Referendum Drive To Submit Signatures Soon

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Net Capitol Journal

Last year, a coalition of Indian tribes and their political consultants took the initiative business to school with a $10 million qualification campaign for Prop. 5, the gambling initiative approved by voters but tossed by the courts.

This year, the students are aiming to surpass the teachers.

Using the same carpet-bombing approach that helped qualify Prop. 5, automobile insurers are setting land-speed records in a bid to get two referenda on the March ballot. The propositions would overturn two legislative measures passed by Democrats that combined to re-establish third-party lawsuits against insurance companies.

According to referenda supporters, the campaign is on track to submit more than 700,000 signatures either late this month or in the first week of December. Approximately 428,000 are needed to qualify the referenda for the ballot, and state law allows such measures to be added to the ballot up to 31 days prior to the March 7 primary.

“A very aggressive effort has been made to gather these signatures,” said Mike Johnson, director of Voter Revolt, a consumer organization backing the effort. “I’m sure there’s been a good amount spent on that.”

Although backers won’t pinpoint how much has been spent, the signature drive includes everything used in the Prop. 5 campaign and then some. Statewide broadcast television in all major media markets has been running continuously for a month, according to organizers. A conservative estimate still places this spending above the nearly $2 million spent by the tribes on television in the Prop. 5 qualification phase.

The campaign also has shipped out at least 3 million pieces of mail across California, each with a petition inside. Paid signature gatherers are fanned out statewide as well, pulling in between $1.50 and $2 a signature.

Backers say the lavish spending is necessary because the stakes for businesses — and insurance customers — are enormous. The laws reinstated a court decision allowing claimants to sue their insurance companies for bad faith. The reinstatement of the Royal Globe decision was pushed by consumer attorneys during the legislative session. The primary bill was signed by Gov. Gray Davis, but only after the companion measure, which limited the scope of the law to car insurance and capped awards, was sent to his desk.

“Despite some of the narrowing, we’re still talking about costs in the billions of dollars,” said John Sullivan, president of the Calif. Civil Justice Assn., one of the sponsors of the referenda drive. “The opposition would like to think that insurers would eat that cost, but … it gets passed on [to consumers] in costs and premiums just like it did in the 1980s.”

California trial lawyers, who backed the reinstatement of Royal Globe, have laid low during the signature drive. But they are all but guaranteed to counter the insurers’ campaign. “We could be looking at a [combined] $100 million campaign,” said Bill Carrick, political consultant for the trial lawyers.

The most visible opposition to this point has come from the Foundation for Taxpayer and Consumer Rights, headed by Prop. 103 author Harvey Rosenfield. The group has called attention to seven insurers, headquartered out of state, that are listed as the sponsors and endorsers of the referenda.

“From our perspective, what is crucial is public awareness that Consumers Against Fraud and Higher Insurance Costs [the name of the coalition listed as supporting the drive] is a ruse,” said Doug Heller, a consumer advocate for Rosenfield’s group. “Really it’s the insurance industry making a mockery of California democracy.”

If, as most believe, the referenda do make the ballot, supporters will enjoy some technical edges which opponents will have to work to overcome. Because voters will, like legislators, be casting their ballot on the laws themselves, a “no” vote on the ballot is actually a “yes” vote for the referenda. Heller worries voters might burn out before they get to the end of the ballot and vote “no” without thinking.

“When you have a very long ballot, as we will in March, and the insurance industry just needs to get a “no” vote, that’s the worst case scenario for consumers,” said Heller.

Initiative backers agree the positioning gives them an edge but won’t let up before the finish line. “I don’t care where the money comes from,” said Johnson. “All I care is that there’s sufficient funding to tell voters what’s at stake here.”

Consumer Watchdog
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