This section contains the nature of the case and procedural background.

Defendants Stewart Title Guaranty Company (Stewart Title) and Placer Title Company (Placer Title) have been dismissed from the action, without prejudice, by stipulation. Ps are engaged in the holding, ownership, and financing of real property. All have purchased properties at tax sales. Ds are the only companies offering title insurance in El Dorado County. All are subject to provisions of the Insurance Code and regulations of the California Department of Insurance. Ps sold at auction a parcel of El Dorado County real estate to Naina and Fathima Rahman. The purchasers were unable to secure title insurance from Placer Title and Stewart Title, which intentionally refused to issue a policy of title insurance. The Rahmans instituted mediation proceedings as provided in their contract of sale and sought rescission of the land sale contract. Placer Title and Stewart Title knew that the land was unencumbered by any trust deed or claim of ownership by any party other than the seller. Placer Title had also issued a written report declaring readiness to issue a title insurance policy on the parcel. Ps sold to SAR at auction two lots in El Dorado County that Ps had acquired at a tax sale. Placer Title and Stewart Title each informed SAR that the lots were uninsurable and therefore unmarketable. They refused to issue title insurance on the property. At the time they did this, these defendants knew there was no cloud on the seller's title, and that any possible clouds on title had been nullified by operation of law one year after the seller took title by tax sale. Robert Constant agreed to purchase at a Western Land Bank auction a parcel of Fresno County realty. Western Land Bank had acquired the property by tax deed. First American (D) issued a commitment for title insurance on the property, but conditioned it on the commencement of a quiet title action. Because First American refused to issue the policy without a quiet title action, Constant did not complete payment for the property. Ds were well aware that the ability to obtain title insurance is an important part of any real estate transaction in California and had individually and jointly undertaken marketing programs stressing the necessity of such insurance, attempting to convince members of the general public that the insurance is essential to protect purchasers. Ds had represented to the public that they would insure any real estate that had a good title. Ps sued Ds, asserting interference with contractual relations, conspiracy among Ds to refuse to issue title insurance policies on real property obtained pursuant to a tax sale; and intentional, willful, and deliberate interference by all Ds with contractual relations of members of the general public for the sale of land purchased through tax sales. First American (D) demurred, and the demurrer was sustained as to all causes of action against First American (D) without leave to amend, and judgment was entered for First American (D). Ps appealed, arguing that they had sufficiently pled causes of action for interference with contract, violation of section 17200, and breach of a duty to issue title insurance policies without discrimination, and that, if not, leave to amend should have been granted. The Court of Appeal disagreed and affirmed. The Court of Appeal held that the allegations did not state a cause of action for intentional interference with contractual relations because First American's (D)refusal to issue title insurance was not wrongful for a reason other than the impact on Ps' contracts with the Rahmans and SAR. The court reasoned that no law or administrative regulation prohibits title insurers from denying a policy. The allegation of a conspiracy did not overcome the absence of any obligation to issue title insurance. The court held that the Insurance Code, and in particular Insurance Code section 12414.26, now limits actions against insurers for unlawful business practices to the remedies provided in that code, displacing other existing rights and remedies for unlawful business practices in the insurance industry. It held, no common law theory of restraint of trade was available because illegality at common law rendered an agreement void and unenforceable, but did not afford a damages remedy. Ps appealed.

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