News Scrapbook 1989

Santa Ana, CA (Orange Co.) Orange County Reporter (Cir. D.) MAY 1 i 19i9 ..All~n '• P. C. B fu I 888 ift~ Gillespie's Plan F~r Exe1nptio11s Labeled l11valid ,,,.1 r;-D r- Dy Torn Dressl • r t" h · · , · · 0 1 - -- _ __ ·-- ions'. t ey say, the comm1ss1oner s only ny receive a fair rate of return on its over• " r ),,,,,,,,, S11Jf R,po,,rr dut>: 1~ I~ ensure a ~ompany's overall op· all operations in the state. SACRAMENTO - Insurance Com-

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erabons in Cahforn1a generate a fair rate of return. They argue that is the standard established under the Constitution, case law and the Cal/amt ruling. Gillespie has the discretion, th<'y add, to order companies to roll back auto rates to the mandated level, even if that rate is confiscatory, as long as the firm's overall stat~ operations generate a fair return. M1diacl Strumwasser, special assistant to state ~ltQOley__G_eneral John Van de ~amp_,_who helped defend the initiati~e;- said, "It's a much closer question in the permanent rate-making system. There, she h~s so_me discretion to decide policy questions hke cross-subsidi1ation.'' But "it's not a close question at all on the exemption proceedings," Strum- wasser added. Under the constitution, he said, "the only due process question is (whether a r~t<•) is confisratory a ov('rall opera- t,ons. No cases talk about line-by-line confiscatory.'' "1 think she's wrong," said LoyQ.!L_ Law School Professor Karl M. Manheim who helped defend Proposition 103 befor~ the high court. "She's not supposed to give relief (from the rollback) unless it is required to avoid a constitutional infirmity." As an example, Manheim said, if a com- pany c~nnot show the manrl~t<'d rollback would result in a confiscatory rate of re- t':ll11 on its overall state operations, Gilles- p1e must order the insurer lo accept the 20 percent reduction in all its lines. If a firm shows the rollback is confisca- tory as to its overall operations, Gillespie has the discretion to order the firm to charge the rollback rate in auto insurance, as long as she sets rates for other lines at a level that gives the insurer an over'all fair return. Manheim agreed with Strumwasser that case law requires only that a compa- -------

tart the Aztecs toward a weep of a Western Athletic Conference double- header at Smith Field. SDSU won the ond game, S-1. The sweep moved SDSU (36-23, 17-9) into second place ahead of Hawaii (36-24, 18-10) The zt c play Hawaii in the opening round of the WAC tournam nt at Ha- wan on Thur ·day . . . Sixth-ranked UC D (23-16) has received a berth in th NCAA Division IIJ West Region- als. The Triton will play 10th- ranked Cal Stale Stanislau (20-17) at Turlock m the first round Friday. It . t:CSD's third playoff appearance ID four years. San Diego Mesa's Larry Todd and Jackie Anderson were voted the outstanding male and female Pacific Coa t Conference track performers by conference coach It' the second consecutive Y r nd rson, a Mount Miguel lumna, ha won the award Todd prepped at Helix. ,J track -

Railroads, Utilities Strumwasscr noted, for example, that t~e cou1ts have held regulatory commis- sions "may compel railroad companies to operate a particular line, even though it is losing money on it, as long as the overall operations subject to the agency·s price controls are not confiscatory." He point- ed to one case in which the court ordered a company not to abanilon a line in north west California because the logging indus- try was dependent on it. And Manheim cited the U.S. Supreme Court's.January decision in D11q11r.111P Power & Light v. Bmasrh, 57 U.S.! .W. 4083: The justices upheld the regulator's dcc1s1on to deny the utility any p1 ofit on the_opcrntions of it~ nuclear power plant, saymg the firm still was earning a fair re- turn on i•s overall oper:ttions. Critirs of Gill spie"s t i~·o al o point to language in the Ca/fann ruling to but- tress their argument. _Man~eim cited the decision in arguing Gtllespte's sole responsibility in ruling on the exemption requests is to cnsare rates ~e.et !he constitutional requirement of givmg insurers a fair return on their over- all operations. On pages 26-27, the court said, "No in- ~nrer, however. will be compell('d to charge the rates set by the initiative un • less it either acquiesces in that rate or i~ unable to prove that a higher rate is con- stitutionally required.'• ~ut Department of Insurance attorney Reid Mcclaran said that "there are sev- eral places in the decision where, while the court does not say it must be that way, gives strong indications that it should be done (on a line-by-line basis) to avoid constitutional problems.''

