Consumer Watchdog Challenges Commissioner Lara's Misleading Statements on FAIR Plan Lawsuit

Consumer Watchdog Takes on Commissioner Lara in Court

A ruling from a Los Angeles Superior Court judge has recently paved the way for Consumer Watchdog's lawsuit against Insurance Commissioner Ricardo Lara to proceed. The core issue in this case centers around Lara's controversial surcharge scheme tied to the California FAIR Plan. The FAIR Plan is designed to spread wildfire risk among insurers, requiring that costs related to such risks be shared rather than shifted to consumers.

The Court's Ruling

On July 22, 2025, the court decisively overruled Lara's attempt to dismiss a central aspect of the legal challenge. The ruling confirms that Lara's actions in approving supplemental fees needed to be scrutinized under the FAIR Plan statute. Justice was served when the judge ruled that these surcharges, which have reportedly led to half a billion dollars in overcharges for consumers, required a fair trial.

William Pletcher, Director of Litigation for Consumer Watchdog, voiced serious concerns regarding Lara's failure to accurately communicate the ruling's implications. Pletcher expressed that misleading the public regarding such significant legal outcomes is inappropriate, particularly when it involves substantial charges on insurance bills that affect millions.

Misleading Claims from Lara

Despite the explicit court ruling allowing the lawsuit to advance, Commissioner Lara issued an erroneous press release suggesting that the court had sided with him. Pletcher noted that this misrepresentation was alarming, indicating a larger disinformation campaign to mislead Californians about the true nature of the court's decision.

Insurers involved with the FAIR Plan had previously attempted to amend the legislation governing their operations but were unsuccessful. Instead of upholding the law, Lara entered into agreements that led to the issuance of bulletins, permitting surcharges without proper hearings or transparency. This decision is wholly at odds with the foundational principles of the FAIR Plan, which mandates collective responsibility among insurers.