Though the election is still three months away, and the campaigning over California’s Prop 33 (the automobile insurance portable persistency initiative) has not yet begun in earnest, the ballot proposition is already being fought in the courts. On July 27, one of the proponents of Prop 33 filed suit in Sacramento Superior Court challenging the description of the proposition in the November ballot pamphlet. Our last report on Prop 33 is found here.

The suit, filed by Michael D’Arelli, the Executive Director of the American Agents Alliance and a proponent of the initiative, is in the form of a writ petition against California Secretary of State Debra Bowen, who the suit states is responsible for the preparation of the ballot pamphlet. The action also named as “real parties in interest” California Attorney General Kamala Harris, alleged to be the author of the Ballot Label and the Ballot Title and Summary for Prop 33; the Acting Printer for the State of California; and five persons who the suit states have authored false and misleading statements in their written arguments against Prop 33.  The various ballot materials at issue, still in draft form, can be found on the Secretary of State’s website.

The first two claims in the suit allege that the Ballot Label and Ballot Title and Summary for Prop 33 are not true and impartial statements as to the purposes of Prop 33 and they are highly likely to create prejudice against the measure. Specifically, the language of the Ballot Label and Ballot Title and Summary that the suit objects to is the following:

"Changes current law to allow insurance companies to set prices based on whether the driver previously carried auto insurance with any insurance company. (Emphasis added.)"

The suit contends that the statement that current law allows insurers to “set prices” is not true and does not describe Prop 33 accurately since “all automobile insurance rates and rating class plans must be approved in advance by the Insurance Commissioner,” and Prop 33 does not change this system. Rather, Prop 33 merely adds another optional rating factor to the existing optional rating factors. 

Moreover, the phrase “set prices” will prejudice voters since it “is commonly used to describe and define illegal price fixing, and has extremely negative connotations.”

The suit provides a recommended re-write of the ballot language: 

"Changes current law to allow an insurance company to offer a continuous coverage discount based on whether the driver previously carried auto insurance with any insurance company."

The final four causes of action in the suit are directed to four alleged false and misleading statements set forth in the written arguments against Prop 33, as submitted by several consumer groups including Consumer Watchdog. Here, the suit recommends that the Secretary of State strike each of those statements from the ballot materials.

Immediately following the filing of the suit, Consumer Watchdog issued attacks on not only the specific claims in the suit but as against Prop 33 as a whole. See here and here.

The suit alleges that the printing deadline for the November ballot is August 13, 2012, and thus the suit requests that the Sacramento court issue a peremptory writ of mandate before that date commanding the Secretary of State to (1) amend Prop 33’s Ballot Label and Ballot Title and Summary and (2) amend or delete the false and misleading statements set forth in the written arguments against the measure.

No action has yet been taken by the court.