As reported by the Texas Lawyer (subscription), on Monday, December 16, 2019, Judge Lee Yeakel of the Western District of Texas gave the first round of approval to a settlement of a class action against Farmers Group Inc. valued at $52 million arising from allegations the insurance company systematically charged their existing customers more than they did new customers for the same insurance coverage in violation of the law. The company was also accused of keeping their loyal existing customers in the dark about lower available rates.

The proposed settlement is noteworthy for arising via a series of mediation sessions between the parties. As Texas Lawyer noted, “Lawyers for both sides told Judge Lee Yeakel…that none of them had experienced another case in their careers with such extensive time dedicated to mediation.” Finding the proposed agreement fair, Judge Yeakel instructed the parties to proceed with sending notices out to auto insurance policyholders who will share in the settlement.

The article notes that Lieff Cabraser partner and plaintiffs’ counsel Roger Heller indicated the lawyers met in person five times and had countless telephone sessions with Deborah Hankinson, a former Texas Supreme Court justice. He went on to explain that it was Justice Hankinson who came up with the $40 million settlement figure.

It will be six months before a final fairness hearing is held to grant final approval to the settlement, but this ruling sets the process in motion by approving of the notice steps and related deadlines to bring a restitutionary conclusion to the case by May 2020.

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