1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 EILEEN-GAYLE COLEMAN, et al., Case No.: 21-cv-217-RSH-KSC
12 Plaintiffs, ORDER ADDRESSING PENDING 13 v. MOTIONS
14 UNITED SERVICES AUTOMOBILE [ECF Nos. 167, 169, 173, 174, 179, 181, ASSOCIATION, et al., 15 189] Defendants. 16 17 18 Pending before this Court are, among other motions, (1) a motion for summary 19 judgment filed by defendants United Services Automobile Association (“United Services”) 20 and USAA General Indemnity Co. (“GIC”) [ECF No. 173] and (2) a motion for partial 21 summary judgment filed by class representatives Eileen-Gayle Coleman and Robert Castro 22 [ECF No. 169]. 23 United Services Automobile Association (“USAA”) offers insurance to members of 24 the military and their families through its subsidiaries, including United Services and GIC. 25 USAA has placement rules under which commissioned officers and higher-ranking 26 enlisted personnel are assigned to United Services, and other enlisted personnel are 27 assigned to GIC. Based on historic losses among the respective pools of policyholders, the 28 1 California Department of Insurance has approved rates that are lower for United Services 2 and higher for GIC. 3 California Insurance Code section 1861.16(b) provides that, where insurers have 4 common ownership, they must offer to statutory “good drivers” a discount policy from 5 whichever insurer within that common ownership offers the lowest rates, “notwithstanding 6 the underwriting guidelines of any of those insurers.” Roughly 70% of GIC’s insureds— 7 approximately two million individuals—are statutory good drivers. Plaintiffs contend that, 8 despite USAA’s placement rules, and despite the fact that the Department approved rates 9 for each company based on historic losses of their policyholders, Section 1861.16(b) 10 requires USAA to assign those individuals to United Services rather than GIC and to charge 11 them the lower United Services rates. 12 Another provision of the California Insurance Code, section 11628(f)(1), provides 13 that nothing in the code “shall prohibit an insurer from limiting the issuance or renewal of 14 insurance … to persons who engage in … governmental or military service or segments of 15 categories thereof,” and their families. Defendants contend that under this statute, United 16 Services may limit its issuance of insurance to “segments” of servicemembers, as set forth 17 in USAA’s placement rules, even where the would-be insured is a statutory good driver. 18 This case presents a legal question of first impression: Whether Section 1861.16(b) 19 requires USAA to assign all statutory good drivers to the USAA subsidiary with the lower 20 rate, or whether Section 11628(f)(1) protects USAA’s ability to assign insureds, including 21 good drivers, in accordance with its placement rules.1 The Court concludes that under the 22 clear language of the relevant statutes, the Insurance Code does not compel USAA to 23 ignore its placement rules that limit insurance “to persons who engage in … governmental 24 25 26 1 This legal question may not, in practical terms, have any present application beyond 27 the USAA group of insurance companies. At oral argument, neither party was aware of any auto insurance company doing business in California with placement rules that assign 28 1 or military service or segments of categories thereof.” Based on this conclusion, 2 Defendants are entitled to summary judgment. 3 As set forth below, the Court grants Defendants’ motion for summary judgment, and 4 denies Plaintiffs’ motion for partial summary judgment. 5 I. BACKGROUND 6 A. Undisputed Facts 7 Defendant USAA is a reciprocal interinsurance exchange composed of affiliated 8 insurance companies. ECF No. 192 (Joint Statement of Undisputed Facts) at 2. Four 9 affiliated companies in the USAA corporate family provide auto insurance to different 10 segments of the military or their family members, including defendants United Services 11 and GIC. Id. Plaintiffs formerly served as enlisted military personnel with a highest pay 12 grade below E-6, and had (or still have) auto insurance through GIC for vehicles garaged 13 in California. Id. 14 The eligibility rules for each USAA company are mutually exclusive; military 15 members and their families are eligible to purchase policies from only one of the USAA 16 entities. Id. at 3. USAA describes the specific eligibility criteria for the four companies in 17 its placement rules, which have been revised periodically over the years. Id. As relevant 18 here, the placement rules dictate that United Services insures, among other categories of 19 