RLI Insurance Co. Group v. Superior Court

I. Introduction

This case arises out of a dispute over the discoverability of certain evidence requested by two insurance companies in their rate rollback hearings under the voter-enacted insurance reform measure, Proposition 103. In addition to the issue of discoverability of the requested documents, this case also presents the question of whether an aggrieved party may seek relief from an adverse discovery ruling of the administrative law judge (ALJ) assigned to hear the rollback case and, if so, how.

II. Background

On November 8,1988, the voters enacted Proposition 103, thereby significantly rewriting California law governing insurance rate regulation. A key component of the initiative was Insurance Code section 1861.01, subdivision (a), which mandated a one-time, 20 percent rollback of rates for the first year following the initiative.

Various insurance companies challenged the constitutionality of the initiative. Our Supreme Court upheld its provisions, including the 20 percent rollback, subject to the right of an insurance company to demonstrate that some lesser rollback amount was constitutionally required to avoid confiscation. (See Calfarm Ins. Co. v.…