State Farm settles civil racketeering case for $250 million News
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State Farm settles civil racketeering case for $250 million

Faced with civil racketeering allegations, State Farm agreed to settle [order] for $250 million on Tuesday, only moments before trial was set to begin in the US District Court for the Southern District of Illinois [official website].

The settlement brings an end to 20 years of litigation [Bloomberg report], which started after consumers alleged they received generic car parts of lower quality than the original parts and in violation of their insurance policies. The case was tried and a jury rendered a $1 billion verdict against State Farm. Following the verdict, State Farm appealed and allegedly engaged in unlawful practices in an attempt to influence the judicial branch in Illinois, in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO) [text].

The plaintiffs were prepared to request a jury verdict for $1.8 billion for the original jury verdict, plus interest for the original verdict, plus triple the damages as provided under RICO.

The judge entered a motion for preliminary approval of the settlement. State Farm denies any wrongdoing in entering this settlement. The final hearing to approve the settlement is set for December.

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