Trial Lawyers Sue to Block Insurance Firms’ Initiative

The California Trial Lawyers Assn. on Friday filed suit in state appeals court to enjoin county voter registrars from accepting petitions to qualify for the November ballot an insurance industry initiative detrimental to the lawyers’ interests.

Joe Remcho, an attorney for the trial lawyers, said the suit alleges that the initiative--which would institute a no-fault system, ban most lawsuits over auto accidents, limit trial lawyers’ contingency fees and give policyholders a 20% rollback in liability premiums--violates a constitutional prohibition against dealing with more than one subject in an initiative.

If the suit is successful, the insurance industry would probably not have sufficient time to redraft its initiative and qualify it for the ballot this year. But in the past, the courts have rarely gone along with pleas that they strike down initiatives before they go to a popular vote.

Advertising Campaign

The insurance industry has already spent close to $1 million on behalf of its initiative and this week began an advertising campaign on its behalf in some areas.

The Trial Lawyers Assn.--which is backing another initiative proposal, one considered detrimental to the interests of the insurance industry--had made it clear even before Friday’s lawsuit that it was determined to take legal action, if necessary, to prevent qualification of initiatives adverse to its interests.

Remcho said Friday evening, “My own view is that any time one of these initiatives contains deceptive material, we’re going to challenge it, bring it to the attention of courts and hope they act on it.”

Spokesmen for the trial lawyers have repeatedly said in recent weeks that they would prefer to see no initiatives relating to insurance on the ballot this year, and that they would be prepared to give up the initiative they are backing if the initiatives they oppose are not qualified for the ballot.

Served With Notice

In Sacramento, a spokesman for the Assn. of California Insurance Cos., sponsor of the insurance industry initiative, said the association had been served Friday afternoon with notice of the lawyers’ suit against it.

“It’s a typical reaction of trial lawyers, which is to sue in any situation,” said insurance association spokesman George Tye. “They tried to strike down Proposition 51, (the so-called ‘deep pockets’ initiative of 1986) after it was passed. They failed. And they tied up the Medical Injury Compensation Reform Act of 1975 for 10 years while it wound its way through the courts, but they ultimately failed then too.

“Obviously, our lawyers who drafted this initiative looked at the single-subject provision (in state law) and concluded all of the provisions in our initiative were appropriate.”

Remcho said the provision in the lengthy insurance industry initiative that the Trial Lawyers Assn. specifically believes is illegal is one saying that elected officials who receive insurance industry contributions could still vote on matters affecting the industry.

Tye said this provision was included because the initiative that the trial lawyers support would severely limit insurers’ contributions to public officials, while allowing the trial lawyers to make unlimited contributions. The provision included by the insurers would undo that.