A Starr Insurance Cos. unit has prevailed in a case where it backed off from defending a retail chain after it was warned away by the California attorney general.

Los Angeles-based Adir International, LLC, which operates a retail chain, Curacao, in California, Nevada and Arizona, and its CEO were sued by the California attorney general in 2017 for unfair and misleading business tactics that allegedly exploited the chain’s mainly low-income Spanish-speaking customer base, according to Thursday’s ruling by the 9th U.S. Circuit Court of Appeals in San Francisco in Adir International LLC et al. v. Starr Indemnity and Liability Co.

The complaint alleged violations of California’s Unfair Competition Law and False Advertising Law.

Adir tendered the complaint to its insurer, Starr unit Star Indemnity, which agreed to defend the city under a reservation of rights, and then became actively involved in the litigation’s defense, according to the ruling.

In March 2019, Starr received a written warning from the California AG that said the insurer violated California’s insurance code in providing a defense to Adir because of the laws it allegedly violated.

A few weeks later, Starr informed Adir it would stop paying defense costs and reserved its right to reimbursement of the amount already paid.

Adir filed suit against Starr, and the U.S. District Court in Pasadena ruled in the insurer’s favor.  It was affirmed by the 9th U.S. Circuit Court of Appeals in San Francisco.

There is no constitutional right to counsel in a civil case, and “the due process right to retain counsel in civil cases appears to apply only in  extreme scenarios, where the government substantially interferes with a party’s ability to communicate with his or her lawyer or actively prevents a party who is willing and able to obtain counsel from doing so,” the ruling said.

This limited right “does not include the indirect right to fund and retain counsel through an insurance policy,” the ruling said, in affirming the lower court’s ruling.

Attorneys in the case did not respond to requests for comment.