State high court thwarted will of people, he says

The San Francisco Chronicle

A California Supreme Court decision permitting the auto insurance industry to continue setting rates based on a driver’s ZIP code rather than his driving record is a triumph of politics and power over the rule of law and thwarts the will of the majority of Californians, one of the state’s leading consumer advocates said today.

Calling for the establishment of a citizens’ judicial watchdog organization, Harvey Rosenfield said, “How can we tell kids who live in the ghetto not to deal crack and to obey the law when the courts of our state blatantly disregard the law when it comes to big corporations?”

Rosenfield, president of the Santa Monica-based Foundation for Taxpayer and Consumer Rights and author of Proposition 103, was reacting to a divided Supreme Court’s refusal yesterday to hear a challenge of industry-backed state regulations that allow insurance rates to be set based on place of residence.

LANDMARK PROPOSITION PASSED

California voters in 1988 passed the landmark Proposition 103, which was intended to allow rates to be based on drivers’ safety records rather than geography, but critics say its primary intent was never implemented. Deposed Insurance Commissioner Chuck Quackenbush agreed with insurance industry arguments that Proposition 103 allowed rates to be based on the costs of providing insurance, which often varies by neighborhoods.

Former Judge Harry Low, appointed by Gov. Gray Davis to succeed Quackenbush after he was driven from office for taking industry contributions, left Quackenbush‘s regulations intact.

An appellate court in San Francisco then ruled in December that Proposition 103 could be interpreted in different ways by the insurance commissioner, permitting continuation of the rate-setting system that critics say discriminates against people in big cities and poor neighborhoods.

For example, a man living in Oakland’s predominantly Latino Fruitvale neighborhood who drives to school in upscale and white Montclair might pay $4,417 for car insurance; the other way around, he would pay $3,389.

Likewise, a motorist who lives in Los Angeles can pay 147 percent more than an identical motorist in Irvine.

Rosenfield’s group and others appealed to the state’s high court, but Low opposed review, as did the insurance industry. In its decision yesterday, the court split 4 to 3 against reviewing the case.

Rosenfield said he was more disturbed by the ruling than anything in his 20-year career as a consumer advocate. When he wrote Prop. 103 in 1988, he said, it was based on an earlier Supreme Court decision (King v. Meese) that held rates based on geography were unfair and that the matter should be dealt with by the state Legislature.

‘THE PEOPLE SPOKE’

“We used their language and went to the Legislature where we were blocked by the insurance industry,” Rosenfield said. “So we went to the ballot box, and the people spoke and spoke loudly.”

Industry delaying tactics prevented two previous insurance commissioners from implementing the initiative, Rosenfield said. “Then the third commissioner, the disgraced Chuck Quackenbush who was forced out of office by corruption, sold out to the insurance industry.

“We did what the courts told us to do and now the courts will not enforce the law,” Rosenfield said.

Reacting to questions about a new initiative, he said, “What’s the point? We did it.” Although he would not characterize yesterday’s high court ruling as such, he described the appellate court’s ruling as “like some cheap, Third World kangaroo court.”

He was spending today talking to people in other states who have formed judicial watchdog councils to monitor courts’ performance, he said. He said he probably would form a blue-ribbon panel to set up a similar watchdog group in California.

“Something is profoundly wrong (with this decision),” Rosenfield said. “There is a fundamental quality of judicial accountability missing here. We are seeing too many rulings that reflect ideology and judicial activism rather than the rule of law. We don’t think the public will tolerate it.

“We have two systems of justice, one for the powerful corporations and one for everybody else.”

Commissioner Low said yesterday he would “consider taking a fresh look at whether the current regulations provide the most equitable approach.”

But Rosenfield said, “Even if he does the right thing (to implement Proposition 103), it will be another five or six years for it to get back to the Supreme Court for a definitive ruling.”

The issue probably will fall to the next insurance commissioner, Rosenfield said, adding: “Whether good drivers are forced to subsidize bad drivers who live in the same neighborhood is going to be the No. 1 issue in the insurance commissioner’s race in 2002. It is clear that implementing the will of the voters . . . will be the No. 1 campaign issue.”

Chief Justice Ronald George and Justices Stanley Mosk and Joyce Kennard voted to review the case, which was appealed by Rosenfield’s group, San Francisco and other major California cities.