Simon, was convicted of structuring cash transactions to evade currency reporting requirements in violation of 31 U.S.C. §§ 5322 and 5324(3). On appeal, Simon contends that the evidence adduced at trial was insufficient to establish knowledge of illegality, as required by Ratzlaf v. United States, 510 U.S. 135, 114 S.Ct. 655, 126 L.Ed.2d 615 (1994). Because we conclude that there was sufficient evidence for a jury to infer knowledge of illegality, we affirm the judgment of conviction.

BACKGROUND

Between July 18, 1989 and July 25, 1989, Simon, a licensed stockbroker, deposited more than $130,000 in cash into one account through 14 deposits at eight Citibank branches located throughout Brooklyn, Nassau County and Suffolk County, New York. More specifically, on Tuesday, July 18, 1989, he made two deposits of $9,730 and $9,620, respectively, at Plainview, Long Island and Melville, Long Island Citibank branches. On Wednesday, July 19, 1989, he made two deposits of $9,000 and $8,800, respectively, at Hicksville, Long Island and Garden City, Long Island Citibank branches. On Thursday, July 20, 1989, he made four deposits of $9,900, $9,900, $9,920 and $9,900, respectively, at 13th Avenue, Brooklyn, 18th Avenue, Brooklyn, Shore Parkway, Brooklyn and Plainview, Long Island Citibank branches.

On Monday, July 24, 1989, he made four deposits of $9,900, $9,700, $9,600 and $9,920, respectively, at 13th Avenue, Brooklyn, 18th Avenue, Brooklyn, Shore Parkway, Brooklyn, and Plainview, Long Island Citibank branches. On Tuesday, July 25, 1989, he made two deposits of $9,920 and $5,400, respectively, at Avenue J, Brooklyn and Plainview, Long Island Citibank branches.

Internal Revenue Service Agent Anthony Curieri arrested Simon on March 3, 1992. At trial, Agent Curieri testified that, after Simon signed a waiver of his Fifth Amendment rights, he questioned Simon about the 1989 cash deposits. According to Curieri’s testimony, the defendant admitted that “he structured these deposits to conceal the monies from the government and to avoid having, in his words, [the] special $10,000 form filled out.”

At trial, the defendant, who did not testify, conceded, through his counsel, that he structured the cash deposits, as described, with the purpose of avoiding the currency reporting requirements. He denied, however, any knowledge that his conduct was illegal. In other words, he conceded knowledge of bank reporting requirements, but denied any knowledge that it was illegal for him to structure transactions with the purpose of avoiding such requirements.

In her charge to the jury, the district judge made it clear that the jury could not convict the defendant unless the jury found beyond a reasonable doubt that the defendant knew that his conduct was illegal. More specifically, she charged the jury as follows:

The first element of the offense that the government must prove beyond a reasonable doubt is that the defendant knew that Citibank had a duty to report currency transactions in excess of $10,000 and also knew that it was unlawful for the defendant to structure his currency transactions in order to avoid causing such a report to be filed. The act of structuring without knowledge that structuring is unlawful is not a crime.

Similarly, both the prosecution and the defense reminded the jury in summation that the only issue in dispute was whether the defendant knew that his conduct was illegal. The jury convicted.

DISCUSSION

I. Standard of Review

In reviewing sufficiency of the evidence claims, “we must view the evidence, whether direct or circumstantial, in the light most favorable to the government, crediting every inference that could have been drawn in its favor, ... and we must affirm the conviction so long as, from the inferences reasonably drawn, the jury might fairly have concluded guilt beyond a reasonable doubt.” United States v. Skowronski, 968 F.2d 242, 247 (2d Cir.1992) (citations omitted). A defendant challenging the sufficiency of evidence bears “a very heavy burden.” United States v. Nusraty, 867 F.2d 759, 762 (2d Cir.1989) (quoting United States v. Young, 745 F.2d 733, 762 (2d Cir.1984), cert. denied, 470 U.S. 1084, 105 S.Ct. 1842, 85 L.Ed.2d 142 (1985)). As we have explained before, if “ ‘any rational trier of fact could have found the essential elements of the crime,’ the conviction must stand.” United States v. Badalamenti, 794 F.2d 821, 828 (2d Cir.1986) (quoting Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979)).

II. Sufficiency of the Evidence

Federal law requires financial institutions to file reports with the Treasury Department of any cash transaction exceeding $10,000. 31 U.S.C. § 5313; 31 C.F.R. § 103.22(a) (1995). Federal law also makes it illegal to structure a transaction for the purpose of evading a financial institution’s reporting requirement. 31 U.S.C. § 5324. A person who “willfully” violates the structuring prohibition is subject to criminal prosecution. 31 U.S.C. § 5322.

The Supreme Court recently held that conduct is not “willful” within the meaning of section 5322 unless the defendant knows that his own conduct is unlawful. Ratzlaf, 510 U.S. at -, 114 S.Ct. at 657. The Ratzlaf Court reasoned that because section 5324 itself prohibited purposeful structuring and section 5322 authorized prosecution only for willful structuring, a prosecution under section 5322 required more than a purpose to circumvent the reporting obligation. Id. at -, 114 S.Ct. at 658. More specifically, the Court reasoned that to avoid rendering the willfulness requirement of section 5322 mere surplusage, section 5322 must be interpreted to require proof that the defendant acted with knowledge that his structuring was unlawful. Id. at -, 114 S.Ct. at 659. Because the district court in Ratzlaf had instructed the jury that the government did not have to prove that the defendant acted with knowledge that structuring was unlawful, the Court reversed and remanded for further proceedings consistent with its opinion. Id. at -, 114 S.Ct. at 663.

