*1 June S031022. 1995.] [No. al., Petitioners, et LIFE INSURANCE COMPANY
MANUFACTURERS v. THE SUPERIOR OF CITY AND COUNTY OF SAN
THE COURT FRANCISCO, Respondent; AGENCY, INC., in Interest.
WEIL INSURANCE Real Party AGENCY, INC., Petitioner, INSURANCE WEIL OF THE THE SUPERIOR COURT CITY AND COUNTY OF SAN FRANCISCO, Respondent; al., et
MANUFACTURERS LIFE INSURANCE COMPANY Real Parties in Interest.
Counsel Khourie, Crew, Crew & Townsend and Townsend Khourie and Jaeger, Crew, Fumiss, Ma, C. Daniel J. Louise E. F. Eugene Timothy Perry, Amy Slater, Thoedore T. Herhold and Paul F. Kirsch for Petitioner and Real Party in Interest Weil Insurance Inc. Agency, General, Walston,
Daniel E. Roderick E. Chief Assis- Lungren, Attorney General, Greene, tant Sanford Gruskin and Thomas Assistant Attorney General, Dove, Markham, Jr., Thomas P. Jesse W. Dave Attorneys Stirling, Foote, General, Richard N. and Kathleen E. Gil Light Deputy Attorneys Garcetti, (Los District Thomas A. and Alan Attorney Angeles), Papageorge District as Amici Curiae on behalf of Peti- Yengoyan, Deputy Attorneys, tioner and Real in Interest Weil Insurance Inc. Party Agency, Biemat, Howard, Rice, Nemerovski, Falk, James D. Robertson & Canady, Falk, Jr., III, Calande, B. Escher Theresa M. Jerome H. Pauline E. Joseph Beiner, Mullin, Fredericks, Richter & Dale E. Sheppard, Hampton, Darryl *6 Woo, Adams, Shane, Hazeltine, Moak, Ann M. & James L. David R. Duque Musick, Garrett, Peeler & De Jon C. Cederberg, R. Sparkman, Joseph Briyn, Freeland, Weld, Roach & Roaul D. Crosby, Heafey, May, Kennedy, Cooper Davis, Verber, & & Mark Robert R. Peter E. LeHocky, LeHocky, Sidley Austin, Ostroff, Wolff, Olson, Charles D. Peter I. H. Tolies & Elroy Munger, Stein, Parcel, Mauro, and Malcolm Allison B. Huitín & Siegal, Spaanstra Wheeler Manufacturers Life for Petitioners and Real Parties in Interest Insurance et al. Company Kaufman,
Buchalter, Nemer, & Marcus M. A. Hugh Fields Younger, Thelen, Linstrom, Foerster, Garrett, Schechter, J. Lori A. Morrison & James Marrin, Hock, Rowen, Marta Johnson & Steven L. N. R. Hilary Bridges,
263 Curiae on as Amici E. Stanno and Philip E. Bamsback Richard Pierpoint, Life Insur- in Interest Manufacturers Parties and Real of Petitioners behlaf et al. ance Company for Respondent.
No appearance
Opinion
the holding
to consider
in this matter
review
BAXTER, J.
granted
We
Code,
(Ins.
Act
Practices
the Unfair Insurance
that
the Court of Appeal
insurance-industry-related
or displace
not supersede
et
does
seq.)
790§
Code,
16720-16770)
(Bus.
Act
& Prof.
the Cartwright
under
§§
claims
Code,
et
(Bus.
seq.)
17200
& Prof.
Competition
the Unfair
§
and/or
insurance,
stated,
which was not affected
life
is whether
the issue
Simply
initiative
declares
measure which expressly
the 1988
Proposition
unfair business practice
to antitrust and
lines of insurance are subject
Code, 1861.03,
from such laws.
(a)), is
(Ins.
subd.
exempt
laws
be affirmed.
should
decision of the Court
We conclude that the
Co. v.
Title Ins.
to dictum in three decisions
Contrary
subsequent
849, 444
(1968)
Cal.Rptr.
Financial
Background *7 counts directed to several related for writ of mandate are These petitions Weil Insurance Agency, action in the court underlying by plaintiff superior Life Insurance (Weil). Company, The defendants are Manufacturers Inc. associations, brokers, insurers, and an trade competing at (defendants). brokers In the counts officer of one group competing here, causes of action for violation asserted statutory Weil’s complaint issue 16720, 16721.5, and and Professions Code sections of Business and Code sections Business and Professions Code section Insurance 790.03.1 Act. Business and of the Cartwright and 16721.5 are provisions of the Unfair Competition section 17200 is part Professions Code (UIPA). Insurance Practices Act of the Unfair (UCA). Section 790.03 part a successful insurance broker- that Weil alleged2 operated complaint settle- business in which it advised attorneys regarding and consulting age such to clients the actual costs of After Weil disclosed those ment annuities. annuities, brokerage boycotted plaintiff’s the defendant insurance companies Weil the information to claimants obtaining and conspired prevent because the information provided did so they plaintiff provided. Allegedly liability on the ability had an adverse impact and victims injury attorneys settlement claims below their cash to settle injury insurance carriers personal defendants to the conspiracy, that pursuant value. The complaint alleged their critical information regarding victims and attorneys denied injury broker, claims; agent to fund settlement of their boycotted annuities used to injury services consulting information and/or or consultant who provided consultants who brokers and refused to attorneys; appoint victims and their brokers, services; their agents prohibited did the information and/or provide services; falsely dispar- the information and consultants from and providing information; for not reasons gave bogus brokers who did aged provide victims and services to consulting injury who offered with brokers dealing brokers to coerce compliance threatened and intimidated their attorneys; scheme; (defendant National the trade association with their and caused rules, enforce Association) guide- and Structured Settlements Trade adopt in furtherance of their scheme. lines and policies injury was to the cost personal of these actions depress The purpose that, in further- alleged cash value. The complaint settlements below their it interference with for and in retaliation plaintiff’s ance of the conspiracy, bar efforts to educate the its consulting brokerage practices through senior authored one plaintiff’s articles industry through and insurance intimidation, coercion, executives, Weil and used defendants boycotted cause structured settlement threats, of Weil to false disparagement indicated, Code. statutory are to the Insurance all references 1Unless otherwise review, allegations of the well-pleaded material we assume that all purposes of this 2For (Hendy Losse Cal.Rptr.2d fn. 2 complaint are true. *8 to discontinue that business with whom Weil did and brokers agents annuity business to refuse all brokers cause other annuity and to relationship, business was destroyed settlement annuity Weil. Plaintiff’s with dealings conduct. of defendants’ a result in that it also harmed the public that the conduct asserted
The complaint restriction, all of and a boycott, concerted output constituted price fixing, Act; its of the Cartwright be se violations were claimed to per which Weil was a se with dealing per that brokers refrain requirement Act; restraint an unreasonable it constituted of the Cartwright violation UIPA; in violation the business of insurance to monopolize intended unlawful, or fraudulent business practices unfair it therefore involved UCA. which violated the first amended demurrers to Weil’s trial court sustained defendants’ action, but Act causes of leave to amend as to the Cartwright with
complaint UIPA claims. Defend- to the UCA and the demurrers with respect overruled court to sustain a of mandate to the trial ants then for writ compel petitioned issued an order to those counts and the Court of Appeal the demurrers writ cause why peremptory the real in interest show directing party not issue as should prayed. it to state attempted
Weil then filed an amended in which complaint again demurred to the Act claims. The life insurance defendants to state a amended on the that the failed ground complaint second complaint of the demurrers support cause of action as to those counts. They argued of insurance by Act had been the business superseded 790.03, It relied for that Code section of the UIPA. Insurance provision claim on Title Ins. Co. v. Great Western Financial Chicago Corp., (hereafter Title), Greenberg Equitable Cal.2d Life The trial court sustained those Assur. Society, supra, 994. demurrers, and Weil mandate to the court for writ of petitioned compel overrule demurrers. this court
After the Court of denied Weil’s summarily petition, Appeal with the Court of review and transferred the matter back to granted had not directions to issue writ. the two an alternative Although petitions consolidated, them for been the Court of formally Appeal joined previously Witkin, (3d ed. (See Cal. Procedure argument opinion. purposes 528-529; 1985) cf. Foundation v. Legal Appeal, pp. California Pacific 158, 165, 655 P.2d Coastal Com. fn. 3
