Stanford Law School - Robert Crown Law Library

Filed 4/26/04

IN THE SUPREME COURT OF CALIFORNIA

STATE FARM MUTUAL AUTOMOBILE )
INSURANCE COMPANY et al.,
Plaintiffs
and
Appellants,
S102251
v.
) Ct.App.
1/1
A093193
JOHN GARAMENDI, as Insurance
Commissioner, etc., et al.,
San
Francisco
County
Defendants and Respondents; )
Super. Ct. No. 308274
SOUTHERN CHRISTIAN LEADERSHIP )
CONFERENCE OF GREATER
LOS ANGELES, INC., et al.,
Interveners and Respondents. )

In 1988, voters passed Proposition 103, which made “numerous
fundamental changes in the regulation of automobile and other types of
insurance.” (Calfarm Ins. Co. v. Deukmejian (1989) 48 Cal.3d 805, 812
(Calfarm).) “Formerly, the so-called ‘open competition’ system of regulation had
obtained, under which ‘rates [were] set by insurers without prior or subsequent
approval by the Insurance Commissioner . . . .’ ” (20th Century Ins. Co. v.
Garamendi (1994) 8 Cal.4th 216, 240 (20th Century).) Proposition 103 altered
this system by adding to the Insurance Code article 10—“entitled ‘Reduction and
Control of Insurance Rates.’ ([Ins. Code,] §§ 1861.01-1861.14.)” (California
Auto. Assigned Risk Plan v. Garamendi (1991) 232 Cal.App.3d 904, 907
1

---

(CAARP).) This new article required, among other things, approval by the
Insurance Commissioner of the State of California (hereafter Commissioner)1 for
all insurance rate increases (see id. at pp. 909-910), and “provide[d] for consumer
participation in the administrative ratesetting process” (Walker v. Allstate
Indemnity Co. (2000) 77 Cal.App.4th 750, 753).
Pursuant, in part, to statutes enacted as part of Proposition 103, the
Commissioner promulgated section 2646.6 of title 10 of California Code of
Regulations (hereafter Regulation 2646.6).2 Under Regulation 2646.6,
subdivision (a), “[e]ach insurer writing in excess of ten million dollars in” certain
“lines of insurance . . . [o]n or before March 1 of every year . . . shall file a
Community Service Statement . . . with the Department of Insurance’s Statistical
Analysis Bureau in Los Angeles.” The statement must contain specified statistical
information concerning the insurer’s business in the State of California, organized
by ZIP code, including information described as “Record A data.”3 Record A data

1
For convenience, we use “Commissioner” to refer to the Insurance
Commissioner and/or the California Department of Insurance.
2
This opinion addresses the pre-March 15, 2003, version of the regulation.
Effective March 15, 2003, the Commissioner amended Regulation 2646.6. These
amendments do not affect our construction of subdivision (c) of Regulation 2646.6
—which did not materially change—and the related Insurance Code provisions.
3
“The insurer’s Community Service Statement shall set forth, for the
reporting period which shall consist of the calendar year ending on the
immediately preceding December 31, for each Zone Identification Program
(‘ZIP’) code in every county in California in which it sells insurance or maintains
agents: [¶] (1) the total earned exposures and total earned premiums, and the
total number of exposures new, exposures canceled and exposures non-renewed,
stated separately for the following coverages: [¶] (A) private passenger
automobile liability (excluding policies issued through the California Automobile
Assigned Risk Plan); [¶] (B) private passenger automobile physical damage; [¶]
(C) homeowners multiple peril (excluding policies issued through the California
FAIR plan); [¶] (D) commercial multiple peril, by ZIP code for the location of
individual risks (excluding policies for which the annual premium is more than

(footnote continued on next page)
2

---

(footnote continued from previous page)

$7,500); [¶] (E) commercial automobile liability (excluding policies issued
through the California Automobile Assigned Risk Plan and excluding policies for
which the annual premium is more than $7,500); [¶] (F) commercial automobile
physical damage (excluding policies for which the annual premium is more than
$7,500); [¶] (G) fire (excluding policies issued through the California FAIR
Plan) (as specified in the Department of Insurance Statistical Plan, dated June 2,
1995); [¶] (H) liability other than automobile (excluding professional liability
coverages and excluding all commercial policies for which the annual premium is
more than $7,500). [¶] (2) by service performed at each office, the number of
offices maintained in the ZIP code during the reporting period; (For purposes of
this section, ‘service’ means claims service, marketing or sales service.) Where
more than one service is performed at an office, the insurer shall categorize the
office based upon the service provided at that office. [¶] (3) the number of
independent, employed or captive agents or agencies and the number of employed
or independent claims adjusters maintaining offices (including home offices) in
the ZIP code during the reporting period; [¶] To be counted for purposes of this
section, an office must be open to the general public no fewer than 37.5 hours per
week at least 50 weeks per year. A new office opened at any time during the
reporting period shall be counted if it has been open at least 60 consecutive
business days during the reporting period. An office closed at any time during the
reporting period shall be counted unless it has been closed for more than 60
consecutive business days during the reporting period. [¶] (4) for an insurer
distributing through direct solicitation, the number of direct mail or telephone
solicitations for new insurance business made during the reporting period to
addresses in the ZIP code; [¶] (5) the number of agents and claims adjusters
maintaining offices in the ZIP code during the reporting period who identified
themselves as conversant in a language other than English, listed by language as
specified in the Department of Insurance’s Statistical Plan, dated June 2, 1995. [¶]
(6) The race or national origin, and gender, of each applicant who is a natural
person, as provided by the applicant on a separate, detachable form that refers to
the application. The form shall state that this information is requested by the State
of California in order to monitor the insurer’s compliance with the law, that the
applicant is not required to provide this information but is encouraged to do so,
and that the insurer may not use this information for underwriting or rating
purposes. A sample of this form shall be included in the Department of
Insurance’s Statistical Plan, dated June 2, 1995. No such information shall be
used for purposes of underwriting or rating any applicant. [¶] For purposes of this
section, race or national origin means one of the following: [¶] (A) American

