Farmers Ins. Exchange v. Low

• Decision Date: 01 November 2001
• Docket Number: No. F035196.,No. F035198.,F035196.,F035198.
• Citation: 113 Cal.Rptr.2d 537,93 Cal.App.4th 667
• Court: California Court of Appeals Court of Appeals
• Parties: FARMERS INSURANCE EXCHANGE et al., Plaintiffs and Appellants, v. Harry W. LOW, as Insurance Commissioner, etc., et al., Defendants and Respondents; Fireman's Fund Insurance Companies et al., Interveners and Appellants; Consumers Union of U.S., Inc., et al., Interveners and Respondents. United Services Automobile Association et al., Plaintiffs and Appellants. v. Harry W. Low, as Insurance Commissioner, etc., Defendant and Respondent; Fireman's Fund Insurance Companies et al., Interveners and Appellants; Consumers Union Of U.S., Inc., et al., Interveners and Respondents.

113 Cal.Rptr.2d 537

93 Cal.App.4th 667

FARMERS INSURANCE EXCHANGE et al., Plaintiffs and Appellants, v. Harry W. LOW, as Insurance Commissioner, etc., et al., Defendants and Respondents;

Fireman's Fund Insurance Companies et al., Interveners and Appellants;

Consumers Union of U.S., Inc., et al., Interveners and Respondents.

United Services Automobile Association et al., Plaintiffs and Appellants. v. Harry W. Low, as Insurance Commissioner, etc., Defendant and Respondent;

Fireman's Fund Insurance Companies et al., Interveners and Appellants;

Consumers Union Of U.S., Inc., et al., Interveners and Respondents.

No. F035196.

No. F035198.

Court of Appeal, Fifth District.

November 1, 2001.

Review Granted January 16, 2002.

Horvitz & Levy and Mitchell C. Tilner and Daniel J. Gonzalez, Encino; Barger & Wolen and Steven H. Weinstein, Los Angeles, Richard G. De La Mora and Robyn E. King, for Plaintiffs/Interveners and Appellants, Farmers Insurance Exchange, Fire Insurance Exchange, Truck Insurance Exchange, Safeco Insurance Companies, and for Fireman's Fund Insurance Companies; Forrest, Henderson, Sloan & Davis and Theodore R. Forrest, Jr., and Jeffrey P. Davis, for Plaintiffs and Appellants Farmers Insurance Exchange, Fire Insurance Exchange and Truck Insurance Company; LeBoeuf, Lamb, Greene & MacRae and R. Scott Puddy for Plaintiffs and Appellants United Services Automobile Association, USAA Casualty Insurance, Allstate Insurance Company, Allstate Indemnity Company and Deerbrook Insurance Company and Interveners and Appellants Allstate Insurance Company and Allstate Indemnity Company and Deerbrook Insurance Company.

Heller, Ehrman, White & McAuliffe and Paul Alexander and Vanessa Wells, Palo Alto, for State Farm Mutual Automobile Insurance Company, State Farm Fire and Casualty Company and State Farm General Insurance Company, Amicus Curiae on behalf of Appellants.

Bill Lockyer, Attorney General, Lawrence K. Keethe, Steven J. Green, Kristin M. Daily and Robert Asperger, Deputy Attorneys General, for Defendants and Respondents.

Public Advocates, Inc. and Mark Savage, John T. Affeldt, San Francisco, and Maria E. Andrade, for Interveners and Respondents Consumers Union of U.S., Inc., National Council of La Raza, Korean Youth and Community Council, Oakland Chinese Community Council, Southern Christian Leadership Conference of Greater Los Angeles.

OPINION

CORNELL, J.

This dispute concerns records and reports made by various insurance companies to the Insurance Commissioner of California, which, by definition, are public records. (Gov.Code, § 6252, subd. (d).) The records detail for every ZIP code in California the number of exposures¹ and the premium dollars earned by an insurer. The Insurance Commissioner agreed to disclose the records after receiving a request for the data from various consumers groups.

Appellants Farmers Insurance Exchange (Farmers), United Services Automobile Association (USAA), USAA Casualty Insurance Company, Fireman's Fund Insurance Companies, General Insurance Company of America, First National Insurance Company of America, Safeco Insurance Company of America, Safeco Insurance Company of Illinois, Safeco Insurance Company of Pennsylvania, Allstate Insurance Company, Allstate Indemnity Company, Deerbrook Insurance Company and Amicus Curiae State Farm Insurance Companies (collectively Insurers), assert the trial court abused its discretion when it denied their application for a preliminary injunction preventing disclosure of the records. Insurers contend the data is a trade secret exempt from disclosure by Government Code section 6254, subdivision (k) and the trial court erroneously interpreted Insurance Code section 1861.07 in denying their application.