II The Court Appeal Opinion of the statutory language In and review of both thorough thoughtful UCA, held the Court of UIPA and its terms history, under the Cartwright UIPA does not or actions that the supersede displace Act, for be stated under the UCA and that a cause action may private Act, We for violations of the UIPA. violations of the but not the court’s below. reasoning summarize
A. Act. reasoned that the UIPA was enacted to pursuant
The Court of Appeal Act, 15 United States Code sections of the McCarran-Ferguson authority 1011-1015, which otherwise have in order to federal law might displace state which did trade the law of any governed practices, displacing same conduct.3 In so doing Legisla- industry generally proscribe state law. to shield the from otherwise applicable ture did not intend industry for unlawful business to and remedies existing rights The intent preserve clear, ex- was as the had Legislature in the insurance industry practices UIPA, 790.09, to cease in the in section order pressly provided “[n]o directed to or adminis- subsequent and desist under any person [the UIPA] relieve or any way or to enforce the same shall judicial proceedings trative or the license against absolve such administrative action person any under the laws of civil or criminal liability penalty certificate such person, methods, found unfair or acts or practices this State out arising this UIPA bill did not contain stipulation, deceptive.” original enforce of the commissioner to instead powers preserved preexisting 1; Sess.) (1959 (Assem. or forfeitures Bill No. 1530 Reg. fines penalties, § of the bill until its 790.08),4 but from the first amended version see now § (As- been included. remedies had the section preserving existing passage, Amend, 1959; 8, Sess.) (1959 to Assem. Bill No. 1530 Reg. Apr. sem. Amend, 6, 1959; Sess.) (1959 Bill No. 1530 Reg. May Assem. Assem. regulate practices is to trade expresses purpose that intent: “The of this article 3Section 790 Congress expressed the Act of insurance in accordance with the intent of in the business (Public defining, Congress), by or Congress Seventy-ninth of March Law of, constitute unfair methods practices for determination all such this State which providing practices by prohibiting the trade competition deceptive or unfair acts or or so defined or determined.” this article shall be additional powers vested in the commissioner in 4Section 790.08: “The forfeitures, denials, or suspensions powers any penalties, to enforce fines methods, acts and respect to the licenses or certificates authorized law with revocations of practices hereby deceptive.” declared to be unfair or 1959; Amend, Sess.) June (1959 Reg. No. 1530 Bill to Assem. Sen. 1737, 1, ch. Stats. *10 the understand- reflected of section 790.09 the inclusion that
It is probable make no change would the UIPA of adoption that of the Legislature ing bill of the UIPA analysis stated an Analyst The Legislative law. existing Analyst, Legis. law.” existing (Ops. substantive change it “makes no 20, 1959) 1530 (May Bill No. of Assem. Analysis observed, had included Moreover, Legislature Court of Appeal from other laws. of insurance classes specified exempting specific provisions insurance], [casualty 1860.1 citizens health 795.7 (E.g., [senior §§ insurance].) Had 12414.26 rates], [title compensation], 11758 [workers’ Act and the Cartwright of insurance from exemption created general UIPA Since the laws, necessary. been would have none of these provisions need to create an aware of the that it was demonstrated thereby Legislature insurance, did not the UIPA of and did not do so for other classes exemption, in the business practices and remedies for unlawful existing rights displace such Act. Finding displace them the Cartwright insurance industry, among of the Cartwright find a tanto repeal would be to necessarily pro ment be and will recog such are disfavored the rule that repeals notwithstanding intent to do so. reflect a clear legislative when the circumstances nized 363, (1993) Cal.4th 379 (See Cal.Rptr.2d v. Palmdale 5 City [20 Roberts Wholesale, 330, 496]; Bd. Equalization Inc. v. State Kennedy 853 P.2d 325, 1360]; 245, Oil P.2d Western Cal.3d 806 (1991) 53 249 Cal.Rptr. [279 (1989) Dist. Control 49 Assn. v. Air Pollution Monterey Bay & Gas Unified 157]; 408, 384, v. Wood Hays 777 P.2d Cal.Rptr. Cal.3d 419-420 [261 19]; 772, 102, v. P.2d Fuentes 25 Cal.3d 603 (1979) 784 Cal.Rptr. [160 673, 1, 547 (1976) Bd. 7 Cal.Rptr. Workers’ Comp. Appeals [128 449].) P.2d
B. UCA.
not create a private
that the UIPA does
The Court of Appeal recognized
(Moradi-Shalal v. Fireman’s
of action for violations
its
right
provisions
116,
(1988)
Fund Ins.
III
Discussion *11 stated, Defendants contend that the Court of erred. their Appeal Simply that, is to the extent that 103 position except Proposition applies, is antitrust and unfair business industry exempt practices Therefore, other than the UIPA. insurers are legislation subject only no the Insurance Commissioner and there is regulatory authority private of action to redress in restraint right injuries about combinations brought in industry. trade and other unfair business the insurance They in that Title and all cases the courts have consis- argue Chicago subsequent industry held that the Act does not to insurance tently Cartwright apply decisions, that stare decisis counsels adherence to those and that practices, Title decision and its have been ratified Chicago by subsequent progeny 103. that the Court of also legislation, including Proposition They argue 790.09, has which the misconstrued section the UIPA Appeal provision section, court held and remedies. That they argue, preserves existing rights establishes that administrative cease-and-desist orders do not preclude claim administrative action related to the same conduct. Finally, they a UCA action for an unfair insurance that is permitting prohib- practice ited the UIPA court’s in holding would this “seriously compromise” Moradi-Shalal, 46 Cal.3d that there is no cause of action private for a violations section 790.03 even if the conduct also constitutes violation of the Act. Cartwright
A. Title. Chicago that, 790.09,
In its conclusion in section the UIPA reaching expressly remedies for unlawful conduct in the insurance which preserved industry existed at the time the UIPA was the Court of rejected adopted, Appeal defendants’ that this court in fact held in Title that the argument Chicago UIPA insurance from the Act and other antitrust exempted remedies, related which Assur. Equitable proposition Greenberg Life was the holding states (Greenberg) Society, supra, in the statement the view that Court Appeal expressed Title. Chicago dictum, be found it to relied was defendants which Title on Chicago authority. nor persuasive compelling neither Court of and the defendants Title to which The language Act, italicized, “The in this passage: refer appears, the federal substance to mentioned, similar spirit
previously
1-7)
Clayton
(15 U.S.C.A.
Sherman
encompassed
§§
legislation
businesses,
individuals,
corporations
12-27). Private
(15 U.S.C.A.
Acts
§§
to enforce
no standing
have,
statutory authority,
absence of express
Co.,
Publishing
v. Hearst
(Cf.
Management
Show
statutes.
such regulatory
731];
Co. v.
Poultry
West Coast
612-616
Cal.Rptr.
[16
196 Cal.App.2d
297];
Craft,
Hudson v.
Glasner,
231 Cal.App.2d
follows
Act however
696].) The Cartwright
7 A.L.R.2d
based
civil litigation
contemplates private
federal
which expressly
policy
ille
including
and unfair trade practices,
statutes
antitrust
regulating
upon
Code,
17040-17051.)
& Prof.
(Bus.
gitimate pricing practices.
§§
constituted
‘protection
the common law which once
“These statutes and
*12
(Speegle
the insurance trade’
combinations in restraint
against
the public
of
of
Underwriters,
867])
now
P.2d
are
Fire
29 Cal.2d
[172
v. Board of
Insur-
the
contravened
the
by
specific provisions
and
expressly superseded
of
and
(secret rebate),
pricing)
four (discriminatory
ance Code. Counts three
of rates
(unlawful rebate)
charged by
the regulation
seven
concern
clearly
has
com-
regulation
traditionally
title insurers and title
rate
companies,
(Ins.
industries.