policyholders, “[c]ommissioned and warrant officers in the U.S. Armed Forces [and] 20 [s]enior non-commissioned/petty officers, defined as E-7 or above in the U.S. Armed 21 Forces … on active duty … or retired from active duty … or separated with a discharge 22 type of ‘Honorable’ from active duty.” The placement rules also dictate that GIC insures, 23 with one other category of policyholders, “[e]nlisted and junior non-commissioned 24 officers, defined as E-1 through E-6 in the U.S. Armed Forces … on active duty … or 25 retired from active duty … or separated with a discharge type of ‘Honorable’ from active 26 27 28 1 duty.” Id. United Services and GIC operate under common management and control. Id. 2 at 2. 3 Since 1989, insurance companies in California—including the four USAA affiliates 4 depending on when they began operations in the State—have had to secure prior approval 5 from the California Department of Insurance (the “Department”) for the rates that are used 6 to set the premiums they charge policyholders. Id. at 3. The Department’s prior-approval 7 rate-setting process is regulated and data-driven. Id. The process is designed to ensure that 8 the ultimate rate filed with the Department is not excessive, inadequate or unfairly 9 discriminatory. Automobile “insurance rates … must be approved by the commissioner 10 prior to their use.” Cal. Ins. Code § 1861.01(c). The Department’s rate-setting process 11 requires that each insurer set its rates based partly on the amounts it has historically paid 12 out to its policyholders to settle claims. ECF No. 192 at 4. Historical losses are used to 13 project future losses. Id. 14 USAA has submitted rate applications that contain separate base rates for each of its 15 four insurance companies, including United Services and GIC. Id. at 5. The average GIC 16 policyholder has a history of greater losses than the average United Services policyholder, 17 and the Department has approved USAA’s applications for higher base rates for GIC than 18 for United Services at all relevant times. Id. at 6. The discrepancy in premiums paid by 19 United Services’ and GIC’s insureds is a result of each group’s corresponding history of 20 losses, and the role those historical losses play in setting each company’s base rates. Id. 21 If an insured meets the statutory good driver qualifications pursuant to California 22 Insurance Code section 1861.025, the insured receives at least 20 percent below the rate 23 the insured would otherwise have been charged for the same coverage. Id. at 5. At all 24 25 26 2 Plaintiffs have adopted the shorthand of referring to GIC’s policyholders as “enlisted 27 personnel” rather than as “current or former personnel whose highest paygrade was E-6 or below,” and referring to United Services’ policyholders simply as “officers.” ECF No. 182 28 1 relevant times, both GIC and United Services have applied a 20% discount on the total 2 premium amount for insureds who qualify as statutory good drivers. Id. Plaintiffs Coleman 3 and Castro—insured by GIC in accordance with USAA’s placement rules—qualified for 4 and received a good driver discount for each six-month policy period during the relevant 5 period. Id. 6 B. Procedural History 7 Plaintiffs filed their original putative class action Complaint on February 4, 2021, 8 alleging six claims. ECF No. 1. On June 22, 2021, the Court granted in part Defendants’ 9 motion to dismiss, dismissing two of Plaintiffs’ claims under California’s Unfair 10 Competition Law (“UCL”) that were based on an underlying violation of Section 790.03(b) 11 of the California Unfair Insurance Practices Act. ECF No. 22. On November 15, 2021, 12 Plaintiffs filed the operative First Amended Complaint (“FAC”). ECF No. 49. The FAC 13 alleges four claims, for violation of: (1) the UCL, based on “unlawful” conduct in violation 14 of California Insurance Code section 1861.16(b); (2) the UCL, based on “unfair” conduct 15 in violation of that same section; (3) the Unruh Civil Rights Act, Cal. Civ. Code § 51; and 16 (4) California Military and Veterans Code section 394(a). Id. 17 On April 14, 2022, Plaintiff’s filed their initial motion for class certification. ECF 18 No. 58. The case was thereafter reassigned to the undersigned. ECF No. 66. On March 21, 19 2023, this Court denied Plaintiffs’ motion for class certification. ECF No. 109. 20 On June 27, 2023, Plaintiffs filed a renewed motion for class certification. ECF No. 21 119. On December 22, 2023, the Court granted the motion in part. ECF No. 133. The Court 22 certified the following class as to Claim One of the FAC: 23 The “unlawful” UCL claim asserted on behalf of the Good Driver Class, which comprises: 24
