I spent the morning down at the Court of Appeal in Los Angeles listening to lawyers for Farmers Insurance try to convince the justices that California voters did not mean what they said when they passed insurance reform Proposition 103.

To buy an insurance policy from Farmers, you have to sign a special agreement to pay a "management fee" on top of the cost of the insurance. Would you be surprised to learn that the company grossly overcharges its customers on that fee?

Proposition 103 gave Californians the right to go to court to challenge overcharges or other abuses by insurance companies.

One of Farmers' customers did just that back in 2003. But Farmers got a Los Angeles Superior Court to throw the case out on the grounds that consumers cannot bring a lawsuit challenging such overcharges. The consumer appealed.

We filed an exhaustive "friend of the court" brief explaining to the Court of Appeal how the Superior Court decision flouted Proposition 103. You can read it here.

At the hearing on the appeal this morning, Farmers' lawyers used the same fear-mongering that other industry lawyers have tried in their endless efforts to get the courts to rewrite the law the voters wrote: that if insurance companies can be sued, the result would be chaos.

In addition to this Chicken Little lawyering, the insurers insisted that when the voters passed 103, they actually intended to expand the industry's immunity from lawsuits. Listening to the justices' questions, though, it didn't seem to me they were buying what the industry was selling. Expect a ruling from the court within three months.