Code
to controlled
manded administrative expertise applied
Co.,
12404-12412;
Even assuming arguendo dictum, was the holding of Insurance Code was not seding provisions impact far narrower than defendants suggest. to in Title is crucial Chicago action of the nature
Consideration the various causes of action arose on demurrers to that case. It understanding for unfair relief and damages sought injunctive stated They plaintiffs. trade, including boycott combinations restraint trade practices that companies” were “underwritten title business. Plaintiffs the plaintiffs’ abstracts of certificates or and examinations and prepared did title searches insurers, issued insurance and delivered the title polices title for title decision, in the plaintiffs In the counts at issue (See insurers. laws, and engaged price violated antitrust that the defendants5 alleged accused the defendants trade practices. They and unfair discrimination customers to transfer in order to induce to rebates conspiring provide business to defendants. state to insurance rates could not that the counts directed
After explaining (which Code of the Insurance action because specific provisions a cause of over Commissioner UIPA) authority the Insurance of the gave are part state a cause rates, counts did not went on to that several other the court say the charge. the factual failed allegations support and that of action Title held only that reason that Chicago concluded for Court of Appeal insufficient, not held and that we had were of the allegations complaint industry Act insofar as UIPA superseded that the concerned. are modifications, of the Court of the decision court with adopted, This had the that the court necessarily Title. Defendants argue Appeal Act had been when it stated that the superseded in mind UIPA referred and that the statement of the Insurance Code provisions specific directed to insurance company that were all of the counts complaint Court of in the base their on a argument passage defendants. They which, assert, of the Insurance addressed the they jurisdiction opinion *13 the opinion when it adopted This court deleted that passage Commissioner. Title, however. of Appeal Chicago Court of the vacated Court of and on a citing relying of impropriety Apart of this merit. The opinion lacks this argument necessarily opinion, Appeal Brothers, firm; Finan Great Western an investment defendants were: Lehman 5The named America, by Lehman holding companies owned financial Corporation and Financial of cial Association; Brothers; Company; Security Title Insurance Savings Loan Great Western and Many Company. Company; Sherwood Escrow Company; Summit Title American Title hold certificates industry thus did not engaged in the insurance these defendants were not power does have the The commissioner could revoke. and/or licenses which commissioner any provisions of the violating who is or about violate injunction against anyone to seek an 12928.6.) (§ regulations issued thereunder. Insurance Code or Company Title Company and American for competed directly with Summit Title Plaintiffs companies. the business of title insurance sole source of decision and the court in Title Chicago reasoning Moreover, a the decision. deletion of a from Court passage underlying that is this court reflect this court’s unwill- may opinion adopted by Appeal deleted matter. the view of the Court of on the ingness adopt Defendants also that this court’s analysis adequacy argue (Bus. Title to state Unfair Practices Act allegations complaint Code, & Prof. 17000 et violations in counts unrelated to ratemaking seq.) § claims made defendants who were not insurance addressed only against Therefore, that discussion does not other circum- companies. imply than stances a cause of action for conduct made unlawful statutes other the UIPA could be stated an insurer to that act. The discus- subject against sion in involved two counts contend in point alleging boycott: “Appellants six and counts that the conduct of the Sherwood and Great Western eight Business and Professions Code section 17046 groups, respectively, infringes of the Unfair Practices of this section [part attempted application Act]. to the facts evidences of the nature of a appellants’ misinterpretation boy- instance cott. The allegation cannot be in this because boycott supported has the unrestricted to select customers and sources of everyone right supply. Code, 17042; (Bus. Prof. & A.B.C. Distributing Co. Distillers Distribut- not, ing Corp., There is could not be an allegation that it is unreasonable for Sherwood to buy through Summit, or for Great Western Financial to its in the subsidiaries require saving and loan or escrow business to the services of the title engage in which it company likewise has an interest. Not are vertical distribu- Code, tion agreements this instance the Insurance but ‘it contemplated by more, seems clear to us that vertical as such without be integration, cannot held violative the Sherman Act.’ Neither do exclusive dealing [Citation.] Title, constitute arrangements . . . .” boycotts (Chicago 305, 323-324.)
This passage contemplates of a Act or Unfair possibility claim, Practices and rejects the claim stated because by plaintiffs only the facts did not constitute a alleged violation of either act.
Defendants’ that these argument counts were not directed insur- against *14 ance and that the companies discussion Act or Unfair anticipates Cartwright Practices Act claims only against or entities that are not in persons engaged the business of insurance is not the The “Sherwood supported by opinion. to which the group” court referred included both Summit Title and Company Title, Sherwood Escrow Cal.2d Company. (Chicago supra, 69 Summit, an underwritten 12402]) title company (§ 12340.5 was [former § to of the Code. and under Insurance
subject licensing regulation provisions 361, 2, added Stats. ch. (§ 12389.2 by [former § Therefore, if the Title statement the Court of here deemed Chicago court, of this the was much narrower dictum was instead holding holding claim. court that of Insurance than defendants The said sections the only Code that are not of the UIPA other antitrust and unfair part superseded to laws as conduct related to rates they might apply competition insofar the Code which are Insurance ratemaking governed by specific provisions as that authorize some to others the Insurance Commis- gave practices the of the sioner to determine the conduct. None authority propriety in Title the Insurance Code cited the court is by Chicago provisions part UIPA and court mention UIPA in Chicago this did not the the Title opinion. Nor did in section the say legislative the court that 790.09 UIPA reflects intent to remedies created the Act or other statutes displace by Cartwright directed to unfair trade practices.
Had the court concluded in Title that the UIPA displaced Chicago preex- in legislation industry thereby the field and that the insurance was isting antitrust and other business remedies unfair exempted appli- detail, industries, cable to other there would been need to have no explain Title, 324-325), the Cal.2d the supra, court did at (Chicago pp. why of the were insuffi- allegations the counts supporting remaining complaint for reasons action the Act or cient to state causes of under Cartwright the Unfair Practices Act.6
B. the UIPA. administrative construction Legislative history which, they
Defendants offer a construction of section 790.09 UIPA, that that in intended demonstrates the the argue, adopting Legislature Commissioner the be to unlawful conduct Insurance authorized remedy Title 6Possibly telling that that antitrust the most rebuttal to defendants’ claim held industry is the competition apply and unfair statutes other than the UIPA did to Cal,2d Title, (Chicago negative implication found dissent Mosk. of Justice dissent, (dis. Mosk, J.).) disagreed opn. In Justice with the court’s that Mosk complaint Cartwright Act. conclusion that the did not state a cause of action under reasoning allegations necessary such a of action. exclusively plead cause directed UIPA, argue, as defendants superseded Had the court held that the Act was be acknowledgment holding of that would the absence from the dissent of reference to or quite remarkable. claim, Moreover, majority precluded any held that the had UIPA holding light opinion certainly responded observing would have the dissent UIPA, action was adequacy allegations pleading on the effect of the those causes of irrelevant. *15 that in that a cease-and-desist They argue providing by companies. a of civil or criminal section 790.09 liability, order does not relieve person and desist orders effect to administrative cease gives nonpreclusive simply Commissioner, and the further action the Insurance that are followed by by section no relevance to the issues in this case. In their view section has of a cease and desist order means that the issuance 790.09 Commissioner does not other action the commissioner Insurance preclude that the directed to the same trade Defendants practice. argue impermissible erred in its construction of section 790.09 when that court Court of Appeal of a concluded that the section stated that commissioner’s issuance cease and desist order shall not “obstruct or civil impede” imposition or criminal a crucial difference liability penalties. They perceive do actual statute which that such orders not “relieve language provides from of civil or or absolve” criminal person imposition liability penalties. distinction, claim, That defendants section 790.09 as a precludes viewing clause” and demonstrates that its “savings purpose merely provide cease and do not desist orders have a effect. preclusive
We agree that definitions of the words used in the two differ. phrases
“Absolve” is defined as “to set free from or an the conse obligation (Webster’s quences 969.) guilt.” New Dict. Collegiate p. obstacle,” “Obstruct” means “to block or close an while up by means “impede” (Id. “to interfere with or slow the of.” at progress We fail to find in those distinctions the crucial difference noted by defendants and do not with agree defendants that “relieve or absolve” is beyond question language res and claim judicata preclusion. Defendants cite no statute or case using those terms in reference to res judicata claim preclusion we are aware of none. The definition of “relieve and absolve” offered by defendants leads us to the same conclusion reached the Court The issuance Appeal. of a cease-and-desist order future unlaw enjoining ful conduct does not free the criminal offender from the civil or obligation incurred as guilt a result of the unlawful conduct he has engaged prior issuance of the order.
