Conservative Sock Puppet Supreme Court overturns Insurance Award

[Timber Loftis]

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 ]

[harleyquinn]

It's disgusting what the insurance companies try to get away with. NY State is a no-fault state (which is a whole other issue I have, but I digress). 3 years ago when I was a passenger in a taxicab we were hit by a drunk driver. Luckily I was not hurt, but I went to the hospital anyway just to be sure (something I learned from my mother who was a paralegal). It took me 2 years to get the insurance company to pay the $180 in hospital bills I had. I could have afforded to pay it, but I didn't feel I should shell that out for the privledge of being hit in a cab by a drunk. They tried every trick in the book but when my lawyer sent a letter to NY State, suddenly the insurance company claimed they never got the bills and paid them right away. A total lie, btw, since I had the signiture from a certified registered letter I sent to them with the bills in them.

[HolyWarrior]

So, Timber, you think all blacks should be leftist Democrats?

[Timber Loftis]

Originally posted by HolyWarrior: So, Timber, you think all blacks should be leftist Democrats?

No. Rich ones need not be. But, generally, yes. And, I'm not saying this is GOOD, I'm just saying that if they want to maximize what they get from the government they would be Dems. Dems *love* (generally) to throw money at public aid and welfare programs. Sorry, but the sad truth is that a higher percentage of minorities live in poverty than whites.

So, if these poor minority members were to do the most selfish thing, they would, IMHO, vote democratic - it benefits them more. Repugs, on the other hand, increase prison sentences and get tough on crime (the vast majority of prison inmates are black males) and (generally) cut welfare / workfare / welfare-to-work spending.

Somehow, the Repugs have put on a good minority face, though, and convinced a fair percentage of minorities that they represent their interests. They did this with blacks in the last election, btw, by touching on the "family values" connection they felt they shared with the black community (as evidenced in advice they got from black civic leaders and ministers).

Just some musings.

[Azred]

This whole case was ridiculous on State Farm's part. Having worked in the insurance industy, I can affirm that State Farm would have made more money in the long run had they simply paid the $50k right away. This paid claim would have been recorded, then the actuaries could have crunched the numbers, shown how much experience that particular plan had (experience = the amount of money paid out) and then everyone's premium would have been increased just a little. The future earnings would far outweigh a mere $50k. Honestly, I can't believe that the senior adjusters didn't see this as a profit-making venture. What could they have been thinking?

That probably sounds uncaring, but that is the reality of insurance. I know for a fact that actuaries project future premiums paid in and claims paid out at least 1 or 2 years in advance (I crunched those numbers for over a year). State Farm could have saved everyone a lot of hassle by simply cutting a check.

[Thorfinn]

I'm curious. If Mr. Campbell had an agreement with State Farm to pay up to $50k to settle insurance claims, how can they possibly be liable for more than that, other than through breach of contract, which appears to be the case. $145 million for breach of contract is ludicrous.

It seems to me that State Farm thought they had a reasonable shot at showing that Mr. Campbell was not liable, probably since his car had apparently not been involved in any other way than by giving Mr. Ospital no option than to swerve off the road. I'm guessing they intended to use the same idea as has worked in other cases -- if you substitute a tree, or some piece of road debris, or a deer, for Mr. Campbell's car, you can prove that Mr. Ospital was clearly in the wrong for driving in excess of roadway conditions. I know for a fact this works in court.

I agree that if State Farm opted to have their day in court, instead of agreeing to the the alleged $50k initial settlement offer (which,
considering the source, I am a little leary to accept as fact), then they should be responsible for the excess. It was a different world in '81, true, but I really doubt anyone would accept a $25k settlement for lifetime disability, let alone $25k for death. I think there is more to this story than is written in the Times.

Even $2.6 million compensatory damages is ludicrous.

All that can be said about preserving a huge award is that many more marginal people will be denied affordable insurance. Woo-hoo! Another bonus. Every time some idiotic, excessive award comes down, my uninsured coverage goes up, because of the effect of pricing people out of having insurance.

We all lost through the stupid decision of the Utah court system, though the Supreme Court mitigated that to some small extent.

[Thorfinn]

Short memory you have of Democrats, there, Timber. When Timothy Leary's case struck down the Marijuana Tax Act of 1937, the Democratic Congress was quick to pass the Drug Control Act, the beginning of the War on Drugs. Nixon's Executive Orders were merely an attempt to enforce an IMO unconstitional law restricting the substances which one could introduce into his own body. When Reagan escalated the War on Drugs, the Democratic Congress could have easily repealed or "clarified" the law so as to benefit poor blacks, the ones who were principally hit by the War on Drugs, but no. The Democrats sold their base down the river.

Same with Get Tough on Crime, which went into full swing in the '80s and early '90s. Note these happened with a Democratically controlled Congress. The Democrats not only supported the harsh sentences, they passed them in the first place.

And your note on the effects of "Repug" Congresses is horribly mis-stated, particularly since Repugs have only had both houses for a few months, and only one for six years before that. Dems had control of at least one, often both, through all these legislative abuses you cite.

It shouldn't come as any surprise that the ever-popular "Three Strikes" laws come from "Repug" strongholds like California, New York and Massachussetts...

Furthermore, welfare checks did not decrease in size through the Contract with America, though people were heavily encouraged to actually work for a living, since they would decrease in 2 years. As a result, most of the Welfare-to-Work recipients are much better off than they would have been living off welfare.

Democrats consider minorities little more than pets. Just pat them a time or two on the head, and the public schooled populace will never realize that they are just barely getting by on dogfood.

The amazing part is not that "Repugs" have an appeal to minorities, but that Dems have brainwashed enough people not to realize that they are little more than pawns...

[ 04-08-2003, 12:39 PM: Message edited by: Thorfinn ]

Speaking as someone who has had State Farm Car insurance for 11 years now and have submitted 3 claims in that time (due to people bashing my car while in various parking lots) I never had them deny me even once...perhaps because Im a white guy? ::Shrugs:: never had a problem with them so far....

Edit: And what do you have against sock puppets TL? I kinda like them

[ 04-08-2003, 12:44 PM: Message edited by: MagiK ]

Well stated Thorfin [img]smile.gif[/img] Did you get that name from "Erick the Viking" by any chance? [img]smile.gif[/img]

[Thorfinn]

I got my first State Farm policy in '77, and though I have only had three incidents in all that time, I have never had a problem with a claim.

Yes, I did get the name from Erik the Viking. Thorfinn Skullsplitter had such a cool ring to it. So cool that the wife and I gave our firstborn son two middle names, Erik Thorfinn.

[ 04-08-2003, 01:06 PM: Message edited by: Thorfinn ]