mis ioner Hoxani_Gille.110.!!:.'.! decision to rule on rC{jiic~ts for exemption from ~.JJlandatcd rate rollback on a linc-hy-lint• basis conflicts with the Constitutio11, rasf' law and the state Su- preme Cou, t 's iuli11g on the issur-, say some cons11111cr ~dvocatcs and lawyers wh,, dc!cnd(•d the initiative before the court. Hut indu,t, y lawyers and (;illespie's counsel say tht· cl1•ci ion arlhcrcs to guide- Imes set by th•· Justices in their May 4 rul- 1ng in Ca/farm ln sr,ra11ce Co. v. /Jeukmrjian, 89 Daily Journal D.A.R. 5837. And th y contend critics misinter- pret case law on the issue. The outromc of the dispute could be a critical factor in dctermi11ing whether con- sumers will receive a rollback in their auto insurnrKf' rat('s. Public ange o er ky- rockctmg auto rates was the focus of last November's multi initiative insurance re- form ballot battle that led to passage of Proposition 103. High Court's Ruling In Ca/farm, the court upheld a provi- sion that requires property-casualty in- surers to reduce their rates 20 percent !rum Nuv. 8, 1987, levels. Hut, signifirantly. the ju,t;res stmck down a provision that would have allowed companies to gain relier from the rollback only if they showed the rate presented them with a "substantial threat of in&ol- vency." ln its place, the court substituted a "fair rate of return" standard. The court also provided insurers an av- enue to immediate relief from the 20 per- cent rollback . It said companies could file applications before Nov. 8., 1989, for higher rates and immediately use those rates, pending the commissioner's review. . Nov. 8 is the effective date of Proposi- tmn 103's provision that requires insurers to obtain prior approval from the state for all rate adjustments. , If the commissioner determines the ,,- rollhack rate, or any other less than that chargc·rl by ~n in~urer, provides a compa- J ny with a fo,r rate of return, the firm will ~ave to rebate any excess premiums, plus mtercst, to po icyholders. Gillespie said last week that insurer,ap• plications for exemption must justify why the rate of return on equity from the roU- back is confiscatory and why the request• ed rate will generate a fair return. But the commissioner said she would determi_ne fair rate of return on a line-by- line basis. In other words, Gillespie inter- prets the Ca/farm decision as requiring a fair rate of return for each line of insur- ance sold by a company. The court's ruling, she said, requires that " each line of insurance must stand on its own." Cross-Subsidization Issue Insurers generally hailed Gillespie's de- cision, saying it would prevent one line or insurance from subsidizing another. But some consumer advocates and Proposition 103 lawyers contend the cross-subsidization question is a policy is- sue that Gillespie should address after Nov. 8, when the permanent rate-!llaking system takes effect. · But in ruling on the rollback exemp-

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amily plot: Chamber of Commerce Pres. Lee Grissom was in Washington when Father Joe Carroll, the ''Hu.slier Priest" of SD's St. Vincent de Paul Center, was given the Regents Award for Human Services by his alma mater, Catholic University of America, last week. Ul was nominated by Steve Garvey) And_Grissom, seated with Fr. Joe s famtly, shared in the family's delight. "You must be very proud," Grissom said to Fr. Joe's sister, Pat Romito. "The whole family is proud," Romito shot back. "But we still won't give him a blank check." Entre new • : H. Lawrence Garrett III, Pres. Bush's designated Secretary of the Navy, is expected ~o be strong f?r San Diego. Not only IS Garrett a magna cum laude graduate of Uni~ersity of San Diego L!iw School, be and his wife stih own a home here... . Former Congressman (and Chargers quarterback) Jack Kemp says his wife, Joan, was the one who finally persuaded him to accept the post as secre~ry of HUD. "You've spent 18 years m the House telling people how things ought to be done " she told him. "Now it's time to go do it." •••Dave Winfield, the Yankees superstar and one-time Padre is back in San Diego today. He's 'holed up at the Hyatt Islandia, where he'll meet over dinner tonight with his marketing agent, Randy Grossman and a representative of Avon Boo~. Avon, publisher of Winfield's biography, "A Player's Life," wants to talk about a second book.

San Diego, CA. (Siln Diego Co .) San Diego Union (Cir. D. 217,089) (Cir. S. 341,840) NAY 18 1989

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not their company-wide operations. Lines of insurance, said Katz, repre- sent different products. He added, ''There is no support in caselaw for say- ing homeowner insurance ought to be lumped in with auto insurance.'' Some consumer advocates say a line- by-line approach will be better public poli- cy, particularly when the permanent rate- making system is in place. Robert Fellmeth, director of the Um- versity of San Diego's Center for 1 1 u6hc lnterest Law, agreed with the notion reg- ulators can order cross-subsidies. "It is very :,veil established in regulatory law," he said, "that a company is entitled to a fair rate of return on its overall opera- tions. Regulators can compel cross- subsidies." But he called cross-subsidies generally / "bad policy and bad economics." //

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. ,,..l..') () He cited footnote 18, in which the court said that in judicial review of the commis- sioner's rate decisions, the administrative rccor~ of the ruling "will make possible a more mformed analysis of any claim that the rate set by Proposition 103 is confis- ~tory as to a particutar insurer and line of msurance. '' Allen M. Katz, a member of the indus- try's legal team in Ca/farm, said, "the in- dustry's position is that insurance should be priced on a line-by-line basis. I thought the court clearly laid that to rest.•' Katz also disagreed with Strum- wasser's and Manheim's interpretation or case law. In railroad and utility cases, he said, the courts have held companies must receive a fui: return on their overall operations relative to a particular service or product,

