Crusader Ins. Co. v. Scottsdale Ins. Co.

This case raises the question of the proper test for determining whether a regulatory statute creates a new private right to sue. Two competing approaches have been presented. The first is the “legislative intent approach.” The legislative intent approach examines the wording of the statute, its legislative history, its statutory context and similar factors, and asks whether the Legislature intended to create a new private right to sue by enacting the statute. The second approach is the “Restatement approach.” The Restatement approach follows the legislative intent approach in most respects. However, in a situation in which the Legislature simply never contemplated the possible creation of a private right to sue, the Restatement approach deviates from the legislative intent approach. In this latter situation, the Restatement approach allows the court itself to create a new private right to sue, even if the Legislature never considered creation of such a right, if the court is of the opinion that a private right to sue is “appropriate” and “needed.”

This case involves Insurance Code section 1763, which regulates the activities of surplus line brokers in California. The…