Amicus Brief: Adir International v. Starr Indemnity and Liability Company

NCLA and Cato’s principal interest participating in this litigation was to vindicate Petitioner Adir International’s due process rights and the rights of any individual or entity defendant whose business actions have been or might be chilled because its insurance coverage can be turned off at will by California enforcers without regard to whether a violation of the UCL and/or FAL by that defendant has actually occurred.

California Insurance Code § 533.5 has no redeeming features and should be invalidated. Not every legal policy experiment by the States succeeds—and not every such experiment is constitutional. Section 533.5 confers arbitrary power on California enforcement officials. And this arbitrary power can only be tamed by overturning the statute as unconstitutional because even a defendant opting to litigate and then prevailing cannot erase the harm it incurred from having lost access during the pendency of such litigation to the insurance rights it lawfully purchased.

Hence, NCLA and Cato prayed that the U.S. Supreme Court would grant the writ of certiorari, reverse the Ninth Circuit, and invalidate this aberrant California Insurance Code provision that denies basic rights of self-defense in litigation without any prior proof of wrongdoing.