The Oregonian
May 05, 1995


Settlement Nears in Saif Corp. Lawsuit
By Jeff Mapes


SALEM -- After some hardball negotiations involving Republican legislative leaders, the state may be close to settling a long-running lawsuit that affects thousands of Saif Corp. policy holders.

The pending settlement stems from a series of court decisions ordering the state to pay back -- with interest -- the $81 million taken from the Industrial Accident Fund by the 1982 Legislature to balance the budget.

Under the proposed settlement, some 48,000 businesses that had policies in 1982 with the state-owned workers compensation insurer could receive rebates ranging as high as several thousand dollars. In addition, thousands of other businesses that later had policies with Saif could also eventually benefit from a settlement.

Attorneys representing the policy holders recently agreed to a settlement with the state that would have required payments of $80 million in each of the next three two-year budget cycles.

No more than $60 million

However, GOP legislative leaders told the governor in a series of meetings this week that the payment for the next two years cannot be any more than $60 million.

"We believe that this is a very reasonable settlement," said Senate Majority Leader Brady Adams, R-Grants Pass. He said the policy holders would be wise to take what they could get from the Legislature rather than continuing litigation. Adams said the Republicans did agree to $80 million payments in the succeeding two budget cycles.

Stephen T. Janik, a Portland lawyer for plaintiffs in the class-action lawsuit, said a steering committee of eight policy holders will have to decide whether to accept the settlement.

"It's obviously not where we thought we were," said Janik, who added that no one has calculated exactly how much any individual policy holder would receive from a settlement.

New offer may be accepted

Lottery Director Gary Weeks, who has been Gov. John Kitzhaber's lead representative on the issue, said he believed the plaintiffs would accept the new offer. Janik offered no indication.

"Based on the conversations I've had today, I still think we're going to get an agreement" on the latest offer, said Weeks.

The Republican lawmakers said they would not put more than $60 million in the budget because they wanted to free up $20 million to handle other needs.

They also argued that plaintiffs should accept their offer because they had no practical way to force the money out of the Legislature. "They can't foreclose on the Capitol and take the Golden Man," said Adams, referring to the gold-plated statue on top of the building.