There are many reports recently that immigrants are being targeted in California, not so much in other places at the moment, because California is on the outs with the current regime.
If those empowered to enforce laws pick which places to enforce them in, to the exclusion of other places, what is to stop them from selectively enforcing any laws against any group of people who are not in favor?
We are concerned in this space with insurer bad faith. First there is a predicate question, which is what we lawyers call a preliminary question that would have to be answered before we could answer the main question: Will there be insurance coverage for selective enforcement?
Not just one branch of police or another might want to claim coverage in the future, but any part of the military, state police, federal agents, or any other government organization equipped with guns and a uniform or badge might be interested in whether there is coverage in the future.
To think about the insurance coverage question most clearly, suppose that the selective enforcement is not policy because that would make the question of insurance coverage harder by moving closer to obviously intentional discrimination.
So, the coverage question then would suppose that rogue units engaged in selective enforcement, and that their members who engaged in this behavior were not immune from liability or suit. That would still leave an intentional discrimination question, but one that would be easier to answer in insurance terms.
Would it be bad faith to deny a defense?
The duty to defend depends on allegations and claims. So, whether there would be a duty to defend would depend on how the selective enforcement discrimination claims were pleaded.
If it were arguable, for example, that the pleaded claims could be proven by evidence of "disparate impact" or different impacts on different groups from the same pattern of behavior, for example, then perhaps there would be a potential for coverage and, under the test in most jurisdictions, therefore a duty to defend.
The duty to defend would arguably be breached by the liability carrier's refusal or failure to defend in that case. Some judges call this "bad faith," but no jurisdiction consistently treats a breach of the duty to defend as automatically triggering extracontractual damages. In some jurisdictions, to be sure, a refusal or failure to defend potentially covered claims under a liability policy could subject the carrier to liability separate and apart from its policy limits, or over and above its policy limits if you will.
Bad faith in settlement?
Liability for bad faith in settlement will depend largely on settlement demands in a situation like this. For example, a settlement demand here might include a demand that the selective enforcement be put to a stop. Obviously that particular behavior would be within the control of the insured rather than the carrier. There is an argument in that situation that a liability insurance company can do nothing in settlement negotiations without the insured's cooperation.
Perhaps this situation would raise a defense to insurance coverage rather than a question of insurer bad faith.
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