Ten with Ben: Episode 15 – Insurance Companies Buying Judges

Hi, I’m Attorney Ben Schwartz

Today going to take up a topic or a question of how do you feel about insurance companies buying Judges? This is a topic that is near and dear to my heart and I’m going to try and explain something that happened. I’m going to try and explain a case that was recently in the news and we’ll see how well I do in giving you the quick summary in an accurate manner. 

So, State Farm Insurance Company was involved in a case back in the late 1990s in the state of Illinois and the case was a class action lawsuit. Essentially there were a lot of people who were insured by State Farm that got in car accidents, had their cars repaired under their insurance policies they were supposed to get OEM parts, but State Farm didn’t provide them with OEM parts. State Farm said to fix the car but use used parts instead and so the people didn’t get what they paid for when they bought their insurance and they paid their premium. 

There was a lawsuit that got filed. The State Court in Illinois gave it class action status. The case went to trial and essentially it resulted in a whopper of a verdict against State Farm, it was a $1 billion. That verdict went up on appeal and the Illinois Supreme Court struck it down. It turns out that one of the Justices that voted to strike down that appeal was a Justice who had received campaign contributions from State Farm funneled through to him through his campaign by State Farm. We’re talking about not a small amount of money. In legal pleadings and in news reports it has been reported that the amount that State Farm spent on that Supreme Court Justices campaign was about $3.5 million. 

Well the plaintiffs in that lawsuit, the people who were given the $1 billion judgment found out that one of the Justices who got on the Supreme Court and instruct that award was elected by State Farm. Elected by the people using those State Farm campaign contributions and he never disclosed it to anyone, and State Farm certainly never disclose that fact to anyone. The Justice maybe he should have recused himself rather than ruling on a case directly involving State Farm. So, a new lawsuit was filed against State Farm by those same people who had been ripped off, by those same people who had received that $1 billion verdict. 

A new lawsuit was filed against State Farm under the Federal RICO Act, (The Racketeer Influenced Corrupt Organization Act). Under that act, under that lawsuit, they were seeking reinstatement of the $1 billion award plus treble damages, three times the damages which the law allows. The case was coming up for trial and State Farm settled it by paying $250 million or agreeing to pay $250 million.  The case is scheduled for a fairness hearing in Illinois on that proposed settlement. It’s not a final settlement, it’s a proposed settlement. 

So, it’s something that made the news. As I’m sitting here today, I have an article from the Insurance Journal in front of me. The article’s title is, “State Farm Agrees to Pay $250 million, Avoids Racketeering Trial”. This is an article by Jef Feeley and Margaret Cronin Fiske. Jef Feeley is someone that I know, also it looks like Tim Bross, these are excellent reporters. Jeff Feeley is a very experienced reporter who specializes in reporting on lawsuit cases and legal matters. If you want to read a really excellent story on this case this is the story to read in the Insurance Journal, something you can Google or we can link to it in the show notes. 

I guess my question is, how do you feel about this? This is a case where State Farm has given millions of dollars to get a Supreme Court Justice elected. Then that Supreme Court Justice doesn’t tell anyone, hey I got $3.5 million from State Farm. Now, he’s rendering decisions to benefit State Farm. So, it looks like he’s been bought and paid for. I want to know, what do you think about that? Is that just par for the course? Is that what we should just accept in that state where this happened? Supreme Court Justices are elected, which someone created that system. The people that created that system of finding and getting Supreme Court Justices must have known that litigants are going to be paying for Justices to get elected. Maybe that’s part of the mix. Maybe that’s part of the deal. I practice law, primarily in Delaware, where we do not get any elected Judges. Our Judges are appointed, sort of like they are in the federal system. 

In the state of Delaware, we don’t have elections for Judges. We don’t give money to Judges so that they can run their campaigns. I think that takes out a lot of this sort of corruption if you want to use that word if you want to go that far. It takes it out of the system. But I’ve also had this discussion with other people about this case and they’ve said to me, well yeah State Farm gave a huge amount of money to get this Judge elected but how is that really any different than giving a huge amount of money to a politician to get elected, to a lawmaker to get elected, who’s then going to go to the legislature and try and get laws passed to protect State Farm from having to pay out legitimate money on legitimate claims. That happens all the time in my world. In the Delaware legislature and the federal legislature, there are consistently bills being filed and lobbied for by insurance industry representatives that would eliminate your ability to sue someone if they negligently injured you or limit the damages that you might be able to collect. 

If a doctor negligently kills your spouse or your parent or your child, you know this goes on all the time. Paying politicians to try and pass laws that limit people’s rights in our society happens all the time. So, how is it different when you’re paying a Judge to rule favorably? How is it different from lobbying activities where you’re paying legislators to do essentially the same thing? I’m interested to know what you think. Should Judges get millions of dollars from the companies that are going to appear before them with cases or is it a bad system? How do you oversee a system where these sort of campaign contributions can be made to Judges or Supreme Court Justices? I’m interested to know what you think if you’ve had experience with this type of thing. 

If you’re a Judge or a former Judge and you have had experience in a state where maybe Judges are elected and you’ve had to get campaign contributions, then I guess my question would be if you’re in that situation how do you avoid the impropriety of ruling favorably on someone’s case if they’ve given you a campaign contribution? What do you do in that type of situation? What kind of safeguards you have in place? I’m Attorney Ben Schwartz, I appreciate you watching. If you have any questions for me or if you’d like to make comments you certainly can leave a comment to this video or you can send me an email. This has been another episode of Ten with Ben. Thanks for watching.  

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