On September 16, 2016, a federal judge ruled that just under 5 million State Farm policyholders can get together to file a class action lawsuit against the insurance giant. Some customers are accusing the company of conspiring to use money to get an Illinois Supreme Court candidate elected to the bench. The company wanted Lloyd Karmeier on the state’s highest court so that he could help throw out a $1 billion award the company was ordered to pay.
Customers are contending that the insurance company defrauded them. In exchange for bankrolling Karmeier’s campaign in 2004, the judge provided an appellate vote against holding the company to the $1 billion verdict. That verdict was granted after the company was found guilty of using generic auto parts in repairs.
The newest ruling is going to complicate the company’s ongoing efforts to defend itself against claims that it engaged in racketeering. The ruling against State Farm was one of the largest awards in the history of the United States.
According to a statement released by State Farm’s attorneys, complainants have been alleging this activity for years and have repeatedly failed to prove their claims. The company plans on fighting the appellate court ruling. Karmeier is not named in the newest case.
In the original case, customers claimed the insurance company ordered generic parts be used to make repairs after accidents. They further claimed that this violated the terms of their insurance contracts. The award was $456 million. Another $730 million was tacked on by a judge for fraud. An appellate court later reduced the verdict to $1.01 billion.
Once Karmeier was sat on the bench, the Illinois Supreme Court tossed the award. The U.S. Supreme Court refused to review it. Lawyers who represented the customers discovered that the insurance company had backed the judge.
Judge David Herndon has found that customers can band together to file a class action lawsuit against State Farm. In his judgment, Herndon concluded that the policyholders showed “common questions regarding defendants’ acts and omissions to evade” the judgment. Karmeier is not being sued for racketeering, but he was ordered to answer questions under oath about whether or not State Farm had any role in his campaign for the seat.
Customers have a reasonable expectation that they will be represented by insurance companies in a way that is fair. Monies spent on purchasing policies are not to be used to pursue political ventures. Unfortunately, State Farm did just that, destroying the trust it had built in its company. How this class action suit will play out in court is anyone’s guess, but if the allegations are true, State Farm will need to be held accountable.
Insurance companies may not be permitted, in today’s society, to defraud or mislead customers. Knowing where your money is going and what you are paying for is your right as a consumer. If you are a State Farm policyholder, keep your eyes peeled for more information on this class action suit and how you can join the millions of customers who feel they were lied to.
If you are in need of an attorney in Miami or the surrounding area, please reach out to our office. We will help you schedule a free consultation so that we can discuss your case and advise you of your options. Call our team today for assistance or browse our website for more information about our firm and the types of cases we handle. We are here for you and your family. Call now.