Judge Blocks Enforcement of Auto Insurance Initiative

A judge in San Francisco has issued a preliminary injunction blocking enforcement of Proposition 213, the mandatory auto insurance measure on last November’s ballot, saying it violates equal protection clauses of the U.S. and state constitutions.

The decision by Superior Court Judge William Cahill, issued late Friday, will be followed by a trial on the constitutionality of the measure, which was passed by a wide majority of voters.

The litigation, filed by trial lawyers and consumer groups, could take a year or longer. Unless the preliminary injunction is overruled, Proposition 213 may be blocked for an extended period, even if it is allowed to take effect.

Sponsored by state Insurance Commissioner Chuck Quackenbush, the ballot measure ruled out lawsuits for pain and suffering in traffic accidents by uninsured motorists, drunk drivers or fleeing felons.

By far the largest group affected is uninsured motorists, who have been estimated at more than 4 million.

Cahill said many provisions in the measure are “irrational, arbitrary, serving no legitimate state purpose and therefore unconstitutional.”

For instance, he said, fleeing felons would be allowed to sue for pain and suffering if they successfully plea bargained charges down to misdemeanors or if they were released on a technicality.

Also, he said, “felons are denied pain and suffering damages only if their injuries were ‘proximately’ caused by their felony or immediate flight.

“Uninsured motorists who are not committing any felony are completely prohibited from recovering those same damages, even if their infraction is completely unrelated, much less a ‘proximate’ cause of their injuries,” he said.

“Proposition 213’s provisions giving more rights to fleeing felons than to innocent uninsured motorists arbitrarily distinguishes between these two groups of citizens and serves no legitimate state purpose, and is therefore unconstitutional as a violation of the equal protection rights available to all citizens,” the judge said.

Suits for pain and suffering in accidents often reap much greater damage awards than those for physical injuries and property losses.

Quakenbush on Saturday issued a statement reiterating his support for Proposition 213.

“Anyone who challenges Proposition 213 is against law-biding California consumers,” the statement said. “The reason why auto insurance rates are going down in California is a direct result of Proposition 213. We have faith the court will eventually agree with 78% of the voting public, who passed this initiative last November.”

During the campaign for the proposition, the commissioner said that restricting lawsuits would lower insurance claims and result in smaller premiums.

The insurance industry contributed nearly $3 million of the $3.12 million collected by the committee, set up by Quackenbush, to advance Proposition 213.

By contrast, trial lawyer and consumer interest groups who were opposed gave very little to the No on 213 effort. The opponents had predicted that a court fight against the measure’s constitutionality would be successful.

“This decision does not come as a surprise,” consumer advocate Harvey Rosenfield said Saturday of the judge’s ruling.

“This sloppily written insurance industry initiative was so deeply flawed, arbitrary and unfair that even people in the insurance industry admitted privately it was probably unconstitutional.”

At the Consumers Union office in San Francisco, spokesman Bill Ahearn hailed the ruling as “halting in its tracks just about every provision of the measure.”

But a leading insurance lobbyist in Sacramento, Dan Dunmoyer of the Personal Insurance Federation, said Cahill’s decision will hurt consumers because insurers have already filed for rate decreases on the supposition that its cost savings were going into effect.

“California consumers are the big loser,” Dunmoyer said. “By definition, people who drive without coverage are breaking the law. California voters want all classes of people who are breaking the law to not get high pain and suffering awards.”