Cutler-Orosi Unified School District v. Tulare County School Districts Liability/Property Self-Insurance-Authority

We are required by this case to decide whether public school districts sued in actions seeking declaratory and injunctive relief under the federal Voting Rights Act of 1965 ( 42 U.S.C. § 1973 et seq.) are entitled to a defense provided by their insurance carrier pursuant to liability policies covering “all sums which the Insured shall become obligated to pay as damages ... by reason of the liability imposed by law” (italics added). In particular, the issues before us include whether the costs of complying with a mandatory injunction or the costs of reimbursing the voting rights plaintiffs for their attorney fees constitute “damages” within the scope of the policies. We will conclude that they are not, and for this and other reasons hold that the insurer had no duty to defend the districts.

Factual and Procedural History

Plaintiffs are three school districts located in Tulare County — the CutlerOrosi Unified School District, the Dinuba Joint Union High School District, and the Dinuba Elementary School District (the Districts) — and their respective boards of education. In 1991, certain residents of the Districts brought separate actions in federal district court alleging…