Road to No-Fault Plan Stops at Brown’s Office : Insurance: Prospects for lower premiums appear dim unless Wilson agrees to negotiate with Speaker.

In engineering the rejection of a no-fault automobile insurance measure favored by Gov. Pete Wilson, Assembly Speaker Willie Brown has delivered a blunt message to the first-year chief executive: the road to insurance reform passes through Brown’s office.

More cynical observers of recent events in the state Capitol say that the road to reform ends at Brown’s door.

For the third year running, the powerful San Francisco Democrat has helped block passage of a no-fault insurance proposal favored by Consumers Union, a broad array of minority groups, advocates for the poor and, now, the insurance industry and the Republican governor.

Each year, Brown has put forward an alternative measure he contends would provide lower premiums for the poor while preserving the right of accident victims to sue the person they believe to be at fault.

None of Brown’s bills have been enacted. But Michael Reese, Brown’s press aide, said his efforts are sincere. “He has always been willing to address everyone’s concerns. He wants a bill that becomes law.”

Now, however, unless Wilson agrees to negotiate with Brown on the current version of his measure, prospects appear dim for lower premiums soon. The continued stalemate could set the stage for another ballot initiative battle in 1992.

“It’s up to the governor,” said Will Glennon, legal counsel for the California Trial Lawyers Assn., which supports Brown’s bill. “We’re willing to talk about anything short of no-fault. We want to get this problem resolved.”

But Wilson aides were pessimistic Wednesday about the chances for compromise on the issue that has handed the governor his first major legislative setback.

“We believe it’s extremely unlikely that the kind of revisions would be made in the Speaker’s bill that would make it acceptable to us,” said Dan Schnur, deputy director of public affairs and communications for Wilson.

The state Senate Judiciary Committee’s rejection of the no-fault bill late Tuesday came after nearly four hours of contradictory testimony and nearly four months of jockeying by Wilson, Brown and various interest groups.

If enacted, the no-fault measure would have created a system under which insurers would compensate their policy-holders for up to $15,000 in medical bills and lost wages, regardless of who caused the accident. Lawsuits would be permitted only when these costs exceeded $15,000, and suits over so-called “pain and suffering” would be limited to cases involving serious or permanent injury.

The bill, by Sens. Patrick Johnston (D-Stockton) and Frank Hill (R-Whittier), would have created a $220 annual policy intended to provide basic coverage for the poor, with the assumption that more affluent drivers would pay more to protect their assets from large court judgments.

The legislation had the strong support of groups that normally get a warm welcome in the offices of Democratic lawmakers--from Consumers Union to the Mexican American Political Assn., from the Urban League to the California Rural Legal Assistance Foundation.

It also was the subject of a fierce public relations campaign--including $1.3 million in advertising, direct mail and telephone calls paid by the insurance industry--targeted at four Democratic members with high concentrations of poor people and minorities in their districts.

Wilson’s involvement--he held two news conferences dedicated to the issue and threatened to veto Brown’s rival bill--was expected to be an important factor. Wilson called one of the Democratic members--Milton Marks of San Francisco--midway through the hearing and pressured him, without success, to vote for the bill.

Leading the opposition to the measure was the Trial Lawyers Assn., a 5,000-member group whose purpose is to preserve the right of victims to sue and the right of lawyers to make a living off those lawsuits. The trial lawyers are among the biggest financial contributors to Democratic campaigns and have long enjoyed a close alliance with Speaker Brown.

“You had the universe lined up on one side and the trial lawyers on the other side. Now we know who’s more powerful,” said Sal Russo, a political consultant who helped run the insurers’ advertising campaign.

The trial lawyers did have some company. Consumer advocate Ralph Nader, insurance activist Harvey Rosenfield--the author of Proposition 103--and a handful of groups representing minorities also opposed the no-fault measure.

The tide turned against the legislation when Senate President Pro Tem David A. Roberti, a Los Angeles Democrat, voted against the bill after huddling with Brown. Roberti said he thought voter-approved Proposition 103 should be given more time to work.

Democratic Sens. Diane Watson and Art Torres of Los Angeles, both of whom were flooded with calls from constituents supporting the bill, also voted against it. They said they resented the mass media tactics employed by the bill’s supporters and reported that many of those who called did not understand the details of the legislation.

But Wilson aide Otto Bos said the Administration believes it was the trial lawyers--cashing in on their support for Brown and other Democrats--who were the deciding factor.

“Clearly the constituents who these liberal Democrats normally express sensitivity to and concern for were on the side of the Johnston bill,” Bos said. “They got the back of the hand.”

No-fault advocates have been trying to enact the system in California for more than 20 years, and they were not ready to quit Wednesday after one more legislative defeat. But there was little eagerness to work with Brown to refine his measure, which aims to create a $300 annual policy for the poor that would be subsidized by other drivers.

“Willie’s bill has served its purpose--to stop our bill,” Hill said.