Dan Walters: California's 1988 insurance battle could see 2010 reprise

Sacramento Bee ^ | 11/18/9 | Dan Walters

[SmithL]

When California's political consultants share war stories, 1988's immensely expensive, multifront battle between insurance companies and lawyer-backed consumer groups takes center stage.

Tens of millions of dollars were spent on a confusing array of competing ballot measures, and when the dust had settled, insurers had lost big, particularly with passage of Proposition 103, which made the state insurance commissioner an elected official and dramatically increased insurance regulation.

It was a big battle in the decades-long "tort war" over rules governing who can sue whom for personal injuries, including auto accidents – a war fought in the Legislature, on the ballot and in the courts and whose financial stakes are untold billions of dollars. Just last month, Gov. Arnold Schwarzenegger vetoed three bills that business groups said would open new fields for litigation.

The only certainty is that no matter how one skirmish turns out, there will always be another, and lobbyists, campaign consultants, petition circulators and other professional gladiators will profit handsomely.

The consultant who managed the losing side of the 1988 ballot battle reportedly was paid $14 million, allowing him to retire in luxury. In fact, the battle was so expensive that the major participants negotiated what came to be known as the "napkin deal" in a restaurant near the Capitol that included a brief truce in hostilities.

We've had occasional firefights since then, such as the trial lawyers' unsuccessful effort to modify California's $250,000 limit on non-economic damages in medical malpractice cases, a ballot battle over whether insurers could be sued for "bad faith" handling of claims, and another over unfair business practices suits against small businesses. And of course, there's the usual flurry of lawyer-sponsored legislation, such as the bills Schwarzenegger rejected.

[SmithL]

Oh Boy! More lawsuits.

Just what the California economy needs to go with all those new taxes.