Harris v. Farmers Insurance Exchange

A Court authorized the Notice because you have a right to know about the proposed Settlement of this class action lawsuit, and about all of your options, before the Court decides whether to give “final approval” to the Settlement. The Notice and this website explain the lawsuit, the Settlement and your legal rights, what benefits are available, who may be eligible for those benefits, and how to get them.

Judge Maren Nelson of the Superior Court of California, County of Los Angeles is overseeing this class action. The Settlement resolves the case known as Harris, et al. v. Farmers Insurance Exchange, et al., Case No. BC 57948.

The persons who sued are called “Plaintiffs,” and the companies sued, Farmers Insurance Exchange and Mid-Century Insurance Company, are called collectively “Farmers” or “Defendants.”

In California, as in other states, drivers are required to maintain auto insurance. Auto insurance companies are not permitted to determine auto insurance premiums based on what the market will bear, but instead must determine premiums based on those rating factors that the Insurance Commissioner has approved as having a substantial relationship to the risk of loss. This case was brought as a class action complaint alleging that Farmers engaged in violations of the Unfair Competition Law – Commission of Unfair Business Act or Practice Cal. Bus. & Prof. Code § 17200 et seq., Unjust Enrichment and Violation of Cal. Ins. Code § 1861.10, and claims that Defendants improperly used price optimization/elasticity of demand (a policyholders’ or class of policyholders’ willingness to tolerate a price increase as a compared to other policyholders or other classes of policyholders) as a factor in calculating premiums in California. This notice is just a summary of the allegations. The complaint in the lawsuit is posted here and contains all of the allegations. Farmers denies these allegations; however, in order to avoid the expense, inconvenience, and distraction of continued litigation, they have agreed to the Settlement described herein.

In a class action, one or more people called class representatives (in this case, Roger Harris, Duane Brown and Brian Lindsey) sue on behalf of people who have similar claims. All of these people are a “Settlement Class” or “Settlement Class Members”. One court resolves the issues for all Settlement Class Members, except for those who timely exclude themselves from the Settlement Class.

The Court did not decide in favor of Plaintiffs or Defendants. Instead, both sides agreed to settle this case to avoid the cost and risk of a trial. The proposed Settlement does not mean that any law was broken or that the Defendants did anything wrong. Defendants deny all legal claims in this case. Plaintiffs and their lawyers think that in light of litigation uncertainties and the lengthy delay that would result from a trial and possible appeal, the proposed Settlement is in the best interest of the Settlement Class Members.

If you received notice of the Settlement by email or by mail, then Farmers’ records show you may be a member of the Settlement Class. However, even if you did not receive a notice, you may still be a member of the Settlement Class.

The Proposed “Settlement Class” is composed of

All California Policy Holders of Defendants Farmers Insurance Exchange (“FIE”) and Mid-Century Insurance Company (“Mid-Century”) who: (1) had 9 years or more years of tenure/persistency as a FIE and/or Mid-Century policyholder as of August 18, 2015 or who reached 9 or more years of tenure/persistency as a FIE and/or Mid-Century policyholder on or before March 31, 2017, and (2) were FIE and/or Mid-Century policyholders at any time during the period extending from August 18, 2015 through March 31, 2017.

Excluded from the Settlement Class are (a) officers, directors, and employees of any member of the Farmers Insurance Group of Companies; (b) the judge overseeing the proposed settlement and the judge’s immediate family and (c) all Policy Holders who make a timely election to be excluded.

You may contact the Settlement Administrator if you have any questions as to whether you are in the Settlement Class.

Farmers will pay $15 million to a Settlement Fund to make payments or give policy credits to eligible Settlement Class Members as well as to pay Class Counsel’s attorneys’ fees and costs, notice and administration expenses, and Service Awards. The maximum estimated amounts for the deductions from the $15 million Settlement Fund are as follows: Class Counsel’s attorneys’ fees ($4,950,000.00), costs ($275,000.00), notice and administration expenses ($573,000.00) and Service Awards ($15,000.00). After these fees and costs are deducted from the Settlement Fund, the remaining funds (approximately $9,187,000.00) will be divided by the total number of Settlement Class Members (approximately 609,000) to calculate the payment amount for each Settlement Class Member. All Settlement Class Members will receive an equal payment amount (estimated at $15.09).