Thus, “Ratzlaf dealt with an abstract jury instruction in yes or no terms; and in its wake, courts and juries must try to answer more concrete questions,” United States v. Hurley, 63 F.3d 1, 16 (1st Cir.1995), cert. denied, — U.S. -, 116 S.Ct. 1322, 134 L.Ed.2d 474 (1996), such as what type and quantum of proof is sufficient to support a reasonable inference of willfulness. In Ratzlaf itself, the dissenters opined that the majority’s knowledge requirement would make structuring prosecutions “difficult or impossible.” 510 U.S. at -, 114 S.Ct. at 669 (Blackmun, J., dissenting). The majority responded with the unremarkable suggestion that knowledge of illegality can be inferred from evidence of the defendant’s conduct. Id. at - n. 19, 114 S.Ct. at 663 n. 19.

Courts directly and indirectly addressing this issue in the wake of Ratzlaf have concluded that general consciousness of illegality, the method of structuring, and the status of the defendant can support a reasonable inference of knowledge of illegality. See Hurley, 63 F.3d at 16 (concluding that “the thrust of Ratzlaf s wilfulness requirement is met if persons engaged in depositing broken down amounts are generally conscious that their laundering operation is illegal, even if they do not know the precise requirements of the law.”); United States v. Marder, 48 F.3d 564, 574 (1st Cir.) (stating that the purchase of approximately $10,000 worth of money orders at “three separate banks suggests that [the] defendant had a purpose beyond evasion of the reporting requirement: concealment of his structuring,” tending to prove knowledge of illegality), cert. denied, — U.S. -, 115 S.Ct. 1441, 131 L.Ed.2d 320 (1995); United States v. Walker, 25 F.3d 540, 548 n. 8 (7th Cir.) (finding that complex scheme to enlist family members to purchase money orders and cashier’s checks in small denominations provided sufficient evidence of knowledge of illegality), cert. denied, — U.S. -, 115 S.Ct. 371, 130 L.Ed.2d 323 and — U.S. -, 115 S.Ct. 531, 130 L.Ed.2d 434 (1994); United States v. Retos, 25 F.3d 1220, 1231 (3d Cir.1994) (reversing conviction on improper instruction, but finding that defendant’s status provided a sufficient basis to infer knowledge of illegality). However, at least one circuit has criticized such decisions and required evidence of knowledge distinct from the evidence of structuring itself. United States v. Wynn, 61 F.3d 921, 928 (D.C.Cir.1995) (disagreeing with Marder, 48 F.3d at 574, and Walker, 25 F.3d at 548 n. 8). Yet, the Wynn Court apparently agreed that the status of the defendant can support an inference of knowledge of illegality. Id. (citing Retos, 25 F.3d at 1231, with approval).

We recognize that currency structuring is not so “obviously ‘evil’ or inherently ‘bad’” that the act of structuring itself satisfies the willfulness requirement. See Ratzlaf, 510 U.S. at -, 114 S.Ct. at 662. However, we also recognize that the method of strumming can provide circumstantial evidence of willfulness. As the majority noted in Ratzlaf, “[a] jury may, of course, find the requisite knowledge on defendant’s part by drawing reasonable inferences from the evidence of defendant’s conduct.” Id. - n. 19, 114 S.Ct. at 663 n. 19 (emphasis added) (citations omitted). And as we have noted repeatedly, a jury may infer “the state of a man’s mind from the things he says and does.” United States v. Sweig, 441 F.2d 114, 117 (2d Cir.), cert. denied, 403 U.S. 932, 91 S.Ct. 2256, 29 L.Ed.2d 711 (1971); see also United States v. Sheiner, 410 F.2d 337, 340 (2d Cir.), cert. denied, 396 U.S. 825, 90 S.Ct. 68, 24 L.Ed.2d 76 (1969).

In other words, when the method of structuring suggests a significant effort not only to avoid the bank reporting requirements but to conceal the currency structuring itself from the authorities, Ratzlaf’s requirement of “something more” is satisfied. 510 U.S. at -, 114 S.Ct. at 657. Although such conduct may support more than one reasonable inference, the trier of fact may choose between reasonable inferences. In reviewing a claim that the government did not present legally sufficient evidence of willfulness, we need only determine if “any rational trier of fact could have found” knowledge of illegality. Jackson, 443 U.S. at 319, 99 S.Ct. at 2789.

Moreover, as we have noted in other contexts, “the trier of fact may properly consider the general educational background and expertise of the defendant as bearing on the defendant’s ability to form the requisite wilful intent.” United States v. Fletcher, 928 F.2d 495, 501-02 (2d Cir.) (citations omitted), cert. denied, 502 U.S. 815, 112 S.Ct. 67, 116 L.Ed.2d 41 (1991). A jury may infer knowledge of the law from a defendant’s education and expertise. United States v. MacKenzie, 777 F.2d 811, 818 (2d Cir.1985) (“Defendants’ backgrounds (each had a college degree, Roderick in economics and Malcolm in business) also demonstrate the likelihood they knew what the law required.”), cert. denied, 476 U.S. 1169, 106 S.Ct. 2889, 90 L.Ed.2d 977 (1986).

