Flash Report: SCOTUS Rejects Applied Underwriters’ Appeal In CIC Conservation

The United States Supreme Court rejected, without comment Applied Underwriters’ appeal of the Ninth Circuit twice upholding the California Department of Insurance’s conservation of California Insurance Company. Applied appealed to the Ninth directly and separately under the guise of its New Mexico subsidiary – it failed in both cases to stop the conservation. 

The Supreme Court distributed Applied’s petition for conference last Friday, and by Monday, the Justices had seen enough and dismissed the case entirely. 

The Ninth Circuit found that the San Mateo Superior Court handling the CIC conservation has exclusive jurisdiction over the proceedings. Applied’s petition to the Supreme Court questioned the application of the prior exclusive jurisdiction doctrine. It also questioned the Ninth Circuit’s finding that the conservation was not brought in bad faith (for past coverage, see Ninth Circuit…).  

Applied filed its petition for the writ of certiorari at the end of November. Insurance Commissioner Ricardo Lara and the California Department had until early January to file a response but found no need to do so.  

The dismissal leaves intact the conservation proceedings at the San Mateo Superior Court, which will soon hold a hearing on the Department’s proposed rehabilitation plan for CIC. 

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