“You have to look under things.”
That was my Mother’s saying when I was a kid, whenever I was searching for something. My lost shoes, or my lost jacket, or my lost lunchbox.
That saying echoed in my head recently, as I was reading about a class action from Montana. I stumbled on the case when the United States Supreme Court denied a petition for certiorari review (Allstate Ins. Co. v. Jacobsen, 2014 U.S. LEXIS 3213 (U.S. May 5, 2014)). For whatever reason, I clicked through to the underlying opinion, from the Montana Supreme Court (Jacobsen v. Allstate Ins. Co., 310 P.3d 453 (Mont. 2013)). And that’s when the case really caught my interest.
In Jacobsen, the dispute started when Robert Jacobsen suffered injuries in an auto accident. The other driver’s insurer – Allstate – paid Jacobsen $3,500 to settle the insurance claim, before Jacobsen was represented by Counsel. Shortly after, Jacobsen hired a lawyer, who renegotiated the settlement, and Jacobsen received $200,000 from Allstate. Jacobsen then sued Allstate under a state law that prohibited bad faith claims handling, challenging Allstate’s tactics in reaching an early, low-dollar settlement on his insurance claim.
Several years into the lawsuit over the bad faith claims-handling, Jacobsen’s lawyers learned that Allstate had followed a protocol called the CCPR, or Claim Core Process Redesign. Allstate adopted its CCPR program in the early 1990s, based on recommendations from McKinsey & Company, who had consulted on a revamp of Allstate’s claims adjusting. Jacobsen’s lawyers uncovered more than 12,000 PowerPoint slides from McKinsey, which had advised Allstate to initiate more early and direct contact with claimants, aiming to make the claimants less likely to hire lawyers. The McKinsey documents described claims adjusting as a “zero sum” economic game: if Allstate gained by reducing payouts, “medical providers, plaintiff attorneys and claimants” must lose. Those McKinsey documents were critical to Jacobsen’s claim that Allstate engaged in bad faith claims adjusting, the Montana Supreme Court said.
The McKinsey documents in Jacobsen would seem to have some power before a jury. And the discovery process in Jacobsen is a great illustration of the old adage: “You have to look under things.”