February 2010 Archives

No on 17 intentionally trying to mislead voters. 'Parade of Horribles' Listed by Opponents in their Ballot Statements are Result of Current Auto Insurance Regulations, Not Prop. 17

Yes on 17, Californians for Fair Auto Insurance Rates, a coalition of consumers, businesses, senior organizations, taxpayer advocates and insurers, filed a lawsuit today in Sacramento Superior Court to force Proposition 17 opponents to make changes to their ballot arguments and ballot rebuttals and correct the patently false and misleading statements contained therein.

Proposition 17 on the June 8, 2010, California statewide ballot simply makes an existing persistency or "continuous coverage" discount portable, allowing customers to take it with them if they change insurance companies. Prop. 17 will mean more competition and choice in the auto insurance marketplace and will result in lower rates for drivers.

Prop 17 does not create a new discount. Thus any reductions in premiums or increases for those who are uninsured and do not maintain coverage are the result of current auto insurance regulations, not Prop 17.

Despite this, opponents of Prop 17 are intentionally misleading voters by repeatedly stating Proposition 17 creates new penalties. Statements to this effect appear throughout opponents' ballot arguments and rebuttals and are false and misleading. The "parade of horribles" cited in No on 17's ballot arguments are, in fact, already happening today, and exist under current regulations.

Ballot arguments and rebuttals appear in the Official Voter Information Guide compiled by the California Secretary of State and are distributed to every voter in California. Election law (Elec. Code Section 9092, Gov. Code  Section 88006) states that information in the voter guide must not contain "false and misleading" statements.

Opponents' ballot arguments and ballot rebuttals are available on the Secretary of State's website at www.sos.ca.gov.

"Proposition 17 simply allows responsible drivers who already qualify for a continuous coverage discount to take that discount with them if they change insurance companies. It does not create a new discount," said Kirk West, former president of the California Chamber of Commerce and co-chair of Californians for Fair Insurance rates (Cal-FAIR). 

West continued: "Throughout this campaign, opponents have misled and attempted to confuse voters. Their ballot arguments and rebuttals are more of the same statements. As authors of Proposition 103, they understand that the so-called "penalties" they speak of are attributable to current law and not to Prop. 17. Yet they are hiding behind false and misleading statements because they are afraid to acknowledge taking an anti-consumer position on Prop. 17 by opposing a measure that will result in more competition and more choice for more than 80% of California drivers who would benefit under Prop. 17."

Today, more than 80% of drivers maintain auto insurance and qualify for the persistency or continuous coverage discount, but can only get that discount from their current insurer. Thus, if a driver wants to switch to a new insurance company, he or she loses the discount and has to pay more.

Opponents' primary allegation against Prop. 17, made in a variety of ways in the ballot arguments and rebuttals, is that if Prop. 17 is passed and the continuous coverage discount is made portable, drivers seeking insurance who do not continuously maintain insurance coverage will pay more.

In fact, because the persistency or continuous coverage discount is being offered today, drivers who do not maintain continuous insurance coverage are today paying more to offset price reductions for those who do get the discount.

In other words, any reductions in premiums for drivers who qualify for the persistency discount, or the increase in premium for those who do not maintain continuous coverage, are products of existing regulations - not Proposition 17. 

Moreover, Proposition 17 adds new provisions to existing law that require insurers to offer the persistency discount even after lapses of coverage for up to 90 days for any reason other than nonpayment and for military service overseas; and Proposition 17 expressly does not limit an insurer's ability to offer additional grace periods for lapses. Current law offers none of these protections. As a result, repeated statements in the ballot arguments by opponents that Proposition 17 will increase rates for motorists are false and misleading. Any such increases are the result of existing law, not Proposition 17.

March 15, 2010, is the statutory deadline by which all June 2010 ballot argument challenges must be resolved. Prior to the deadline, Yes on 17 and No on 17 will meet in Sacramento Superior Court for oral argument in front of the judge assigned to this case. Since the suit was filed today no court date or judge has been assigned. There will be no ruling prior to oral argument. In past cases, the presiding judge has ruled from the bench immediately after oral arguments.

