State Farm Barely Escapes Racketeering Trial by Paying $250M to Plaintiffs

In a story that sounds like it belongs in a Hollywood drama, State Farm — the insurance company that totes itself as a “good neighbor” — barely escaped being taken to trial for allegations of politically-charged racketeering by giving a massive payout to a group of plaintiffs. State Farm had been accused of leading a clandestine effort to recruit a judge friendly to its interests for the Illinois Supreme Court by secretly funding the Judge’s election campaign. What would an insurance company have to gain by placing a coerced Judge into the Illinois Supreme Court, though?

Customers formed a plaintiff group that claimed the company was trying to rig the Illinois justice system to wipe out a $1 billion jury verdict from nearly two decades back. Many years ago, State Farm was accused of using generic car parts of lower quality instead of original equipment to complete policyholder repairs, which violated the terms of the insurance policies. A jury deliberated and reached the massive verdict amount, but that verdict sat relatively unfulfilled for the longest time.

Jump to the present day and the recent claim of racketeering and collusion. If the State Farm-influenced Judge earned a seat in Illinois’ highest court, it could be possible to erase that verdict. Plaintiff-customers demanded at least $8.5 billion if the racketeering trial reached the courtroom. The amount would have been ballooned by the penalties set forth by the Racketeer Influenced and Corrupt Organizations (RICO) Act. To end the 20 years of litigation, State Farm agreed to pay $250 million right before trial instead. A “final fairness hearing” will be held in December to review the settlement and case conclusion. State Farm also went out of its way to say it was not admitting wrongdoing by paying the settlement, but rather it only wanted to end the litigation that had already been quite extensive.

(Want to know more about this ongoing story? You can click here to view a full article from Insurance Journal.)

Trust in Our Sarasota Insurance Claim Attorney

If there is just one thing to be learned from the State Farm racketeering case and settlement, it is that insurance companies are not your friend after an accident, even if they claim to be a “good neighbor.” Insurers are businesses that need to make profits at any risk, including shorting policyholders and trying to tilt the civil justice system in their favor. When you are hurt in an accident and need to file a claim, be aware that the “help” your insurer offers might be anything but, especially if they toss a lowballed recovery amount at you upfront.

To make certain your claim is properly handled and respected, call 866.233.4529 to connect with Gerber Law. Our insurance claim lawyer in Sarasota has 20+ years of legal experience focused on plaintiff claims and injury cases. You can even schedule a free initial case evaluation to learn more about our services and your rights without needing to reach for your wallet first. We look forward to hearing from you!