We conclude that the evidence presented at trial was sufficient to sustain the defendant’s conviction for currency structuring. There was sufficient circumstantial evidence for a rational jury to find that the defendant comprehended the unlawfulness of his structuring.

First, and most importantly, we emphasize that this is not a case like Ratzlaf, where the court improperly instructed the jury on willfulness. The district court here instructed the jury that the government was required to prove knowledge of illegality. The government and the defense reminded the jury of that requirement.

Second, the defendant’s conduct in this case suggests not only knowledge of the reporting requirements and an intent to circumvent those requirements, but knowledge of illegality as well. Contrast Ratzlaf, 510 U.S. at -, 114 S.Ct. at 657 (describing the defendant’s efforts in obtaining cashier’s checks from at least ten different banks immediately after learning from casino that it would have to file a report if it accepted $100,000 in cash as repayment of gambling debt). Here, the undisputed evidence of the defendant’s structuring—of his method of structuring—supports a reasonable inference that the defendant was attempting to conceal not only his deposits, but also his acts of structuring. In other words, a reasonable jury could infer that the extensive efforts undertaken by the defendant in structuring his cash deposits “undoubtedly [were] based on the knowledge that his conduct was unlawful.” Caming v. United States, 889 F.Supp. 736, 741 (S.D.N.Y.1995).

In structuring his deposits of more than $130,000 in cash, the defendant went to eight different branches of Citibank in Brooklyn, Nassau County and Suffolk County on 14 different occasions over a seven day period. On two separate days, Simon went to four different Citibank branches located throughout two different counties. Simon’s decision to make all his deposits in different branches of the same bank rather than in different banks may have been made out of carelessness or convenience or lack of knowledge of how branches assemble information for reporting purposes. The extensive effort Simon did take in structuring these deposits amply supports a reasonable inference that he was attempting to hide his structuring activities because he knew that his conduct was unlawful.

Finally, we note that this defendant is not an unsophisticated person. He was a licensed stockbroker, and he himself was required, as a stockbroker, to file currency transaction reports with the Treasury Department. See 31 U.S.C. § 5315; 31 C.F.R. § 103.11(n)(2) (1995). The jury reasonably could have inferred that this defendant possessed the knowledge and sophistication to understand that his own conduct was unlawful. Retos, 25 F.3d at 1231; see Wynn, 61 F.3d at 928 (citing Retos with approval).

To the extent that defense counsel suggests, as he did at trial, that the defendant was attempting to avoid filling out the reporting forms himself, see n.l, supra, the jury logically could reject that explanation, reasoning that the defendant’s structuring conduct entailed considerably more effort in time and travel than what is entailed in completing a currency transaction report. To the extent that defense counsel argues that the defendant was merely attempting to avoid scrutiny of his deposits by the IRS, we observe that he would have had a better chance of achieving this objective if he had used different banks or different account names. The defendant’s attempts to conceal his activities amply support a reasonable inference that the defendant knew that his own conduct was unlawful. The appellant, in challenging the sufficiency of the evidence, has not borne his “very heavy burden.” Nusraty, 867 F.2d at 762 (quoting Young, 745 F.2d at 762).

CONCLUSION

For the foregoing reasons, the judgment of the district court is affirmed.

WINTER, Circuit Judge,

dissenting:

Respectfully, I disagree with my colleagues as to the sufficiency of the evidence that Simon knew that structuring cash deposits to avoid reporting requirements was illegal. I therefore dissent.

The parties and all members of the panel are in agreement that Simon triggered the obligation of Citibank to report cash transactions exceeding $10,000. 31 U.S.C. § 5313; 31 C.F.R. § 103.22(a) (1995). Indeed, Citibank duly reported Simon’s transactions. We also agree that Simon knowingly made separate deposits of under $10,000 in an attempt to evade the daily reporting requirements. 31 U.S.C. § 5324. Simon concedes that he wanted to conceal the aggregate size of the transactions from the government. He readily admitted to that purpose when arrested. What is at issue is whether Simon knew that the structuring of deposits to avoid reporting requirements itself was illegal.

The government paints Simon as a sophisticated stockbroker with knowledge of reporting requirements for currency transactions in excess of $10,000. In its view, Simon conceived of a clever scheme to make separate cash deposits of slightly under that amount at different Citibank branches on the days in question. The very nature of the scheme, the government argues, supports an inference of Simon’s knowledge that structuring was illegal. See Ratzlaf v. United States, 510 U.S. 135, 114 S.Ct. 655, 126 L.Ed.2d 615 (1994).

The scheme was anything but clever, however, and Simon’s understanding of the laws regarding the reporting of cash transactions was hardly sophisticated. Simon’s fourteen deposits were all made to a single account in his own name. For Simon to have expected that daily deposits totalling over $10,000 would not be detected — the government’s, and evidently the jury’s, view of his purpose — he must have been ignorant of the elementary fact that banks tally all deposits during and at the end of the day in order to determine the balance in an -account. In short, the government’s position is that Simon’s sophistication extended to knowledge of the illegality of structuring but did not include a familiarity with bank statements. Discovery of the fact that he had made cash deposits in excess of $10,000 on each of the days in question was thus as inevitable as the sunset. Indeed, the total of the daily cash deposits was reported by the bank, and the government conceded at oral argument that the reports were precisely what caused Simon’s arrest. Far from being a nascent Professor Moriarty, Simon might as well have faxed his deposit receipts to the United States Attorney.