Respondents the Insurance Commissioner of the State of California, the California Department of Insurance, the Southern Christian Leadership Conference of Greater Los Angeles, the National Council of La Raza, the Korean Youth and Community Council, the Oakland Chinese Community Council and Consumers Union of U.S., Inc. (collectively, the Commissioner), assert the trial court properly interpreted the statutes and regulations. The Commissioner argues the exemption in Government Code section 6254, subdivision (k) was eliminated for this data by Insurance Code section 1861.07.

We conclude the data at issue is covered by Insurance Code section 1861.07, but that this section did not eliminate the exemption from disclosure found in Government Code section 6254, subdivision (k). As the trial court did not consider this exemption from disclosure, we remand to the trial court for further proceedings.

FACTUAL AND PROCEDURAL SUMMARY

A. Background

In 1994, California Code of Regulations, Title 10 section 2646.6 was promulgated (Regulation 2646.6). Since it was last amended in 1996, this section has required every insurance company with more than 10 million dollars of sales annually in a specific line of insurance to file a Community Service Statement (CSS) with the Commissioner. (Reg.2646.6, subd. (a).) The information required by the CSS is reported separately for each ZIP code in California and includes what is referred to as Record A data.

Each reporting insurance company includes in its Record A report for each ZIP code in California (1) the total earned exposures, (2) the total earned premiums, (3) the total number of new exposures, (4) the total number of exposures which were cancelled, and (5) the total number of exposures which were not renewed. (Reg. 2646.6, subd.(b)(1).) This information must be reported separately for the following lines of insurance: private passenger automobile liability, private passenger automobile physical damage, homeowners multiple peril, commercial multiple peril, commercial automobile liability, commercial automobile physical damage, fire, and liability other than automobile. (Reg. 2646.6, subd. (b)(1)(A)-(H).)

In addition to the Record A data, the CSS includes: (1) the number of offices maintained by the insurance company in every ZIP code including the type of service offered (Reg.2646.6, subd. (b)(2)), (2) the number of independent, captive, or employed agents and claims adjusters for the insurance company located in each ZIP code in which the insurer maintains an office (Reg.2646.6, subd. (b)(3)), (3) the number of direct mail or telephone solicitations for new insurance for every ZIP code for direct solicitation insurers (Reg.2646.6, subd. (b)(4)), (4) the number of agents and claims adjusters maintaining offices in each ZIP code who are conversant in a language other than English (Reg.2646.6, subd. (b)(5)), (5) the gender and race for each person who applied to the insurance company for insurance (Reg.2646.6, subd. (b)(6)),² (6) the number of applications received for each line of insurance by ZIP code (Reg.2646.6, subd. (b)(7)), and (7) the number of applications declined for each line of coverage by ZIP code (Reg.2646.6, subd. (b)(8)). The disclosure of this additional information is not an issue here.

This appeal arises from a trial court interpretation of Regulation 2646.6, subdivision (c) which provides that all the data submitted by the Insurers is subject to California Insurance Code section 1861.07.³ This section states that all information provided pursuant to article 10, chapter 9, part 2 of division 1 of the Insurance Code (Article 10) shall be made available to the public.

In November 1999, the consumer groups requested the Commissioner disclose the CSS data submitted by the top five Insurers pursuant to Regulation 2646.6 for the years 1995, 1996 and 1997. The Commissioner wrote the Insurers, told them of the request and the Commissioner's intention to disclose the information.

B. The Farmer's Action

In response to the Commissioner's letter, Farmers filed a complaint for declaratory and injunctive relief in Fresno County Superior Court (No. 645146-2) naming the Insurance Commissioner and the Department of Insurance as defendants. The thrust of the action was to prevent disclosure of the Record A information. Farmers applied for a temporary restraining order and moved for a preliminary injunction. The trial court granted the temporary restraining order and issued an order to show cause why a preliminary injunction should not issue. The Commissioner filed papers opposing the motion for preliminary injunction.

The parties stipulated, and the trial court ordered, that USAA, Fireman's Fund, Safeco, Allstate, and the consumer groups could intervene in the action. Complaints in intervention were filed. The insurance interveners joined in the motion for a preliminary injunction, while the consumer groups opposed it.

The trial court denied the motion for a preliminary injunction finding that section 1861.07 required disclosure of the documents. The trial court did not consider whether the information was a trade secret. The order dissolved the temporary restraining order.

C. The USAA Action

On the same date that Farmers filed its action, USAA filed a complaint for misappropriation of trade secrets in Fresno County Superior Court (No. 645144-7), also seeking to prevent disclosure of the CSS data. USAA also applied for a temporary restraining order and a preliminary injunction. The trial court issued the temporary restraining order and issued an order to show cause why a preliminary injunction should not issue.

It does not appear the trial court consolidated the Farmers action and the USAA action. However, the stipulation to intervene was signed by the parties in both actions and referred to both actions. Papers apparently were filed only one time, but were utilized in both actions. The order denying the application for the preliminary injunction referred to both actions.

D. Writ of Supersedeas

Each Insurer filed a notice of appeal and also filed a petition for a writ of supersedeas in this court seeking a stay of the trial court's order to the extent that it allowed the Commissioner to...