Opinion ID: 2625838
Heading Depth: 4
Heading Rank: 4

Heading: Effect of State Farm's Misconduct on the Campbells and Others

Text: ¶ 37 This factor examines how the defendant's conduct affected other people as well as the Campbells. The larger the number of people affected, the greater the justification for higher punitive damages. ¶ 38 Here, the effect of State Farm's conduct on the Campbells is well-documented. In particular, the Campbells lived for nearly eighteen months under constant threat of losing everything they had worked for their whole lives. This threat led to sleeplessness, heartache, and stress in the Campbells' marriage and family relationships. Id. State Farm argues that these were relatively minor impacts, and were not as severe as those punished in Crookston II, and additionally, that the alleged harms suffered by other State Farm customers cannot be considered in this case. ¶ 39 Even if the harm to the Campbells can be appropriately characterized as minimal, the trial court's assessment of the situation is on target: The harm is minor to the individual but massive in the aggregate. Moreover, State Farm's assertion that the trial court erred in considering alleged harms suffered by other customers is incorrect; Crookston II specifically allows courts to consider the effect of the defendant's conduct on others. Crookston II, 860 P.2d at 941. In fact, the Crookston II court justified a high punitive damage award based on the fact that the insurance company's fraudulent practices were inflicted on countless customers. Id. ¶ 40 In the present case, State Farm's conduct seriously affected the Campbells, as indicated previously, as well as many others. In particular, State Farm's conduct corrupted its employees by forcing them to engage in deceptive practices or lose their jobs. Moreover, State Farm's continuing illicit practice created market disadvantages for other honest insurance companies because these practices increased profits. As plaintiffs' expert witnesses established, such wrongfully obtained competitive advantages have the potential to pressure other companies to adopt similar fraudulent tactics, or to force them out of business. Thus, such actions cause distortions throughout the insurance market and ultimately hurt all consumers. Id. Because State Farm's actions have such potentially widespread effects, this factor supports a high punitive damages award.