Simon’s status as a licensed stockbroker adds nothing to the proof regarding his knowledge of the laws regulating structuring. The government’s evidence was only that financial institutions, including stockbrokers, must file reports concerning cash transactions in excess of $10,000. The government offered no evidence as to whether Simon ever received cash from a client, ever filled out such a report, or ever received training as to pertinent statutory or regulatory requirements. The government’s proof, in short, was the law itself.

The government’s entire ease thus rests on inferences to be drawn from Simon’s conduct. What is lacking, however, is an explanation of why someone who knew that structuring deposits was illegal would make several cash deposits on the days in question — on one day totaling over $39,000 — into a single account in his own name, whether or not separate branches were used.

Simon’s conduct is at least as consistent with the lack of knowledge of the illegality of structuring as with that knowledge. Given that his conduct made his arrest inevitable, it is far more consistent with lack of knowledge. When asked at oral argument how Simon’s behavior differed from that of a person lacking knowledge of the illegality of structuring, the government speculated that such a person might make separate deposits at the same branch but at different times during the day. However, such a person might also anticipate that a teller at that branch might recognize the depositor as a repeat customer and ask him to fill out a currency transaction report. Indeed, Simon’s post-arrest statement suggested exactly that fear.

My colleagues suggest that the jury could have logically rejected the inference that Simon hoped through his efforts only to avoid having to fill out currency transaction forms himself because structuring “entailed considerably more effort in time and trouble” than filling out the reports. I may misunderstand my colleagues’ reasoning, but it seems to me unresponsive. Someone who is ignorant of the illegality of structuring but wants to avoid making a currency transaction report might well spend time and effort in going to different branches to achieve that goal.

I realize that Simon’s behavior is more than highly suspicious. He had access to large amounts of cash during very brief periods of time, and the likelihood of some kind of past or future serious criminal activity looms large. However, Ratzlaf, in overruling our precedents, requires proof beyond a reasonable doubt that Simon knew that structuring was illegal. The government’s proof failed to meet this standard. Simon’s conduct, the sole evidence offered to show such knowledge, demonstrates at best a belief that form — deposits just under $10,000 at separate branches — would prevail over substance — the aggregate deposits in one day— for purposes of the currency transaction rules. This is not an unreasonable or uncommon belief given our tax or regulatory laws. For example, splitting a large monetary gift between two tax years alters the tax consequences, as does the use of relatively meaningless trusts for estate purposes.

Finally, it ill behooves the government to seek a conviction based on flimsy inferences regarding a defendant’s knowledge of the details of currency reporting and structuring laws. The government has refused to adopt proposals that the requirements of these laws be posted in banks. 53 Fed.Reg. 7,948 (1988); 54 Fed.Reg. 20,398 (1988). Such ignorance is presumably fostered in order to identify the depositors and to put them under surveillance in order to locate the sources of cash. The government’s failure to post such requirements is surely no defense. Nevertheless, the lack of such notices undermines any assumption that the details of the laws are widely known.

I respectfully dissent.

      . Subsequent to the conduct which formed the basis of the indictment, Congress recodified § 5324(l)-(3) as § 5324(a)(l)-(3), without substantive change. Congress also added subsection (b) to impose the prohibitions of subsection (a) in the international currency context. See Annunzio-Wylie Anti-Money Laundering Act, Pub.L. No. 102-550, tit. XV, § 1525(a), 106 Stat. 4064 (1992) (codified at 31 U.S.C. § 5324). The grand jury indicted Simon on July 14, 1994 under the law in effect at the time of the conduct charged in the indictment. For consistency and clarity, we refer to the codification in effect at the time of the conduct charged in the indictment. See 31 U.S.C. § 5324 (1988 & Supp. V 1993). See also infra n.3 (discussing 1994 amendment).

      . Defense counsel pointed out, on cross-examination and on appeal, that the agent's contemporaneous report states that the defendant told him that he structured the deposits “to conceal the monies from the government and avoid filling out that $10,000 special form.”

      . Ratzlaf overruled Second Circuit precedent, namely, United States v. Scanio, 900 F.2d 485 (2d Cir.1990), under which knowledge of the bank reporting obligation and the intent to evade that obligation provided a sufficient basis for conviction. Although Congress subsequently amended the anti-structuring law to conform to the Scania interpretation, see Riegle Community Development and Regulatory Improvement Act of 1994, § 411, Pub-L. No. 103-325, 108 Stat. 2160, 2253 (1994) (codified at 31 U.S.C. §§ 5322(a), (b), 5324(c)), Ratzlaf governed anti-structuring prosecutions for Simon’s conduct, which occurred pri- or to the amendment. See also supra n. 1 (discussing 1992 amendment).


source: Caselaw Access Project

author: LEVAL, Circuit Judge:

license: Public Domain

text:
    PREFERRED PHYSICIANS MUTUAL RISK RETENTION GROUP and U.S. Physicians Mutual Risk Retention Group, Plaintiffs-Appellees, v. George E. PATAKI, Governor of the State of New York, Dr. Barbara De Buono, Commissioner of Health of the State of New York and Edward J. Muhl, Superintendent of Insurance of the State of New York, Defendants-Appellants, Physicians’ Reciprocal Insurers, Medical Liability Mutual Insurance Company and Catholic Medical Center of Brooklyn & Queens, Inc., Defendants.
    Nos. 1598, 2198, Dockets 94-9224, 94-9322.
    United States Court of Appeals, Second Circuit.
    Argued July 21, 1995.
    Decided May 30, 1996.
    Phyllis H. Weisberg, New York City (Kurzman Karelsen & Frank), for PlaintiffsAppellees.
    August L. Fietkau, Assistant Attorney General, New York City (Dennis C. Vacco, Attorney General of the State of New York and Frederic L. Lieberman, Assistant Attorney General, Jon G. Rothblatt, Associate Attorney, New York State Insurance Department, of counsel), for Defendants-Appellants.
    Philip C. Olsson, Washington, D.C. (Olsson, Frank and Weeda, on the brief), for Amicus National Risk Retention Association.

