Copyright 1999 St. Louis Post-Dispatch, Inc.
St.
Louis Post-Dispatch
October 9, 1999, Saturday, FIVE STAR LIFT
EDITION
SECTION: EDITORIAL, Pg. 32
LENGTH: 427 words
HEADLINE:
LETTERS TO THE EDITOR: RULING SHOWS NEED FOR CLASS-ACTION
REFORM
BODY:
The ruling against
State Farm and its policyholders by a Marion, Ill., jury is a threat to commerce
and consumers on many levels. However, the verdict most importantly should sound
a strong call for reform of the way the judicial system handles
class-action litigation.
Because of a
class-action system that is severely out of whack, a small
group of individuals in south-central Illinois were forced into making a
decision that will affect millions of auto insurance consumers across the
country through higher insurance premiums. The verdict also hands rich and
powerful automakers a monopoly on the aftermarket parts business. A recent
explosion of class-action filings has shifted the legal landscape dramatically
to the state courts. The case against State Farm is the latest example of the
"jackpot justice" mentality that sends visions of sugarplums dancing through
trial lawyers' heads - all because the plaintiffs didn't take advantage of State
Farm's satisfaction guarantee.
Class actions clog courtrooms and stretch
the limits of the judicial system to the breaking point. Inflated verdicts have
undermined the credibility of the system, strangled innovation and hobbled the
productivity of the economy. In this case, the jury's verdict also undermines
state insurance regulation, where the use of parts other than original equipment
has already been considered and accepted.
The Alliance of American
Insurers, a national trade association representing 312 insurers, is drafting
legislative initiatives, procedural changes and other tools designed to reduce
incentives to bring suits that do little but enrich lawyers and increase
insurance costs. The initiatives would:
* Move lawsuits from
state to federal courts.
* Derail baseless class actions while
strengthening state regulation.
* Create a presumption of validity for
insurers in the same way government standards are invoked in product liability
cases.
Other proposals are aimed at controlling discovery costs,
promoting alternative dispute resolution and enabling appeals of class
certification long before a case goes to trial.
These initiatives are
procedural in nature, protecting consumers rights, not lawyers' pocketbooks.
The immediate detrimental effect of the State Farm ruling on consumers i
s bad enough. Let's not compound the problem by passing up a chance to reform
the class-action system that made it possible.
Ann Spragens
Senior Vice President and General Counsel
Alliance
of American Insurers
Downers Grove, Ill.
LOAD-DATE: October 9, 1999 
