Deukmejian Tells Court He’s Neutral on 103

Gov. George Deukmejian and state Insurance Commissioner Roxani Gillespie, filing a joint brief with the state Supreme Court, took no stand Thursday on the constitutionality of Proposition 103 or its prescribed insurance rate rollbacks.

Rather, they asked the court for guidance on how to interpret the measure if it is upheld, particularly with respect to what date any rollbacks that may be ruled valid are to be made effective. They also asked for a clear definition from the court of what constitutes a “substantial threat of insolvency” that may exempt an insurance company from the rollbacks.

While Deukmejian and Gillespie, two of the four defendants named in the insurance industry’s lawsuit to overturn the initiative, stuck to a neutral position, the other two defendants, Atty. Gen. John K. Van de Kamp and the State Board of Equalization, submitted a joint brief that defended the measure, rollbacks and all.

Underscoring the split, Van de Kamp, a prospective candidate to succeed Deukmejian in the 1990 elections, told a Los Angeles press conference that he was “disappointed that the governor is not taking a strong role in defense of the will of the people.

“The governor may be neutral on this issue, but I’m not,” he said.

Deukmejian, speaking at his own press conference nearby an hour before, said that he and Gillespie felt that Van de Kamp and other parties--the insurers and other groups filing friend-of-the-court briefs--would provide the Supreme Court with adequate arguments on the constitutional issues.

“We are ready, willing and able to implement all of Proposition 103,” the governor said. “We’re urging the court to make a quick decision and we are asking for it to clarify how 103 should be interpreted. . . . We want them to give us as much guidance as they can.”

Deukmejian said he felt this was the “proper role” for him and Gillespie to play. Their brief declared they were “mindful of their role as executive officers of the state who are constitutionally charged with the responsibility of enforcing Proposition 103” and implied that this was a reason they should stay out of the fray over the measure’s constitutionality.

Harvey Rosenfield, chairman of the Proposition 103 campaign, accused the governor, however, of showing a lack of leadership.

Governor Criticized

“It says about what we’ve suspected all along,” Rosenfield declared. “The governor has decided to bail out on this issue.”

Thursday was the day set by the Supreme Court as a deadline for defendants of Proposition 103 to file briefs answering the industry’s lawsuit. In addition to the Deukmejian and Van de Kamp filings, briefs also came in from Rosenfield’s Voter Revolt organization, Los Angeles City Atty. James K. Hahn and a coalition of 13 citizens groups led by Consumers Union. All of the other briefs urged the court to find Proposition 103 constitutional.

Its rollback provisions, calling for 20% reductions from 1987 rates in auto, homeowners, commercial and other forms of property-casualty insurance and a one-year rate freeze, have been stayed by the high court, but other parts of the initiative have been allowed to go into effect pending the review.

Van de Kamp’s Brief

The most elaborate presentation came from Van de Kamp, who also submitted a lengthy declaration by insurance expert J. Robert Hunter, president of the National Insurance Consumer Organization, and a critic of the industry’s financial claims, to the effect that the insurers have been charging too much in California and that the industry is far better able to comply with the rollbacks called for in Proposition 103 than it claims to be.

Van de Kamp said his own brief could be summarized in just 21 words: “The people knew what they were doing when they voted for insurance reform. And what they voted for was perfectly legal.”

Van de Kamp spoke scathingly about the insurance industry’s argument that the Supreme Court ought to strike down Proposition 103 because the public would not have approved it without the rate rollback provisions that the insurers argue are unconstitutional.

Van de Kamp called this argument “a blatant attempt to thwart the people’s will on the flimsiest of pretenses.” Major portions of Proposition 103, he argued, “are so manifestly constitutional that not even the most fertile minds of insurance company lawyers can conjure up a respectable argument against them.

“Instead, they propose that the court throw an entire seven-course meal into the garbage if it decides there are too many calories in the dessert. Well, I doubt the justices will find that an appetizing suggestion.”

As for the rollbacks, the attorney general asserted that insurance company profits are at record levels, reserves are often larger than necessary, some companies are holding excessive surpluses and that some are wasteful and inefficient. Those companies that, nonetheless, cannot afford the rollbacks may go to the insurance commissioner for relief under terms of the initiative, he pointed out.

A common strand running through the briefs, except for the one from the governor and insurance commissioner, was that both the California Supreme Court and other courts have traditionally been loathe to interfere with the people’s will as expressed in initiatives, except as a last resort. Proposition 103, the briefs argue, does not pose issues that would justify such interference.

The Proposition 103 campaign’s brief, prepared with the assistance of six professors from schools of law at the University of California and elsewhere, declared:

“This court (is being invited) to indulge in an extraordinary exercise in judicial activism. Petitioners, an aggregation of large and powerful insurance carriers, seek to completely nullify the will of the voters of this state to enact broad-based insurance reform.”