(footnote continued on next page)
3

---

consists of “the total earned exposures and total earned premiums, and the total
number of exposures new, exposures canceled, and exposures non-renewed, stated
separately” for each line of insurance and ZIP code. (Reg. 2646.6, subd. (b)(1).)
The statement, including the record A data, is subject to Insurance Code section
1861.07, pursuant to Regulation 2646.6, subdivision (c). And Insurance Code
section 1861.07 provides that “[a]ll information provided to the commissioner
pursuant to this article shall be available for public inspection, and the provisions
of Section 6254(d) of the Government Code and Section 1857.9 of the Insurance
Code shall not apply thereto.”
In this case, we consider the validity of the public inspection provision
found in Regulation 2646.6, subdivision (c) and the scope of the public disclosure
mandate of Insurance Code section 1861.07. We conclude that (1) the public
inspection provision of Regulation 2646.6, subdivision (c) is valid; and (2)
Insurance Code section 1861.07 does not incorporate the exemption from
disclosure found in Government Code section 6254, subdivision (k), and does not
therefore exempt information protected by the trade secret privilege from
disclosure.
I.
As required by Regulation 2646.6, State Farm Mutual Automobile
Insurance Company, State Farm Fire and Casualty Company and State Farm

(footnote continued from previous page)

Indian or Alaskan Native [¶] (B) Asian or Pacific Islander [¶] (C) African-
American [¶] (D) Latino [¶] (E) White [¶] (F) Other [¶] (G) Information
not provided by applicant or policyholder. [¶] (7) The number of applications
received for each line of insurance as listed in (b)(1) above. [¶] (8) The number
of applications for which the insurer declined to provide each of the coverages
listed in (b)(1) above.” (Reg. 2646.6, subd. (b).)
4

---

General Insurance Company (collectively State Farm) filed a community service
statement with the Commissioner in 1998. In a letter accompanying its statement,
State Farm wrote: “STATE FARM INSURANCE COMPANIES CONSIDER[]
THE INFORMATION CONTAINED IN RECORD A, B, AND C HEREIN AS
PRIVILEGED AND CONFIDENTIAL. IT IS PROPRIETARY IN NATURE,
CONSTITUTES TRADE SECRET MATERIAL, AND IS NOT TO BE
DISSEMINATED BEYOND THE DESIGNATED RECIPIENTS WITHOUT
THE EXPRESS WRITTEN CONSENT OF THE STATE FARM INSURANCE
COMPANIES.”
Despite State Farm’s invocation of the trade secret privilege, the
Commissioner, without notifying State Farm beforehand, provided its community
service statement to David “Birny” Birnbaum upon his request pursuant to
Regulation 2646.6 and Insurance Code section 1861.03. After learning about this,
State Farm sent a letter to the Commissioner, protesting the release of its trade
secrets to Birnbaum and asking the Commissioner to take all reasonable steps to
retrieve this information. The Commissioner then sent a letter to Birnbaum stating
that it had “inadvertently released” the information and asking him to return it.
Birnbaum, however, refused to do so.
State Farm then filed this action against Birnbaum and the Commissioner,
seeking declaratory and injunctive relief. In its complaint, State Farm alleged that
“the information contained in the Community Service Statement is confidential
and constitutes trade secrets belonging to State Farm” and is not subject to public
inspection under Insurance Code section 1861.07. It sought, among other things,
the return of its trade secret information and an injunction barring Birnbaum from
using or disclosing that information.
Soon thereafter, the Southern Christian Leadership Conference of Greater
Los Angeles, Inc., and the Consumers Union of U.S., Inc. (collectively
5

---

interveners), successfully intervened in the action. In their complaint, the
interveners sought a declaration “that the Community Service Statement and data
insurers file with the [Commissioner] . . . are public records subject to public
inspection and not exempt from public disclosure.”
State Farm then amended its complaint. The amended complaint included
the interveners and clarified that only the record A data was a trade secret. State
Farm also added two declaratory relief claims. First, it sought “a declaration that
10 C.C.R. § 2646.6(c) is invalid to the extent that it purports to make Insurance
Code § 1861.07 applicable to data submitted by State Farm pursuant to 10 C.C.R.
§ 2646.6, and purports to make data submitted in confidence by State Farm
pursuant to 10 C.C.R. § 2646.6 publicly available.” Second, it sought a
“declaration that Insurance Code § 1861.07 does not abrogate trade secret rights;
that trade secret protections apply to information submitted under Insurance Code
§ 1861.07; that State Farm’s data submitted in Record A . . . constitutes a trade
secret; and that, if Insurance Code § 1861.07 applies to data submitted pursuant to
10 C.C.R. § 2646.6, State Farm’s data submitted in Record A to each of its
Community Service Statements must be held as confidential by the
[Commissioner] and cannot be produced pursuant to a Public Records Act
request.”
After the trial court dismissed Birnbaum from the action,4 both the
Commissioner and the interveners moved for summary judgment. The court
granted both motions. In granting the Commissioner’s motion, the court held that
the Commissioner “did not exceed [his] powers in enacting and implementing

4
Birnbaum filed a motion to strike pursuant to Code of Civil Procedure
section 425.16. The trial court granted the motion and entered judgment for
Birnbaum. State Farm filed a notice of appeal, but later abandoned the appeal.
6

---

10 CCR § 2646.6(c), and State Farm has not shown that there is an exception to
the requirements of 10 CCR § 2646.6(c) and Insurance Code § 1861.07 for
information which would otherwise be considered a trade secret.” In granting the
interveners’ motion, the court held that (1) “there is no triable issue as to any
material fact; there is no showing by [State Farm] of economic value of the Record
A data in the Community Service Statements, Cal. Regs. Code tit. 10, § 2646.6;
and the Community Service Statements and Record A data are not a trade secret”;
(2) “the California Department of Insurance did not exceed its powers in
promulgating Section 2646.6 of Title 10 of the California Code of Regulations to
ensure that insurers do not unfairly discriminate against poor and ethnic
communities”; and (3) “the Community Service Statements and data insurers file
with the California Department of Insurance pursuant to Cal. Regs. Code tit. 10,
§ 2646.6 are public records subject to public inspection under Regulation
§ 2646.6(c) and Cal. Ins. Code § 1861.07 and are not exempt from public
disclosure.”
The Court of Appeal affirmed.5 First, the court concluded that State Farm
had standing to bring an action to prevent the Commissioner from disclosing its
record A data. Second, the court held that the Commissioner did not exceed his
statutory authority by making community service statements subject to the public
disclosure mandate of Insurance Code section 1861.07. Third, the court found no
trade secret exception to the public disclosure mandate of Insurance Code section
1861.07. According to the court, Insurance Code section 1861.07 declared a