Background on ballot arguments and rebuttals in California

In ballot proposition campaigns in California, both the Yes side and No campaigns submit ballot arguments and ballot rebuttals for publication in the Official Voter Information Guide prepared by the California Secretary of State's Office.

Ballot arguments are submitted first. The Secretary of State then exchanges the arguments so each side can prepare a rebuttal to the main arguments for and against the proposition.

Rebuttals are in turn submitted, and then made available for public review along with the rest of the Official Voter Information Guide.

Proponents and opponents review ballot arguments and rebuttals and decide if they meet the California standard. If they do not meet the standard and contain false and misleading statements, lawsuits are permitted to ensure voters are not misled.

Ballot argument/rebuttal submission and litigation takes place months in advance of Election Day to allow time for potential litigation, printing and mailing the Voter Guide.

SOURCE Californians for Fair Auto Insurance Rates

United Security Bancshares, Inc. (Nasdaq: USBI) today announced that, along with its banking subsidiary First United Security Bank and Acceptance Loan Company, Inc., a finance company operated by the bank (collectively referred to as the "USB Companies"), it has entered into a settlement agreement to resolve all claims alleged against the defendants named in the lawsuit styled Acceptance Loan Company Inc., First United Security Bank and United Security Bancshares, Inc. v. The Cincinnati Insurance Company, et al., filed in the Circuit Court of Clarke County, Alabama on December 18, 2009, Case No. 16-CV-2009-900168.00.

The USB Companies filed the lawsuit to seek recovery under a fidelity insurance policy and bond issued by The Cincinnati Insurance Company, which policy provides coverage for losses due to the dishonest or fraudulent conduct of employees of the USB Companies.  Acceptance Loan Company, Inc. originally submitted a claim under the policy in connection with the loan irregularities discovered during the second quarter of 2007 resulting from the fraudulent conduct of certain ALC employees.

Pursuant to the settlement agreement, The Cincinnati Insurance Company agreed to pay to the USB Companies the sum of $4,150,000.  In exchange, the USB Companies agreed to dismiss, with prejudice, each of the defendants from the lawsuit and to release the defendants from all claims asserted or that may have been asserted against the defendants in the lawsuit.  The parties will be responsible for their own attorneys' fees and costs arising from the lawsuit, with the costs of mediation in the proceeding to be shared equally by the USB Companies and The Cincinnati Insurance Company.

"We are very pleased with the settlement agreement that was reached with the insurance company," said Terry Phillips, President and Chief Executive Officer of United Security Bancshares, Inc.  "USBI has been very aggressive in pursuing all available recovery in connection with the ALC losses and thus far has been successful in doing so."

The settlement agreement concludes the lawsuit.  The USB Companies entered into the settlement agreement to avoid the expense and uncertainty of future litigation of the claims alleged in the lawsuit.

United Security Bancshares, Inc. is bank holding company that operates nineteen banking offices in Alabama through First United Security Bank.  In addition, the Company's operations include Acceptance Loan Company, Inc., a consumer loan company, and FUSB Reinsurance, Inc., an underwriter of credit life and credit accident and health insurance policies sold to the bank's and ALC's consumer loan customers.  The Company's stock is traded on the Nasdaq Capital Market under the symbol "USBI."

SOURCE United Security Bancshares, Inc.

The law firm of McCuneWright, LLP has filed for a preliminary injunction in United States District Court, Central District of California seeking an immediate order requiring Toyota to expand the Sudden Unintended Acceleration recalls.  

McCuneWright, which filed the first and leading class action lawsuit against Toyota to force the automaker to remedy the sudden unintended acceleration defects in all affected makes and models, is asking the court to issue a specific order requiring Toyota to provide a brake over-ride system on all Toyota models equipped with Electronic Throttle Control System -- intelligent ("ETCS-i") that have experienced significant numbers of sudden acceleration events.

