Bodell

We consider here a question of first impression in this Circuit: whether an insurance policy promising to provide representation in “any proceeding or suit brought by any governmental regulatory agency seeking non-pecuniary relief’ obligates the insurer to provide representation during an investigation by agents of the United States Postal Inspection Service (“the Postal Inspection Service”) into allegations of mail fraud on the insured’s part. Under the particular wording of the policies at issue, we hold that the insurers here made a promise they are obligated to keep.

Plaintiff Gregory S. Bodell (“Bodell”), an attorney, was an insured under two claims-made professional liability insurance policies issued by defendants, Walbrook Insurance Company, et al. (“the carriers”). Bodell brought this action seeking to compel the carriers to pay attorneys fees and costs incurred as the result of a federal investigation into events arising out of his actions and activities as a practicing lawyer. The investigation ultimately matured into a criminal charge to which he pled guilty.

The district court granted summary judgment in the carriers’ favor. We have jurisdiction pursuant to 28…

dissenting.

Appellant, a lawyer, was once convicted for helping bilk insurance companies out of attorney’s fees. This time he gets away with it.

I

My colleagues find there is coverage for attorney’s fees incurred in criminal proceedings based on a clause in the policy where the insurance company promises to defend “any proceeding ... brought by any governmental regulatory agency seeking non-pecuniaiy relief.” This clause covers defense costs when regulatory agencies, like the Securities and Exchange Commission, the Federal Trade Commission or the state bar, seek civil relief, such as an injunction, suspension of a license or disbarment. The proceedings the insurers were asked to defend-a grand jury investigation and subsequent criminal prosecution-were manifestly not “brought” by a “regulatory agency.” They were brought by a federal grand jury and by the Attorney General acting through the United States Attorney. Not even appellant claims that the grand jury or the United States Attorney is a regulatory agency.

The majority nevertheless finds coverage on two grounds. First, my colleagues argue that the United States Postal Service’s investigation was the proceeding brought by…