5
Pending consideration of the appeal, the Court of Appeal “temporarily
enjoined the Commissioner, the Department, and Interveners from disclosing data,
information, or potential trade secrets that State Farm provided under [Regulation]
2646.6, the record A data.”
7

---

general rule requiring disclosure “without exceptions” and did not incorporate the
exemption from disclosure for statutory privileges found in Government Code
section 6254, subdivision (k). Thus, State Farm could not shield its record A data
from public inspection by asserting the trade secret privilege codified in Evidence
Code section 1060. Finally, the court held that, even if the trade secret privilege
applied, it “still would not protect State Farm’s record A data.” Relying on Uribe
v. Howie (1971) 19 Cal.App.3d 194, the court held that Evidence Code section
1060, even if applicable, could not shield this data from disclosure because “the
public interest is better served by disclosure . . . than by nondisclosure.” As a
result, the court declined to consider State Farm’s contention that there was a
triable issue of fact as to whether its record A data is a trade secret.
We granted review.
II.
Before the Court of Appeal, State Farm contended the Commissioner
exceeded his “statutory authority by making community service statements subject
to the public disclosure mandate of Insurance Code section 1861.07 and that
California Code of Regulations, title 10, section 2646.6, subdivision (c) [was]
invalid to the extent that it purport[ed] to do so.” According to State Farm, only
information submitted pursuant to article 10 of chapter 9 of part 2 of division 1 of
the Insurance Code (hereafter article 10) must be disclosed under Insurance Code
section 1861.07, and community service statements do not contain such
information. The court rejected this contention. Citing Insurance Code section
1861.03,6 it concluded that “article 10 is not only about rates and rate regulation; it

6
As relevant here, Insurance Code section 1861.03, subdivision (a) provides
that “[t]he business of insurance shall be subject to the laws of California
applicable to any other business, including, but not limited to, the Unruh Civil

(footnote continued on next page)
8

---

also concerns other factors that may impermissibly affect the availability of
insurance.” Thus, “[i]t was well within the authority of the Commissioner to
conclude that requiring insurers to submit the information contained in those
statements would facilitate his obligations to implement and enforce article 10.”
In a convoluted argument, State Farm now challenges this holding. We, however,
find the public inspection provision of Regulation 2646.6, subdivision (c) to be
valid.
In reviewing the validity of a regulation, “[o]ur function is to inquire into
the legality of the regulations, not their wisdom.” (Morris v. Williams (1967) 67
Cal.2d 733, 737.) The Commissioner “has broad discretion to adopt rules and
regulations as necessary to promote the public welfare.” (Calfarm, supra, 48
Cal.3d at p. 824.) Thus, our task “is limited to determining whether the regulation
(1) is ‘within the scope of the authority conferred’ (Gov. Code, § 11373)
and (2) is ‘reasonably necessary to effectuate the purpose of the statute’
(Gov. Code, § 11374).” (Agricultural Labor Relations Bd. v. Superior Court
(1976) 16 Cal.3d 392, 411.) In this case, State Farm only challenges the authority
of the Commissioner to enact the public inspection provision of Regulation
2646.6, subdivision (c). We must therefore conduct an independent examination
(see 20th Century, supra, 8 Cal.4th at pp. 271-272) and determine “whether in
enacting the specific rule” the Commissioner “reasonably interpreted the

(footnote continued from previous page)

Rights Act (Sections 51 to 53, inclusive, of the Civil Code), and the antitrust and
unfair business practices laws (Parts 2 (commencing with Section 16600) and 3
(commencing with Section 17500) of Division 7 of the Business and Professions
Code).”
9

---

legislative mandate” (Fox v. San Francisco Residential Rent etc. Bd. (1985) 169
Cal.App.3d 651, 656).
The challenged portion of Regulation 2646.6, subdivision (c) provides that
community service statements are subject to Insurance Code section 1861.07. As
relevant here, Insurance Code section 1861.07 states that “all information”
submitted to the Commissioner “pursuant to” article 10 “shall be available for
public inspection . . . .” Because all information provided pursuant to article 10—
which encompasses Insurance Code sections 1861.01 to 1861.16—is subject to
public disclosure under Insurance Code section 1861.07, the validity of the
regulation depends on whether the statutes in article 10 authorize the
Commissioner to require community service statements.
In answering this question, we first find that Office of Administrative Law
(OAL) opinions approving Regulation 2646.6 are irrelevant. “The approval of a
regulation . . . by the [OAL] . . . shall not be considered by a court in any action
for declaratory relief brought with respect to a regulation.” (Gov. Code, § 11350,
subd. (c), italics added; see also Jimenez v. Honig (1987) 188 Cal.App.3d 1034,
1040, fn. 4 [“The courts are precluded from considering . . . the opinion of the
[Office of Administrative Law (OAL)] . . . in reviewing the validity of the
regulation”].) Thus, we reject State Farm’s claim that we are constrained by
holdings of the OAL. As such, we may consider all the article 10 statutes cited as
authority for the promulgation of Regulation 2646.6, subdivision (c)—i.e.,
Insurance Code sections 1861.02, 1861.03 and 1861.05—in determining the
regulation’s validity. (See Note, foll. Regulation 2646.6.)
Nor, contrary to State Farm’s contention, did the Court of Appeal consider
whether Insurance Code section 1861.03 actually incorporates provisions of the
Unruh Act and other business laws. Rather, the court correctly observed that
Insurance Code section 1861.03 made “the business of insurance subject to the
10