      Ellen Dolíase Wilcox, Kansas City, Missouri, for Amicus National Association of Insurance Commissioners.
    Before WINTER, LEVAL, and CALABRESI, Circuit Judges.
   LEVAL, Circuit Judge:

Preferred Physicians Mutual Risk Retention Group (“Preferred”), plaintiff-appellee, is a risk retention group (“RRG”) chartered under Missouri law, which offers insurance to doctors practicing in the State of New York. Preferred is not licensed by the State of New York’s Commissioner of Insurance. It brought this action to challenge the lawfulness of New York’s Excess Insurance Law (“EIL”), because it gives a commercial advantage to insurers who are licensed in New York. Plaintiff contends principally that the federal Liability Risk Retention Act (“LRRA”), 15 U.S.C. § 3901-04, by exempting RRGs from most regulation by non-domieiliary states and barring discrimination against them, protects it from the injurious effects of the EIL. Judge Leisure granted summary judgment in plaintiff’s favor. For the reasons set forth below, we vacate and remand for further proceedings.

Background

RRGs are groups of risk-bearers, in this case anesthesiologists, who have banded together in an insurance cooperative to share liability. See 15 U.S.C. § 3901(a)(4). RRGs function pursuant to a federal statute, the 1986 LRRA. 15 U.S.C. § 3901-04. We have had occasion to review the LRRA’s history once before. See Insurance Company of the State of Pennsylvania v. Corcoran, 850 F.2d 88, 89-90 (2d Cir.1988). In brief, the LRRA was an expansion of the 1981 Product Liability Risk Retention Act (“PLRRA”), Pub.L. No. 97-45, 95 Stat. 949 (1981), which allowed RRGs to insure industry against product liability injuries only. Congress’s intention in passing the LRRA was to decrease insurance rates and increase the availability of coverage by promoting greater competition within the insurance industry. See H.R.Rep. No. 99-865, 1986 U.S.C.C.A.N. 5303, 5304-06 (report accompanying Risk Retention Amendments of 1986, Pub.L. No. 99-563, 100 Stat. 3170) [hereinafter “House Report”].

Under the MeCarran-Ferguson Act, 15 U.S.C. § 1012, the business of insurance is regulated by the states, rather than the federal government. Most states did not allow RRGs prior to the LRRA’s passage. However, the LRRA partially preempts state regulation of RRGs and prohibits states from excluding RRGs chartered under the laws of another state. See 15 U.S.C. § 3902(a)-(b)(exemptions from state law); Corcoran, 850 F.2d at 89-90 (describing history and functioning of LRRA); National Home Ins. Co. v. State Corp. Comm’n, 838 F.Supp. 1104, 1110 (E.D.Va.1993)(same). An RRG’s state of domicile may “regulate the formation and operation” of the group. 15 U.S.C. § 3902(a)(1). Non-domiciliary states retain some regulatory authority under the LRRA, but it is highly limited. National Home, 838 F.Supp. at 1111.

This ease requires that we determine whether New York’s EIL regulates or discriminates against Preferred in a manner prohibited by the LRRA. The EIL provides a substantial benefit to certain medical practitioners who obtain primary insurance coverage from a New York-licensed insurer. Under the EIL, physicians and dentists with hospital admitting privileges are provided— at no expense to the practitioners — a free layer of excess insurance coverage. Practitioners qualify for the insurance only if their primary coverage is with a New York-licensed insurer and the primary policy provides at least $1 million of coverage for each individual claimant, with a total protection of $3 million for all claims. See N.Y. Comp. Codes R. & Regs. tit. 10, § 91.1(a). Participating physicians receive excess coverage sufficient to provide them with total coverage of $2 million per claimant, and $6 million for all claims.

Because Preferred is not licensed in New York, physicians insured by it — or any other out-of-state RRG or insurer — are not eligible to receive the free excess insurance coverage provided by the EIL. Preferred brought this action in the district court against various New York State defendants. When the defendants’ moved for summary judgment, Preferred cross-moved for partial summary judgment. Preferred argued that the EIL violates the provisions of the LRRA which make RRGs “exempt” from any State law that either: (1) “regulate[s], directly or indirectly, the operation of a risk retention group,” 15 U.S.C. § 3902(a)(1), or (2) “otherwise diseriminate[s] against a risk retention group,” id. § 3902(a)(4). Preferred also claimed that the EIL impermissibly burdens interstate commerce. The district court found there to be no disputed issue of material fact, and granted Preferred’s motion for partial summary judgment. Subsequently, the trial judge ordered injunctive relief requiring, inter alia, that physicians insured by out-of-state RRGs be allowed to participate in the EIL program as if covered by state-licensed insurers. New York appeals.