25 All enlisted persons who (a) at any time on or after December 28, 2017, purchased or renewed an automobile insurance policy including 26 collision coverage from GIC, (b) qualified as good drivers under Cal. 27 Ins. Code § 1861.025 according to USAA’s records, (c) were not offered a good driver discount from United Services, (d) paid more for 28 1 that policy than they would have paid in United Services, and (e) at any time in which clauses (a) through (d) have been satisfied, garaged 2 vehicles in the State of California. 3 Id. at 58. The Court declined to certify a class as to Claim Two, the “unfair” UCL claim. 4 Id. at 46. 5 On January 26, 2024, upon stipulation of the Parties, the Court dismissed Claims 6 Three and Four. ECF Nos. 139, 140. Thus, the pending claims in the FAC are Claim One, 7 a class claim for violation of the UCL based on “unlawful” conduct, and Claim Two, an 8 individual claim for violation of the UCL based on “unfair” conduct. 9 Defendants’ motion for summary judgment, and Plaintiffs’ motion for partial 10 summary judgment, have been fully briefed.3 Also pending are several motions to exclude 11 portions of reports, declarations, or testimony by opposing experts or attorneys. ECF Nos. 12 167, 174, 179, 181, 189. Additionally, each party has requested that the Court take judicial 13 notice of certain documents. ECF Nos. 173-3, 180.4 On December 12, 2024, the Court held 14 a hearing on the pending motions, and took them under submission. ECF No. 207. 15 II. LEGAL STANDARD 16 The Court “shall grant summary judgment if the movant shows that there is no 17 genuine dispute as to any material fact and the movant is entitled to judgment as a matter 18 of law. See Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A 19 fact is material when, under the governing substantive law, it could affect the outcome of 20 the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute about a 21 material fact is genuine if “the evidence is such that a reasonable jury could return a verdict 22 for the nonmoving party.” Id. 23 24 25
26 27 3 The Court allowed Plaintiffs to file a sur-reply in opposition to Defendants’ summary judgment motion. See ECF Nos. 200, 201. 28 1 The movant always bears the initial burden of establishing the absence of a genuine 2 issue of material fact. Celotex, 477 U.S. at 323. The moving party can satisfy this burden 3 by: (1) presenting evidence that negates an essential element of the nonmoving party’s 4 case; or (2) demonstrating that the nonmoving party failed to make a showing sufficient to 5 establish an element essential to that party’s case on which that party will bear the burden 6 of proof at trial. Id. at 322–23. “Disputes over irrelevant or unnecessary facts will not 7 preclude a grant of summary judgment.” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors 8 Ass’n, 809 F.2d 626, 630 (9th Cir. 1987). 9 If the movant fails to discharge this initial burden, summary judgment must be 10 denied, and the court need not consider the nonmoving party’s evidence. Adickes v. S.H. 11 Kress & Co., 398 U.S. 144, 159-60 (1970). If the moving party meets this initial burden, 12 however, the nonmoving party cannot defeat summary judgment merely by demonstrating 13 “that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. 14 Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986); see also Triton Energy Corp. v. 15 Square D Co., 68 F.3d 1216, 1221 (9th Cir. 1995) (“The mere existence of a scintilla of 16 evidence in support of the non-moving party’s position is not sufficient.” (citing Anderson, 17 477 U.S. at 242, 252)). Rather, the nonmoving party must “go beyond the pleadings” and 18 by “the depositions, answers to interrogatories, and admissions on file,” designate “specific 19 facts showing that there is a genuine issue for trial.” Celotex, 477 U.S. at 324 (quoting Fed. 20 R. Civ. P. 56(e)). 21 When making this determination, the court must view all inferences drawn from the 22 underlying facts in the light most favorable to the nonmoving party. See Matsushita, 475 23 U.S. at 587. “Credibility determinations, the weighing of the evidence, and the drawing of 24 legitimate inferences from the facts are jury functions, not those of a judge, [when] he is 25 ruling on a motion for summary judgment . . . .” Anderson, 477 U.S. at 255. 26 // 27 // 28 // 1 III. ANALYSIS 2 Here, all Parties contend that this case is suitable for disposition on summary 3 judgment in light of the undisputed facts. ECF No. 169-1 at 1, 7; ECF No. 173 at 1-2; ECF 4 No. 182 at 1. 