Defendants offer no answer to the observation of the satisfactory Court of 790.09, that as defendants section construe its reference to civil and criminal becomes liability The section that a cease- meaningless. provides and-desist order to a does not “relieve or absolve such person person any administrative action the license or certificate of against such person, civil or liability criminal penalty under the laws of this State out of arising methods, added.) acts found (Italics unfair or deceptive.” The Insurance Commissioner has no to initiate a power criminal proceeding
274 on, in civil a who engages to impose liability person or an action against, to commissioner is limited The the authority trade practices. unfair or a license or revoking future unlawful conduct suspending enjoining 406, (1975) 44 409 Court (Shernoff v. Superior [118 certificate. 680].) Cal.Rptr. civil and criminal liability of section which preserves
That 790.09 part the section construction of if defendants’ proposed would be meaningless a construction statutory preclude were Well-established canons accepted. or In a of a statute meaningless inoperative. which renders part construction instrument, is or the office of the judge simply of a statute the construction therein, what in or in substance contained to and declare terms ascertain inserted; omitted, to been what been or omit what has not to insert has is, if such a construction are or provisions particulars, where there several Proc., 1858.) (Code Civ. to be as will effect to all. possible, adopted give § of a we to statute significance every part to this mandate must give Pursuant Homes, (1991) (Schwab Inc. 53 to v. Rondel legislative purpose. achieve the 428, 83, 226]; 808 J. R. Norton Co. Cal.3d 435 Cal.Rptr. 1, Cal.3d 36-37 Labor Relations Bd. Agricultural 710, 603 P.2d the inconsistent with suggest is the construction defendants
Not 790.09, intended by but conclusion that the Legislature of section a language Act, Act, and UCA Unfair Practices section 790.09 displace Cartwright construction remedies would be to consistent administrative contrary be to the conclu- It would also contrary act and available legislative history. same similar sion courts of other states which have the adopted Act the exemp- in order to take legislation advantage McCarran-Ferguson are rights law and remedies existing tion from federal application this preserved by provision. 1, 1941, 526, 1834) (Stats. Unfair p. Act ch.
The § 1941, Code, Stats. (Bus. Prof. 17000 et also added seq., Practices & § 4191). 526, 1, 1834) (Stats. p. UIPA ch. predate ch. § which the UIPA almost all of the practices was aware that Legislature as methods of defines “unfair competition section 790.03 and prohibits insurance” were business of and unfair and acts or deceptive UIPA was introduced under acts.7 those When already proscribed was preclude Bill its acknowledged purpose No. Assembly judicial took notice of which the Court 7Records of the Insurance Commissioner Assembly Bill No. at the time to the Insurance Commissioner reflect that in memorandum introduced, proscribed were acts bill his chief assistant advised that was federal over the business of insurance. Section states that jurisdiction *17 of article is to trade in the regulate “The this purpose: purpose practices business in with the of as of insurance accordance intent Congress expressed (Public in the Act of of March Law Congress Seventy-ninth of, or for the all determination such Congress), by defining, providing in this State which constitute methods of unfair practices competition unfair or acts or the trade so deceptive by prohibiting practices defined or determined.” Lower courts have that the recognized repeatedly law, of the UIPA is to federal not law in state the purpose displace existing Zalta, field of (See, antitrust unfair Karlin v. competition. e.g., 953, 966; Group, American Internat. Inc. v. Court Cal.App.3d Superior (1991) 756-758
Moreover, the Court of in the of the recognized, nothing history UIPA legislative reflects intent to tanto of the about bring pro repeal orAct the UCA. Cartwright the
At the time bill was the the passed Legislative Analyst view expressed law, that the of UIPA made no in adoption “The bill change existing stating: makes no substantive in the law as insurance commissioner change existing has the regulated such matters his past general under powers.” (Ops. of Legis. Analyst, Analysis Assem. Bill No. 20, 1959) That (May p. this was understanding UIPA shared the is confirmed by Legislature that body’s enactment of the specific antitrust exemptions legis above, lation noted that would have been exemptions had unnecessary the UIPA effected a blanket of exemption industry the from the Act, and remedies rights available under the UCA and other Cartwright legislation.8 statutes, threat, covered particular boycott, and in the acts of or intimidation were
proscribed by
the
chief
expressed
notwithstanding
Act. The
assistant
concern that
UIPA,
other sections of the
it could be construed
use
preclude
to
of the sanctions available
existing
under
law. That
concern led
the inclusion
section
the proposed
of
790.09 in
legislation.
Commissioner,
8The Insurance
proposed
whose office
inclusion
section 790.09 in the
UIPA
existing
to ensure
preserved,
position
that
would be
remedies
continues to take the
intend,
Legislature
UIPA,
by adoption
did
supersede
Act or
Appearing
other state laws.
plaintiff,
as amicus
support
curiae
the commissioner
expresses his
that regulatory
belief
complementary
enforcement
his office is
Cartwright Act and the
Attorneys
UCA. Both the
commissioner
California District
Association,
curiae,
appears
which also
express
as amicus
belief
public
that the
interest
by vigorous
served
enforcement
of all
Attorneys
three
The California
statutes.
District
Association asserts that
principal
actions under
UCA
have become
law enforcement
prosecutors
instrument of
protection
competition,
the areas
consumer
and unfair
with
more than
being prosecuted
200 such actions
annually.
UCA is
the basis for
also
noted,
was
after a draft of
section 790.09
patterned
As the Court Appeal
the National Associ
Insurance Practices Act proposed by
the Model Unfair
(NAIC) (exhibit B to
of Joint Com.
Commissioners
Rep.
ation of Insurance
24, 1947) 8(d);
78th Ann.
(Jan.
etc.
Proceedings,
on Federal Legislation,
Sess.,
in other states which
(1947))
398),9 and has been construed
NAIC
remedies
similar statute as preserving
have
the same or substantially
adopted
(See
was
in those states.
available at the time the UIPA
adopted
already
1985)
Co.
687 S.W.2d
General
Tex. v. Allstate Ins.
Attorney
(Tex.App.
803, 805;
N.Y.S.2d
enactment of subsequent legislation
subject
do
if
later statute revises the earlier in a manner that
will
so
brought
provisions
Safety
Code and the Labor
prosecutions
supplement
of the Health
violations,
safety
remedy public
public
Code
health and sanitation and
and its use to
(See, e.g., People
v. McKale
supplement
provisions
upheld repeatedly.
has been
of law
Palm,
811,
People
Angeles
626,
731];
v. Los
(1979)
Cal.Rptr.
632
602 P.2d
25 Cal.3d
[159
People
25,
257];
Blanca Convalescent
(1981)
v. Casa
Cal.App.3d
Cal.Rptr.
Inc.
121
33
[175
Homes,
164,
661].)
(1984)
Inc.
Cal.Rptr.
53 A.L.R.4th
[206
judicial
request
plaintiff
this court
take
notice of this and other materials
9The
UBPA,
by
Appeal,
the Court of
adoption
much of which was considered
related to
459,
judicial notice
reviewing
Pursuant
to Evidence Code section
court must take
granted.
properly
which the trial court was
any matter
that was
noticed
the trial court or of
reviewing
may
notice
court
also take
required to take
under Evidence Code section 451. The
judicial
specified
notice
matters
Evidence Code section 452.
10Illinois,
Jersey,
exemptions
from state
Washington
express
New
have enacted
regulated by
for
insurance commis
antitrust
law
those activities of insurers which are
their
(III.
(1969);
Ann.
par.
sioners and/or authorized
Stat. ch.
60-5
N.J. Stat.
statute.
Rev.
56:9-5,
19.86.170;
Pharmacy,
Metropol
see B & L
Inc. v.
(b)(4);
subd.
Code
Wash. Rev.
§
King
Washington
(1970)
462];
itan
Osteo. Med. Ass’n v.
Ins. Co.
46 Ill.2d
N.E.2d
[262
Life
(1970)
Corp.
Co. Med. S.