Discussion

I. Indirect Regulation Under 15 U.S.C. § 3902(a)(1)

Preferred argues that the EIL constitutes indirect regulation of RRGs, and as such is prohibited by the LRRA. See 15 U.S.C. § 3902(a)(l)(exempting RRGs from any state law that would “regulate, directly or indirectly,” their operation) (emphasis added). It contends that, by granting a competitive advantage to regulated competitors, New York’s EIL effectively compels Preferred to submit to regulation by New York, and thus indirectly regulates it. The district court agreed, and granted Preferred’s motion for summary judgment. Summary judgment is, of course, appropriate only where there is no genuinely disputed issue of material fact, and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c). Without prejudice to any findings that the district court may make on remand, we think the district court’s determination was based on a misunderstanding of the showing required of Preferred in order to make out a claim of indirect regulation under the LRRA.

We agree with the district court that the LRRA’s preemption language is expansive. Both direct and indirect regulation of RRGs by non-domiciliary states are forbidden. 15 U.S.C. § 3902(a)(1). This expansiveness is emphasized by the structure of the Act, which sets forth a broad preemption followed by certain limited exceptions. See 15 U.S.C. § 3902(a)(1)(A-I); Corcoran, 850 F.2d at 91 (predecessor statute, PLRRA, “carved out specific exceptions to ... broad preemption”); State of Florida v. National Amusement Purchasing Group, Inc., 905 F.2d 361, 363 (11th Cir.1990)(same).

Furthermore, the legislative history of the Act makes clear that Congress intended to exempt RRGs broadly from state law “requirements that make it difficult for risk retention groups to form or to operate on a multi-state basis.” House Report, at 5305; see New York Conf. of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., — U.S. -, -, 115 S.Ct. 1671, 1677, 131 L.Ed.2d 695 (1995)(consideration of text, structure, and legislative history of federal statute proper in determining whether state law is preempted). The House Committee Report explains that the Act is a response to the policies of many states that had “prevent[ed] insurance purchasing groups from achieving the advantages in rates and terms derived from the economic efficiency of collective purchasing that could contribute to resolving affordability and availability problems [in the insurance industry].” House Report, at 5305. Hence, the Congress “exempt[ed] risk retention ... groups from State law, in the respects specified in the [Act], in order to achieve [these] beneficial effects.” Id. at 5305-06.

Preferred urges us to consider the economic impact of the EIL on its ability to compete in the New York malpractice insurance market a form of indirect regulation forbidden under the LRRA. There is no disagreement between the parties that the EIL constitutes, in effect, a subsidy by New York to insurers licensed in that state who sell insurance to those EIL-eligible medical practitioners who are also in the market for excess coverage. Preferred argues, and the district court found, that this subsidy constitutes a “powerful incentive, bordering on compulsion, to out-of-state RRGs to receive New York accreditation.”

Were the evidence of economic impact well-developed, we would be required to determine whether the district court was correct in finding the effect of the subsidy on Preferred’s ability to compete in the New York medical malpractice market was sufficiently substantial to constitute — in essence — indirect regulation. But that question is not before us in answerable form. On the record as it now stands, the compulsive effect of the EIL on Preferred and other RRGs seeking to do business in New York is ambiguous.

To begin with, it is not clear from the record how much, if at all, the compulsive impact of this subsidy is counterbalanced by certain competitive advantages that New York argues RRGs possess because of their exemption under the LRRA from the bulk of New York’s insurance regulations. See 15 U.S.C. § 3902(a)(1).

Furthermore, the value of the subsidy received by New York licensed insurers under the EIL is unclear because it is dependent upon the importance to New York health care practitioners of the excess coverage provided. As to practitioners who would purchase excess insurance in any event, the subsidy is functionally the equivalent of the market value of the excess coverage policy. On the other hand, with regard to those practitioners who value the excess policy at less than its market value, and would therefore have otherwise not purchased excess coverage, the subsidy benefit received by the New York licensed insurer would be smaller. As to these customers, the value of the subsidy for the insurer would be the below-market price at which the insureds would have purchased excess insurance. And of course, if there are physicians who have no interest in receiving the excess coverage, and who therefore would not have purchased it at any price, as to them the New York licensed insurer receives no subsidy benefit at all.

New York asserts on appeal that roughly two-thirds of all physicians licensed in New York do not participate in the EIL program. This fact, if true, may tend to support New York’s argument that physician RRGs covering medical malpractice risks are not coerced by the EIL into subjecting themselves to the state’s regulation as a condition of doing business in New York. The fact that Preferred has operated in New York in the face of the EIL without accepting regulation further tends to support New York’s contention. We are advised that no RRG has submitted to New York regulation. (The parties’ submitted papers do not, however, show the extent of operations in New York by unregulated RRGs.) On the other hand, if the EIL effectively forecloses RRGs from competing in a substantial submarket of New York’s physicians, that might constitute indirect regulation of RRGs.

Because the record is unclear, and the district court made no findings on these issues, we cannot determine whether the EIL has sufficient impact on RRGs to constitute indirect regulation. The mere existence of a competitive advantage to regulated insurers conferred by a New York State statute does not necessarily amount to indirect regulation. Whether unlicensed RRGs are either compelled to accept regulation in order to compete in New York or effectively foreclosed from a substantial submarket depends on facts not shown in the record. On this unclear record, we prefer not to venture to interpret the precise reach of the statute. We leave such interpretations to be made in the first instance by the district court in the light of its factual findings. We conclude that summary judgment should not have been granted in favor of Preferred.

