Opinion ID: 2604151
Heading Depth: 2
Heading Rank: 3

Heading: The Questions Presented

Text: The scope of our task is greatly narrowed not only by the limited attack made by plaintiffs, but also by the various concessions made by defendants. First and foremost, plaintiffs have expressly and repeatedly confined themselves to two main legal theories: (1) By providing no mechanism whereby a driver can question and challenge (a) an insurer's decision not to issue a policy or (b) the rate thereof, and by effectively making the ability to drive contingent on having insurance, the state is denying drivers procedural due process of law; and (2) By effectively requiring drivers to carry insurance, by allowing insurers to decide who will or will not be able to obtain private insurance, and by failing to provide adequate guidelines to insurers in making their decision, the Legislature has unconstitutionally delegated its authority to insurers. [8] Similarly, defendants also concentrate on two major points. First, they contend that since the appeal is from a denial of a preliminary injunction we can affirm the trial court solely by balancing the equities without reaching the merits of plaintiffs' claims. Second, they argue that even if we reach the merits and find that there is a procedural due process interest involved, CAARP meets all constitutional standards, and hence the 1984 Act is constitutional. [9] (1) As defendants correctly note, at this stage of the proceedings, i.e., denial of a preliminary injunction, the trial court must be affirmed unless it abused its discretion in making its determination. ( IT Corp. v. County of Imperial (1983) 35 Cal.3d 63, 69 [196 Cal. Rptr. 715, 672 P.2d 121].) In exercising its discretion, the trial court must consider two interrelated factors, specifically, the likelihood that plaintiffs will prevail on the merits at trial, and the comparative harm to be suffered by plaintiffs if the injunction does not issue against the harm to be suffered by defendants (or in this case the people of the State of California) if it does. ( Id. at pp. 69-70.) Although there is no data quantifying the harm to be caused by issuing the injunction, there is no doubt that the victims of accidents caused by uninsured drivers suffer greatly, especially if these victims do not themselves have medical or uninsured motorist coverage. Against that unquantified harm, the trial court weighed the effect of the law on plaintiffs. Many members of the putative class were undoubtedly faced with fines and threatened with or actually subjected to suspension of their licenses. [10] Without considering the merits, the trial court found that the balance of hardships favored defendants, and therefore denied the injunction. In doing so, the trial court considered the reasoning of the Michigan Supreme Court in Shavers v. Kelly (1978) 267 N.W.2d 72 [267 N.W.2d. 72]. That case raised similar issues to those raised here, and is discussed in detail infra. At this point it is necessary only to point out that the Michigan court agreed with plaintiffs' legal position but stayed the effect of its decision for 18 months so that the Legislature could enact appropriate corrective legislation. Inferentially, then, even after the plaintiffs in that case won on the merits the Michigan court must have found that a balance of hardships favored defendants. However, the procedural posture in Shavers is strikingly different from that in the instant case. In Shavers, the law in question, a no-fault plan which effectively required all drivers to carry insurance, had been in effect, and enforced, for four and one-half years. For the Michigan court to enjoin enforcement would therefore have changed the status quo. In contrast, the 1984 Act had only been in effect for a short time when the trial court heard the preliminary injunction motion. Hence, in the case at bench, an injunction would have maintained the status quo. We therefore conclude that reference to Shavers is of limited value with regard to a balancing-of-hardships analysis. We conclude that the trial court did not err insofar as it found that the balance-of-hardships analysis favored defendants. However, as previously stated, the trial court must also consider the likelihood of plaintiffs' ultimate success on the merits in determining whether to issue a preliminary injunction. Although consideration of this issue does not entail final adjudication of the ultimate rights in controversy ( Cohen v. Board of Supervisors (1985) 40 Cal.3d 277, 286 [219 Cal. Rptr. 467, 707 P.2d 840]), it does affect the showing necessary to a balancing-of-hardships analysis. That is, the more likely it is that plaintiffs will ultimately prevail, the less severe must be the harm that they allege will occur if the injunction does not issue. This is especially true when the requested injunction maintains, rather than alters, the status quo. ( Continental Baking Co. v. Katz (1968) 68 Cal.2d 512, 528 [67 Cal. Rptr. 761, 439 P.2d 889].) We believe it is the mix of these factors that guides the trial court in its exercise of discretion. (2) On review, a trial court's order with regard to a preliminary injunction may be affirmed if either the balance-of-hardships analysis or plaintiffs' likelihood of success considerations would alone support the ruling. ( Cohen, supra, 40 Cal.3d at pp. 286-287.) However, if the trial court relies on but one of the foregoing, the reviewing court must determine whether that reliance conclusively supports the trial court's determination regardless of the remaining considerations. Although the balance of hardships favors defendants in this case, we cannot say that it tilts so sharply in their favor that it supports the trial court's order irrespective of the likelihood of plaintiffs' success on the merits, especially where, as here, the trial court's order denying the motion had the effect of altering the status quo. Normally, it would be appropriate to remand the case to the trial court for consideration of the latter question. However, plaintiffs have argued, and we agree, that there exist no contested factual questions necessary to resolve the case. In addition, the legal issues have been exhaustively briefed by the parties and numerous amici. In light of these factors and the importance of the case, we take the unusual, but practical, step of reaching and resolving the merits ourselves.