C. Stare decisis. decisis,
Invoking
stare
defendants next
principles
argue
that the court should not
from the construction of the UIPA that
depart
courts have followed since this court’s decision in
Title. As
we have
above, however,
explained
the court did not construe the UIPA or section
Title,
790.09
that act in Chicago
and has never held that the UIPA created
a wholesale
from the
exemption
Act and UCA
remedies for the
and,
Those
industry.
acts do not create such an
since
exemption,
the state scheme of regulation of the insurance
is not
industry
wholly
inconsistent with their
no
application,
(Cianci
be
exemption may
implied.
Court
Superior
710 P.2d
*19
Defendants also
on the Court of
rely
Appeal
of
interpretation
in
Chicago Title
994, 999,
34
Greenberg,
2,
supra,
Cal.App.3d
footnote
which,
assert,
they
was
this
in
accepted by
court
Globe
Royal
Ins. Co. v.
Superior
Court
In Greenberg, supra, the Cal.App.3d to state plaintiff sought a of cause action under section 77011 on behalf of himself and a similarly situated class. The complaint that the alleged defendant insurance company, as for the security made, balance on home loans it the required borrower to 11Section 770: person engaged “No in financing the business of purchase the of real or personal property or lending money of on security personal the of real or property and no trustee, director, officer, agent of, or employee, any or affiliate such person shall require, as a precedent condition financing purchase property of such loaning or to money thereof, upon security or as a prerequisite condition for the renewal or of extension any such loan or for the performance any therewith, of other act in connection person that the from whom purchase such is to be financed money or to whom the is to be for loaned or extension, whom such renewal or other granted act is to be performed or negotiate insurance or covering renewal thereof property through particular such a agent insurance broker.” from the of whole life insurance to the loan
obtain company policy equal It was that insurance was available from other balance. alleged comparable the “tie-in at a lower and that sale” violated companies premium section 770. On after the trial court had sustained a appeal plaintiff’s amend, leave to held no demurrer without Court that while section, of action had been stated under that leave to amend should cause it have been could state a UIPA cause granted appeared plaintiff (c) under subdivision of section for an unfair business practice action 790.03 should be construed in of similar statutes prohibiting as that subdivision light in In footnote the Greenberg activities restraint trade. an accompanying “In Title Financial Corp., court stated: Ins. Co. Great Western Court, 481], 444 P.2d dealing Cal.2d our Supreme a demurrer to a restraint of trade an insurance complaint alleging with stated that the Act which Cartwright encompasses general company, California is antitrust law of and contravened ‘expressly superseded 322.)” (Green (69 of the Insurance Code.’ Cal.2d at p. specific provisions 994, 999, fn. berg, supra, to defendants’ characterization our discussion of
Contrary Greenberg Globe, we did not state there that the Royal Greenberg court had Title as correctly interpreted Chicago precluding application Act to all forms of conduct insurers. Our anticompetitive said that the court had that the only Greenberg “determined opinion general Code, (Bus. antitrust & Prof. 16700 et prohibitions were to insurance and that section 790.03 seq.) inapplicable companies Globe, insurers from prohibits engaging anticompetitive activity.” (Royal *20 880, 886-887.) in 23 Cal.3d That statement was made to an supra, response that section 790.09 did not affirmative for argument provide authority filing a civil action for violation of the UIPA. We said that this was argument the that section did afford the basis for Greenberg to 790.03 contrary holding hold, claim, a civil suit. We did not as defendants that the Greenberg Chicago Title was correct. That was not before us interpretation question in Globe. Royal claim that
Defendants’ the Title has Greenberg interpretation Chicago been “affirmed all case authorities” does not withstand exam- by subsequent Moradi-Shalal, 287, which, Other ination. than 46 Cal.3d as we have supra, does not defendants cite explained, Greenberg approve interpretation, three The only cases of that None does so. court support proposition. Zalta, Greenberg statement in Karlin v. 154 quoted supra, Cal.App.3d 953, but Karlin the court concluded that claims were not plaintiffs’ and, concede, governed the Insurance Code as defendants plaintiffs Thus, Act claim. no occasion to the court had Cartwright did not state a formulation of Title. In Inc. Chicago Liberty Transport, the Greenberg apply Co., 417, on other supra, W. Harry Cal.App.3d disapproved Gorst (1991) v. Murakami 54 Cal.3d in Adams grounds Cal.Rptr. [284 1348], the dictum that the UIPA 813 P.2d court stated in only prohibits insurer, (229 at citing Greenberg. Cal.App.3d behavior an anticompetitive however, There, 432.) the court that because Moradi-Shalal acknowledged p. (229 Royal had limited the case was Globe. only retroactivity, governed by at fn. The actual was that statute of Cal.App.3d holding did bar the cause stated limitations not section 790.03 of action plaintiff. (1990)
Maler v. Court Superior 222] affords no more not support defendants. does mention either opinion Greenberg, Title or that the of sections holding only adoption 8, 1988, 1861.03 and 1861.10 as 103 at the part November Proposition election did restore or create causes of action under section private 790.03.12 court, other,
Nor has this defendants’ accepted argument that the UIPA from other state laws or exempts companies antitrust from civil for liability conduct.13 The act itself contains anticompetitive no such and, case in which exemption only this court has considered that we question, held the insurance is not industry exempt claims. v. Board (Speegle Fire Underwriters 29 Cal.2d 45-46 As the Court of Appeal Royal Globe and recognized, such Greenberg recognized liability, holding that the statutory authority UIPA, for a civil action was found in the not the Act. We have Moradi-Shalal, 287, 304-305, since held in that neither section 790.03 nor section creates the basis for private 790.09 cause of action, but that insurance do have civil for such companies liability conduct. The Court of below understood that correctly “Moradi-Shalal marks UIPA, a return statutes, fundamental that the like all principle is to be to its applied terms. Its neither new according language creates private rights *21 nor destroys [who, old ones. This was the view of Justice in his Richardson[] Court, assertion, Superior 12Contrary supra, Maler to defendants’ Cal.App.3d did uphold sustaining not the of a demurrer to a UCA cause of action. trial court had (id. 1596) overruled p. that at before the Maler demurrer and the issue court was whether sustaining 1861.03, the court erred a in demurrer to a cause of of section action for violation the by Proposition section industry added 103 which subject states that is the insurance to (220 antitrust practices and unfair business laws. p. at appear argue 13Defendants to exempt both that from industry insurance is antitrust regulation generally private and that no remedy civil exists. for such conduct civil or crim dissent,] that section preexisting wrote 790.09 ‘preserves or decisional statutory which the insurer face under might inal liability not, Globe, .).” at . . This court did 23 Cal.3d supra, law.’ (Royal to common in Moradi-Shalal that insurers are subject hold defendants argue, law, civil for activities and unfair but not statutory, liability anticompetitive said, to third and insured who We with respect parties business practices. to action under section bad settle. had no cause of 790.03 refusal for faith to civil or other remedies damages retain jurisdiction impose “[C]ourts actions, in common law based on such tradi insurers against appropriate fraud, distress, (as infliction of emotional tional theories as insured) of contract or breach of the covenant of implied good either breach 287, 304-305.) (Moradi-Shalal, faith and fair 46 Cal.3d Bad supra, dealing.” faith Act. Cartwright refusal to settle is not conduct encompassed Whether Act and the UCA causes of action under the statutory Cartwright in be stated an insurance was not an issue Moradi- may against company which, claims, Shalal in the context of bad faith refusal to settle overruled Co., Ins. and confirmed that section Royal Globe 790.03, (h), subdivision was not the source of a of action private right an insurer for that conduct. against context,
Addressed in this defendants’ that stare decisis argument princi- foremost, to Title must fail. First and mandate adherence ples did not hold Chicago Title that UIPA supersedes displaces activities and Act and UCA on prohibitions anticompetitive Second, insurers. we have never held that the unfair business practices by unfair laws or industry antitrust and exempt competition it even Finally, from civil for such conduct. enjoys immunity liability we to defendants’ that the UIPA and section 790.03 were accept argument UCA, Act and Title could be assuming Chicago supplant read as that section administrative sanctions for holding 790.09 permits only activities and unfair business anticompetitive practices proscribed by UIPA, of stare decisis would not reconsideration of that principles preclude conclusion. (c) the unfair methods of