5 A. California Insurance Code Provisions 6 Plaintiffs’ UCL claims are based on alleged violations of Section 1861.16(b), which 7 provides: 8 An agent or representative representing one or more insurers having common ownership or operating in California under common 9 management or control shall offer, and the insurer shall sell, a good 10 driver discount policy to a good driver from an insurer within that common ownership, management, or control group, which offers the 11 lowest rates for that coverage. This requirement applies 12 notwithstanding the underwriting guidelines of any of those insurers or the underwriting guidelines of the common ownership, management, or 13 control group. 14 Cal. Ins. Code § 1861.16(b) (emphasis added). Given that United Services and GIC are 15 under common management and control, Plaintiffs argue that Defendants violate this 16 statute when they fail to assign all statutory good drivers to United Services. See ECF No. 17 182 at 4 (“[T]he class contends that USAA wrongly sold enlisted good drivers policies 18 from GIC instead of from United Services.”); ECF No. 169-1 at 7-8 (“By placing class 19 members with GIC without regard to whether United Services offers the lowest rates for 20 good driver discount policy coverage, USAA is violating § 1861.16(b) on its face.”).5 21 Defendants invoke Section 11628(f)(1), which provides: 22 Except as provided in Article 4 (commencing with Section 11620), 23 nothing in this section or in Article 10 (commencing with Section 24 25 5 Plaintiffs are not arguing that GIC had an obligation to retain its insured good drivers 26 but offer them a discounted or lower rate based on what United Services would have 27 charged. See ECF No. 182 at 18 (“[T]his case is about which policies (GIC’s or United Services’) should be offered to class members. It’s about the sale of the wrong policies 28 1 1861.01) of Chapter 9 of Part 2 of Division 1 or in any other provision of this code, shall prohibit an insurer from limiting the issuance or 2 renewal of insurance, as defined in subdivision (a) of Section 660, to 3 persons who engage in, or have formerly engaged in, governmental or military service or segments of categories thereof, and their 4 spouses, dependents, direct descendants, and former dependents or 5 spouses.
6 Cal. Ins. Code § 11628(f)(1) (emphasis added).6 Section 1861.16(b) falls within Article 10 7 of Chapter 9 of Part 2 of Division 1 of the Insurance Code. Accordingly, Section 8 11628(f)(1) provides that nothing in Section 1861.16(b) “shall prohibit an insurer from 9 limiting the issuance or renewal of insurance … to persons who engage in, or have formerly 10 engaged in, governmental or military service or segments of categories thereof ….” 11 Defendants contend that this statute permits United Services to limit their insurance 12 offerings to officers, and protects them from Plaintiffs’ claim that United Services was 13 required to insure all good drivers regardless of rank. 14 B. Statutory Interpretation 15 A federal court exercising diversity jurisdiction construes a state statute under the 16 state’s rules of statutory construction. See Powell’s Books, Inc. v. Kroger, 622 F.3d 1202, 17 1209 (9th Cir. 2010) (“[O]ur role is to ‘interpret the law as would the [California] Supreme 18 Court’”). Accordingly, this Court construes the California Insurance Code under California 19 rules of statutory interpretation. The California Supreme Court has described the task of 20 statutory interpretation as follows: 21 Our fundamental task is to determine the Legislature’s intent and give 22 effect to the law’s purpose. We begin by examining the statute’s words because they generally provide the most reliable indicator of legislative 23 intent. If the statutory language is clear and unambiguous our inquiry 24 ends. However, we will not give statutory language a literal meaning if doing so would result in absurd consequences that the Legislature could 25 not have intended. 26 27 6 No party contends that the exception to Section 11628(f) recited at the outset, 28 1 In re D.B., 58 Cal. 4th 941, 945-46 (2014) (citations and quotation marks omitted). See 2 also People v. Orozco, 9 Cal. 54th 111, 122 (2020) (“Because the [statutory] language … 3 is clear … we need not look to extrinsic sources for guidance.”); Frlekin v. Apple Inc., 8 4 Cal. 5th 1038, 1046 (2020) (“We … begin with the text. If it is clear and unambiguous our 5 inquiry ends.”) (quotation marks omitted). A court considers statutory language “in its 6 ‘broader statutory context’ and, where possible, harmonize[s] that language with related 7 provisions by interpreting them in a consistent fashion.” ZB, N.A. v. Super. Ct., 