State Farm has been accused of buying a judge to get them off the hook from a billion-dollar judgment. Yes, State Farm, a Fortune 500 company, has been accused of buying a judge to avoid paying a heavy fine for using aftermarket parts.
This is not the kind of thing you would expect from a company that’s supposed to foot the bill for your car to be properly repaired. We’re talking about the largest car insurance company in the country, one that spends millions of dollars on TV commercials promising its policyholders that they’re in good hands, and here we have them breaking the law to protect its pockets instead of its clients.
The Newest Case
The case with State Farm had been cooking for over 20 years, and only recently reached a settlement. State Farm customers sued the colossal insurance company for using second-rate car parts, because firstly it is dangerous, and secondly, it violates their policy terms.
The History Behind The Case
Initially, 19 years ago, State Farm was going to have to pay 1 billion dollars for the damages caused by their shoddy work. Then, in 2004, State Farm thought it would install a puppet judge onto the Illinois Supreme Court, a blatant conflict of interest. They funded Judge Lloyd Karmier through advocacy groups that concealed the fact that their donor was none other than State Farm.
This judge, once elected, didn’t waste any time putting the case on permanent standby, or better yet, tossing it into the trash. The verdict calling for over a billion dollars in damages was canceled, just like that, and the U.S. Supreme Court didn’t think twice about it. The case wasn’t reviewed. It seemed closed.
Then the case returned with a vengeance. In 2009, the Supreme Court came to its senses after handling a lawsuit with Massey Energy Co., a coal-mining company. It realized that judges handling cases involving their campaign contributors is probably not a good idea. So the Supreme Court released a ruling that forced judges to refuse handling cases involving their sponsors. It’s called the federal Racketeer Influenced and Corrupt Organizations Act (RICO).
It would seem like the most basic common sense that you must avoid having biased judges handling a case. It’s disheartening to think that the very U.S. Supreme Court, the beacon of justice in the country, would have to reach this conclusion after some lawsuit. It should have already been one of their basic tenets.
The Aftermath
Now State Farm didn’t have any judges to protect them, and they found themselves faced with an unforgiving jury. According to the RICO law, the penalty for buying off a judge would have State Farm pay three times the amount of the initial charge: the $1 billion demanded by their customers suing for using second-rate parts, plus the $1.8 billion in interest. You do the math.
Guess what State Farm did? After repeating their pledge of innocence, they went ahead and paid a much smaller sum to avoid going to trial altogether. State Farm’s spokesman, Jim Camoriano, provided some feedback, which was nothing short of embarrassing. According to Mr. Camoriano, the insurance mogul didn’t do anything wrong, they paid the money because they simply wanted the whole ordeal to end. It was taking too long –let’s not forget that they were the ones postponing the trial in the first place. That’s
audacity at its finest, a clever trick to weasel one’s way out of being held responsible.
With billions of dollars at their disposal, State Farm thought they would just pay a hefty sum to avoid paying a much bigger one, now that they couldn’t avoid the suit any longer. This way they could also still say they were innocent. But paying 250 million dollars to end a case before it starts, when you’re in danger of having to pay at least 3 times that amount is really just another way to plead guilty.
Sadly, this is yet another piece of evidence in an ever-growing collection that proves why customers should choose auto repair shops adhering to the manufacturer’s guidelines, and not the demands of the sponsor.