New York argues in addition that its motion for summary judgment should have been granted. We disagree. On New York’s motion, Preferred was entitled to have the evidence viewed in the light most favorable to it, and to have the motion denied unless the evidence, seen in that light, left no issue of material fact and compelled judgment in New York’s favor. See Goenaga v. March of Dimes Birth Defects Found., 51 F.3d 14, 18 (2d Cir.1995); Olin Corp. v. Consolidated Aluminum Corp., 5 F.3d 10, 14 (2d Cir.1993). Preferred’s demonstration of the competitive advantage conferred on regulated insurers by the EIL sufficiently raises the issue of compulsion to accept regulation as to make summary judgment in New York’s favor inappropriate.

In sum, Preferred has put forward enough support for its claim of coercion to withstand New York’s motion for summary judgment. Equally, summary judgment in favor of Preferred is inappropriate on this record since New York has raised a material factual dispute as to the eoerciveness of the EIL. See, e.g., Cadbury Beverages, Inc. v. Cott Corp., 73 F.3d 474, 483-84 (2d Cir.1996)(denying on appellate review motion and cross-motion for summary judgment). We therefore remand for further consideration of Preferred’s claim under § 3902(a)(1).

II. Discrimination Under 15 U.S.C. § 3902(a) (b)

As an alternative ground for granting Preferred’s motion for summary judgement, the district court found that the EIL violated the LRRA’s general prohibition on discrimination against RRGs. See 15 U.S.C. § 3902(a)(4) (prohibiting any state from “otherwise discriminat[ing] against a risk retention group”). The question as to what constitutes discrimination against RRGs under the LRRA is one of first impression in this circuit. The district court ruled that because the EIL provides .advantages to licensed insurers that it does not provide to any unlicensed insurer, including to RRGs, it discriminates against RRGs for purposes of § 3902(a)(4). We think the question is more complex.

The word “discrimination” is of course inherently “ambiguous.” See Guardians Assoc. v. Civil Serv. Comm’n, 463 U.S. 582, 592, 103 S.Ct. 3221, 3227, 77 L.Ed.2d 866 (1983)(opinion of White, J.). The text and legislative history of the LRRA do little to illuminate Congress’s intent. However, we think — both as a matter of ordinary meaning and by analogy to similar uses of the term “discriminate” in other statutes — that discrimination against a particular class is not proven merely by a showing that the class is part of a larger group that suffers some competitive disadvantage.

The concept of discrimination requires more. In its narrowest meaning it requires a showing that the contested act was done with the intent to discriminate against the protected class. The word is also sometimes employed, in particularly protective legislation, in a broader sense that is satisfied by a showing of “disparate impact” — that is to say, a harmful effect of a generally applicable policy that is disproportionately visited upon a protected class, regardless whether inspired by an intention to harm that class. Cf. Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 985-87, 108 S.Ct. 2777, 2783-85, 101 L.Ed.2d 827 (1988)(describing difference between Title VII “disparate treatment” and “disparate impact” analysis). In no case, however, is the concept of discrimination satisfied by a mere showing that the rule in question disadvantages a protected class, absent a further showing that the injurious practice either disparately effects the protected class, or was intended to injure it. Because the district court’s finding of discrimination in violation of § 3902(a)(4) was premised solely on the conclusion that RRGs (among others) are injured by the EIL, that finding must be vacated.

If Preferred were to demonstrate that the EIL was enacted with discriminatory intent, that would no doubt suffice to make out a claim of discrimination under the LRRA. Cf. Mears Transp. Group v. Florida, 34 F.3d 1013, 1018 (11th Cir.1994) (suggesting showing of discriminatory intent would be sufficient to make out discrimination claim under § 3902(a)(4)), cert. denied, — U.S. -, 115 S.Ct. 1960, 131 L.Ed.2d 852 (1995). Summary judgment is not appropriate on this point, however, as there is a material factual dispute as to whether the EIL was enacted with discriminatory intent. New York notes that the EIL was enacted in its initial form in 1985, prior to the passage of the LRRA. The State therefore suggests that the EIL could not possibly have been intended to diseriminate against RRGs, which had not existed in New York prior to the LRRA’s passage. Preferred rejoins that the EIL expires of its own terms each year, and so has been renewed many times since the passage of the LRRA with full knowledge of its effect on RRGs and with an intent to discriminate against them. These are matters for the consideration of the district court on remand.

Turning to the possibility that Preferred might prevail on a disparate impact theory, this claim raises questions which the parties did not address in their first round of litigation.

As a matter of law, we note that it is unclear whether the LRRA forbids only intended targeting of RRGs, or whether it also prohibits legislation with an unintended disparate impact. The Supreme Court has indicated that the application of disparate impact theory to a given statute’s anti-discrimination provisions is a troublesome question, requiring careful assessment of congressional purpose. See, e.g., Alexander v. Choate, 469 U.S. 287, 292-99, 105 S.Ct. 712, 715-19, 83 L.Ed.2d 661 (1985)(considering whether to apply disparate impact theory to § 504 of the Rehabilitation Act); cf. Washington v. Davis, 426 U.S. 229, 238-42, 96 S.Ct. 2040, 2047-49, 48 L.Ed.2d 597 (1976)(finding of discrimination under Equal Protection Clause generally requires showing of invidious intent).

