American International Group, Inc. v. Superior Court

Petitioners, American International Group, Inc., and American Home Assurance Company, are defendants in an action commenced by respondent Brutoco Engineering & Construction, Inc. (Brutoco). Brutoco seeks damages on a number of legal theories , all of which allegedly arise from certain misrepresentations made to it by petitioners with respect to a policy for workers’ compensation insurance. The only claim with which we are concerned is the 10th cause of action which was brought under the Racketeer Influenced and Corrupt Organizations Act. ( 18 U.S.C. §§ 1961-1968 [RICO].)

The question which we address is both novel and narrow. Petitioners ask us to issue a writ of mandate requiring the trial court to vacate an order denying their motion for a judgment on the pleadings with respect to Brutoco’s RICO claim. Petitioners assert that such a cause of action is precluded by the operation of the McCarran-Ferguson Act ( 15 U.S.C. § 1011 et seq.; see fn. 3, post) and the laws of the State of California purporting to regulate the business of insurance. We conclude that petitioners are correct and that a civil RICO cause of action cannot be asserted by an insured in California…