---

state’s antitrust and unfair business practice laws and to the Unruh Civil Rights
Act.” (See also Farmers Ins. Exchange v. Superior Court (1992) 2 Cal.4th 377,
394 [Ins. Code, § 1861.03 “merely modifies preexisting law, to provide, in
essence, that insurers are subject to the unfair business practices laws in addition
to preexisting regulations under the McBride Act, as amended”].) Based on the
breadth of these business laws, the court then concluded that article 10
“encompasses more than rate matters and addresses other factors that may
impermissibly affect the availability of insurance.”
In doing so, the Court of Appeal correctly found that the Commissioner did
not exceed his authority by promulgating the public inspection provision of
Regulation 2646.6, subdivision (c). As part of Proposition 103, article 10’s stated
purpose was “ ‘to protect consumers from arbitrary insurance rates and practices,
to encourage a competitive insurance marketplace, to provide for an accountable
Insurance Commissioner, and to ensure that insurance is fair, available, and
affordable for all Californians.’ ” (Historical and Statutory Notes, 42A West’s
Ann. Ins. Code (1993 ed.) foll. § 1861.01, p. 649.) To this end, article 10 gives the
Commissioner broad authority over insurance rates (CAARP, supra, 232
Cal.App.3d at pp. 913-914), and expressly precludes him from approving rates
that are “excessive, inadequate, unfairly discriminatory or otherwise in violation
of ” chapter 9 of the Insurance Code (Ins. Code, § 1861.05, subd. (a)). Through
Insurance Code section 1861.03, subdivision (a), the article also subjects the
business of insurance to laws prohibiting discriminatory and unfair business
practices. Thus, article 10 is not limited in scope to rate regulation. It also
addresses the underlying factors that may impermissibly affect rates charged by
insurers and lead to insurance that is unfair, unavailable, and unaffordable.
As such, the Commissioner undoubtedly has the authority under article 10
to gather any information necessary for determining whether these factors are
11

---

impermissibly affecting the fairness, availability, and affordability of insurance.
This information necessarily includes statistical data relevant to the
Commissioner’s determination that a California community is underserved by the
insurance industry. (See Reg. 2646.6, subd. (c) [using information from
community service statements, the Commissioner shall “issue the Commissioner’s
Report on Underserved Communities which will report those communities within
California, designated by ZIP code, that the Commissioner finds to be underserved
by the insurance industry”].) Therefore, the Commissioner reasonably concluded
that community service statements fall within his legislative mandate under
article 10. Accordingly, we conclude that the Commissioner did not exceed his
statutory authority by promulgating Regulation 2646.6, subdivision (c), and
subjecting these statements to the public disclosure mandate of Insurance Code
section 1861.07.
III.
Although the public inspection provision of Regulation 2646.6, subdivision
(c) is a valid regulation, the scope of disclosure required by the regulation depends
on the scope of disclosure required by Insurance Code section 1861.07.
According to State Farm, Insurance Code section 1861.07, by expressly barring
the application of the exemption from public disclosure codified in Government
Code section 6254, subdivision (d), establishes that the rest of Government Code
section 6254 applies. Specifically, State Farm contends Government Code section
6254, subdivision (k)—which exempts from disclosure “[r]ecords, the disclosure
of which is exempted or prohibited pursuant to federal or state law, including, but
not limited to, provisions of the Evidence Code relating to privilege”—controls.
Thus, trade secret information privileged under Evidence Code section 1060
should be exempt from public disclosure under Insurance Code section 1861.07.
12

---

(See CBS, Inc. v. Block (1986) 42 Cal.3d 646, 656 [Gov. Code, § 6254, subd. (k)
“merely incorporates other prohibitions established by law”].)
The interveners concede that the trade secret privilege applies if
Government Code section 6254, subdivision (k) applies. But they counter that
Insurance Code section 1861.07 establishes an absolute rule in favor of public
disclosure, and its language barring the application of Government Code section
6254, subdivision (d) merely buttresses this rule. Thus, according to the
interveners, neither Government Code section 6254, subdivision (k) nor Evidence
Code section 1060 applies to a records request. As explained below, we agree
with the interveners.
“When construing a statute, we must ‘ascertain the intent of the Legislature
so as to effectuate the purpose of the law.’ ” (Wilcox v. Birtwhistle (1999) 21
Cal.4th 973, 977, quoting DuBois v. Workers Comp. Appeals Bd. (1993) 5 Cal.4th
382, 387.) “In determining such intent, a court must look first to the words of the
statute themselves, giving to the language its usual, ordinary import and according
significance, if possible, to every word, phrase and sentence in pursuance of the
legislative purpose.” (Dyna-Med, Inc. v. Fair Employment & Housing Com.
(1987) 43 Cal.3d 1379, 1386-1387.) At the same time, “we do not consider . . .
statutory language in isolation.” (Flannery v. Prentice (2001) 26 Cal.4th 572,
578.) Instead, we “examine the entire substance of the statute in order to
determine the scope and purpose of the provision, construing its words in context
and harmonizing its various parts.” (Alford v. Superior Court (2003) 29 Cal.4th
1033, 1040.) Moreover, we “ ‘read every statute “with reference to the entire
scheme of law of which it is part so that the whole may be harmonized and retain
effectiveness.” ’ ” (Calatayud v. State of California (1998) 18 Cal.4th 1057, 1065,
quoting People v. Pieters (1991) 52 Cal.3d 894, 899.) “These rules apply equally
13

---

in construing statutes enacted through the initiative process.” (Day v. City of
Fontana (2001) 25 Cal.4th 268, 272.)
We now apply these rules. Insurance Code section 1861.07 states: “All
information provided to the commissioner pursuant to [article 10] shall be
available for public inspection, and the provisions of Section 6254(d) of the
Government Code and Section 1857.9 of the Insurance Code shall not apply.”
The first clause broadly requires public disclosure of “[a]ll information provided
to the commissioner pursuant to” article 10—which, by definition, includes
record A data. (Ins. Code, § 1861.07, italics added.) Thus, Insurance Code
section 1861.07, on its face, subjects State Farm’s record A data to public
inspection.
The second clause of Insurance Code section 1861.07—which states that
two specific statutory exemptions from disclosure do not apply—does not alter
this conclusion. The statutes listed in the second clause—Government Code
section 6254, subdivision (d)7 and Insurance Code section 1857.98—specifically

7
Government Code section 6254, subdivision (d) provides that: “Except as
provided in Section 6254.7 and 6254.13, nothing in this chapter shall be construed
to require disclosure of records that are any of the following: [¶] . . . (d)
Contained in or related to any of the following: [¶] (1) Applications filed with
any state agency responsible for the regulation or supervision of the issuance of
securities or of financial institutions, including, but not limited to, banks, savings
and loan associations, industrial loan companies, credit unions, and insurance
companies. [¶] (2) Examination, operating, or condition reports prepared by, on
behalf of, or for the use of, any state agency referred to in paragraph (1). [¶] (3)
Preliminary drafts, notes, or interagency or intra-agency communications prepared
by, on behalf of, or for the use of, any state agency referred to in paragraph (1).
[¶] (4) Information received in confidence by any state agency referred to in
paragraph (1).”
8
Insurance Code section 1857.9 states in relevant part that “(a) An insurer
doing business in this state, except as provided by subdivision (f), shall report the
information specified by the commissioner that is collected by a licensed advisory

