SACRAMENTO, CA — A consumer group demanded Thursday that the state insurance commissioner fire one of his top attorneys, saying the department lawyer tried to help insurers avoid paying $300,000 in court costs stemming from a fight over auto insurance rates.
The Foundation for Taxpayer and Consumer Rights said it obtained a series of e-mails showing that William Gausewitz secretly collaborated with insurers to file a declaration in court. It says the document supported the insurers’ claim that court costs should be paid by the state, not them.
“The documents obtained by FTCR show that Mr. Gausewitz continues to work closely with, and on behalf of, the insurance industry, albeit in a covert fashion conduct that is utterly incompatible with your pledge of an independent and open administration,” the foundation said in its letter to Poizner.
It was signed by Harvey Rosenfield, the group’s founder, and Doug Heller, its executive director.
A spokeswoman for Poizner, Jennifer Kerns, said the foundation’s criticism is unfounded.
“While Harvey’s work is admirable, he’s just plain wrong on this,” Kerns said. “The fact is, it is not uncommon for the Department of Insurance to submit statements of fact on particular issues, which is what Bill Gausewitz did in this case.”
The dispute involves a lawsuit filed by the insurance industry in 2006. It sought to overturn regulations that limited use of motorists’ ZIP codes in setting their auto insurance rates. Consumers groups favored the regulations, saying rates should be based primarily on driving records and not on where people live.
Several groups, including the Santa Monica-based foundation, joined the attorney general in successfully defending the regulations. They then urged a Sacramento County Superior Court judge to order the insurers to repay them for their court costs.
Jeff Fuller, a lobbyist for the Association of California Insurance Companies, sent Gausewitz an e-mail on Aug. 24 asking the department to give the judge a declaration the industry had drafted.
“We believe that the court should be aware of the information contained in the declaration and that (a) signature by the insurance commissioner or someone else in the Dept. of Insurance is appropriate,” Fuller wrote in an e-mail obtained by the foundation under the California Public Records Act.
Gausewitz asked that the declaration be rewritten and returned to him.
“Send the draft declaration, in Word format, to me alone,” Gausewitz told Fuller. “Please don’t talk about this to other folks until we have talked about it further.”
Gausewitz subsequently sent a copy of the declaration to several people, including an attorney for Consumers Union, another of the groups involved in defending the regulations.
Gausewitz said the declaration provided historical information about the department’s payment of consumer group court costs from a fund set up to enforce Proposition 103. That initiative, passed by voters in 1988, governs auto insurance rates.
He said in the e-mail to the Consumers Union attorney and others that the declaration was “provided to give factual information only. No (department) position is implied by or should be inferred from this declaration with respect to any legal issue before the court in this litigation,” he added.
The declaration, filed with the court on Sept. 12, stated that the department had paid out $2.5 million from the Proposition 103 fund to cover court costs run up by various groups helping enforce the proposition.
Rosenfield said the declaration was “anything but routine… The only purpose was to relieve the companies from having to pay for the cost of the lawsuit. That is not routine.”
The judge, Rosenfield said, subsequently ordered the industry, not the Department of Insurance, to pay the court costs.