Deukmejian to Represent Insurer Before High Court : Law: Ex-governor appointed five of seven justices who will hear the case. He is arguing to have a former backer’s surety firm exempted from Prop. 103 rate rollbacks.

Former Gov. George Deukmejian, now a lawyer in private practice, has signed on to represent an insurance company owned by his onetime leading campaign contributor in a case pending before the California Supreme Court, five of whose seven members he appointed.

The insurer, Northridge-based Surety Co. of the Pacific, is fighting, along with the rest of the industry, to get the Supreme Court to uphold a 1990 law--which Deukmejian signed--that exempts surety companies from the rate rollbacks required by Proposition 103.

Proposition 103 author Harvey Rosenfield said Deukmejian’s involvement is “a threat to the integrity of the judicial branch.” He asserted that this instance would be the first time a former governor represented a law client before the California Supreme Court.

“I don’t see how the court can properly face a guy who’s been either a law partner, an employer or a benefactor of five of them,” Rosenfield said.

Deukmejian appointed Chief Justice Malcolm M. Lucas and Justices Edward A. Panelli, Joyce L. Kennard, Armand Arabian and Marvin R. Baxter. Lucas is a former law partner of Deukmejian and Baxter a former aide. The other two justices, Stanley Mosk and Ronald M. George, were appointed by Gov. Edmund G. (Pat) Brown Sr. and Gov. Pete Wilson, respectively.

Deukmejian did not return telephone calls for comment at his law office with the Los Angeles firm of Sidley & Austin.

It is unclear whether Deukmejian will argue the case in person, but he wrote a four-page letter to the court dated Jan. 19 in which he outlined the reasons why he thought the high court should hear the case.

Last month, in the case of Amwest Surety Insurance Co. vs. Pete Wilson et al, the 2nd District Court of Appeal struck down the 1990 law in a 2-1 decision.

Surety Co. of the Pacific is involved in the case only as a friend of the court, supporting Amwest, but it has a strong financial interest in the outcome.

Surety companies provide completion bonds and other kinds of performance guarantees for construction projects, movies and other ventures. It has been estimated that the surety industry as a whole will be liable for price rebates of as much as $100 million if it is ultimately found to be subject to Proposition 103, the 1988 insurance rollback initiative.

Surety’s owner and president, William Erwin, was the leading contributor to Deukmejian’s 1982 campaign for governor, giving $203,000. From 1978 through 1989, Surety Co. contributed $243,457 to Deukmejian-controlled campaign committees, according to the Fair Political Practices Commission.

Erwin hung up on a reporter seeking comment Monday.

Insurance Commissioner John Garamendi, in a statement Monday evening, avoided criticizing Deukmejian directly, but said he had faith in the Supreme Court justices “being professionals who can and will ignore the high-powered political pressure of the insurance companies and will instead decide the case on its merits.”

Times staff writer Paul Jacobs in Sacramento contributed to this story.