(footnote continued on next page)
14

---

exempt from disclosure records relating to regulatory information provided by
insurers to state agencies. Because the application of these exemptions would
nullify the broad disclosure mandate of Insurance Code section 1861.07, the
drafters of Proposition 103 presumably added the second clause to make clear that
these exemptions do not apply. As such, this clause does not establish that the
other statutory exemptions from disclosure found in Government Code section
6254—such as section 6254, subdivision (k)—do apply. Indeed, the drafters’ use
of the inclusive term “all” to describe the information subject to public disclosure
bolsters this construction of Insurance Code section 1861.07. (See California
Assn. of Dispensing Opticians v. Pearle Vision Center (1983) 143 Cal.App.3d 419,
429 [use of “inclusive terms such as ‘in any form directly or indirectly’ and ‘or
otherwise’ ” indicated that the listed items were not intended to be exclusive],
disapproved on another ground in Leach v. City of San Marcos (1989) 213
Cal.App.3d 648, 661; Worthington v. Unemployment Ins. Appeals Bd. (1976) 64
Cal.App.3d 384, 388 [“The general expression [‘any and all’] we deem not to be
limited by the description of two common positions of persons engaged by

(footnote continued from previous page)

organization on an annual basis for each class of insurance designated in the prior
calendar year by the commissioner pursuant to subdivision (b) for policies issued
or issued for delivery in California. The commissioner shall waive the
requirements of this subdivision for any information that has been provided to the
Insurance Services Office by the insurer, if the Insurance Services Office provides
the information to the commissioner on or before the date on which the insurer is
required to file the statement. . . . [¶] . . . [¶] (i) The information provided
pursuant to subdivision (a) shall be confidential and not revealed by the
department, except that the commissioner may publish an analysis of the data in
aggregate form or in a manner which does not disclose confidential information
about identified insurers or insureds.”

15

---

others”].) Thus, when viewed in context, the exemptions listed in Insurance Code
section 1861.07 “are meant to be examples rather than an exhaustive listing of all
those” statutory exemptions that are inapplicable. (California Assn. of Dispensing
Opticians, at p. 429.)
Such a construction comports with the purpose behind Proposition 103.
Proposition 103 was enacted to “ ‘ensure that insurance is fair, available, and
affordable for all Californians.’ ” (Wolfe v. State Farm Fire & Casualty Ins. Co.
(1996) 46 Cal.App.4th 554, 564.) To achieve this goal, the drafters established a
public hearing process for reviewing insurance rate changes. (See Ins. Code, §§
1861.05, 1861.055, 1861.08.) In doing so, the drafters sought to “enable consumers
to permanently unite to fight against insurance abuse . . . .” (Ballot Pamp., Gen. Elec.
(Nov. 8, 1988) arguments in favor of Prop. 103, p. G88.) By giving the public access
to all information provided to the Commissioner pursuant to article 10—which was
enacted by Proposition 103—our construction of Insurance Code section 1861.07 is
wholly consistent with Proposition 103’s goal of fostering consumer participation in
the rate-setting process.
Nonetheless, State Farm contends our rules of statutory construction
compel a contrary conclusion. According to State Farm, Insurance Code section
1861.07, by specifying that the exemption from disclosure found in Government
Code section 6254, subdivision (d) does not apply, establishes that the rest of
Government Code section 6254—including its other exemptions from disclosure,
such as the exemption codified in subdivision (k)—does apply. Otherwise, the
clause would be mere surplusage and serve no purpose, in direct contravention of
our rules of statutory construction. (See, e.g., Williams v. Superior Court (1993) 5
Cal.4th 337, 357 [“An interpretation that renders statutory language a nullity is
obviously to be avoided”].)
16

---

State Farm also claims that the rule of statutory construction, expressio
unius est exclusio alterius, establishes that the other exemptions from disclosure
codified in Government Code section 6254 should apply. Under this rule, “where
exceptions to a general rule are specified by statute, other exceptions are not to be
presumed unless a contrary legislative intent can be discerned.” (Mountain Lion
Foundation v. Fish & Game Com. (1997) 16 Cal.4th 105, 116.) According to
State Farm, the second clause of Insurance Code section 1861.07 creates an
exception to the general rule—that records identified in Government Code section
6254 may be exempt from disclosure—for those records identified in subdivision
(d). Thus, it contends no exception should be presumed for those records
identified in any other part of Government Code section 6254, including
subdivision (k). (See Mountain Lion Foundation, at p. 116.)
These rules of statutory construction do not, however, apply here. As
explained above, the language of Insurance Code section 1861.07, when viewed in
context, is not ambiguous and, by its terms, requires public disclosure of the
record A data. (See ante, at pp. 14-16.) The rules cited by State Farm therefore
“cannot perform [their] proper role of resolving an ambiguity in statutory language
or uncertainty in legislative intent because here we encounter neither ambiguity
nor uncertainty.” (Williams v. Los Angeles Metropolitan Transit Authority (1968)
68 Cal.2d 599, 603.) “In these circumstances there is no room for the proposed
rule[s] of construction.” (Ibid.) Indeed, we have long recognized that these rules
do not control where, as here, the statutory language “may fairly comprehend
many different objects, some of which are mentioned merely by way of example,
without excluding others of similar nature.” (Estate of Banerjee (1978) 21 Cal.3d
527, 539, fn. 10.)
Finally, the fact that insurers may invoke the trade secret privilege in the
public hearing process established by Proposition 103, pursuant to Insurance Code
17

---

section 1861.08, does not dictate a different result.9 There is nothing anomalous
about precluding insurers from invoking the trade secret privilege after they have
already submitted trade secret information to the Commissioner pursuant to a
regulation validly enacted under article 10 (see ante, at pp. 9-12), while permitting
them to invoke the privilege in response to a request for information in a public
rate hearing. Insurance Code section 1861.07 merely requires public disclosure of
“information provided to the commissioner pursuant to” article 10. By definition,
this information is relevant to the Commissioner’s mandate under article 10 to
“ ‘ensure that insurance is fair, available, and affordable for all Californians.’ ”
(Historical and Statutory Notes, 42A West’s Ann. Ins. Code, supra, foll.
§ 1861.01, at p. 649.) Given that article 10 seeks to encourage public participation
in the rate-setting process (see ante, at p. 16), precluding insurers from
withholding trade secret information already provided to the Commissioner
because of its relevance under article 10 (see ante, at pp. 9-12) is certainly
reasonable.10 And such a conclusion does not render meaningless the insurers’
power to invoke the trade secret privilege at the public rate hearing, because
insurers may still prevent disclosure of trade secret information not already
provided to the Commissioner pursuant to article 10.