8 Cal. 5th 8 175, 189 (2019). If ambiguity remains after this textual analysis, a court “may consider 9 extrinsic sources such as legislative history and contemporaneous administrative 10 construction.” Id. 11 Here, as discussed above, Section 11628(f)(1) provides that nothing in Section 12 1861.16(b) (among other provisions) “shall prohibit an insurer from limiting the issuance 13 or renewal of insurance …. to persons who engage in … military service or segments of 14 categories thereof ….” At the hearing, Plaintiffs agreed that the term “segments” here 15 includes distinctions based on ranks of servicemembers. Plaintiff also agreed that Section 16 11628(f)(1) allows an insurance company to only provide insurance to members of the 17 military who have certain ranks. That is precisely what United Services and GIC do, using 18 USAA’s placement rules: Officers are insured by United Services, and enlisted personnel 19 are insured by GIC. Yet this is also precisely what Plaintiffs challenge. They contend that 20 United Services must insure statutory good drivers regardless of whether they fall within a 21 segment of the military (enlisted personnel) that United Services would otherwise insure. 22 On its face, Section 11628(f)(1) is clear and unambiguous: Plaintiffs may not rely on 23 Section 1861.16(b) to argue, as they do here, that United Services is prohibited from 24 drawing a distinction between officers (whom it insures) and enlisted personnel (whom it 25 does not). 26 Plaintiffs argue that this application of Section 11628(f)(1) creates a “conflict” with 27 Section 1861.16(b), which the Court is required to “harmonize.” ECF No. 182 at 7. 28 1 However, there is no conflict here. Section 1861.16(b) imposes an obligation, and Section 2 11628(f) expressly imposes a limitation on that obligation: “[N]othing in this section or in 3 Article 10 (commencing with Section 1861.01) of Chapter 9 of Part 2 of Division 1 or in 4 any other provision of this code, shall prohibit ….” The purpose of Section 11628(f), as 5 manifest in its language, is to ensure that certain other laws (including Section 1861.16(b)) 6 do not prohibit an insurer from choosing to provide insurance only to members of the 7 military or certain segments of the military, precisely what USAA does here. Plaintiffs 8 appear to agree that this is what Section 11628(f)(1) was intended to do. See ECF No. 182 9 at 10 (“It stands to reason that the purpose of the amendment in 1990, adding the words ‘or 10 segments … thereof,’ was to allow USAA to continue to limit its sales to officers and 11 limited categories of government employees, without requiring it to sell to good drivers 12 who were enlisted or to most governmental personnel.”). 13 A statutory scheme that provides a rule, and thereafter provides an exception or 14 limitation to the rule, is not in conflict with itself and does not need to be harmonized. 15 There are other statutory exceptions to the requirement contained in Section 1861.16(b). 16 For example, Section 1861.16(c) provides an exception to that requirement where the 17 California Insurance Commissioner determines that certain conditions are satisfied (not at 18 issue here). As another example, Section 1861.02(b)(3)(A), allows motor clubs like AAA 19 to require membership as a condition of obtaining insurance. These exceptions are not in 20 conflict with the requirements that they suspend or limit. Neither is Section 11628(f). 21 As the Court interprets it, Section 11628(f)(1) does not, in any general sense, negate 22 or nullify Section 1861.16(b). Most applications of Section 1861.16(b) would not implicate 23 Section 11628(f)(1) at all. Indeed, even in the highly specific context of a group of insurers 24 under common ownership or management who insure members of the military, Section 25 11628(f)(1) might not serve to limit Section 1861.16(b) in any way, depending on the facts. 26 For example, if each insurer within the group limited its insurance offerings to members of 27 the military only, without distinguishing between ranks, then the “lowest good driver 28 discount” requirement contained in Section 1861.16(b) would still apply within that group. 1 Such a requirement would not somehow “prohibit” any of the insurers from “limiting the 2 issuance” of insurance to persons engaged in military service or segments thereof. 