The brake override system is a failsafe system that enables the onboard computer to detect when both the throttle and the brake are being activated simultaneously, recognize that there is an error in the signals it is receiving, and immediately return the throttle to idle.  It is an important failsafe system used by other vehicle manufacturers to keep a sudden unintended acceleration event from turning into a runaway vehicle with resulting crashes, injuries, and deaths.

Toyota has recently announced that it will install this important safety device on all new Toyota and Lexus vehicles.  In its November 26, 2009, recall, Toyota also announced that it would retroactively install this important safety device on just six existing models and further limited the recall to only recent model years -- 2007 -- 2010 Toyota Camry, 2005 -- 2010 Toyota Avalon, 2007 -- 2010 Lexus ES 350, 2007 2010 Lexus GS 350, 2006 -- 2010 Lexus IS 250, and 2006 2010 Lexus IS 350.

The preliminary injunction motion asserts that by limiting this brake over-ride system recall to recent model years for just six vehicle models, Toyota has left more than 75 percent of the affected models and model years out of this important recall.

"Toyota cannot justify limiting this important recall to models and model years that include less than 25 percent of the reported sudden acceleration problems," says Richard McCune, a partner at McCuneWright, LLP. "Toyota has identified an important solution to this problem and it has a duty to its customers and to public safety the apply it to all the Toyota vehicles. Toyota shouldn't wait until there's another deadly crash."

On November 5, 2009, McCuneWright filed the first and leading class action on sudden unintended acceleration, Choi, et. al. v. Toyota Motor Company, et. al. CV 09-08143 AHM (FMOx), in United States District Court, Central District of California.  The preliminary injunction and supporting exhibits can be found on the Court's website or is available at www.mccunewright.com/toyota.

SOURCE McCuneWright, LLP

Atricure Inc., a medical device manufacturer, has agreed to pay the United States $3.76 million to resolve civil claims in connection with the alleged promotion of its surgical ablation devices, the Justice Department announced today. Surgical ablation devices use focused energy to create controlled lesions or scar tissue on a patient's heart or other organs.

The settlement resolves allegations that the West Chester, Ohio-based company marketed its medical devices to treat atrial fibrillation (the most common cardiac arrhythmia or abnormal heart rhythm), a use that is not approved by the U.S. Food and Drug Administration (FDA). Atricure also allegedly promoted expensive heart surgery using the company's devices when less invasive alternatives were appropriate, advised hospitals to up-code surgical procedures using the company's devices to inflate Medicare reimbursement, and paid kickbacks to health care providers to use its devices. The United States asserted that by engaging in this conduct, Atricure knowingly violated the Food, Drug, and Cosmetic Act and caused the submission of false and fraudulent claims in violation of the False Claims Act.

"This settlement reflects our commitment to enforce the Food, Drug, and Cosmetic Act and protect Medicare from the improper marketing practices of Atricure and other medical device manufacturers," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "We will continue to work with our partners at the Department of Health and Human Services Inspector General's Office and the FDA Office of Chief Counsel to preserve the integrity of our public health programs."

The allegations were made against Atricure in a lawsuit filed under the qui tam or whistleblower provisions of the False Claims Act, which permit private citizens, called "relators," to bring lawsuits on behalf of the United States and receive a portion of the proceeds of any settlement or judgment. The relator will receive a total of $625,000 as the statutory share of the current settlement.

"The misuse of medical devices has the potential of exposing patients to dangerous procedures and taxpayers to payment of unwarranted claims against Medicare," said Tim Johnson, United States Attorney for the Southern District of Texas. "This settlement demonstrates the government's commitment to maintaining safe and affordable health care for its citizens."

Assistant Attorney General West noted that the settlement with Atricure resulted from a coordinated effort by the Justice Department's Civil Division, the U.S. Attorney's Office for the Southern District of Texas, the Department of Health and Human Services' Office of Inspector General, and the FDA Office of Chief Counsel.

This settlement is part of the government's emphasis on combating health care fraud. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover approximately $2.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department's total recoveries in False Claims Act cases since January 2009 have topped $3 billion.

SOURCE U.S. Department of Justice