9
Under Insurance Code section 1861.08, rate hearings are “conducted
pursuant to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of
Title 2 of the Government Code . . . .” Because Government Code section 11513,
subdivision (c) provides that “[t]he rules of privilege shall be in effect to the extent
they are otherwise required by statute to be recognized at the hearing,” the trade
secret privilege codified in Evidence Code section 1060 applies in these hearings.
10
In reaching this conclusion, we decide only that information already
provided to the Commissioner pursuant to a validly enacted regulation under
article 10 is not protected by the trade secret privilege.
18

---

Accordingly, we conclude that Insurance Code section 1861.07 does not
incorporate the exemption to disclosure found in Government Code section 6254,
subdivision (k), and that trade secret information is therefore not exempt from
disclosure. Because we find that State Farm may not invoke the trade secret
privilege to prevent disclosure of its record A data under Insurance Code section
1861.07, we decline to address the other issues raised by State Farm.11
DISPOSITION
We affirm the judgment of the Court of Appeal.
BROWN, J.
WE CONCUR:

GEORGE, C.J.
KENNARD, J.
BAXTER, J.
WERDEGAR, J.
CHIN, J.
MORENO, J.

11
Specifically, we do not determine whether (1) a trade secret owner has
standing to assert the trade secret privilege and prevent the Commissioner from
disclosing its trade secret information pursuant to a records request under
Insurance Code section 1861.07; (2) a trade secret owner has waived the trade
secret privilege by submitting its trade secrets in its community service statements;
and (3) the “injustice” exception to the trade secret privilege permits disclosure
despite the privilege under the facts of this case.
19

---

See last page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion State Farm Automobile Insurance v. Garamendi
__________________________________________________________________________________

Unpublished Opinion

Original Appeal
Original Proceeding
Review Granted XXX 92 Cal.App.4th 1169
Rehearing Granted

__________________________________________________________________________________

Opinion No.

S102251
Date Filed: April 26, 2004
__________________________________________________________________________________

Court:

Superior
County: San Francisco
Judge: Ronald Evans Quidachay

__________________________________________________________________________________

Attorneys for Appellant:

Heller Ehrman White & McAuliffe, Paul Alexander, Vanessa Wells and Victoria Collman Brown for
Plaintiffs and Appellants.

LeBoeuf, Lamb, Greene & MacRae, Sonnenschein Nath & Rosenthal, Thomas E. McDonald and Sanford
Kingsley for Allstate Insurance Company, Allstate Indemnity Company, Deerbrook Insurance Company,
United Services Automobile Association and USAA Casualty Insurance Company as Amici Curiae on
behalf of Plaintiffs and Appellants.

Paul, Hastings, Janofsky & Walker, Roger M. Milgrim, George L. Graff, Romy Berk, Thomas J. Finn,
Brian Moran, Paul W. Cane, Jr.; National Chamber Litigation Center and Robin S. Conrad for California
Chamber of Commerce, Chamber of Commerce of the United States, the California Business Roundtable,
California Healthcare Institute and the Pharmaceutical Research and Manufacturers of America as Amici
Curiae on behalf of Plaintiffs and Appellants.

Horvitz & Levy, David S. Ettinger, Mitchell C. Tilner, Daniel J. Gonzalez; Barger & Wolen, Steven H.
Weinstein and Robyn E. King for Farmers Insurance Exchange, Fire Insurance Exchange, Truck Insurance
Exchange, The Association of California Insurance Companies, The Personal Insurance Federation of
California and The National Association of Independent Insurers as Amici Curiae on behalf of Plaintiffs
and Appellants.

Fred J. Hiestand for the Civil Justice Association as Amicus Curiae on behalf of Plaintiffs and Appellants.

__________________________________________________________________________________

Attorneys for Respondent:

Bill Lockyer, Attorney General, Randall P. Borcherding and Kristian D. Whitten, Deputy Attorneys
General, for Defendants and Respondents.

1

---

Page 2 - counsel continued - S102251

Attorneys for Respondent:

Public Advocates, Mark Savage and Thorn Ndaizee Meweh for Interveners and Respondents Southern
Christian Leadership Conference of Greater Los Angeles, Inc., and Consumers Union of U.S., Inc.

Gail Hillebrand for Intervener and Respondent Consumers Union of U.S., Inc.

Kevin Stein for California Reinvestment Committee as Amicus Curiae on behalf of Interveners and
Respondents.

John A. Russo, City Attorney (Oakland), Barbara J. Parker, Chief Assistant City Attorney, and Daniel
Rossi, Deputy City Attorney for City of Oakland as Amicus Curiae on behalf or Interveners and
Respondents.

Dennis J. Herrera, City Attorney (San Francisco), Owen J. Clements, Chief of Special Litigation, and Ellen
M. Forman, Deputy City Attorney, for City and County of San Francisco as Amicus Curiae on behalf of
Interveners and Respondents.

Harvey Rosenfield and Pamela Pressley for The Proposition 103 Enforcement Project as Amicus Curiae on
behalf of Interveners and Respondents.