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ou c nc1lman Ron Roberts has c edul d a pr conference today to 11Dveil his proposal for a 16-acr public park on property bounded by Broadway Harbor Drive and P cific Hwy. The park would be inco rated p ans for a n w avy comp! x nd would be a co-operative venture among the C1_ty, Port and Navy (Port Comm 10n Lou Wol heimer and C 's John I>av1 will attend the p conference Included in the proposal· a 5,000-seat amphitheater with a noatln stage in D Bay.. . San D1 o f end of HUD Secretary Jack Kemp and his wife, Joann , are g ttmg wedding invitations. Kemp IS bout to become a two-time father of the rid His daughter, J nnifer, wlll be married May 27 in Wa m ton. Daughter Judith is planning a summ weddmg ~1LJ1=~11U.l!Ulw!....:w~ill bestow a p r of honorary J uru orate degr Saturday. The recipients form r W tergate pccial pr utor Archibald Cox and state Bar n Pres. Cohn Wied. ' mouths:

San Die~o. CA. (San Diego Co.) San Diego Union (Cir. 0. 217,089) (Cir. S. 341,840)

MAY 18 1989

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..Jlll~n•• , c 9 1:,, 1888 ~~1:i,~tymTij: ana has t o adult c dren One blmd. The other is spastic. Both have kindergarten minds. "The mother was taking them to the House Of The Poor for help hat day She sat the woman child on her boulders She then lifted the man child to her breast •She was movmg like a mountain toward the bus top,' Diane Doyle says. "In that hillside shanty the woman, m her 50s, also made a home for a man in his 80s She had found htm homeless, wandering, alone. She gave him a place to die in ease," Doyle says. "And he did more. The shanty's also borne to a younger man. He'd been a security guard. He'd been hot. He was paralyzed. 'And I asked the woman why? hy did s 1e do it all?" Doyle says. The woman told her, Doyle says, "I do 1t 1?ecause there's no one else to do It." Doyle says she herself is trying to do a little of 1t no .

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ters, all had been killed in El Salva- dor's kind of war. Her injury was in her heart. I walked around the yard with her and she began to cry. "I told her there was no medicine for her kind of pain." She plucked a pregnant mother from a muddy shack in a river bed. She felt needed in El Salvador. "When I came home I felt I bad experienced something. It gave me more self-respect in two weeks than a lifetime in a hospital,'' Doyle says. Then, ugh. "My darling Rick. He was fixing his boat by the water. is heart wenl He fell into the water and di 't come out alive, ' she says. Work with Operation Smile, w with Carol McLaughlin m helping Sister Maggie in Tijuana, Fhe says, "It's been my salvation since Rick died." She lifts a letter from the girl in Manila. The girl sent a photo of her smile. No more cleft lip The girl's letter says she will never forget Doyle. She writes that "never'' is "forever."

Doyle was working as a earney with a traveling circus when she found herself in North Zulch, Texas. "The circus always played at snake hunts. I never have liked snakes too wen. Rattlesnake, despit~ rumor, does not taste like chicken. Eating it is beef jerky time," Doyle says. "North Zulch was so lonesome you hardly heard a twang. The 100 or so people talked mostly to the little doggies. No restaurant. There was a drive-m movie, 20 miles away. San Diego, here I came." After completing USD studies and marrying Rick Doyle and settling high above Ocean Beach and setting out the cat dish maze, Doyle felt she should be doing more than hospital work. She joined a two-week Salvation Army medical mission to El Salva- dor. "It changed my life." A young woman stumbled into the mission in the capital. "She said she hurt fiercely. 'Medicine, please. Oh, the pain.' "Her parents, her brothers, her sis-

knows, he tried. His wife tried too and was louder. One son was in pris- on for murder. Two other sons liked to set Dorchester on fire. "Something always seemed to be burning down Locust Street, a car or a house. One day they lit a house. And it spread. Burned down four blocks of Bellflower and Dorset streets," Doyle says. The fire stayed across the street from her house. "Mother made coffee for the firemen. I served it. And we collected t.,..nkets and clothing for th b "'°

"I remember the 12-year-old who came alone. Her family had spent an its money for her ticket. She rode all the way to Manila as she bad lived her life - keeping a handkerchief pressed under her nose," Dvyle says. The Filipino gitl was afraid to let the world see her split upner lip. "She feared ridicule," Doyie says. The crew of Operation SI! i.e. a Balti- more-based medical TI 1ssionarv group, operated. "She held a mirror surgery had caused " s nurse sch .,ling "gave me the too1S I needro. And life helped." Back in her native Boston, in a Dorchester neighborhood so poor 1 treasured any conar, white or blue, Doyle was 12 when she first helped strangers. "Around the corner lived the neighborhood's problem. The father felt he could outdrink B-Oston. God But she C

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