Insurance Side Sees Bias Favoring Lawyers in 2 Recent Court Setbacks

Stung by two recent court defeats in contests with the California Trial Lawyers Assn., insurance interests backing three ballot initiatives are suggesting that the courts may be biased on behalf of the trial lawyers.

A statement released last week by the insurers’ Citizens for No-Fault Committee labeled as “incredible” decisions by the 3rd District Court of Appeal in Sacramento that invalidated the original version of the insurers’ no-fault auto initiative. The court later refused to hold a hearing on an industry petition to knock out the initiative backed by the trial lawyers.

The first decision came in a lawsuit by the trial lawyers that accused the insurers of violating a constitutional ban on initiatives dealing with more than one subject. But when the insurers filed a countersuit alleging that the lawyers’ initiative also violated the “single subject” rule, the court would not grant a hearing.

Sharp Turnaround

Charging that the court made “a 180-degree reversal” in its rulings, industry spokesman John Crosby declared, “It leaves us wondering what that court will do next.”

Clint Reilly, campaign coordinator for the no-fault initiative, a second version of which is now being circulated, as well as an initiative to slash lawyers’ contingency fees, said that he expects the trial lawyers to file other suits in the same court.

“They may wait and submit some sort of suit on No Fault II,” Reilly declared. “We got 650,000 signatures at a cost of nearly $1 million on the first version, and they threw it out. . . . That’s the first time this has ever happened with an initiative campaign.”

Asked whether the trial lawyers will sue to invalidate the second no-fault initiative, Joe Remcho, a counsel for the lawyers, would not comment.

Remcho accused the insurers of “trying to blackmail the courts,” and called their allegations “as graceless a complaint of sour grapes as I’ve heard.” He said there was “no comparison” between the issues raised in the lawyers’ suit and the insurers’ countersuit.

Political Input

The controversy already involves at least one prominent politician who has taken the insurance industry’s side in the tangle over the future of the auto insurance system.

State Supt. of Public Instruction Bill Honig declared in an April 26 newspaper ad purchased by the insurers: “To the amazement of responsible leaders, the judges agreed with their fellow lawyers and ruled against the 650,000 Californians who signed the initiative for No-Fault Auto Insurance.”

Justice Robert Puglia, head of the three-judge panel that made the rulings, declined to comment.

But another judge, assailed last week by a lawyer for a third insurer-backed initiative sponsored by Assemblyman Richard Polanco (D-Los Angeles), did speak out.

Alameda County Superior Court Judge Michael Ballachey said that his critic, Polanco initiative attorney Dana Reed, had misinterpreted what happened Friday in his courtroom and he accused Reed of “wanting me to be a patsy for the insurers.”

Signatures Challenged

This case involves another suit by the Trial Lawyers Assn. seeking to invalidate nearly 100,000 petition signatures of the 670,000 submitted for the Polanco initiative, a ballot measure supported with $900,000 from Harry Miller, chief of Coastal Insurance Co.

Ballachey ordered the California secretary of state’s office to show cause at a June 2 hearing why acceptance of the 100,000 signatures should not be delayed until the issue is decided.

Reed suggested that the Trial Lawyers Assn. had shopped for a sympathetic judge to get a favorable decision, a charge some insurers have also made in relation to the filing of the trial lawyers’ suit against the no-fault initiative in the Court of Appeal.

“I certainly don’t want to defame the court,” Reed declared. “But it’s very strange that the trial lawyers would file in Alameda County, and then that the judge would keep jurisdiction. . . . None of the disputed petitions were filed in Alameda County.”

Uncomfortable Venue

Saying that he had asked for a change of venue, Reed said he fears the trial lawyers might amend their complaint later to invalidate even more signatures, threatening further the initiative’s chance to qualify for the ballot, “and then we’d be stuck in this courtroom.”

Ballachey answered, “Mr. Reed’s comments trouble me. . . . I don’t like having my integrity questioned by a man I don’t even know.”

He said Reed had made no formal motion for a change of venue, and that had he not decided to hear the case himself there would have been a substantial delay, possibly putting the initiative under a further cloud.

Trial lawyers counsel Remcho said it was absurd to suggest the lawyers had sought out Ballachey to hear the case. He said the case was filed in Alameda County because it is the home county of the president of the Trial Lawyers Assn., J. Gary Gwilliam.

But Reilly, the insurers’ initiatives coordinator, said it is important that the insurers make an issue of what they regard as questionable rulings, so that the courts will be aware they cannot act in the trial lawyers’ interests with political impunity.