In Part 1, I gave you the facts for the underlying case. In summary, Campbell was at-fault for causing a wreck which seriously injured Slusher and killed Ospital. State Farm — Campbell’s auto insurance — took the case all the way to trial. In so doing, it exposed the Campbells to a $135 k judgment and told them that they “may want to put for sale signs on your property to get things moving.”
Instead of selling their farm, the Campbells hired a Salt Lake City law firm (Lee Henning‘s old firm, by the way) to represent them in an insurance bad faith lawsuit against State Farm. In this bad faith suit, the Campbells brought claims against State Farm for bad faith, fraud and intentional infliction of emotional distress. And, boy, did they ever have a lawsuit. In this epic piece of litigation, the Campbells discovered that State Farm had implemented a nationwide scheme to meet corporate fiscal goals called “Performance, Planning and Review” or PP&R. (Click here and here for the opinion on these facts). PP&R was enacted by State Farm high-ups to meet corporate fiscal goals by capping payouts on claims company wide.
As part of this scheme insurance adjusters were directed to falsify evidence in claims files and unjustly attack the character, reputation and credibility of a claimant. Two Utah State Farm employees, Felix Jensen and Samantha Bird testified that, as part of PP&R, they were pressured to reduce payouts on claims below fair value. “When Jensen complained to top managers, he was told to ‘get out of the kitchen’ if he could not take the heat.” Bird testified that she “was forced to commit dishonest acts and to knowingly underpay claims.”
Further, the PP&R pressures were “deliberately crafted to prey on consumers who would be unlikely to defend themselves.” Several former State Farm employees testified that “they were trained to target the weakest of the herd, — the elderly, the poor, and other consumers who are least knowledgeable about their rights and thus most vulnerable to trickery or deceit …”
The bad faith jury heard this evidence and found that the Campbells had suffered $2.6 million in compensatory damages and $145 million in punitive damages. The trial court reduced the amounts and the Utah State Supreme Court reinstated the punitive damages verdict.
The next step for the Campbells and State Farm was the United States Supreme Court.