3 Moreover, if each insurer within the group limited its insurance offerings to members of 4 the military within certain ranks—but there was overlap, such that more than one insurer 5 provided insurance to a persons of a certain rank—then the requirement of Section 6 1861.16(b) would still obligate the group of insurers to offer the lowest good driver 7 discount to persons of that particular rank. In contrast, here, United Services and GIC have 8 mutually exclusive placement guidelines, each covering different segments of the military 9 and their family members. This means that under Section 11628(f)(1), the “lowest good 10 driver discount” requirement does not apply to require United Services to insure good 11 drivers who, by virtue of their rank, fall outside of the military segment that United Services 12 insurers. The manner in which Section 11628(f)(1) serves to limit Section 1861.01(b) is 13 thus quite limited in scope—and as a practical matter, may only apply to USAA, if it is 14 indeed the only group that offers similar policies in California. 15 Plaintiffs also invoke the interpretive principle that a specific statute controls over a 16 general statute covering the same subject. ECF No. 182 at 13 (citing Estate of Kramme, 20 17 Cal. 3d 567, 576 (1978)). But this principle does not support Plaintiffs’ position. Section 18 11628(f)(1) specifically provides for a limitation of other statutes, using language that 19 encompasses Section 1861.16(b). In contrast, Section 1861.16(b) contains no similar 20 language limiting or suspending the application of other statutes like Section 11628(f)(1). 21 In short, the statutory language of Section 11628(f)(1) reflects a legislative intent to 22 allow insurers to limit their offerings to members of the military, or to members of certain 23 ranks or other segments of the military—even if another enumerated portion of the 24 Insurance Code would provide otherwise. Although it is unnecessary in these 25 circumstances to consider extrinsic evidence like legislative history, the legislative history 26 of Section 11628(f)(1) does not help Plaintiffs either; it does not appear to conclusively 27 address the interplay between that statute and Section 1861.16(b). See ECF No. 182 at 8- 28 1 11. Accordingly, under California rules of statutory interpretation, the Court concludes that 2 Section 11628(f)(1) is clear and unambiguous.7 3 C. Proposition 103 4 Plaintiffs also contend that Defendants’ interpretation of Section 11628(f)(1) would 5 run afoul of considerations, unique to the insurance context, relative to Proposition 103. 6 ECF No. 182 at 12-13. Proposition 103, the “Insurance Rate Reduction and Reform Act,” 7 was passed by California voters on November 8, 1988. Cal. Ins. Code, § 1861.01. The 8 intention of Proposition 103 was to “protect consumers from arbitrary insurance rates and 9 practices, to encourage a competitive insurance marketplace, to provide for an accountable 10 insurance commissioner and to ensure that insurance is fair, available, and affordable for 11 all Californians.” Found. for Taxpayer & Consumer Rts. v. Garamendi, 132 Cal. App. 4th 12 1354, 1359 (Ct. App. 2005). The voters further provided in subdivision (b) of section 8 that 13 “[t]he provisions of this act shall not be amended by the Legislature except to further its 14 purposes.” Id. Plaintiffs argue that Defendants’ interpretation of Section 11628(f)(1) would 15 be an unlawful amendment of Proposition 103 that fails to further the purposes of that 16 ballot measure; and they also urge that Proposition 103 “requires liberal construction to 17 fully promote its underlying purposes, to protect consumers from arbitrary insurance rates 18 and practices … and to ensure that insurance is fair, available, and affordable for all 19 Californians.” Mercury Ins. Co. v. Lara, 35 Cal. App. 5th 82, 103 (Ct. App. 2019) (internal 20 quotation marks and citations omitted). Plaintiffs identify three cases in which California 21 courts have invalidated statutes as unlawful amendments to Proposition 103. Amwest 22 Surety Ins. Co. v. Wilson, 11 Cal. 4th 1243, 1265 (1995); Found. for Taxpayer & Consumer 23 24 25 7 The Court is mindful that, at the outset of the case, it denied Defendants’ motion to 26 dismiss the Complaint based on Section 11628(f)(1). ECF No. 22 at 12. As Plaintiffs agreed 27 at the hearing of the pending motions, that earlier ruling does not constrain the Court—in the context of the record that has been developed on the Parties’ summary judgment 28 1 Rts., 132 Cal. App. 4th at 1364-6 (Ct. App. 2005); Proposition 103 Enforcement Project v. 2 Quackenbush, 64 Cal. App. 4th 1473, 1494 (Ct. App. 1998). 3 Among the numerous changes effected by Proposition 103, Plaintiffs focus on the 4 “take all comers” provision, codified at Section 1861.02(b), that requires all insurers to 5 provide a Good Driver Discount policy to any person who meets the requisite standards. 