Settlement Class Members who are “Renewing Current Policy Holders” will receive a credit at the time of renewal of their Policies. “Non–Renewing Current Policy Holders” and those Settlement Class Members who are no longer Policyholders will receive their Settlement Class Member Payment by paper check.

“Renewing Current Policy Holder” means a Settlement Class Member who continues to have his or her Policy as of the Effective Date and who renews his or her Policy within six months after the Payment Date.

“Non–Renewing Current Policyholder” means a Settlement Class Member who continues to have his or her Policy as of the Effective Date and who declines to renew his or her Policy within six months after the Payment Date.

“Policy” means any private passenger auto insurance policy maintained by Farmers in the state of California.

“Effective Date” means the day following: (A) the entry by the Court of the Final Order and Judgment: (i) affirming certification of the Settlement Class; (ii) finding the Settlement Agreement to be fair, adequate and reasonable; (iii) finding that the Notice to the Class of the Settlement Agreement was fair, adequate and reasonable; (iv) resolving any and all objections to the fairness and reasonableness of the Settlement Agreement, if any; and (B) the expiration of the deadline for seeking appellate review of the Final Order and Judgment if no appeal is sought; or the day following the date all appellate courts with jurisdiction affirm the Final Judgment and Order with no possibility of further appellate review existing; and (C) the Insurance Commissioner’s dismissal of the Department Proceeding (without prejudice to reinstitution in the event the Settlement does not receive Final Approval and/or the Effective Date does not occur).

“Payment Date” means the date occurring after the Effective Date on which the Court orders the payment of the Settlement Class Member Payments to begin.

Details on all of the settlement benefits are in the Settlement Agreement, which is available here.

If you received a notice by email or in the mail telling you that you are Settlement Class Member, you will receive an automatic payment or policy credit once the Settlement is approved by the Court and the Effective Date passes, provided you are eligible for a payment and you have not requested exclusion from the Settlement (see FAQ 11).

If you did not receive a notice by email or in the mail and believe you are a Settlement Class Member, you may contact the Settlement Administrator if you have any questions as to whether you are in the Settlement Class.

Payments and policy credits will be made after the Effective Date, which comes after Court grants “final approval” to the Settlement and after any appeals are resolved (see FAQ 18). It is uncertain when the Court will decide to approve or disapprove the proposed Settlement and whether any appeals will be filed. Please be patient.

If the Settlement becomes final, Settlement Class Members who do not timely request exclusion from the Settlement will be releasing Farmers per the Amended Settlement Agreement and Release as follows:

“As of the Effective Date, Plaintiffs and each Settlement Class Member, each on behalf of itself and on behalf of its respective heirs, assigns, beneficiaries and successors (“Releasing Parties”), shall automatically be deemed to have fully and irrevocably released and forever discharged Farmers and each of its present and former parents, subsidiaries, divisions, affiliates, predecessors, successors and assigns, and the present and former directors, officers, employees, agents, insurers, members, attorneys, advisors, consultants, representatives, partners, joint venturers, independent contractors, wholesalers, resellers, distributors, retailers, predecessors, successors and assigns of each of them (“Released Parties”), of and from any claims that were or could have been alleged based on the facts pleaded in the First Amended Complaint dated October 29, 2015 and/or any subsequent amended complaint filed in conjunction with the Court’s approval of the Settlement (“Released Claims”).”

This means you will no longer be able to sue Farmers regarding any of the claims described in the Settlement Agreement.

The Settlement Agreement is available here. The Settlement Agreement provides more detail regarding the release and describes the released claims with specific descriptions in necessary, accurate legal terminology, so read it carefully. You can talk to the law firms representing the Settlement Class listed in FAQ 15 for free or you can, at your own expense, talk to your own lawyer if you have any questions about the released claims or what they mean.

This Settlement may be terminated by either of the Parties if a related proceeding pending before the California Department of Insurance (the “Department Proceeding”) is not dismissed prior to final approval of the Settlement.

No. If you exclude yourself, you may not apply for any benefits under the Settlement and you cannot object to the proposed Settlement. If you ask to be excluded, however, you will retain any right you have to sue or be part of a different lawsuit against the Defendants in the future. You will not be bound by anything that happens in this lawsuit.

No, not over the issues raised in this case.