Subdivision of section 790.03 includes among business of and unfair and acts or competition deceptive describes; commit, or by any insurance it into “Entering any agreement intimidation concerted action act of coercion or committing, any boycott, in, of, restraint or monopoly to result unreasonable resulting tending activ- anticompetitive the business of insurance.” This broad prohibition that defendants may ities and unfair business conduct alone demonstrates conduct. A on in such unlawful claim reliance justifiable right engage *22 to deter or such belief that administrative sanctions are available punish only that the conduct is conduct is not to a belief equivalent justifiable permissi- Thus, basis for that under their ble. defendants have no arguing interpreta- Title, tion of were free to in concerted action that they engage tended in an restraint trade. to result unreasonable ‘is doctrine of stare decisis based on the that assumption certainty,
“[T]he the law of the are predictability stability major objectives legal i.e., that should be able to their and enter system; conduct parties regulate the into with reasonable assurance of rules of law.’ relationships governing Witkin, (9 1985) (3d Cal. Procedure ed. and see cases Appeal, cited.)” (Moradi-Shalal, Even if defendants insurer, however, believed the Act UCA did to an Cartwright not apply would be to bound conform their conduct to the UIPA. law they That mirrors Act’s and other forms of unfair prohibition boycotts Therefore, conduct. will not anticompetitive defendants be heard to com- that should not civil plain suffer because they lacked “reason- liability they essence, able of the assurance rules of law.” In their claim is that governing believed could be they they violate law and to subject sanctions the Insurance imposed by Commissioner. of stare decisis do Principles protect person consequences of actions based on such a belief. D. Proposition
Defendants that argue legislation to subsequent Chicago Title has “ratified” the rule that the UIPA supplants Act. reason They 1861.03, that the addition of (a), section subdivision to the Insurance Code implies that to the prior 103 the adoption Proposition insurance industry was from antitrust exempt that regulation than of the Insurance Code. That subdivision provides: “The business of insurance shall be subject laws of business, California applicable any other including, but not to, limited 53, inclusive, Unruh (Sections Civil 51 to Rights Civil Code), and the (Parts antitrust and unfair business laws 16600) with (commencing Section and 3 with 17500) Section (commencing of Division 7 of the Business and Code).” Professions
Clearly, 103 was intended Proposition to terminate an insurance industry antitrust 1861.03, That exemption. intent manifest in section subdivision (a), and in the ballot materials provided to voters. The Legislative stated in his Analyst measure makes analysis “[t]he compa- nies subject the state’s antitrust laws.” In ballot pamphlet argument favor of Proposition and in rebuttal to the counterargument, proponents *23 “will also end the insurers’ stated that the measure
of Proposition laws, that it “eliminates the . . .” and from the antimonopoly exemption (Ballot antitrust laws.” from the unfair industry’s exemption Const, Amends, to voters Gen. to Cal. with arguments Pamp., Proposed 100-101, 1988) in favor of (Nov. pp. argument Prop. Elect. 1853, 1853.6, However, and 103 also former sections Proposition repealed Those sections were of the McBride- part of the Insurance Code. 1853.7 Act, Board Speegle was enacted after this court held which Grunsky Underwriters, Act Cal.2d that the to applied Fire created a antitrust they partial exemption applicable the insurance industry; of insurance.14 The McBride and lines casualty to certain property insurers to in rate-setting practices casualty engage Grunsky permitted authorization, that, have violated antitrust law. for would statutory but 1861.03, Therefore, (a), and in section subdivision the declaration purpose more than an intent nothing statements reflect may the ballot pamphlet lines of to those property terminate the antitrust partial exemption granted reflect a belief that other do not They necessarily insurance. casualty McBride-Grunsky similar or that the exemption, lines of insurance a enjoyed from all even lines casualty aspects Act had exempted property laws. antitrust and unfair competition
Moreover, belief on the that section 1861.03 did reflect a even assuming that the Cartwright the drafters of 103 and the electorate Proposition part that belief to the insurance industry, Act and UCA were not applicable 1861.03, (a), subdivision irrelevant. The addition of section would be in the law. Code cannot what is not present prior Insurance ratify supply insurance, which among 103 does not to several lines of Proposition apply intended 1861.13.)15 decide if the drafters (§ is life insurance. We need not of the insurance (a) of section 1861.03 to to all apply aspects subdivision however, 103 can be construed as there is no industry, way Proposition those lines of insurance an from antitrust laws for as creating exemption which its other do apply. provisions exemption partial antitrust eight categories of insurance from the 14Section 1851 excludes lines. The among the excluded McBride-Grunsky Act. Life insurance is conferred reinsurance, marine, title, mortgage, county compensation, disability, others are: workers’ mutual fire insurance. operations or on in this on risks apply 1861.13: “This article shall to all insurance 15Section
state, except those listed Section 1851.” Code, 1861.13, Insurance of division 1 of the part chapter section Section like rating. chapter directed to rates and *24 IV Competition Unfair 1187, (1993) on this decision in Rubin v. Green 4 Cal.4th
Relying court’s 828, 1044], 1201-1202 Cal.Rptr.2d 847 Court held Appeal [17 that, action, because 790.03 does not a civil cause section create private could not around that limitation on by conduct which plaintiff plead relying held, violates the UIPA the basis for a UCA cause of action. It however, that the trial court had overruled defendants’ demurrers to properly UCA cause of action because the conduct on which plaintiff predicated Therefore, cause of action violated the that also Act. conduct form the for a could basis cause of action under the UCA.
Defendant contends that this will holding “seriously compromise” our holding Moradi-Shalal that there be no UIPA cause of may private action under section 790.03. Green, 1187, the court question addressed in Rubin v. 4 Cal.4th supra,
was whether an allegedly improper attorney, solicitation which could not form the basis of a tort action because conduct fell within litigation 47, (b), Civil Code section privilege subdivision could be the basis of an for action injunctive relief under the UCA. Plaintiff’s was theory that the conduct could do so as it was prohibited by Business and Professions Code Therefore, sections 6152 and 6153. it was a of “unfair species competi- which, tion” as to 17204, under Business and Professions Code section plaintiff, acting in the interests of the general public, had to seek standing an injunction.16
The court held plaintiff could around the plead absolute bar to relief created litigation the cause of privilege by action as recasting one for unfair It such competition. analogized pleading attempts avoid the bar to 790.03, “implied” private causes action under section which several Courts had held could not be Appeal avoided character the claim izing as one under the (See UCA. v. Ins. Co. Superior Court Safeco (1990) 216 585]; Court, 1491 Cal.App.3d Cal.Rptr. Superior Maler [265 1592; 220 Cal.App.3d Industrial Co. v. Indemnity Superior Court UCA, 16Business and part Professions Code provides section a that an action injunction others, for an against competition unfair may prosecuted among be by, “any person itself, acting for the general interests of its public.” members or the 655]; Lee v. Travelers (1989) Compa Cal.Rptr. 209 Cal.App.3d [257 468]; (1988) 205 Doctors’ Co. Cal.Rptr. nies 694-695 Cal.App.3d [252 (1990) 225 Services v. Court Superior Cal.App.3d Ins. 674]; Internat. Inc. v. Court Superior American Group,
Cal.Rptr. however, As the Court of here cause action for recognized, *25 based on conduct made unlawful Act is competition Cartwright unfair cause of action which Moradi-Shalal held could not be not an “implied” is to use the UCA to confer found in the UIPA. There no attempt private of the UIPA. Nor is the cause of action based to enforce standing provision statute, conduct which is or immunized another absolutely on privileged (b). as the of Civil Code section subdivision litigation privilege such This conclusion does not the rule of Moradi-Shalal in any compromise The court concluded there that the did not intend to create way. Legislature causes of action when it described unlawful insurance business new prac- 790.03, and did create a tices in section therefore that section not private cause of action under the UIPA. The court did not hold that by identifying in the that violate that are unlawful insurance industry, practices Act, intended to bar Act causes of Legislature Cartwright UIPA such a action based on those would Nothing practices. support The UIPA nowhere reflects intent to conclusion. legislative repeal insofar as it to the insurance industry, applies has stated its intent that the remedies and under Legislature clearly penalties the UCA are cumulative to other remedies and penalties.17
V
Disposition of the Court of is affirmed. judgment Lucas, J., Kennard, J., Arabian, J., J., J., C. George, Werdegar, concurred. expressly provided, otherwise 17Business and Professions Code section 17205: “Unless to each and to the penalties provided by chapter
remedies or this are cumulative penalties under this state.” remedies available all other laws of MOSK, J. concur in the judgment. I
I concur in the also Justice Baxter. generally majority opinion prepared Its sound. Its result is reasoning correct. On substantially unquestionably however, two I would take a different points, approach.