6 ECF No. 182 at 9. Plaintiffs contend that “[a]n interpretation of section 11628(f)(1) that 7 undermines Proposition 103’s ‘all comers’ requirement, as manifested by sections 8 1861.02(b)(1) and 1861.16(b), would be contrary to the expressed intent of the electorate 9 and, under California law, render that statute an unlawful amendment to Proposition 103.” 10 Id. at 13. 11 The Court disagrees. Although the “take all comers” provision codified at Section 12 1861.02(b) was part of Proposition 103, Plaintiffs conceded at the hearing that the statute 13 on which they rely here, Section 1861.16(b), is not part of Proposition 103. Accordingly, 14 to the extent Section 11628(f)(1) imposes a limitation on the requirement contained in 15 Section 1861.16(b), it is not limiting or otherwise amending Proposition 103. Because 16 Section 11628(f)(1) does not amend Proposition 103, the Court has no occasion to consider 17 whether such amendment “further[s] the purposes” of Proposition 103. See Proposition 18 103 Enforcement Project, 64 Cal. App. 4th at 1484 (“If [a statute] does not amend the 19 provisions of Proposition 103, then we need not consider whether [that statute] furthers the 20 purpose of Proposition 103.”). 21 Additionally, Plaintiffs fail to adequately explain how the Court’s interpretation of 22 Section 11628(f)(1) would effect an unlawful amendment to Proposition 103. Plaintiffs’ 23 counsel agreed at the hearing that Section 11628(f)(1) does not run afoul of Proposition 24 103 by allowing an insurer to issue policies to segments of the military only—thereby 25 creating an exception to Proposition 103’s “take all comers” requirement as contained in 26 Section 1861.02(b)(1). Yet if Section 11628(f)(1) is valid in this respect, in which it 27 actually modifies a requirement of Proposition 103, then it is no less valid in limiting the 28 “lowest good driver discount” requirement that is not part of Proposition 103. Even 1 liberally constructing Proposition 103 to promote its underlying purposes, that ballot 2 measure does not alter the Court’s interpretation of the clear and unambiguous language of 3 Section 11628(f)(1). 4 D. Summary Judgment and Other Motions 5 The Court concludes that under the clear language of Section 11628(f)(1), USAA is 6 entitled to follow its placement rules that limit insurance “to persons who engage in … 7 governmental or military service or segments of categories thereof.” Section 1861.16(b) 8 does not require United Services to insure a good driver who does not otherwise qualify 9 for insurance from United Services under USAA placement rules. Based on this 10 conclusion, Defendants are entitled to summary judgment on Plaintiffs’ UCL claim based 11 on “unlawful” conduct (Claim One). In light of the disposition herein, the Court does not 12 reach the other arguments raised in Defendants’ summary judgment motion. 13 Also pending is Plaintiff’s UCL claim based on “unfair” conduct (Claim Two). As 14 set forth in the FAC, that claim is based on the same alleged violation of the same statute, 15 Section 1861.16(b). At the hearing, Plaintiffs’ counsel agreed that the two claims stand or 16 fall together with the Court’s interpretation of the relevant statutes. The Court concludes 17 that summary judgment for Defendants is warranted on both Claims One and Two. 18 Plaintiffs’ motion for partial summary judgment seeks rulings: (1) “that USAA’s 19 Placement Rules violate § 1861.16(b)”; and (2) in opposition to Defendants’ proposed 20 expert trial testimony, “that recalculating base rates and relativities based on a combined 21 risk pool of GIC’s and United Services’ policyholders in order to identify injured GIC 22 policyholders or estimate the amount of their restitution conflicts with Section 1861.16(b).” 23 ECF No. 169-1 at 2. In light of the analysis herein, the Court denies the first request, and 24 denies as moot the second request. 25 The motions to exclude are directed to testimony, declarations, or reports that the 26 Court did not rely on in this Order. Accordingly, the Court denies those motions as moot. 27 IV. CONCLUSION 28 For the foregoing reasons, the Court: l 1. GRANTS Defendants’ motion for summary judgment [ECF No. 173]. 2 2. DENIES Plaintiff's motion for partial summary judgment [ECF No. 169]. 3 3. DENIES AS MOOT the motions to exclude [ECF Nos. 167, 174, 179, 181, 4 || 189]. 5 4. DIRECTS the Clerk of Court to enter judgment for Defendants. 6 IT IS SO ORDERED. ‘ 7 Dated: January 9, 2025 [obec 7 fame g Hon. Robert S. Huie United States District Judge 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28