California Government Code Section 11342.2
"Government Code section 11342.2 provides the general standard of review for determining the validity of administrative regulations.
That section states that 'whenever by the express or implied terms of any statute a state agency has authority to adopt regulations to implement, interpret, make specific or otherwise carry out the provisions of the statute, no regulation adopted is valid or effective unless 1 consistent and not in conflict with the statute and 2 reasonably necessary to effectuate the purpose of the statute.' " (Communities for a Better Environment v. California Resources Agency (2002) 103 Cal.App.4th 98, 108 126 Cal. Rptr. 2d 441, fn. omitted (Communities).)
Insurance Companies do not challenge the trial court's finding that they "failed to demonstrate that the Amended Regulations are ... not reasonably necessary to effectuate the purpose of Proposition 103." Accordingly, on this appeal we need not address the reasonable necessity requirement, but only the consistency requirement of the standard set out in Government Code section 11342.2.
The standard of consistency in Government Code section 11342.2 means "being in harmony with, and not in conflict with or contradictory to, existing statutes, court decisions, or other provisions of law." (Gov. Code, 11349, subd. (d).)
With respect to the consistency requirement, "the judiciary independently reviews the administrative regulation for consistency with controlling law. The question is whether the regulation alters or amends the governing statute or case law, or enlarges or impairs its scope. In short, the question is whether the regulation is within the scope of the authority conferred; if it is not, it is void. This is a question particularly suited for the judiciary as the final arbiter of the law, and does not invade the technical expertise of the agency." (Communities, supra, 103 Cal.App.4th at pp. 108-109, fns. omitted.) "By contrast, the second prong of this standard, reasonable necessity, generally does implicate the agency's expertise ... ." (Id. at p. 109; see Yamaha Corp. of America v. State Bd. of Equalization (1998) 19 Cal.4th 1, 11 78 Cal. Rptr. 2d 1, 960 P.2d 1031 (Yamaha).)
Proposition 103, in section 1861.09, requires that "judicial review shall be in accordance with Section 1858.6." Section 1858.6 states in pertinent part: "Any finding, determination, rule, ruling or order made by the commissioner under this chapter shall be subject to review by the courts of the State and proceedings on review shall be in accordance with the provisions of the Code of Civil Procedure. In such proceedings on review, the court is authorized and directed to exercise its independent judgment on the evidence and unless the weight of the evidence supports the findings, determination, rule, ruling or order of the commissioner, the same shall be annulled."
"The independent judgment standard requires the trial court to accord a strong presumption of correctness to the Commissioner's findings, and the burden of proof rests on the party challenging those findings, but ultimately the trial court is free to reweigh the evidence and substitute its own findings. On appeal, we apply the substantial evidence test to the trial court's factual findings, but review legal determinations independently." (State Farm Mutual Automobile Ins. Co. v. Quackenbush (1999) 77 Cal.App.4th 65, 71 91 Cal. Rptr. 2d 381.)
"In deciding whether the regulation conflicts with its legislative mandate, the court does not defer to the agency's interpretation of the law under which the regulation issued, but rather exercises its own independent judgment. (See Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1105, fn. 7 56 Cal. Rptr. 3d 880, 155 P.3d 284 'while the agen- cy's construction of a statute is entitled to consideration and respect, it is not binding and it is ultimately for the judiciary to interpret this statute'; Yamaha, supra, 19 Cal.4th at p. 11, fn. 4 'the court, not the agency, has "final responsibility for the interpretation of the law" under which the regulation was issued'; see also California Assn. of Psychology Providers v. Rank (1990) 51 Cal.3d 1, 11 270 Cal. Rptr. 796, 793 P.2d 2 ' "administrative regulations that alter or amend the statute or enlarge or impair its scope are void and courts not only may, but it is their obligation to strike down such regulations" '.)" (Aguiar v. Superior Court (2009) 170 Cal.App.4th 313, 323 87 Cal. Rptr. 3d 813.)
"Courts must, in short, independently judge the text of the statute, taking into account and respecting the agency's interpretation of its meaning, of course, whether embodied in a formal rule or less formal representation. Where the meaning and legal effect of a statute is the issue, an agency's interpretation is one among several tools available to the court. Depending on the context, it may be helpful, enlightening, even convincing. It may sometimes be of little worth." (Yamaha, supra, 19 Cal.4th at pp. 7-8.)
"The general principles that govern interpretation of a statute enacted by the Legislature apply also to an initiative measure enacted by the voters. Thus, our primary task here is to ascertain the intent of the electorate so as to effectuate that intent ." (Arias v. Superior Court (2009) 46 Cal.4th 969, 978-979 95 Cal. Rptr. 3d 588, 209 P.3d 923.)
"Usually, there is no need to construe a provision's words when they are clear and unambiguous and thus not reasonably susceptible of more than one meaning." (Id. at p. 979.)