I First, unlike the I would declare that the majority, statement in Chicago Title Ins. Co. v. Great Western Financial Corp.
322-323 (hereafter 444 P.2d sometimes Chicago 481] dictum, Title), is and unsound at holding, dictum that. As the majority show, themselves this clearly has caused mischief language in the It past. should not be allowed to retain for the future. any vitality *26 Act,” court,
“The
stated the
Title
“is
similar in spirit
and substance to that federal
legislation
(15
Sherman
encompassed by
U.S.C.A.
1-7) and
(15
Acts
Clayton
12-27).
U.S.C.A.
Private individ
§§
§§
uals,
have,
businesses or
in the
corporations
absence of express statutory
no
authority,
standing
enforce such
(Cf.
regulatory statutes.
Show Man
Co.,
v. Hearst
agement
Publishing
196
612-616
Cal.App.2d
[16
731];
Glasner,
West
Cal.Rptr.
Coast
Co.
Poultry
v.
231
747
Cal.App.2d
[42
297];
Cal.Rptr.
Hudson Craft,
“These statutes and the common law which once constituted the ‘protec- tion of the public combinations against in restraint of the insurance trade’ (Speegle Underwriters, v. Board Fire Cal.2d 867]) 29 45 P.2d are [172 now expressly superseded contravened specific provisions of Insurance Code. Counts (secret three rebate), four (discriminatory pricing) (unlawful seven rebate) concern the clearly rates regulation charged title insurers and title companies, and rate has regulation traditionally commanded administrative expertise (Ins. controlled industries. applied Code, 12404-12412; County Co., Placer v. Aetna Cas. etc. §§ 753]; P.2d [323 Division Labor Law v. Moroney, 28 Enforcement Cal.2d three, 3].) instance, Count for is based a statute upon Code, 17045)
(Bus. & Prof. aimed at a distributor from dis preventing § customers, between but fails to facts from which a court criminating allege infer that the title insurer might properly prices charged by Security [a Summit or title from differ customer to company defendant] [a defendant] customer, (Federal and is thus defective. Automotive Services v. Lane Buick Co., four, Count based presumably facts, on the same that the discount constitutes sale of title charges insurance below cost which is an if infraction done ‘for the purpose Code, (Bus. 17049), & Prof. but a court is injuring competitors’ §§ not the initial arbiter of factors involved in insurance costs. appropriate (an [defendant]) Count seven that Sherwood escrow acts as implies company for real owners with title ‘agent’ whom insurers and title property companies are from fees and that because Summit is prohibited splitting controlled by interests, identical of a receipt title at a discount policy Security Code, (Ins. 12404) constitutes an rebate to Sherwood. The illegal statutory framework, however, a division of fees between specifically contemplates title insurers and title which shall be unless the method companies proper Code, 12412, 12404.5, (Ins. used constitutes such fee divisions ‘illegal.’ §§ 12405.7.) is not It clear from the facts that the discount rendered alleged commissioner, would or should be considered the insurance or that illegal by secret practice rebates or low or extending engaging unreasonably defendants, is followed of them. discriminatory pricing policy illustrated, factual fail in each instance to allegations, support “[T]he *27 the Just as earlier the counts state facts insufficient to establish charge. conduct on the proscribed of the actors and thus cannot reach parts alleged their so the purported conspirators, infringe- final counts antitrust charging ments fall for similar reasons.” Title Ins. Co. v. Great Western (Chicago 322-323, Financial 69 Cal.2d at italics added and brackets Corp., supra, pp. deleted.) without enclosed material view, dictum,
In Title’s statement is indeed unsound dictum. my Chicago I On this the that Justice Benson set out in his analysis point, adopt opinion below, Court of I for the which full. Appeal quote rests on a “Defendants’ Act claims challenge Cartwright ultimately Financial Corp. sentence Title Ins. Co. v. Great Western Chicago single 305, 849, ‘These statutes (1968) Cal.2d 322 444 P.2d 69 Cal.Rptr. 481]: [70 and the common law which once constituted “the the protection public combinations in restraint of the insurance trade” v. Board (Speegle against Underwriters, 34, 867]) Fire 29 Cal.2d 45 P.2d are now expressly [172 Insurance and contravened the the superseded by specific provisions
287 context, Code.’ After this statement in scrutinizing we have concluded that Title is neither Chicago nor compelling for a rule persuasive authority the Act holding Cartwright Insurance superseded by Practices [Unfair UIPA. or] “The statement is quoted dictum. Dictum is the ‘statement of a principle (1993) 235, the decision.’ necessary (People 15 Squier Cal.App.4th 536], 240 internal omitted.) marks Cal.Rptr.2d [18 quotation holding Title Chicago is that the failed to complaint the elements of adequately plead action, a Act cause of other claim. The court undertook a of the painstaking count-by-count analysis numerous complaint, identifying deficiencies.[1] factual and If the legal Court had believed that Supreme statutes cited by plaintiffs Act) were (including super Code, seded the Insurance there would have been no occasion for this discussion. But the court explicitly identified factual insufficiency issue.[2] ‘determinative’
“Dictum, course, is not even controlling when it emanates authority from the Supreme Court. (Grange Debris &Box Co. Wrecking v. Superior (1993) 1349, Court 16 Cal.App.4th 515]; Cal.Rptr.2d cf. Auto [20 Sales, Equity Inc. v. Superior (1962) Court 57 Cal.2d Cal.Rptr. 937]; P.2d Brown v. Kelly Broadcasting Co. 734-735 Nonetheless it ‘carries persua sive weight should be followed where it demonstrates a thorough analysis issue or reflects compelling logic.’ (Grange, supra, at .) . . . Chicago Title’s statement Insurance Code concerning exclusivity satisfies neither of these requirements.
“Like most of the Title, opinion statement quoted was authored Court ‘adopted’ (69 Supreme Court. example: 1 “For ‘We persuaded are . . . appellants’ vague conclusionary pleadings allege fail to facts might which reasonably be construed to wrongful *28 reveal a combination.’ (Chicago Title Ins. Co. v. Great Corp., supra, Western Financial 315.) p. 69 Cal.2d at “ illustrated, factual allegations, ‘[T]he fail in each support instance to charge. the Just as the earlier counts state facts insufficient to establish proscribed parts conduct on the of the alleged actors and thus cannot purported reach their conspirators, so the final charging counts infringements antitrust (69 323, fall for similar p. reasons.’ original.) Cal.2d at brackets “ allegation ‘The boycott of cannot supported be in this everyone instance because has the right unrestricted to select (69 customers 324.)” and sources of supply.’ p. at Cal.[2]d 2“ ‘We must determine . . superior . whether the jurisdiction court has to entertain an theories, action upon them, based appellants’ and, so, any if whether appellants have stated a against cause of any action of the various named finding, latter defendants. which determinative, (Chicago is in negative.’ the Title Ins. Corp., Co. v. Great Western Financial p. added.)” 69 Cal.2d at italics 288 deference, 311.) This in itself does warrant lessened but the
Cal.2d at p. with, also a certain lack of authorial attention. To it begin statement betrays confuses the Act with the Practices The subject Cartwright Act]. [Unfair dictum is a citation to Business and Professions immediately preceded (69 322.) These statutes are Code sections 17040-17051. Cal.2d at part p. not, the Practices as the author the dictum seemed to Act] [Unfair believe, ibid.; (See Act. cf. id. at pp. [correctly Code, Act’]; [same]; Food & defining ‘Cartwright Agr. §§ [34,] 42 [(1946)] v. Board Fire Underwriters Speegle Code, [same]; cf. Bus. & Prof. ‘Unfair Practices [defining 867] § Act’].) The statement that ‘these statutes’ have been superseded by Insurance Code is thus burdened with a glaring anomaly.