We do not undertake to answer this question here, because the parties have failed to brief it adequately in their presentation to us, and because the issue may well be mooted by the district court’s findings on remand. If the district court finds on remand, after exploring the factual issues presented in the first part of this opinion, that the EIL indirectly regulates RRGs, the disparate impact question will be moot. Similarly, if Preferred proves able to demonstrate intentional discrimination, or fails to show the existence of facts that would satisfy a disparate impact standard, these events too would render it unnecessary for the district court to reach the question.

We note the existence of a factual dispute material to the question of whether Preferred, presuming the applicability of disparate impact analysis, can prevail on such a claim. To demonstrate that the EIL has a disparate impact on RRGs, Preferred would have to offer evidence as to the limited number of unlicensed non-RRG insurers in the New York market affected by the EIL, in order to show that the effect of the New York law falls disparately on RRGs rather than more generally on a wide group of unlicensed insurers doing business in New York.

We inquired about this matter at oral argument. In post-argument letter briefs submitted to us, the parties have advanced very different views. New York contends that the “mail order” exception to licensing freely allows unlicensed foreign insurers to write policies on New York risks, so long as they do not solicit in New York or enter the state to complete the transaction. N.Y. Ins. Law § 1101(b)(2). New York suggests that numerous foreign unlicensed entities other than RRGs are actively engaged in providing malpractice insurance to New York doctors and dentists in this fashion, and that the burden of the EIL meaningfully falls on them to the same extent as on RRGs, dispelling the contention that it disparately injures RRGs. Preferred’s letter brief suggests that the barriers imposed by New York’s regulatory scheme are so substantial that, among unlicensed issuers, only RRGs acting under the protection of the LRRA can effectively compete for New York business.

Because the EIL on its face does not burden RRGs any more severely than other foreign unlicensed insurers competing for New York business, Preferred will need to develop a factual record supporting its contention that no meaningful business is done by other unlicensed insurers if it is to prevail on a disparate impact claim, presuming that the statute allows for one at all.

Conclusion

The judgment of the district court is vacated. The ease is remanded for further findings.

      . By stipulation of the parties, U.S. Physicians Mutual Risk Retention Group has withdrawn from this case.

      . The EIL was originally enacted in a slightly different form in 1985. See 1985 N.Y. Laws 294. Although the statute expires by its own terms each year, it has been repeatedly reenacted— with amendments not relevant to this dispute. See e.g., Act of July 1, 1994, 1994 N.Y. Laws 223; see also N.Y. Comp.Codes R. & Regs. tit. 10, Part 91 (1995).

      .This coverage is funded, through a complex mechanism, by general hospitals and third-parly payers. See N.Y. Comp.Codes R. & Regs. tit. 10, Part 91. The details are not relevant to this appeal.

      . A practitioner not covered by an individual primary policy may also participate in the program if insured through an approved hospital policy. See N.Y. Comp.Codes R. & Regs. tit. 10, § 91.1(a).

      . This prohibition does not apply to an RRG’s state of domicile. See 15 U.S.C. § 3902(a)(1).

      . The LRRA expressly exempts RRGs from:
      any State law, rule, regulation, or order to the extent that [it] ... would—
      (1) make unlawful, or regulate, directly or indirectly, the operation of a risk retention group except that the jurisdiction in which it is chartered may regulate the formation and operation of such a group and any State may require such a group to [comply with certain specified requirements]____
      (4) otherwise discriminate against a risk retention group or any of its members, except that nothing in this section shall be construed to affect the applicability of State laws generally applicable to persons or corporations.
      15 U.S.C. § 3902(a).

      .For example, RRGs may be required by a non-domiciliary state to "comply with unfair claim settlement practices law,” 15 U.S.C. § 3902(a)(1)(A), “pay, on a nondiscriminatory basis, applicable premium and other taxes which are levied on admitted insurers,” id. at § 3902(a)(1)(B), and “register with and designate the State insurance commissioner as its agent” for service of process, id. at § 3902(a)(1)(D).

      . The New York licensed insurer also receives no subsidy benefit with regard to those physicians who are ineligible for excess coverage under the EIL for reasons unrelated to their primary coverage, for example because they lack hospital admitting privileges.

      . These materials are not formally in the record, and we note them purely for purposes of illustration. We recognize that Preferred may be able to rebut the significance of this figure. New York’s numbers might include physicians who are retired, not practicing in New York, or do not possess hospital admitting privileges. Furthermore, even if only some portion of physicians (perhaps only those practicing in relatively high-risk areas of specialty), find New York licensed insurers preferable because of the EIL coverage that results, this may, as noted below, still constitute indirect regulation of a sub-market within the medical malpractice insurance industry. These are matters for the district court to consider on remand.

      . We recognize that the Eleventh Circuit’s ruling in Mears may be read to suggest the inapplicability of disparate impact analysis to § 3902(a)(4) claims. See Mears, 34 F.3d at 1018.

      . The district court also ruled that summary judgement in favor of Preferred was appropriate because the EIL impermissibly burdens interstate commerce. The district court expressly based its ruling on the determination that the EIL violates the LRRA. Because we have determined that this finding was inappropriate, we remand for further consideration of Preferred's Commerce Clause claim by the district court in the first instance.