Look, any insurance insider will tell you that State Farm's policy is to deny every claim the first time it is made. (The people who just sulk away result in a profit for State Farm.) State Farm fights its own insured regularly and, IMO, if there is a hell every decision maker at State Farm will go there.
$145 million punitive damage award *is* excessive. But, it must be. Remember, punitive damages are aimed at *punishing* SF not compensating the insured. Therefore, that high amount is extremely appropriate - it's what it takes to get SF's attention. The windfall that the plaintiff gets is unfortunate, but that is NOT the point. (Now, if they ever take my advice and divert punitive damage awards to LegalAid funds rather than to the plaintiff, the unjust windfall will be a non-issue.)
So, because they dislike the windfall, the Justices were able to remove their lips from Bush and the Republican Party's ass long enough to come up with a silly opinion based on absolutely no law.
Like Congress, the Justices just vote party lines these days. I'm sick of 5-4 Repug v. Dem opinions from the High Court. These old white (yes, despite what you may think, Clarence Thomas *is* white) rich bastards have denegrated our system by becoming mere sock puppets.
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From today's NY Times:
Justices Overturn Huge Award for Car Accident
By DAVID STOUT
WASHINGTON, April 7 — The Supreme Court today overturned a huge jury award arising from an automobile accident, declaring that $145 million in punitive damages was too much for a Utah driver who had been mistreated by his insurance company.
The 6-to-3 decision, written by Justice Anthony M. Kennedy, involved a 1981 accident in which one man was killed and another permanently disabled. The case has nationwide implications and has been closely followed by the insurance industry, lawyers and others involved in the continuing debate over "tort reform."
The case pitted Curtis Campbell against his auto insurer, State Farm. Investigators determined that Mr. Campbell triggered the crash when he attempted to pass six vans traveling ahead of him on a two-lane highway in Cache County, Utah.
Todd Ospital, driving a small car approaching from the opposite direction, was killed as he swerved onto the shoulder to avoid Mr. Campbell's car. Another driver, Robert G. Slusher, was permanently disabled by the injuries he suffered when Mr. Ospital's car slammed into his.
Mr. Campbell and his wife, Inez, escaped unscathed. But as the record of the case makes clear, their ordeal had only begun. Justice Kennedy acknowledged that fact when he wrote, "We must acknowledge that State Farm's handling of the claims against the Campbells merits no praise."
Ignoring its own investigators' advice, State Farm, declined offers by Mr. Slusher and Mr. Ospital's estate to settle the case for $50,000 (or $25,000 for each plaintiff), the limit of Mr. Campbell's policy. Instead, State Farm took the case to trial, meanwhile assuring the Campbells that their assets would be safe and that they were not liable for the crash.
But a jury found against Mr. Campbell, deciding that he was totally at fault and fixing the damages at $185,849. At first, State Farm refused to cover the $135,849 the jury said Mr. Campbell should pay over and above the coverage provided by his insurance policy. In fact, a State Farm lawyer told the Campbells they should be prepared to sell their house in order to put the case behind them. By the time State Farm finally agreed to cover Mr. Campbell for the entire damages, he and his wife had endured many months of emotional distress, the couple contended.
Mr. Campbell hired a lawyer to sue State Farm for bad faith. He also reached an agreement with Mr. Slusher and Mr. Ospital's estate whereby those plaintiffs would receive 90 percent of any verdict Mr. Campbell won against State Farm.
A jury agreed that Mr. Campbell had been treated shabbily by State Farm and awarded him $2.6 million in compensatory damages, plus $145 million in punitive damages. The trial judge reduced the amounts to $1 million and $25 million, respectively, and both sides appealed. Eventually, the Utah Supreme Court reinstated the $145 million award.
Today, the United States Supreme Court said the Utah high court was wrong. "This case is neither close nor difficult," Justice Kennedy wrote, in an opinion joined by Chief Justice William H. Rehnquist and Justices John Paul Stevens, Sandra Day O'Connor, David H. Souter and Stephen G. Breyer.
The majority held that the $1 million set by the lower court for compensatory damages was enough for the Campbells' emotional distress, and enough to punish State Farm as well. Moreover, the justice said, the Utah courts had improperly sought to punish State Farm for its business practices across the country.
Justice Ruth Bader Ginsburg wrote a dissent joined by Justice Antonin Scalia and Clarence Thomas. She pointedly did not signal approval of the huge award; indeed, she said it "indicates why damage-capping legislation may be altogether fitting and proper," an argument the insurance industry has been advancing in state legislatures and before Congress.
But Justice Ginsburg said that neither the side of the award nor the trial record "justifies this court's substitution of its judgement for that of Utah's competent decisionmakers."
Justice Ginsburg took notice of testimony by State Farm employees that the company often tried to limit payments to "the elderly, the poor, and other consumers who are least knowledgeable about their rights."
In the Campbell case, Justice Ginsburg observed, there was testimony that an insurance adjuster was told by a State Farm manager to write in his file that Mr. Ospital was speeding because he was on his way to see a pregnant girlfriend. "In truth, there was no pregnant girlfriend," Justice Ginsburg noted.
The opinions in State Farm Mutual Automobile Insurance Company v. Campbell, No 01-1289, can be read on the Supreme Court's web site:
www.supremecourtus.gov.
[ 04-07-2003, 04:07 PM: Message edited by: Timber Loftis ]