“Moreover, the court never identified of the Insurance Code any provision which and contravened’ other statute. In ‘expressly superseded particu lar, never mentioned the UIPA. Instead it cited certain opinion provisions of the Insurance Code title insurance rates. involving regulation Ins. Co. v. Great Cal.2d at (Chicago Corp., supra, Title Western Financial 322-323, Code, 12404-12412.) Ins. None of those pp. citing provisions §§ Indeed, could be said to other statute. some five ‘expressly abrogate’ any later the did enact an some of years Legislature exemption covering express Code, (Ins. the activities authorized the cited of the code. portion 12414.26, 1130, 15, added Stats. The absence of ch. § such a statute 1968 renders the Title dictum nearly unintelligible. could not have that case the defend Certainly Legislature given meaning do, it ants or would not have bothered to enact the cited statute.
“The two dictum paragraphs immediately following subject suggest of the intrude the commis- that three eleven counts complaint’s might upon over title rates. Title Ins. Co. v. (Chicago sioner’s jurisdiction 322-323.) None of Great Western Financial 69 Cal.2d at Corp., supra, pp. these three counts invoked the Act. We note historical and sharp distinctions between the analytical rate-setting regulation (See [(1984)] the broad in the UIPA. Karlin v. Zalta prohibitions [953,] 973-977.) “The court thus seemed to no more than that of the part say complaint intrude turf. Even with to that might respect part upon regulatory however, to its holding, the court returned complaint, ultimately declaring that the factual under ‘fail in each instance allegations scrutiny support *29 and that the ‘state facts insufficient to charge’ counts discussed that point establish conduct.’ Title Ins. Co. v. Great Western proscribed (Chicago 323.) Financial Cal.2d at The court then turned to Corp., supra, p. only here, claims that ‘. . . the final counts having any bearing declaring charg- (Ibid.) antitrust fall for similar reasons.’ the next On ing infringements page, Court itself inserted a declaration that the Supreme counts failed ‘because vague conclusionary fail to plaintiffs’ pleadings (Id. 324.) sufficient facts.’ at allege p.
“It thus that dictum means at most that the three appears subject claims rates were or concerning repugnant, to the potentially repugnant, ‘specific of the Insurance Code’ provisions rate The allusion to the concerning setting. case, Act, and thus Speegle was not apparently dictum, (Fn. omitted.) but unsound.”
II Second, I consider somewhat from the differently majority question Act, whether the Unfair 6.5, Insurance Practices codified as article com- with section mencing 1 of 2 of division 1 chapter part of the Code, law, Insurance decisional, supersedes statutory bemay to trade applicable in the practices business of insurance.
The source is, of the Unfair Insurance Practices Act the Model obviously, Unfair Trade Practices Act drafted by the National Association of Insurance Commissioners. The source of the Model Unfair Trade Practices Act is the Act, Federal Trade Commission codified at section et of title 15 of seq. Indeed, the United States Code. the model act “is patterned very closely after” the federal act “and much of the language was lifted there- bodily” (2 from. Proceedings National Association Insurance Commission- ers
Let us return to the Unfair Insurance Practices Act itself. Insurance Code section 790 declares that of’ the act “is to purpose trade regulate “[t]he in the practices business of insurance in accordance with the intent of Congress expressed the Act of (Public of March Congress Law 15, Seventy-ninth Congress), for the defining, determination providing of, all such in this practices State which constitute unfair methods of or unfair or competition acts or deceptive practices by prohibiting trade so defined or determined.” The act congressional referred to is popularly Act, known as the McCarran-Ferguson codified at section 1011 et of title Code, 15 of the seq. United States which in its 2(b), section section 1012(b) of Code, title 15 of the Act, United States makes “the Sherman . . .
290 Act, and ... Federal Trade Commission Act . . . Clayton [in]ap to the business insurance to the extent that such business is plicable . . . State law.” regulated by
It seems clear that the Unfair Insurance Practices Act was not intended to law, decisional, other supersede be statutory might applicable trade in the business of insurance. The are practices majority right impliedly Justice Benson in his approve reasoning for the opinion Court of below: The Unfair Insurance Practices Act “was enacted pursuant authority McCarran-Ferguson Act ... order to federal law which otherwise have displace might insurance trade governed the law of state which did not practices, displacing generally proscribe the same conduct. In so did not industry doing Legislature intend to ante, shield the from otherwise industry state law.” at applicable (Maj. opn., 266, omitted.) fn. clear, however, Less is whether the Unfair Insurance Practices Act has the law, decisional, other superseding statutory and that may be appli effect cable to trade in the business of practices insurance. to use Evidently, 790, “defin[es], of Insurance Code language section the act or provides] for of, the determination all. . . in the practices business of [trade insurance] this State which constitute unfair methods of or unfair or competition acts or and . . . deceptive practices the trade so prohibits] defined practices (Italics added.) or determined.” In so it doing, constitutes a comprehensive scheme trade statutory in the business of governing practices insurance. (American Intern. Inc. Group, (1991) Court Superior 234 Cal.App.3d 765].) Such a scheme Cal.Rptr. [285 may supersede otherwise common law. applicable (E.g., (1985) I.E. Associates v. Ins. Title Co. Safeco 596].) 702 P.2d It may supersede otherwise applicable statutory law as well. balance, however, all in the I
Weighing believe that the Unfair Insurance law, Practices does not have the effect of superseding statutory and decisional, that be to trade may applicable in the business of insurance. A effect should be found if supersessive if the act may be considered a (See substitute for such other law. v. West Ameri- Penziner can Finance Co. Cal.2d The condition is not satisfied. The act sets of direct up regime actors regulation by public contrast, through administrative of various sorts. the other- proceedings By wise law allows “indirect applicable both regulation” by private public actors both civil and criminal through actions. There is no basis to conclude that the former is a substitute for the latter. *31 Code it to on Insurance rely the I find unnecessary view of foregoing,
In do so. it I would not Because I find unnecessary, section 790.09. Insurance Code section 790.09 I cannot discern in the Unlike majority, discovered, an “intent to existing preserve have impliedly namely, what they indus in insurance business the remedies for unlawful practices and rights “No ante, added.) The declares: provision italics at (Maj. opn., p. try.” Practices issued under” the Unfair Insurance to cease desist order or judicial proceeding to or administrative any person subsequent “directed from any the same in relieve or absolve such any way person to enforce shall civil or certificate such person, action license against administrative this State out of arising or criminal under laws of liability penalty methods, The merely acts or found unfair or practices deceptive.” provision that an a bar defensive collateral against estoppel—stating imposes on a cease-and-desist order issued person finding administrative against or or conduct does not “relieve that he has in unfair engaged deceptive action, civil or criminal absolve” him from administrative any liability, out conduct The source of in penalty arising proximate question. Trade 8(d) Insurance Code section is section of Model Unfair 790.09 Act: “No of a Practices order of the Commissioner under this Act or order in or court to enforce the same shall relieve absolve any person any way affected such order from under other laws of this state.” any any liability added.) (Italics ultimate source Code The of Insurance section 790.09 Act, 45(e) 5 of the 15 of section Federal Trade Commission section of title States “No order of or of court the United Code: the Commission judgment the same enforce shall in or absolve anywise to relieve any person, partner (Italics under the Antitrust Acts.” corporation ship, liability fact, added.) That a bar defensive provision, merely imposes against Co., (4th (See, collateral State v. Chas. & Inc. estoppel. e.g., of N.C. Pfizer 67, 74; 1976) (S.D.N.Y. Cir. 537 F.2d United States v. Chas. & Co. Pfizer 1962) 94, 96-97.) 205 F.Supp. that, I hasten to add I cannot discern in Insurance Code section although an “intent 790.09 and remedies for unlawful preserve existing rights ante, business at industry” (maj. opn., added), italics I “existing nevertheless find therein an that such assumption The a bar rights remedies” are indeed “preserved.” provision imposes broad, defensive admin- collateral against estoppel beyond that is extending istrative proceedings to civil criminal actions. Administrative proceed- Insurance belong regulation of direct set the Unfair ings regime up actions, contrast, Act. Civil Practices and criminal belong regime “indirect allowed under law. regulation” provision otherwise applicable the survival of those actions. It recognizes thereby presupposes perdu- rance of that law.
III *32 said, allWith I concur in the and also concur in judgment, generally the majority opinion.