Appeals Court Upholds Most of State Farm Case

An Illinois state appellate court has upheld most of a lower court’s verdict in a nationwide class-action lawsuit against State Farm Mutual Automobile Insurance Co., ruling that the country’s largest auto insurer acted with “calculated deception of its policyholders” in supplying them with auto body parts that critics claimed were substandard. The verdict, handed down in the 5th Circuit Illinois Court of Appeals in Mount Vernon, upheld most of the $1.2-billion awarded by a Marion, Ill., judge and jury to 4.7 million plaintiffs nationwide in October 1999. The appeals court reduced the award by $130 million because of damages erroneously computed twice by the lower court. A spokesman for Bloomington, Ill.-based State Farm said the company is disappointed in the verdict and will appeal it to the Illinois Supreme Court. State Farm argued that the cheaper parts held down insurance premiums.