I have previously blogged about the decisions coming out of the United States District Court of Arizona in the Barten v. State Farm case. Recall, my Barten blogs have largely concerned State Farm’s corporate profit augmentation programs, whether the programs are called ACE or something else. Well, good orders just keep coming out of the Barten case. As discussed in greater detail below, State Farm continues to try to come up with every possible reason under the sun for not producing ACE or ACE-related documentation to Barten; but, thankfully, the District Court of Arizona continues to take a stance against State Farm’s maneuvering.
Following the Court’s orders for State Farm to produce ACE-related documentation,
State Farm informed Barten that because he believes ACE was designed to increase profits at the expense of the insureds and because State Farm rejects the interpretation of the ACE program, none of State Farm’s programs include the principles of ACE as Barten understands them. Accordingly, State Farm explained to Barten it has no documents responsive to this request. Nevertheless, State Farm did produce documents concerning the ‘nature and purpose of the Quality Assurance Review program’ because the court’s order indicates that these documents should be produced.1
Can you tell State Farm does not want its ACE or ACE-related documentation exposed? Thankfully, the Court is not buying into the carrier’s gamesmanship:
State Farm’s creative interpretation of the scope of the court’s order is inconsistent with the court’s finding that the QAR program should be disclosed. That inconsistency should have been a tip-off to State Farm that its initial premise was incorrect and the phrase ‘principles of ACE’ should have been given a more generous interpretation. The court is not in the habit of issuing self-contradictory orders. State Farm’s insistence on parsing the court’s order in this way was unreasonable.
Though Barten did not obtain desired sanctions against State Farm for its “unreasonable” “parsing [of] the court’s order,” Barten did obtain important confirmation from the Court as to the scope of State Farm’s prospective production:
The court will, however, instruct State Farm to employ a more generous interpretation of the phrase ‘principles of ACE’ … . … To be clear, State Farm is to disclose ‘documentation of the programs since ACE in which the principles of ACE are included.’ This documentation should explain the nature of each program, its goals, and the manner of its execution in sufficient detail to reveal how it influences and reflects State Farm’s corporate culture and how it informs the behavior of its claims personnel.
Any program that encourages claims department personnel to lower claim payout in order to increase corporate profit is a major no-no. So, this is why the progress of the Barten case is important and why I continue to keep readers in the loop … stay tuned.
1 Barten v. State Farm Mut. Auto. Ins. Co., No. 12-399 (D. Ariz. Feb. 5, 2014).