If you wish to exclude yourself from the Settlement Class, you must send a letter to the Settlement Administrator identifying:

1. the name and case number of this lawsuit (Harris, et al. v. Farmers Insurance Exchange, et al., Superior Court of California, County of Los Angeles, Case No. BC 57948);
2. your full name, current address, and telephone number;
3. a statement that you wish to exclude yourself from the Settlement Class; and
4. your signature.

To be effective you must submit the above information to the following address postmarked no later than May 6, 2020:

Farmers PO Settlement Administrator
P.O. Box 5053
Portland, OR 97208-5053

This is a firm deadline for requesting exclusion from the proposed Settlement. You cannot ask to be excluded on the phone, by email, or at the website.

The Court approved the law firms of Mehri & Skalet PLLC, Tycko & Zavareei LLP and Berger Montague PC, as Class Counsel to represent the Settlement Class. You will not be charged separately for these lawyers. If you wish to be represented by your own lawyer in this case, you may hire one at your own expense.

Class Counsel will apply to the Court for an award of attorneys’ fees of up to $4,950,000 plus costs and expenses (capped at $275,000) for investigating the facts, litigating the cases, and negotiating the Settlement. To date, Class Counsel have not received any payment for their services in conducting this Litigation on behalf of the Settlement Class Representatives and the Settlement Class, nor have Class Counsel been reimbursed for their costs and expenses to date in this case. Class Counsel will also request the Court to award a Service Award of $5,000 to each of the three Settlement Class Representatives in recognition of their service to the Settlement Class. The amount of the fees, expenses and Service Award will be determined by the Court. Class Counsel’s contact information is as follows:

You can object to the Settlement if you do not like some part of it. You must state the reasons you think the Court should not approve the Settlement. To object, send a letter (as instructed below) saying that you object to the proposed Settlement. You must include:

1. the case name and case number of this Litigation (Harris, et al. v. Farmers Insurance Exchange, et al., Superior Court of California, County of Los Angeles, Case No. BC 57948);
2. your full name, current address, and phone number;
3. an explanation of the basis upon which you claim to be a Settlement Class member;
4. all grounds for the objection;
5. the identity of all counsel who represent you;
6. a statement confirming whether you intend to personally appear and/or testify at the Final Approval Hearing;
7. your signature.

Mail the objection to the following address so that it is postmarked no later than May 6, 2020. This is a firm deadline. Objections postmarked after this date will not be recognized.

Farmers PO Settlement Administrator
P.O. Box 5053
Portland, OR 97208-5053

Objecting is telling the Court that you do not like something about the Settlement. You can object to the Settlement only if you do not exclude yourself from the Settlement. Excluding yourself from the Settlement is telling the Court that you do not want to be part of the Settlement. If you exclude yourself from the Settlement, you have no basis to object to the Settlement because it no longer affects you.

The Court granted final approval of the Settlement on September 4, 2020. at the Superior Court of California, County of Los Angeles, in Department 17 at Spring Street Courthouse, 312 North Spring Street, Los Angeles, CA 90012. Benefits will be distributed after the Court enters its Final Judgment, and the deadline to file an appeal has passed or after all appeals are resolved. If there are appeals, resolving them can take time, perhaps more than a year. Please continue to check this website for updates.

No. Class Counsel will answer any questions the Court may have. However, you are welcome to attend the hearing at your own expense. If you send in a written objection, you do not have to come to the Final Approval Hearing to talk about it. As long as you mailed your written objection on time, the Court may consider it. You may also pay your own lawyer to attend the Final Approval Hearing, but their attendance is not necessary.

If you are a Settlement Class Member and received a notice by email or in the mail telling you that you will receive an automatic payment or policy credit, you do not need to do anything in order to receive your payment or policy credit (provided the Court approves the Settlement). If you did not receive a notice by email or in the mail telling you that you will receive an automatic payment or policy credit and do nothing, you will not get a payment or policy credit from this Settlement. In addition, unless you exclude yourself, you will not be able to start a lawsuit, continue with a lawsuit, or be part of any other lawsuit against the Defendant about the claims in this case, ever again.

The Detailed Notice summarizes the proposed Settlement. More details can be found in the Settlement Agreement. You can obtain a copy of the Detailed Notice and the Settlement Agreement here. You may also write with questions to Farmers PO Settlement Administrator, P.O. Box 5053, Portland OR 97208-5053, or call the toll-free number, 1-855-964-0518.