2

---

Counsel who argued in Supreme Court (not intended for publication with opinion):

Vanessa Wells
Heller Ehrman White & McAuliffe
275 Middlefield Road
Menlo Park, CA 94025
(650) 324-7000

Kristian D Whitten
Deputy Attorney General
455 Golden Gate Avenue, Suite 11000
San Francisco, CA 94102-7004
(415) 703-5589

Mark Savage
Public Advocates, Inc.
1535 Mission Street
San Francisco, CA 94103
(415) 431-7430

3

---

Opinion Information

Date:	Docket Number:
Mon, 04/26/2004	S102251

Disposition
Apr 26 2004	Opinion: Affirmed

Dockets
Nov 19 2001	Petition for review filed   by counsel for Plaintiffs and Appellants State Farm Mutual Automobile Insurance Company et al
Nov 20 2001	Record requested
Dec 10 2001	Answer to petition for review filed   by counsel for Respondent (Southern Christian Leadership Conf. of Greater Los Angeles)
Dec 10 2001	Answer to petition for review filed   by Respondent (AG)
Dec 13 2001	Second Record Request
Dec 13 2001	Received Court of Appeal record   file jacket/briefs/two boxes
Dec 17 2001	Request for depublication (petition for review pending)   Farmers Insurance Exchange (non-party)
Dec 17 2001	Request for depublication (petition for review pending)   counsel for appellant (State Farm)
Dec 27 2001	Opposition filed   by counsel for Respondents (SCLC) to depublication requests.
Jan 16 2002	Petition for Review Granted (civil case)   Votes: George, CJ., Kennard, Baxter, Werdegar, Chin, Brown & Moreno, JJ.
Jan 17 2002	Note:
Jan 22 2002	Request for extension of time filed   Appellant requests extension to April 1, 2002 to file the opening brief.
Jan 28 2002	Certification of interested entities or persons filed   counsel for appellant (State Farm Mutual Automobile Ins.Co. et al,.)
Jan 31 2002	Certification of interested entities or persons filed   counsel for respondent ( Southern Christian Leadership Conf. of Greater Los Angeles)
Jan 31 2002	Extension of time granted   Appellant's time to serve and file the opening brief on the merits is extended to and including April 1, 2002. **No further extensions will be granted***.
Apr 2 2002	Opening brief on the merits filed   by counsel for aplts.
Apr 2 2002	Request for judicial notice filed (in non-AA proceeding)   by counsel for aplts
Apr 11 2002	Opposition filed   by counsel for respondents (Southern Christian Leadeship Conf. and Consumers Union of U.S.) to Request for Judicial Notice by appellants.
Apr 25 2002	Association of attorneys filed for:   Respondents (Southern Christian Leadership Conf. of Greater Los Angeles and Consumers Union of U.S.)
May 1 2002	Answer brief on the merits filed   by counsel (AG) for respondents.
May 2 2002	Answer brief on the merits filed   by counsel for respondents (Southern Christian Leadership Conf. and Consumer Union)
May 2 2002	Request for judicial notice filed (in non-AA proceeding)   by counsel for respondents (SCLC and Consumers Union)
May 21 2002	Reply brief filed (case not yet fully briefed)   by counsel for appellant (State Farm Mutual Automobile Ins., et al.)
May 21 2002	Received:   from appellant Appendix of Non-Calif. Authority in Support of Reply to Respondent Calif. Ins. Comm. and Calif. Dept. of Ins.
May 22 2002	Reply brief filed (case fully briefed)   by counsel for appellants (State Farm Mutual Automobile Ins., et al.))
May 22 2002	Received:   from appellants Appendix of Non-Calif. Authority in Support of Reply to Southern Christian Leadeship Conf. and Consumers Union
Jun 11 2002	Request for extension of time filed   by counsel for (Non-Party) Farmers Insurance Exchange, et al., requesting extension to July 5, 2002, to file request to file amicus curiae brief in support of appellant.
Jun 14 2002	Extension of time granted   (non-party) Farmers Insurance Exchange, et al., time to serve and file the request to file amicus curiae brief is extended to and including July 5, 2002.
Jun 17 2002	Request for extension of time filed   by counsel for (non-party) The Prop. 103 Enforcement Project to July 5, 2002, to file the request to file amicus curiae brief in support of (So. Christian Leadership Conf and Consumers Union of U.S.).
Jun 18 2002	Request for extension of time filed   by counsel for (non-party) City of Oakland to July 5, 2002, to file the request to file amicus curiae brief in support of respondents.
Jun 20 2002	Received application to file amicus curiae brief; with brief   Allstate Insurance Co., et al., in support of petitioners (non-party).
Jun 20 2002	Request for extension of time filed   by counsel for petitioners (State Farm Mutual Ins. et al,.) to August 5, 2002 to file the answers to amicus curiae briefs of the Proposition 103 Enforcement Project and the City of Oakland.
Jun 20 2002	Request for extension of time filed   by counsel for (non-party) Civil Justice Assoc. of Calif. to July 9, 2002, to file request to file amicus curiae brief in support of appellants.
Jun 20 2002	Extension of time granted   Proposition 103 Enforcement Project time to serve and file the request to file amicus curiae brief is extended to and including July 5, 2002.
Jun 21 2002	Received application to file amicus curiae brief; with brief   California Reinvestment Comm. (non-party) requests permission to file amicus curiae brief in support of respondents.
Jun 25 2002	Application filed to:   be admitted as counsel pro hac vice Roger M. Milgrim, on amicus curiae brief of California Chamber of Commerce et al.
Jun 25 2002	Received application to file amicus curiae brief; with brief   California Chamber of Commerce, et al., (non- party) in support of petitioners. w/Appendix to Brief. (40k)
Jun 25 2002	Extension of time granted   Civil Justice Assoc. of Callifornia time to serve and file the request to file amicus curiae brief is extended to and including July 9, 2002. ** No further extensions will be ganted.***
Jun 25 2002	Permission to file amicus curiae brief granted   California Reinvestment Committee in support of respondents.
Jun 25 2002	Amicus Curiae Brief filed by:   California Reinvestment Committee in support of respondents. w/ Appendix of Non-California Authority in support of brief. An Answer thereto may be served and filed by any party within 20 days of the filing of the beief.
Jun 25 2002	Permission to file amicus curiae brief granted   Allstate Insurance Company, et al. in support of petitioners.
Jun 25 2002	Amicus Curiae Brief filed by:   Allstate Insurance Company, et al., in support of petitioners. An Answer thereto may be served and filed by any party within 20 days of the filing of the brief.
Jun 27 2002	Permission to file amicus curiae brief granted   California Chamber of Commerce, et al,.
