A Starr Insurance Cos. Unit has won a case in which it backed out of defending a retail chain after it was warned away by California's attorney.
Los Angeles-based Adir International, LLC, which operates a retail business. the chain, Curacao, in California, Nevada and Arizona, and its CEO were sued by California's Attorney General in 2017 for unfair and misleading business tactics alleged to have exploited the chain's mainly low-income Spanish-speaking customer base, following Thursday's decision by the 9th U.S. Circuit Court of Appeals in San Francisco Adir International LLC et al. v. Starr Indemnity and Liability Co.
The lawsuit alleges violations of California's unfair competition laws and false advertising laws.
Adir lodged a complaint with its insurance company, Starr unit Star Indemnity, which agreed to defend the city under a reservation of rights and then became actively involved in the defense of the dispute, according to the decision. Adir because of the laws they are alleged to have violated.
A few weeks later, Starr informed Adir that it would stop paying defense costs and reserves the right to reimburse the amount already paid.
Adir brought an action against Starr and the United States. The Pasadena District Court ruled in favor of the insurer. This was confirmed by the 9th American Circuit Court of Appeals in San Francisco.
There is no constitutional right to a lawyer in a civil case, and "the right to retain a lawyer in civil cases seems to apply only in extreme scenarios, where the government essentially interferes with a party's ability to communicate with its lawyer or actively obstructs a party is willing and can get advice from doing so, "the decision states.
This limited right "does not include the indirect right to finance and retain a lawyer through insurance," is stated in the decision and confirms the decision of the lower court.
Lawyers in the case did not respond to requests for comment.