Jun 27 2002	Amicus Curiae Brief filed by:   California Chamber of Commerce et al., in support of petitioners. An answer thereto to may be served and filed by any party within twenty days of the filing of the brief.
Jun 27 2002	Extension of time granted   Counsel for petitioners time to serve and file the answers to the amicus briefs of The Proposition 103 Enforcement Project and the City of Oakland is extended to and including August 5, 2002. No further extensions will be granted.
Jun 27 2002	Order filed   The application of Roger M. Milgrim of the State of New York for admission Pro Hac Vice to appear on behalf of amicus curiae California Chamber of Commerce et al., is hereby granted.
Jun 28 2002	Extension of time granted   City of Oakland time to serve and file the request for permission to file amicus curiae brief is extended to and including July 5, 2002. No further extensions will be granted.
Jul 1 2002	Request for extension of time filed   counsel for respondents (SCLC of Greater Los Angeles and Consumers Union of U.S., Inc.) requests extension of time to August 9, 2002, to file answers to amicus briefs.
Jul 5 2002	Received application to file amicus curiae brief; with brief   City of Oakland, et al., (non-party) in support respondents.
Jul 8 2002	Amicus Curiae Brief filed by:   The Proposition 103 Enforcement Project (with permission)
Jul 8 2002	Extension of time granted   Respondent's time to serve and file the answers to amicus briefs is extended to and including August 9, 2002. ** NO FURTHER EXTENSIONS WILL BE GRANTED.**
Jul 8 2002	Received:   Amicus curiae brief and Appendix from The Prop. 103 Enforcement Project w/ request for Relief from Default.
Jul 8 2002	Received application to file amicus curiae brief; with brief   Farmer's Insurance Exchange, et al., in support of appellant. (brief under same cover) (40k)
Jul 9 2002	Permission to file amicus curiae brief granted   City of Oakland, et al., in support of respondents.
Jul 9 2002	Amicus Curiae Brief filed by:   City of Oakland, et al.
Jul 9 2002	Permission to file amicus curiae brief granted   Farmers Insurance Exchange, et al., in support of appellant.
Jul 9 2002	Amicus Curiae Brief filed by:   Farmers Insurance Exchange, et al,.
Jul 10 2002	Received application to file amicus curiae brief; with brief   Civil Justice Assoc.of Calif. in support of appellants. (40k)
Jul 12 2002	Received:   from counsel for amicus curiae The Proposition 103 Enforcement Project (CORRECTED) amicus brief.
Jul 12 2002	Permission to file amicus curiae brief granted   Civil Justice Association of Calif. in support of appellants
Jul 12 2002	Amicus Curiae Brief filed by:   Civil Justice Assoc. of Calif.
Jul 15 2002	Response to amicus curiae brief filed   by counsel for appellants (State Farm Mutual Automobile Ins., et al.) to amicus brief of California Reinvestment Committee
Jul 15 2002	Response to amicus curiae brief filed   by counsel (AG) for respondents (Calif. Dept. of Ins.) to amicus curiae brief of Allstate Ins. Co., et al.
Jul 17 2002	Response to amicus curiae brief filed   counsel (AG) for respondents (Calif. Dept. of Insurance, et al.) to amicus curiae brief of Calif. Chamber of Commerce, et al.
Jul 26 2002	Response to amicus curiae brief filed   by resps to A/C of Farmers Ins. et al. With appendix of non-calif authority in support.
Aug 5 2002	Response to amicus curiae brief filed   by counsel for petitioners (State Farm Mutual Ins. et al.) to amicus brief of City of Oakland, et al. w/ appendix of authorities.
Aug 5 2002	Filed:   from counsel for appellants (State Farm Mutual Ins, et al.) answer to (CORRECTED) amicus brief of Proposition 103 Enforcement Project.
Aug 9 2002	Response to amicus curiae brief filed   by counsel for respondents (SCLC and Consumers Union of U.S.) to Insurer 's Amici Curiea Briefs.
Mar 21 2003	Change of Address filed for:   Mark Savage, counsel for resps.
Jun 17 2003	Filed:   by amici Allstate Ins. Co. , et al. (non-party) substitution of counsel.
Jan 14 2004	Case ordered on calendar   Wednesday, February 11, 2004 @ 9am (Sacramento)
Jan 23 2004	Filed letter from:   counsel for respondent (Insurance Commissioner) providing additional authorities.
Jan 26 2004	Filed:   Joint request of resps So. Christian Leadership etc and Garamendi (Ins. Comm) to divide oral argument time.
Feb 2 2004	Received:   from counsel for aplt. (State Farm Mutual) supplemental brief.
Feb 3 2004	Order filed   The request to allocate 15 minutes to resp. Insurance Commissioner of the State of Calif. and to allocate 15 min to resp Southern Christian Leadership Conference of resps' 30-min allotted time for oral argument is granted
Feb 11 2004	Cause argued and submitted
Mar 19 2004	Request for judicial notice granted   Petitioners' motion re request for judicial notice in Court of Appeal or alternative request for judicial notice before this court is denied. Prespondents' request for judicial notice is denied as to exhibit 5 (Proposition 100 ballot materials) but granted as to all other exhibits (1-4 and 6).
Apr 26 2004	Opinion filed: Judgment affirmed in full   OPINION BY: Brown, J. joined by -- George, C.J., Kennard, Baxter, Werdegar, Chin, Moreno, JJ.
May 12 2004	Received:   from Intervenors Consumers Union of U.S. and SCLC of LA requesting correction re: opinion filed on 4-26-04
May 14 2004	Time extended to consider modification or rehearing   The finality of the opinion in the above-entitled case is extended to and including June 25, 2004.
Jun 9 2004	Opinion modified - no change in judgment
Jun 9 2004	Remittitur issued (civil case)

Briefs
Apr 2 2002	Opening brief on the merits filed
May 1 2002	Answer brief on the merits filed
May 2 2002	Answer brief on the merits filed
May 21 2002	Reply brief filed (case not yet fully briefed)
May 22 2002	Reply brief filed (case fully briefed)
Jun 25 2002	Amicus Curiae Brief filed by:
Jun 25 2002	Amicus Curiae Brief filed by:
Jun 27 2002	Amicus Curiae Brief filed by:
Jul 8 2002	Amicus Curiae Brief filed by:
Jul 9 2002	Amicus Curiae Brief filed by:
Jul 9 2002	Amicus Curiae Brief filed by:
Jul 12 2002	Amicus Curiae Brief filed by:
Jul 15 2002	Response to amicus curiae brief filed
Jul 15 2002	Response to amicus curiae brief filed
Jul 17 2002	Response to amicus curiae brief filed
Jul 26 2002	Response to amicus curiae brief filed
Aug 5 2002	Response to amicus curiae brief filed
Aug 9 2002	Response to amicus curiae brief filed

If you'd like to submit a brief document to be included for this opinion, please submit an e-mail to the SCOCAL website